AXP(SM)
Global
Growth Fund
2000 SEMIANNUAL REPORT
American Express (R) Fund
(icon of) compass
The goal of AXP Global Growth Fund seeks to provide shareholders with long-term
capital growth.
<PAGE>
It's a Big World After All
No one needs to be told that the world is changing rapidly. For example, some
years ago U.S. stocks accounted for about two-thirds of the total value of
stocks worldwide. Today, that figure is down to about one-third, as many foreign
stock markets have enjoyed explosive growth. AXP Global Growth Fund seeks to
take advantage of that trend by investing in companies throughout the world, not
just the United States. For the most part, these are fast-growing foreign
companies involved in essential businesses such as infrastructure creation,
finance and environmental clean-up. As they prosper, AXP Global Growth Fund
offers investors the potential to prosper along with them.
CONTENTS
From the Chairman 3
From the Portfolio Manager 3
Fund Facts 5
The 10 Largest Holdings 6
Financial Statements (Fund) 7
Notes to Financial Statements (Fund) 10
Financial Statements (Portfolio) 16
Notes to Financial Statements (Portfolio) 19
Investments in Securities 24
<PAGE>
(picture of) Arne H. Carlson
Arne H. Carlson
Chairman of the board
From the Chairman
The financial markets have always had their ups and downs, but in recent months
volatility has become more frequent and intense. While no one can say with
certainty what the markets will do, American Express Financial Corporation, the
Fund's investment manager, expects economic growth to continue this year,
accompanied by a modest rise in long-term interest rates. But no matter what
transpires, this is a great time to take a close look at your goals and
investments. We encourage you to:
o Consult a professional investment advisor who can help you cut through
mountains of data.
o Set financial goals that extend beyond those achievable through retirement
plans of your employer.
o Learn as much as you can about your current investments.
The portfolio manager's letter that follows provides a review of the Fund's
investment strategies and performance. The semiannual report contains other
valuable information as well. The Fund's prospectus describes its investment
objectives and how it intends to achieve those objectives. As experienced
investors know, information is vital to making good investment decisions.
So, take a moment and decide again whether the Fund's investment objectives and
management style fit with your other investments to help you reach your
financial goals. And make it a practice on a regular basis to assess your
investment options.
On behalf of the Board,
Arne H. Carlson
(picture of) Richard Leadem
Richard Leadem
Portfolio manager
From the Portfolio Manager
Sharp stock selection and generally strong markets in the U.S. and Europe set
the stage for a healthy gain by AXP Global Growth Fund during the first half of
the fiscal year. For the November 1999 through April 2000 period, the Fund's
Class A shares generated a total return of 17.80% (excluding the sales charge).
Against a positive backdrop of expanding economic growth (especially in the
U.S.), healthy corporate profits and low inflation, stocks in the major markets
were already on the move when the period began. With Y2K computer-bug fears
rapidly subsiding and excitement about the potential for the Internet growing
almost daily, the markets kept gathering momentum through the end of 1999.
Illustrating the strength of the surge, the Fund was ahead by more than 20% in
the first two months of the period.
The new year, however, brought with it a new mood in the markets. Concerns about
potentially higher inflation and higher interest rates now dominated the
psychology, and investors were questioning whether the sky-high price levels on
some stocks, particularly technology-related issues, could be sustained much
longer. The result over the final four months of the period was that the markets
struggled against increasing selling pressure, capped by a steep decline in
technology-related stocks from mid-March to mid-April. While the Fund held up
relatively well during those months, it nevertheless saw some erosion in its net
asset value. A period-long decline in the euro, Europe's new common currency,
also detracted from performance.
On the whole, though, it was a very productive six months, thanks chiefly to the
Fund's substantial holdings in the technology, telecommunications and media
sectors. Although the stocks were volatile, their ups overwhelmed their downs. A
few prominent performers included: Mannesmann AG, a German provider of wireless
telecommunication services; Kyocera, a Japanese manufacturer of
telecommunications equipment and semiconductors; News Corporation Limited, an
Australia-based global media company; and Atmel, a U.S. provider of
semiconductors to the wireless communication industry.
On a regional basis, the biggest investment -- about 40% of the portfolio -- was
in Europe, including the United Kingdom, France, Germany and Italy. The
next-largest exposure was to North America (the U.S. and Canada), which
comprised about a third of the portfolio, followed by Japan, which made up
between 13% and 17%. Encouraged by government policy changes and corporate
restructuring, I added to the Japanese exposure as the period progressed. Still,
as the second half of the fiscal year begins, I am maintaining the investment
emphasis on Europe, where economic growth appears to have a long time to run.
Overall, I continue to be optimistic about global equity markets. While the
potential for higher interest rates in the U.S. may be a near-term restraint,
the global economy is accelerating and inflation is not a problem in most major
markets. Once the interest-rate question in the U.S. is resolved, I think stocks
will have a good opportunity to advance.
Richard Leadem
<PAGE>
Fund Facts
Class A -- 6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 2000 $9.83
Oct. 31, 1999 $9.18
Increase $0.65
Distributions -- Nov. 1, 1999 - April 30, 2000
From income $0.29
From capital gains $0.71
Total distributions $1.00
Total return* +17.80%**
Class B -- 6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 2000 $9.63
Oct. 31, 1999 $9.01
Increase $0.62
Distributions -- Nov. 1, 1999 - April 30, 2000
From income $0.25
From capital gains $0.71
Total distributions $0.96
Total return* +17.29%**
Class Y -- 6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 2000 $9.84
Oct. 31, 1999 $9.20
Increase $0.64
Distributions -- Nov. 1, 1999 - April 30, 2000
From income $0.30
From capital gains $0.71
Total distributions $1.01
Total return* +17.79%**
*Returns do not include sales load. The prospectus discusses the effect of sales
charges, if any, on the various classes.
**The total return is a hypothetical investment in the Fund with all
distributions reinvested.
<PAGE>
The 10 Largest Holdings
Percent Value
(of net assets) (as of April 30, 2000)
Ericsson (LM) CI B (Sweden) 4.24% $91,925,468
Nokia (Finland) 3.44 74,639,327
Vodafone AirTouch (United Kingdom) 3.12 67,663,899
Pfizer (United States) 2.48 53,827,325
EMC (United States) 2.35 50,906,700
Nippon Telegraph & Telephone (Japan) 2.28 49,507,847
Electronic Data Systems (United States) 2.09 45,381,875
Schering-Plough (United States) 1.99 43,233,624
Marconi (United Kingdom) 1.99 43,057,713
EMI Group ADR (United Kingdom) 1.88 40,710,983
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."
(picture of) pie chart
The 10 holdings listed here
make up 25.86% of net assets
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<TABLE>
<CAPTION>
Financial Statements
Statement of assets and liabilities
AXP Global Growth Fund
April 30, 2000 (Unaudited)
Assets
<S> <C>
Investment in World Growth Portfolio (Note 1) $2,166,812,439
Capital shares receivable 1,255
-----
Total assets 2,166,813,694
-------------
Liabilities
Accrued distribution fee 27,096
Accrued service fee 69
Accrued transfer agency fee 10,053
Accrued administrative services fee 2,672
Other accrued expenses 73,231
------
Total liabilities 113,121
-------
Net assets applicable to outstanding capital stock $2,166,700,573
==============
Represented by
Capital stock-- $.01 par value (Note 1) $ 2,217,728
Additional paid-in capital 1,583,830,320
Net operating loss (6,079,214)
Accumulated net realized gain (loss) 288,309,813
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 298,421,926
-----------
Total -- representing net assets applicable to outstanding capital stock $2,166,700,573
==============
Net assets applicable to outstanding shares: Class A $1,520,219,296
Class B $ 620,879,892
Class Y $ 25,601,385
Net asset value per share of outstanding capital stock: Class A shares 154,700,591 $ 9.83
Class B shares 64,469,274 $ 9.63
Class Y shares 2,602,955 $ 9.84
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See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Statement of operations
AXP Global Growth Fund
Six months ended April 30, 2000 (Unaudited)
Investment income
Income:
<S> <C>
Dividends $ 8,044,932
Interest 1,603,936
Less foreign taxes withheld (867,395)
--------
Total income 8,781,473
---------
Expenses (Note 2):
Expenses allocated from World Growth Portfolio 7,727,355
Distribution fee
Class A 1,856,592
Class B 2,874,003
Transfer agency fee 1,539,121
Incremental transfer agency fee
Class A 120,874
Class B 84,259
Service fee-- Class Y 14,205
Administrative services fees and expenses 479,575
Compensation of board members 4,141
Printing and postage 66,583
Registration fees 88,826
Audit fees 4,000
Other 4,886
-----
Total expenses 14,864,420
Earnings credits on cash balances (Note 2) (47,929)
-------
Total net expenses 14,816,491
----------
Investment income (loss) -- net (6,035,018)
----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions 290,538,871
Foreign currency transactions (2,217,625)
----------
Net realized gain (loss) on investments 288,321,246
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 24,717,842
----------
Net gain (loss) on investments and foreign currencies 313,039,088
-----------
Net increase (decrease) in net assets resulting from operations $307,004,070
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
AXP Global Growth Fund
April 30, 2000 Oct. 31, 1999
Six months ended Year ended
(Unaudited)
Operations and distributions
<S> <C> <C>
Investment income (loss) -- net $ (6,035,018) $ (775,673)
Net realized gain (loss) on investments 288,321,246 184,375,354
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 24,717,842 125,627,405
---------- -----------
Net increase (decrease) in net assets resulting from operations 307,004,070 309,227,086
----------- -----------
Distributions to shareholders:
From net investment income
Class A (6,029,970) (5,494,846)
Class B (16,898) (2,288)
Class Y (156,601) (142,170)
From net realized gain
Class A (130,885,134) (45,913,293)
Class B (50,476,975) (14,747,605)
Class Y (2,678,427) (1,056,181)
---------- ----------
Total distributions (190,244,005) (67,356,383)
------------ -----------
Capital share transactions (Note 3)
Proceeds from sales
Class A shares (Note 2) 228,236,165 362,979,328
Class B shares 116,299,298 151,060,171
Class Y shares 11,262,265 11,056,126
Reinvestment of distributions at net asset value
Class A shares 131,689,253 49,848,367
Class B shares 50,017,434 14,640,382
Class Y shares 2,835,028 1,198,351
Payments for redemptions
Class A shares (185,526,889) (294,695,663)
Class B shares (Note 2) (38,404,133) (54,189,827)
Class Y shares (16,587,922) (12,905,756)
----------- -----------
Increase (decrease) in net assets from capital share transactions 299,820,499 228,991,479
----------- -----------
Total increase (decrease) in net assets 416,580,564 470,862,182
Net assets at beginning of period 1,750,120,009 1,279,257,827
------------- -------------
Net assets at end of period $2,166,700,573 $1,750,120,009
============== ==============
Undistributed net investment income $ (6,079,214) $ 6,159,273
-------------- --------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
AXP Global Growth Fund
(Unaudited as to April 30, 2000)
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. 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, incremental transfer agency fee and service fee (class
specific expenses) differ among classes. Income, expenses (other than class
specific expenses) and realized and unrealized gains or losses on investments
are allocated to each class of shares based upon its relative net assets.
Investment in World Growth Portfolio
The Fund invests all of its assets in World Growth Portfolio (the Portfolio), a
series of World Trust (the Trust), an open-end investment company that has the
same objectives as the Fund. The Portfolio seeks to provide shareholders with
long-term capital growth by investing primarily in equity securities of
companies throughout the world.
The Fund records daily its share of the Portfolio's income, expenses and
realized and unrealized gains and losses. The financial statements of the
Portfolio are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements.
The Fund records its investment in the Portfolio at the value that is equal to
the Fund's proportionate ownership interest in the Portfolio's net assets. The
percentage of the Portfolio owned by the Fund as of April 30, 2000 was 99.95%.
Valuation of securities held by the Portfolio is discussed in Note 1 of the
Portfolio's "Notes to financial statements" (included elsewhere in this report).
Use of estimates
Preparing financial statements that conform to accounting principles generally
accepted in the United States of America requires management to make estimates
(e.g., on assets and liabilities) that could differ from actual results.
Federal taxes
The Fund's policy is to comply with all sections of the Internal Revenue Code
that apply to regulated investment companies and to distribute substantially all
of its taxable income to the shareholders. No provision for income or excise
taxes is thus required.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred losses on
certain futures contracts, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes, and losses deferred due to
"wash sale" transactions. The character of distributions made during the year
from net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
Dividends to shareholders
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
2. EXPENSES AND SALES CHARGES
In addition to the expenses allocated from the Portfolio, the Fund accrues its
own expenses as follows:
The Fund has an agreement with American Express Financial Corporation (AEFC) to
provide administrative services. Under an Administrative Services Agreement, the
Fund pays AEFC a fee for administration and accounting services at a percentage
of the Fund's average daily net assets in reducing percentages from 0.06% to
0.035% annually. A minor portion of additional administrative service expenses
paid by the Fund are consultants' fees and fund office expenses. Under this
agreement, the Fund also pays taxes, audit and certain legal fees, registration
fees for shares, compensation of board members, corporate filing fees and any
other expenses properly payable by the Fund and approved by the board.
Under a separate Transfer Agency Agreement, American Express Client Service
Corporation (AECSC) maintains shareholder accounts and records. The Fund pays
AECSC an annual fee per shareholder account for this service as follows:
o Class A $19
o Class B $20
o Class Y $17
The Fund has agreements with American Express Financial Advisors Inc. (the
Distributor) for distribution and shareholder services. Under a Plan and
Agreement of Distribution, the Fund pays a distribution fee at an annual rate up
to 0.25% of the Fund's average daily net assets attributable to Class A shares
and up to 1.00% for Class B shares.
Under a Shareholder Service Agreement, the Fund's Class Y shares pay a fee for
service provided to shareholders by financial advisors and other servicing
agents. The fee is calculated at a rate of 0.10% of the Fund's average daily net
assets attributable to Class Y shares.
Sales charges received by the Distributor for distributing Fund shares were
$2,203,870 for Class A and $221,430 for Class B for the six months ended April
30, 2000.
During the six months ended April 30, 2000, the Fund's transfer agency fees were
reduced by $47,929 as a result of earnings credits from overnight cash balances.
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
Six months ended April 30, 2000
Class A Class B Class Y
Sold 22,603,071 11,713,076 1,132,264
Issued for reinvested distributions 13,174,143 5,092,421 283,787
Redeemed (18,305,831) (3,864,344) (1,625,338)
----------- ---------- ----------
Net increase (decrease) 17,471,383 12,941,153 (209,287)
Year ended Oct. 31, 1999
Class A Class B Class Y
Sold 41,837,560 17,631,622 1,268,487
Issued for reinvested distributions 6,001,482 1,784,519 144,275
Redeemed (33,906,049) (6,300,388) (1,495,745)
----------- ---------- ----------
Net increase (decrease) 13,932,993 13,115,753 (82,983)
4. BANK BORROWINGS
The Fund has a revolving credit agreement with U.S. Bank, N.A., whereby the Fund
is permitted to have bank borrowings for temporary or emergency purposes to fund
shareholder redemptions. The Fund must have asset coverage for borrowings not to
exceed the aggregate of 333% of advances equal to or less than five business
days plus 367% of advances over five business days. The agreement, which enables
the Fund to participate with other American Express mutual funds, permits
borrowings up to $200 million, collectively. Interest is charged to each Fund
based on its borrowings at a rate equal to the Federal Funds Rate plus 0.30% or
the Eurodollar Rate (Reserve Adjusted) plus 0.20%. Borrowings are payable up to
90 days after such loan is executed. The Fund also pays a commitment fee equal
to its pro rata share of the amount of the credit facility at a rate of 0.05%
per annum. The Fund had no borrowings outstanding during the six months ended
April 30, 2000.
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<CAPTION>
5. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
Fiscal period ended Oct. 31,
Per share income and capital changesa
Class A
2000b 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.18 $7.80 $6.90 $7.12 $6.37
Income from investment operations:
Net investment income (loss) (.02) .02 .02 .03 .08
Net gains (losses) (both realized and unrealized) 1.67 1.78 1.12 .39 .83
Total from investment operations 1.65 1.80 1.14 .42 .91
Less distributions:
Dividends from and in excess
of net investment income (.04) (.05) (.06) (.22) (.13)
Distributions from realized gains (.96) (.37) (.18) (.42) (.03)
Total distributions (1.00) (.42) (.24) (.64) (.16)
Net asset value, end of period $9.83 $9.18 $7.80 $6.90 $7.12
Ratios/supplemental data
Net assets, end of period (in millions) $1,520 $1,260 $962 $889 $908
Ratio of expenses to average daily net assetsc 1.21%d 1.25% 1.22% 1.27% 1.37%
Ratio of net investment income (loss)
to average daily net assets (.37%)d .14% .35% .60% 1.45%
Portfolio turnover rate
(excluding short-term securities) 61% 83% 80% 199% 134%
Total returne 17.80% 23.59% 17.00% 6.22% 14.51%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended April 30, 2000 (Unaudited).
c Expense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
d Adjusted to an annual basis.
e Total return does not reflect payment of a sales charge.
</TABLE>
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<TABLE>
<CAPTION>
Fiscal period ended Oct. 31,
Per share income and capital changesa
Class B Class Y
2000b 1999 1998 1997 1996 2000b 1999 1998 1997 1996
Net asset value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of period $9.01 $7.68 $6.79 $7.05 $6.34 $9.20 $7.81 $6.91 $7.13 $6.38
Income from investment operations:
Net investment income (loss) (.04) (.05) -- -- .05 (.01) .03 .02 .03 .09
Net gains (losses)
(both realized and unrealized) 1.62 1.75 1.08 .35 .81 1.66 1.78 1.13 .40 .83
Total from investment operations 1.58 1.70 1.08 .35 .86 1.65 1.81 1.15 .43 .92
Less distributions:
Dividends from and in excess
of net investment income -- -- (.01) (.19) (.12) (.05) (.05) (.07) (.23) (.14)
Distributions from realized gains (.96) (.37) (.18) (.42) (.03) (.96) (.37) (.18) (.42) (.03)
Total distributions (.96) (.37) (.19) (.61) (.15) (1.01) (.42) (.25) (.65) (.17)
Net asset value, end of period $9.63 $9.01 $7.68 $6.79 $7.05 $9.84 $9.20 $7.81 $6.91 $7.13
Ratios/supplemental data
Net assets, end of period
(in millions) $621 $464 $295 $222 $146 $26 $26 $23 $21 $19
Ratio of expenses to
average daily net assetsc 1.98%d 2.02% 1.99% 2.03% 2.14% 1.05%d 1.13% 1.15% 1.15% 1.19%
Ratio of net investment
income (loss) to average
daily net assets (1.12%)d (.62%) (.40%) (.18%) 1.05% (.21%)d .24% .41% .72% 1.60%
Portfolio turnover rate
(excluding short-term securities) 61% 83% 80% 199% 134% 61% 83% 80% 199% 134%
Total returne 17.29% 22.66% 16.13% 5.40% 13.64% 17.79% 23.86% 17.10% 6.34% 14.71%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended April 30, 2000 (Unaudited).
c Expense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
d Adjusted to an annual basis.
e Total return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial Statements
Statement of assets and liabilities
World Growth Portfolio
April 30, 2000 (Unaudited)
Assets
Investments in securities, at value (Note 1)
<S> <C>
(identified cost $1,964,680,967) $2,263,149,296
Cash in bank on demand deposit 112,022
Dividends and accrued interest receivable 3,271,765
Receivable for investment securities sold 835,091
-------
Total assets 2,267,368,174
-------------
Liabilities
Payable for investment securities purchased 34,555,998
Unrealized depreciation on foreign currency contracts held, at value (Notes 1 and 4) 2,829
Payable upon return of securities loaned (Note 5) 64,821,600
Accrued investment management services fee 42,767
Other accrued expenses 98,070
------
Total liabilities 99,521,264
----------
Net assets $2,167,846,910
==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of operations
World Growth Portfolio
Six months ended April 30, 2000 (Unaudited)
Investment income
Income:
<S> <C>
Dividends $ 8,048,910
Interest 1,588,501
Less foreign taxes withheld (867,820)
--------
Total income 8,769,591
---------
Expenses (Note 2):
Investment management services fee 7,614,372
Compensation of board members 4,970
Custodian fees 81,434
Audit fees 12,000
Other 26,273
------
Total expenses 7,739,049
Earnings credits on cash balances (Note 2) (7,835)
------
Total net expenses 7,731,214
---------
Investment income (loss) -- net 1,038,377
---------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 290,695,110
Foreign currency transactions (2,218,330)
----------
Net realized gain (loss) on investments 288,476,780
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 24,726,528
----------
Net gain (loss) on investments and foreign currencies 313,203,308
-----------
Net increase (decrease) in net assets resulting from operations $314,241,685
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
World Growth Portfolio
April 30, 2000 Oct. 31,1999
Six months ended Year ended
(Unaudited)
Operations
<S> <C> <C>
Investment income (loss)-- net $ 1,038,377 $ 9,492,822
Net realized gain (loss) on investments 288,476,780 184,483,395
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 24,726,528 125,692,141
---------- -----------
Net increase (decrease) in net assets resulting from operations 314,241,685 319,668,358
Net contributions (withdrawals) from partners 102,459,761 151,432,468
----------- -----------
Total increase (decrease) in net assets 416,701,446 471,100,826
Net assets at beginning of period 1,751,145,464 1,280,044,638
------------- -------------
Net assets at end of period $2,167,846,910 $1,751,145,464
============== ==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
World Growth Portfolio
(Unaudited as to April 30, 2000)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
World Growth Portfolio (the Portfolio) is a series of World Trust (the Trust)
and is registered under the Investment Company Act of 1940 (as amended) as a
diversified, open-end management investment company. The Portfolio seeks to
provide long-term capital growth by investing primarily in equity securities of
companies throughout the world. The Declaration of Trust permits the Trustees to
issue non-transferable interests in the Portfolio.
The Portfolio's significant accounting policies are summarized below:
Use of estimates
Preparing financial statements that conform to accounting principles generally
accepted in the United States of America requires management to make estimates
(e.g., on assets and liabilities) that could differ from actual results.
Valuation of securities
All securities are valued at the close of each business day. Securities traded
on national securities exchanges or included in national market systems are
valued at the last quoted sales price. Debt securities are generally traded in
the over-the-counter market and are valued at a price that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Securities for which market quotations are not readily available are valued at
fair value according to methods selected in good faith by the board. Short-term
securities maturing in more than 60 days from the valuation date are valued at
the market price or approximate market value based on current interest rates;
those maturing in 60 days or less are valued at amortized cost.
Option transactions
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the Portfolio 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
Portfolio 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 Portfolio gives up the opportunity for
profit if the market price of the security increases. The risk in writing a put
option is that the Portfolio 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 Portfolio pays a premium whether or not the option is exercised. The
Portfolio 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 Portfolio
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 Portfolio may buy
and sell financial futures contracts traded on any U.S. or foreign exchange. The
Portfolio 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 Portfolio 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 Portfolio 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 Portfolio recognizes a realized gain or loss when the
contract is closed or expires.
Foreign currency translations and foreign currency contracts
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the statement of operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes.
The Portfolio 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 Portfolio and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates from an
independent pricing service. The Portfolio is subject to the credit risk that
the other party will not complete its contract obligations.
Federal taxes
For federal income tax purposes the Portfolio qualifies as a partnership and
each investor in the Portfolio is treated as the owner of its proportionate
share of the net assets, income, expenses and realized and unrealized gains and
losses of the Portfolio. As a "pass-through" entity, the Portfolio therefore
does not pay any income dividends or capital gain distributions.
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. Interest
income, including level-yield amortization of premium and discount, is accrued
daily.
2. FEES AND EXPENSES
The Trust, on behalf of the Portfolio, has an Investment Management Services
Agreement with AEFC to manage its portfolio. Under this agreement, AEFC
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Portfolio's average daily net assets in reducing
percentages from 0.8% to 0.675% annually. The fee may be adjusted upward or
downward by a performance incentive adjustment based on a comparison of the
performance of Class A shares of AXP Global Growth Fund to the Lipper Global
Fund Index. The maximum adjustment is 0.12% of the Portfolio's average daily net
assets after deducting 1% from the performance difference. If the performance
difference is less than 1%, the adjustment will be zero.
Under the agreement, the Trust also pays taxes, brokerage commissions and
nonadvisory expenses, which include custodian fees, audit and certain legal
fees, fidelity bond premiums, registration fees for units, office expenses,
consultants' fees, compensation of trustees, corporate filing fees, expenses
incurred in connection with lending securities of the Portfolio and any other
expenses properly payable by the Trust or Portfolio and approved by the board.
AEFC has a Sub-investment Advisory Agreement with American Express Asset
Management International Inc. (International), a wholly-owned subsidiary of
AEFC.
During the six months ended April 30, 2000, the Portfolio's custodian fees were
reduced by $7,835 as a result of earnings credits from overnight cash balances.
The Portfolio also pays custodian fees to American Express Trust Company, an
affiliate of AEFC.
According to a Placement Agency Agreement, American Express Financial Advisors
Inc. acts as placement agent of the Trust's units.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $1,302,216,409 and $1,249,128,273, respectively, for the
six months ended April 30, 2000. For the same period, the portfolio turnover
rate was 61%. Realized gains and losses are determined on an identified cost
basis.
4. FOREIGN CURRENCY CONTRACTS
As of April 30, 2000, the Portfolio has a foreign currency exchange contract
that obligates it to deliver currency at a specified future date. The unrealized
appreciation and/or depreciation on this contract is included in the
accompanying financial statements. See "Summary of significant accounting
policies." The terms of the open contract are as follows:
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
May 2, 2000 1,840,093 2,020,970 $-- $2,829
U.S. Dollar European Monetary Unit
Total $-- $2,829
5. LENDING OF PORTFOLIO SECURITIES
As of April 30, 2000, securities valued at $64,301,650 were on loan to brokers.
For collateral, the Portfolio received $64,821,600 in cash. Income from
securities lending amounted to $189,437 for the six months ended April 30, 2000.
The risks to the Portfolio of securities lending are that the borrower may not
provide additional collateral when required or return the securities when due.
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
World Growth Portfolio
April 30, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (95.0%)
Issuer Shares Value(a)
Australia (1.8%)(c)
Media (0.6%)
<S> <C> <C>
News 1,033,705 $13,126,585
Metals (0.6%)
Broken Hill Proprietary 1,253,000 13,492,355
Transportation (0.6%)
Brambles Inds 465,000(f) 13,088,074
Brazil (1.1%)(c)
Banks and savings & loans (0.4%)
Uniao de Bancos Brasileiros GDR 323,227 8,060,473
Utilities -- telephone (0.7%)
Embratel Participacoes ADR 666,739 15,001,628
Canada (1.9%)(c)
Communications equipment & services (1.0%)
Nortel Networks 185,020 20,953,515
Utilities -- telephone (0.9%)
BCE 166,900(f) 19,151,775
Finland (4.5%)(c)
Communications equipment & services
Nokia 1,301,148 74,639,327
Sonera 397,671 21,872,124
Total 96,511,451
France (3.0%)(c)
Computers & office equipment (1.8%)
Cap Gemini 201,075 39,484,213
Energy (1.2%)
Total Petroleum Cl B 172,407 26,159,106
Germany (1.9%)(c)
Computers & office equipment (1.4%)
SAP 53,158(f) 31,266,882
Miscellaneous (0.5%)
Epcos 73,274(b) 10,311,753
Hong Kong (1.8%)(c)
Communications equipment & services (0.8%)
China Telecom 2,436,000(b) 17,591,665
Multi-industry conglomerates (1.0%)
Hutchison Whampoa 1,487,000 21,667,758
Italy (2.6%)(c)
Banks and savings & loans (1.4%)
Instituto Bancario San Paolo di Torino 2,237,191 31,320,988
Utilities -- telephone (1.2%)
Telecom Italia Mobile 2,667,479(f) 25,462,554
Japan (15.1%)(c)
Computers & office equipment (2.7%)
Canon 405,000(b) 18,525,858
Fujitsu 720,000 20,400,944
Hitachi Software Engineering 201,000 20,566,230
Total 59,493,032
Electronics (2.7%)
Hitachi 1,612,000 19,255,336
Nintendo 128,000 21,334,321
Rohm 52,800 17,698,597
Total 58,288,254
Financial services (0.9%)
Nikko Securities 1,600,000 18,889,763
Furniture & appliances (1.2%)
Matsushita Electric Industrial 958,000 25,370,434
Media (1.8%)
Sony 348,000 39,989,629
Multi-industry conglomerates (1.1%)
Secom 275,000 23,070,513
Utilities -- telephone (4.7%)
Nippon Telegraph & Telephone 3,990 49,507,847
Nippon Television Network 20,370 15,221,621
NTT Data 1,333 17,774,156
NTT Mobile Communication Network 620 20,725,034
Total 103,228,658
Korea (0.3%)(c)
Metals
Pohang Iron & Steel ADR 305,127 6,407,667
Mexico (1.1%)(c)
Beverages & tobacco (0.5%)
Fomento Economico Mexicano ADR 247,800 10,221,750
Utilities -- telephone (0.6%)
Telefonos de Mexico ADR Cl L 239,306 14,074,184
Netherlands (2.9%)(c)
Insurance (1.6%)
Fortis 1,363,546(d) 34,287,327
Miscellaneous (1.3%)
United Pan-Europe Communications 766,968(b) 27,910,942
Singapore (1.2%)(c)
Banks and savings & loans (0.9%)
Overseas Union Bank 3,920,528 17,919,788
Financial services (0.3%)
DBS Land 5,315,500 7,537,949
South Korea (1.3%)(c)
Electronics (0.6%)
Samsung Electronics 47,000 12,705,564
Utilities -- telephone (0.7%)
Korea Telecom ADR 468,539 16,164,596
Spain (0.5%)(c)
Building materials & construction
Fomento de Construcciones y Contractas 547,192 11,217,548
Sweden (4.2%)(c)
Communications equipment & services
Ericsson (LM) Cl B 1,033,902 91,925,468
United Kingdom (15.0%)(c)
Aerospace & defense (0.8%)
British Aerospace 2,685,858 16,473,424
Communications equipment & services (2.0%)
Marconi 3,450,983 43,057,713
Health care (3.3%)
Glaxo Wellcome ADR 1,094,415 33,749,794
SmithKline Beecham 2,838,364 38,816,329
Total 72,566,123
Insurance (1.3%)
Prudential 1,847,798 28,361,945
Leisure time & entertainment (1.9%)
EMI Group ADR 4,252,378 40,710,983
Retail (0.5%)
Next 1,455,842 11,388,196
Utilities -- gas (1.2%)
BG Group 4,227,462 25,204,791
Utilities -- telephone (4.0%)
COLT Telecom Group 455,212(b) 19,338,458
Vodafone AirTouch 14,759,346 67,663,899
Total 87,002,357
United States (34.8%)
Chemicals (0.5%)
Du Pont (EI) de Nemours 233,300 11,067,169
Communications equipment & services (0.5%)
Corning 57,400 11,336,500
Computer software & services (2.7%)
Microsoft 333,300(b) 23,247,675
Oracle 440,300(b) 35,196,481
Total 58,444,156
Computers & office equipment (8.7%)
America Online 371,500(b) 22,220,344
Cisco Systems 347,494(b) 24,091,107
Compaq Computer 550,000 16,087,500
Electronic Data Systems 660,100 45,381,875
EMC 366,400(b) 50,906,700
Sun Microsystems 328,000(b) 30,155,500
Total 188,843,026
Electronics (4.1%)
Atmel 476,128(b) 23,300,514
Intel 169,300 21,469,356
Micron Technology 212,600(b) 29,604,551
Natl Semiconductor 236,100(b) 14,343,075
Total 88,717,496
Energy (1.3%)
Texaco 572,700 28,348,650
Financial services (3.4%)
Citigroup 368,850 21,923,522
Fannie Mae 550,134 33,179,957
Goldman Sachs Group 188,159 17,545,827
Total 72,649,306
Health care (5.5%)
Pfizer 1,277,800 53,827,325
Pharmacia 431,400 21,543,038
Schering-Plough 1,072,462 43,233,624
Total 118,603,987
Household products (0.9%)
Colgate-Palmolive 339,200 19,376,800
Insurance (1.5%)
American Intl Group 302,125 33,139,336
Multi-industry conglomerates (1.1%)
General Electric 155,000 24,373,749
Retail (1.1%)
Wal-Mart Stores 412,100 22,820,037
Utilities -- telephone (3.5%)
AT&T 366,086 17,091,640
Crown Castle Intl 225,000 8,634,375
Infonet Services Cl B 548,526(b) 9,256,376
Level 3 Communications 252,300(b) 22,454,700
SBC Communications 407,900 17,871,119
Total 75,308,210
Total common stocks
(Cost: $1,760,618,694) $2,059,147,795
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term securities (9.4%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (4.0%)
Federal Home Loan Bank Disc Nts
<S> <C> <C> <C>
05-24-00 5.85% $1,800,000 $1,792,031
05-26-00 5.85 200,000 199,015
06-21-00 6.04 20,500,000 20,307,161
Federal Natl Mtge Assn Disc Nts
05-04-00 5.83 300,000 299,709
05-25-00 5.92 32,000,000 31,858,639
06-27-00 6.06 30,000,000 29,687,500
06-29-00 6.07 3,200,000 3,165,500
Total 87,309,555
Commercial paper (5.4%)
Alabama Power
05-01-00 6.02 2,000,000 1,998,997
Bayer
06-20-00 6.10 4,000,000(e) 3,963,666
Bell Atlantic Finance Services
05-31-00 6.03 6,500,000 6,462,939
Cargill Global Funding
05-01-00 5.85 2,900,000 2,898,586
Colgate-Palmolive
05-17-00 6.07 30,000,000(e) 29,904,208
CXC
07-10-00 6.28 5,000,000(e) 4,936,530
Dresdner US Finance
05-05-00 5.99 500,000 499,419
Exxon Mobil Australia
05-19-00 6.02 27,300,000(e) 27,204,450
Fleet Funding
05-31-00 6.06 4,100,000(e) 4,076,623
Sysco
05-01-00 6.04 21,300,000(e) 21,289,279
Toyota Motor Credit
05-17-00 6.02 13,500,000(e) 13,457,249
Total 116,691,946
Total short-term securities
(Cost: $204,062,273) $204,001,501
Total investments in securities
(Cost: $1,964,680,967)(g) $2,263,149,296
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.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars.
(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) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(f) Security is partially or fully on loan. See Note 5 to the financial
statements.
(g) At April 30, 2000, the cost of securities for federal income tax purposes
was approximately $1,964,681,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $430,971,000
Unrealized depreciation (132,503,000)
------------
Net unrealized appreciation $298,468,000
<PAGE>
PRSRT STD AUTO
U.S. POSTAGE
PAID
AMERICAN
EXPRESS
S-6451 L (6/00)
AXP Global Growth Fund
200 AXP Financial Center
Minneapolis, MN 55474
TICKER SYMBOL
Class A: IGLGX Class B: IDGBX Class Y: IDGYX
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.
