AXP GLOBAL SERIES INC, N-14/A, 2000-04-17

AXP GLOBAL SERIES INC
N-14/A, 2000-04-17

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N-14 Registration Stmt
AXP Global Series, Inc.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-14

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]

Pre-Effective Amendment No. 1 (File No. 333-32360) [X]

Post-Effective Amendment No. [ ]
---------

AXP GLOBAL SERIES, INC.
IDS Tower 10
Minneapolis, Minnesota 55440-0010

Leslie L. Ogg
901 S. Marquette Avenue, Suite 2810
Minneapolis, MN 55402-3268
(612) 330-9283

Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of the Registration Statement.

Title of Securities Being Registred: Common Stock

No filing fee is due because of reliance on Section 24(f) of the Investment
Company Act of 1940.

This Registration Statement shall hereafter become effective in accordance with
the provisions of Section 8(a) of the Securities Act of 1933.

<PAGE>

<PAGE>
STRATEGIST FUND GROUP

NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 9, 2000

Strategist Growth Fund, Inc.
-Strategist Growth Fund
-Strategist Growth Trends Fund
-Strategist Special Growth Fund
Strategist Growth and Income Fund, Inc.
-Strategist Balanced Fund
-Strategist Equity Fund
-Strategist Equity Income Fund
-Strategist Total Return Fund
Strategist Income Fund, Inc.
-Strategist Government Income Fund
-Strategist High Yield Fund
-Strategist Quality Income Fund
Strategist World Fund, Inc.
-Strategist Emerging Markets Fund
-Strategist World Growth Fund
-Strategist World Income Fund
-Strategist World Technologies Fund
Strategist Tax-Free Income Fund, Inc.
-Strategist Tax-Free High Yield Fund

Your Fund will hold a special shareholders' meeting at 2:00 p.m. on May 9, 2000,
at the IDS Tower, 80 South Eighth Street, Minneapolis, MN, in Conference Room A
on the 27th floor. This will be a joint meeting for all of the Funds listed
above. At the meeting, shareholders will consider the following:

- - A proposal to approve an Agreement and Plan of Reorganization between the
Strategist Fund and the corresponding AXP Fund investing in the same master
fund. Under this Agreement, the Strategist Fund will transfer all of its
assets to the AXP Fund in exchange for Class A shares of the AXP Fund. These
shares will be distributed proportionately to you and the other shareholders
of the Strategist Fund. The AXP Fund will assume the Strategist Fund's
liabilities. The Board of Directors recommends that you vote FOR the
proposal.
- - Any other business that may come before the meeting.

Please take a few minutes to read the proxy statement. It discusses the proposal
in more detail. If you were a shareholder on April 5, 2000, you may vote at the
meeting or any adjournment of the meeting. We hope you can attend the meeting.
For those of you who cannot attend, please complete and return the enclosed
proxy card. If you have questions, please call 1-800-775-5805. This proxy
statement was first mailed to shareholders the week of April 17, 2000.

April 17, 2000
<PAGE>
COMBINED PROXY STATEMENT/PROSPECTUS
DATED APRIL 17, 2000

This document is a proxy statement for each of the Strategist Funds and a
prospectus for the corresponding AXP Fund as shown in the table below. It
contains the information you should know before voting on the proposed
reorganization of the Strategist Fund into the corresponding AXP Fund (the
"Reorganization"). Please read it carefully and keep it for future reference.
The table shows the investment objective for each Strategist Fund and
corresponding AXP Fund. Investment policies for the Strategist Fund and its
corresponding AXP Fund are identical. The address of the Strategist Fund is IDS
Tower 10, Minneapolis, Minnesota 55440-0010. The address of the AXP Fund is 901
Marquette Avenue South, Suite 2810, Minneapolis, MN 55402-3268.

FUND NAMES AND INVESTMENT OBJECTIVES

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
<S> <C> <C>
STRATEGIST FUND AXP FUND INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------------
Strategist Balanced AXP Mutual Balance of growth of capital and
current income.
- --------------------------------------------------------------------------------------
Strategist Emerging AXP Emerging Long-term capital growth.
Markets Markets
- --------------------------------------------------------------------------------------
Strategist Equity AXP Stock Current income and growth of capital.
- --------------------------------------------------------------------------------------
Strategist Equity AXP Diversified High level of current income.
Income Equity Income Secondary goal is steady growth of
capital.
- --------------------------------------------------------------------------------------
Strategist Government AXP Federal High level of current income and
Income Income safety of principal consistent with
investment in U.S. government and
government agency securities.
- --------------------------------------------------------------------------------------
Strategist Growth AXP Growth Long-term capital growth.
- --------------------------------------------------------------------------------------
Strategist Growth AXP New Long-term growth of capital.
Trends Dimensions
- --------------------------------------------------------------------------------------
Strategist High Yield AXP Extra Income High current income. Secondary goal is
capital growth.
- --------------------------------------------------------------------------------------
Strategist Quality AXP Selective Current income and preservation of
Income capital.
- --------------------------------------------------------------------------------------
</TABLE>

2
<PAGE>

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
<S> <C> <C>
STRATEGIST FUND AXP FUND INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------------
Strategist Special AXP Research Long-term capital growth.
Growth Opportunities
- --------------------------------------------------------------------------------------
Strategist Tax-Free AXP High Yield High yield generally exempt from
High Yield Tax-Exempt federal income taxes.
- --------------------------------------------------------------------------------------
Strategist Total Return AXP Managed Maximum total return through a
Allocation combination of growth of capital and
current income.
- --------------------------------------------------------------------------------------
Strategist World Growth AXP Global Growth Long-term capital growth.
- --------------------------------------------------------------------------------------
Strategist World Income AXP Global Bond High total return through income and
growth of capital.
- --------------------------------------------------------------------------------------
Strategist World AXP Innovations Long-term capital growth.
Technologies
- --------------------------------------------------------------------------------------
</TABLE>

HOW THE REORGANIZATION WILL WORK

- - The Strategist Fund will transfer all of its assets to the corresponding AXP
Fund. The AXP Fund will assume the Strategist Fund's stated liabilities.

- - The AXP Fund will issue Class A shares to the Strategist Fund in an amount
equal to the value of the assets it receives, less the liabilities it
assumes. These Class A shares will be distributed to the Strategist Fund's
shareholders in proportion to their holdings in the Strategist Fund. You will
not pay any sales charge in connection with this distribution of shares.

Please note that the AXP Fund is not a bank deposit, is not federally insured,
is not endorsed by any bank or government agency and is not guaranteed to
achieve its goal.

As with all mutual funds, the Securities and Exchange Commission (the "SEC") has
not approved or disapproved these securities or passed on the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.

3
<PAGE>
WHERE TO GET MORE INFORMATION*

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
<S> <C>
The AXP Fund's most recent prospectus In the same envelope as this proxy
and annual report. statement/prospectus.
- ------------------------------------------------------------------------------------
The AXP Fund's most recent statement of Incorporated by reference into this
additional information and semi-annual proxy statement/prospectus. For a copy
report to shareholders (if a semi-annual at no charge, call toll-free
report has been issued subsequent to the 1-800-862-7919 or write to the address
most recent annual report). below.
- ------------------------------------------------------------------------------------
The Strategist Fund's most recent Incorporated by reference into this
prospectus. proxy statement/prospectus. For a copy
at no charge, call toll-free
1-800-297-8800 or write to the address
below.
- ------------------------------------------------------------------------------------
The Strategist Fund's most recent annual Incorporated by reference into this
report and semi-annual report to proxy statement/prospectus. For a copy
shareholders (if a semi-annual report at no charge, call toll-free
has been issued subsequent to the most 1-800-297-8800 or write to the address
recent annual report). below.
- ------------------------------------------------------------------------------------
Statement of additional information Incorporated by reference into this
dated the same date as this proxy proxy statement/prospectus. For a copy
statement/prospectus. This document at no charge, call toll-free
contains information about both the 1-800-862-7919 or write to the address
Strategist Fund and the AXP Fund. below.
- ------------------------------------------------------------------------------------
To ask questions about this proxy Call toll-free 1-800-775-5805 or write
statement/prospectus. to: American Express Client Service
Corporation, P.O. Box 534, Minneapolis,
MN 55440-0534.
- ------------------------------------------------------------------------------------
</TABLE>

* See Table G-2 for the dates of each of these documents.

4
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
A. Summary.................................................. 7

- How the Reorganization Will Work........................ 7

- Comparison of the Strategist Fund to the AXP Fund....... 8

- Tax Consequences........................................ 10

- Investment Policies and Risk Factors.................... 10

B. Fees and Expenses........................................ 13

C. The Reorganization....................................... 17

- Terms of the Reorganization............................. 17

- Conditions to Closing the Reorganization................ 18

- Termination of the Agreement............................ 18

- Tax Status of the Reorganization........................ 18

- Reasons for the Proposed Reorganization and Board
Deliberations........................................... 19

- Boards' Determination................................... 21

D. Information Concerning the Meeting....................... 22

- Recommendation and Vote Required........................ 22

- Voting.................................................. 22

- Revoking Your Proxy..................................... 22

- Simultaneous Meetings................................... 22

- Solicitation of Proxies................................. 22

- Dissenters' Right of Appraisal.......................... 23

- Other Business.......................................... 23

- Adjournment............................................. 23
</TABLE>

5
<PAGE>

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
E. Capitalization and Ownership of Fund Shares.............. 24

- Capitalization.......................................... 24

- Ownership of Fund Shares................................ 25

F. Experts.................................................. 28

G. Additional Information About the Funds' Businesses....... 28

EXHIBITS

1. Form of Agreement and Plan of Reorganization between the
Strategist Fund and the AXP Fund.......................... 30

2. Minnesota Business Corporation Act Sections 302A.471 and
302A.473.................................................. 42

3. Most recent AXP Fund prospectus and annual report
(enclosed)
</TABLE>

6
<PAGE>
A. SUMMARY

This proxy statement/prospectus is being used by the Board of Directors (the
"Board") of the Strategist Fund to solicit proxies to vote at a special meeting
of shareholders. The purpose of the meeting is to consider a proposal to approve
an Agreement and Plan of Reorganization (the "Agreement") providing for the
Reorganization of the Strategist Fund into the corresponding AXP Fund invested
in the same master fund.

The following is a summary. More complete information appears later in this
proxy statement/prospectus. You should read the entire proxy
statement/prospectus and the exhibits because they contain details that are not
in the summary. The materials in the statement of additional information dated
the same date as this proxy statement/prospectus for the Strategist Fund and the
AXP Fund are incorporated by reference into this proxy statement/prospectus.

HOW THE REORGANIZATION WILL WORK.

- - The Strategist Fund will transfer all of its assets to the corresponding AXP
Fund. The AXP Fund will assume all the Strategist Fund's stated liabilities.
There are no outstanding liabilities with respect to the Strategist Fund's
12b-1 plan.

- - Neither the Strategist Fund nor the shareholders of the Strategist Fund will
pay any sales charge in connection with the Reorganization.

- - After the Reorganization is completed, Strategist shareholders will be
shareholders of Class A shares of the corresponding AXP Fund. The Strategist
Fund will be deregistered as a mutual fund and terminated under state law.

7
<PAGE>
TABLE A-1.
COMPARISON OF THE STRATEGIST FUND TO THE AXP FUND
- -------------------------------------------------------------------------

<TABLE>
<CAPTION>
STRATEGIST FUND AXP FUND
<S> <C> <C>
- ---------------------------------------------------------------------------------------
General A series of capital stock of A series of capital stock of
an open-end management an open-end management
investment company organized investment company organized
as a Minnesota corporation. as a Minnesota corporation.
- ---------------------------------------------------------------------------------------
Investment Structure A feeder fund, as shown in A feeder fund, as shown in
Table A-2, investing all of Table A-2, investing all of
its assets in a master fund. its assets in a master fund.
- ---------------------------------------------------------------------------------------
Investment Adviser American Express Financial AEFC is the investment
Corporation ("AEFC") is the adviser for the master fund.
investment adviser for the
master fund.
- ---------------------------------------------------------------------------------------
Investment Objectives, Identical for both Funds.
Policies, Investment See Table A-2 for more information on each fund.
Strategies, Risks and
Restrictions
- ---------------------------------------------------------------------------------------
Pricing Each Fund calculates its net asset value per share at the
close of trading on the New York Stock Exchange (the "NYSE")
(normally 3:00 p.m. Central Time) each business day.
- ---------------------------------------------------------------------------------------
</TABLE>

8
<PAGE>

<TABLE>
<CAPTION>
STRATEGIST FUND AXP FUND
<S> <C> <C>
- ---------------------------------------------------------------------------------------
Classes of Shares One class of shares, offered Three classes of shares.
without a sales charge. Only Class A shares are
Effective October 4, 1999 being offered to Strategist
the Strategist Fund Fund shareholders in this
discontinued a 0.25% 12b-1 proxy statement/prospectus.
fee. - Class A has a front-end
sales charge and a 0.25%
12b-1 fee.*
- Class B has a contingent
deferred sales charge and a
1% 12b-1 fee.
- Class Y is offered only to
institutional investors with
no sales charge and a 0.10%
service fee.
*No sales charge will be
charged as part of the
Reorganization. On
subsequent purchases, the
sales charge will be waived
permanently for former
Strategist shareholders.
- ---------------------------------------------------------------------------------------
Buying and Selling Strategist Fund shares are Investors may purchase and
Shares no longer available for new redeem shares directly,
investment. Existing through their American
shareholders may make add-on Express financial advisor or
purchases to existing through other authorized
accounts. broker-dealers or third
parties.
- ---------------------------------------------------------------------------------------
Minimum Investment Initial: No new investments Initial: $2,000*
Amounts allowed Subsequent: $100
Subsequent: $100 for *The AXP Fund will waive the
existing investors minimum investment amount
for any Strategist Fund
account that, after the
Reorganization, contains
less than $2,000.
- ---------------------------------------------------------------------------------------
</TABLE>

9
<PAGE>

<TABLE>
<CAPTION>
STRATEGIST FUND AXP FUND
<S> <C> <C>
- ---------------------------------------------------------------------------------------
Exchanges Permitted only between Class A shares of the AXP
existing Strategist Fund Fund may be exchanged for
accounts. Class A shares of 38 other
AXP Funds.
- ---------------------------------------------------------------------------------------
Voting Rights No cumulative voting rights Cumulative voting rights
when voting on the election when voting on the election
of directors. of directors.
- ---------------------------------------------------------------------------------------
</TABLE>

TAX CONSEQUENCES. The Reorganization is expected to be tax-free for federal
income tax purposes and will not take place unless the Strategist Fund and the
AXP Fund receive a satisfactory opinion from the law firm of Ropes & Gray,
substantially to that effect.

INVESTMENT POLICIES AND RISK FACTORS. Because both the Strategist Fund and the
AXP Fund invest in the same master fund and are subject to the same investment
objectives, investment strategies and restrictions, the risks of an investment
in the AXP Fund are identical to the risks of an investment in the Strategist
Fund. Investment policies and risk factors are described in detail in the
enclosed AXP Fund prospectus under the headings "Investment Strategies" and
"Risks". The following table provides a brief summary of the investment policies
and risks.

10
<PAGE>
TABLE A-2.
SUMMARY OF PRIMARY INVESTMENT POLICIES AND RISKS
(policies and risks are identical for the Strategist Fund and its corresponding
AXP Fund)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
STRATEGIST FUND AXP FUND PRIMARY INVESTMENT POLICIES PRIMARY INVESTMENT RISKS
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Strategist Balanced AXP Mutual Primarily invests in a combination of Market risk, interest rate risk,
common stocks and senior securities. sector/ concentration risk,
call/prepayment risk, credit risk,
liquidity risk, style risk
- ----------------------------------------------------------------------------------------------------------------------------
Strategist Emerging AXP Emerging Markets Primarily invests in equity Market risk, foreign/emerging markets
Markets securities of companies in emerging risk, liquidity risk, style risk,
market countries. sector/ concentration risk
- ----------------------------------------------------------------------------------------------------------------------------
Strategist Equity AXP Stock Primarily invests in common stocks Market risk, inflation risk, foreign
and securities convertible into risk
common stocks.
- ----------------------------------------------------------------------------------------------------------------------------
Strategist Equity AXP Diversified Equity Primarily invests in dividend-paying Market risk, sector/concentration
Income Income equity securities. risk, inflation risk
- ----------------------------------------------------------------------------------------------------------------------------
Strategist Government AXP Federal Income Primarily invests in debt obligations Market risk, correlation risk,
Income issued or guaranteed as to principal interest rate risk, call/prepayment
and interest by the U.S. government, risk
its agencies or instrumentalities.
- ----------------------------------------------------------------------------------------------------------------------------
Strategist Growth AXP Growth Primarily invests in common stocks Market risk, style risk, foreign risk
and securities convertible into
common stocks that appear to offer
growth opportunities.
- ----------------------------------------------------------------------------------------------------------------------------
Strategist Growth AXP New Dimensions Primarily invests in common stocks Market risk, style risk, foreign risk
Trends showing potential for significant
growth.
- ----------------------------------------------------------------------------------------------------------------------------
Strategist High Yield AXP Extra Income Primarily invests in high-yielding, Market risk, interest rate risk,
high risk corporate bonds (junk credit risk
bonds).
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

11
<PAGE>
TABLE A-2.
SUMMARY OF PRIMARY INVESTMENT POLICIES AND RISKS
(policies and risks are identical for the Strategist Fund and its corresponding
AXP Fund)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
STRATEGIST FUND AXP FUND PRIMARY INVESTMENT POLICIES PRIMARY INVESTMENT RISKS
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Strategist Quality AXP Selective Primarily invests in debt obligations Market risk, interest rate risk,
Income that are investment grade or credit risk
equivalent.
- ----------------------------------------------------------------------------------------------------------------------------
Strategist Special AXP Research Primarily invests in securities of Market risk, issuer risk, style risk
Growth Opportunities companies that are part of the S&P
500 and are believed to be
undervalued or offer the potential
for long-term growth.
- ----------------------------------------------------------------------------------------------------------------------------
Strategist Tax-Free AXP High Yield Tax- Primarily invests in medium and lower Market risk, interest rate risk,
High Yield Exempt quality bonds (junk bonds) and other credit risk, legal/legislative risk,
debt obligations issued by or on call/ prepayment risk
behalf of state or local governmental
units whose interest is exempt from
federal income tax.
- ----------------------------------------------------------------------------------------------------------------------------
Strategist Total AXP Managed Allocation Primarily allocates investments among Market risk, interest rate risk,
Return four asset classes: U.S. equities, foreign/ emerging markets risk,
U.S. and foreign debt securities, call/prepayment risk, credit risk,
foreign equity securities and cash. event risk, liquidity risk, small
company risk
- ----------------------------------------------------------------------------------------------------------------------------
Strategist World AXP Global Growth Primarily invests in equity Market risk, foreign/emerging markets
Growth securities of companies around the risk, style risk
world that are positioned to meet
market needs in a changing world
economy.
- ----------------------------------------------------------------------------------------------------------------------------
Strategist World AXP Global Bond Primarily invests in debt obligations Interest rate risk, foreign/emerging
Income of U.S. and foreign issuers. markets risk, credit risk, liquidity
risk
- ----------------------------------------------------------------------------------------------------------------------------
Strategist World AXP Innovations Primarily invests in equity Market risk, sector/concentration
Technologies securities of companies in the risk, style risk
information technology industry.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

12
<PAGE>
B. FEES AND EXPENSES

The following table describes the fees and expenses that you pay if you buy and
hold shares of the Strategist Fund or Class A shares of the AXP Fund. The table
also shows Pro Forma expenses of Class A shares of the AXP Fund assuming the
proposed Reorganization had been effective during the most recent fiscal year.

13
<PAGE>
TABLE B-1.
ACTUAL AND PRO FORMA FUND EXPENSES
For the Most Recent Fiscal Year
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SHAREHOLDER FEES ANNUAL OPERATING EXPENSES(A)
(fees paid directly (expenses that are deducted from Fund assets)
FUND from your investment) (as a percent of average daily net assets)
- ---------------------------------------------------------------------------------------------------------------------------------
Maximum sales Management Distribution Other
charge fees(b) (12b-1) fees(c) expenses(d) Total(e)
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist Balanced............................. 0% 0.48% 0.25% 2.41% 3.14%
AXP Mutual - Class A............................ 5% 0.46% 0.25% 0.19% 0.90%
AXP Mutual - Class A Pro Forma.................. * 0.46% 0.25% 0.19% 0.90%
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist Emerging Markets..................... 0% 1.10% 0.25% 4.82% 6.17%
AXP Emerging Markets - Class A.................. 5% 1.10% 0.25% 0.76% 2.11%
AXP Emerging Markets - Class A Pro Forma........ * 1.10% 0.25% 0.76% 2.11%
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist Equity............................... 0% 0.48% 0.25% 1.42% 2.15%
AXP Stock - Class A............................. 5% 0.48% 0.25% 0.15% 0.88%
AXP Stock - Class A Pro Forma................... * 0.48% 0.25% 0.15% 0.88%
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist Equity Income........................ 0% 0.49% 0.25% 2.88% 3.62%
AXP Diversified Equity Income - Class A......... 5% 0.49% 0.25% 0.22% 0.96%
AXP Diversified Equity Income - Class A
Pro Forma....................................... * 0.49% 0.25% 0.22% 0.96%
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist Government Income.................... 0% 0.50% 0.25% 0.66% 1.41%
AXP Federal Income - Class A.................... 5% 0.50% 0.25% 0.23% 0.98%
AXP Federal Income - Class A Pro Forma.......... * 0.50% 0.25% 0.23% 0.98%
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist Growth............................... 0% 0.52% 0.25% 0.26% 1.03%
AXP Growth - Class A............................ 5% 0.53% 0.25% 0.19% 0.97%
AXP Growth - Class A Pro Forma.................. * 0.53% 0.25% 0.19% 0.97%
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist Growth Trends........................ 0% 0.53% 0.25% 0.17% 0.95%
AXP New Dimensions -- Class A................... 5% 0.53% 0.25% 0.15% 0.93%
AXP New Dimensions -- Class A Pro Forma......... * 0.53% 0.25% 0.15% 0.93%
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist High Yield........................... 0% 0.56% 0.25% 1.04% 1.85%
AXP Extra Income - Class A...................... 5% 0.56% 0.25% 0.20% 1.01%
AXP Extra Income - Class A Pro Forma............ * 0.56% 0.25% 0.20% 1.01%
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist Quality Income....................... 0% 0.52% 0.25% 2.81% 3.58%
AXP Selective - Class A......................... 5% 0.51% 0.25% 0.22% 0.98%
AXP Selective - Class A Pro Forma............... * 0.51% 0.25% 0.22% 0.98%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

14
<PAGE>
TABLE B-1.
ACTUAL AND PRO FORMA FUND EXPENSES
For the Most Recent Fiscal Year
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SHAREHOLDER FEES ANNUAL OPERATING EXPENSES(A)
(fees paid directly (expenses that are deducted from Fund assets)
FUND from your investment) (as a percent of average daily net assets)
- ---------------------------------------------------------------------------------------------------------------------------------
Maximum sales Management Distribution Other
charge fees(b) (12b-1) fees(c) expenses(d) Total(e)
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist Special Growth....................... 0% 0.64% 0.25% 1.38% 2.27%
AXP Research Opportunities - Class A............ 5% 0.63% 0.25% 0.33% 1.21%
AXP Research Opportunities - Class A
Pro Forma....................................... * 0.63% 0.25% 0.33% 1.21%
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist Tax-Free High Yield.................. 0% 0.45% 0.25% 2.55% 3.25%
AXP High Yield Tax-Exempt - Class A............. 5% 0.44% 0.25% 0.11% 0.80%
AXP High Yield Tax-Exempt - Class A
Pro Forma....................................... * 0.44% 0.25% 0.11% 0.80%
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist Total Return......................... 0% 0.44% 0.25% 0.62% 1.31%
AXP Managed Allocation - Class A................ 5% 0.43% 0.25% 0.21% 0.89%
AXP Managed Allocation - Class A Pro Forma...... * 0.43% 0.25% 0.21% 0.89%
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist World Growth......................... 0% 0.75% 0.25% 1.85% 2.85%
AXP Global Growth - Class A..................... 5% 0.74% 0.25% 0.32% 1.31%
AXP Global Growth - Class A Pro Forma........... * 0.74% 0.25% 0.32% 1.31%
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist World Income......................... 0% 0.75% 0.25% 2.46% 3.46%
AXP Global Bond - Class A....................... 5% 0.74% 0.25% 0.28% 1.27%
AXP Global Bond - Class A Pro Forma............. * 0.74% 0.25% 0.28% 1.27%
- ---------------------------------------------------------------------------------------------------------------------------------
Strategist World Technologies................... 0% 0.72% 0.25% 2.24% 3.21%
AXP Innovations - Class A....................... 5% 0.72% 0.25% 0.15% 1.12%
AXP Innovations - Class A Pro Forma............. * 0.72% 0.25% 0.15% 1.12%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C>
* The 5% sales charge will be waived permanently for former
Strategist shareholders.
(a) For all Funds, operating expenses include expenses charged
by both the Fund and the master fund. Expenses are based on
actual expenses for the last fiscal year, restated to
reflect current fees.
(b) The management fee is paid by the master fund and is
allocated between the Strategist Fund and the AXP Fund based
on respective net assets. For some Funds, the chart shows a
slight difference between the management fee for the
Strategist Fund and the management fee for the AXP Fund.
This difference is due to rounding.
(c) Effective October 4, 1999 the 0.25% distribution fee was
discontinued for the Strategist Fund.
(d) Other expenses include an administrative services fee, a
transfer agency fee and other nonadvisory expenses.
(e) For the Strategist Fund, AEFC has agreed to waive certain
fees and to absorb certain other Fund expenses until the end
of the Fund's current fiscal year. The agreement may be
terminated at any time after that date. Under the agreement,
total expenses will not exceed 0.95% for Tax-Free High
Yield; 1.10% for Government Income and Quality Income; 1.20%
for High Yield; 1.25% for Balanced, Equity and Equity
Income; 1.30% for Growth, Growth Trends and Total Return;
1.35% for World Income and World Technologies; 1.40% for
Special Growth; 1.75% for World Growth; and 2.20% for
Emerging Markets. For the most recent fiscal year, actual
total expenses with fee waivers and expense reimbursement
were 0.95% for Tax-Free High Yield; 1.09% for Government
Income, 1.09% for Quality Income, 1.19% for High Yield;
0.98% for Balanced; 1.25% for Equity; 1.25% for Equity
Income; 1.03% for Growth; 0.95% for Growth Trends; 1.22% for
Total Return; 1.35% for World Income, 1.47% for World
Technologies; 1.39% for Special Growth; 1.71% for World
Growth; and 2.20% for Emerging Markets.
</TABLE>

15
<PAGE>
EXAMPLE: This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. Assume you invest
$10,000 and the Fund earns a 5% return. The operating expenses remain the same
each year. If you hold your shares until the end of the year shown, the
following table shows your costs under the current arrangements and your costs
if the proposed reorganization had been in effect. The numbers for the AXP Fund
reflect the costs that would be incurred if a shareholder paid $500 in sales
charge to purchase Class A shares. You will not incur that cost since the sales
charge will be waived permanently for former Strategist Fund shareholders.
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
Strategist Balanced........................ $317 $ 969 $1,645 $3,451
AXP Mutual - Class A....................... 587 773 974 1,557
AXP Mutual - Class A Pro Forma............. 587 773 974 1,557
- --------------------------------------------------------------------------------------
Strategist Emerging Markets................ 613 1,819 2,996 5,823
AXP Emerging Markets - Class A............. 703 1,128 1,578 2,824
AXP Emerging Markets - Class A Pro Forma.. 703 1,128 1,578 2,824
- --------------------------------------------------------------------------------------
Strategist Equity.......................... 218 673 1,155 2,487
AXP Stock - Class A........................ 585 767 964 1,534
AXP Stock - Class A Pro Forma.............. 585 767 964 1,534
- --------------------------------------------------------------------------------------
Strategist Equity Income................... 365 1,109 1,874 3,882
AXP Diversified Equity Income - Class A.... 593 791 1,005 1,623
AXP Diversified Equity Income - Class A
Pro Forma.................................. 593 791 1,005 1,623
- --------------------------------------------------------------------------------------
Strategist Government Income............... 144 447 772 1,696
AXP Federal Income - Class A............... 595 797 1,015 1,646
AXP Federal Income - Class A Pro Forma..... 595 797 1,015 1,646
- --------------------------------------------------------------------------------------
Strategist Growth.......................... 105 328 570 1,264
AXP Growth - Class A....................... 594 794 1,010 1,634
AXP Growth - Class A Pro Forma............. 594 794 1,010 1,634
- --------------------------------------------------------------------------------------
Strategist Growth Trends................... 97 303 526 1,171
AXP New Dimensions - Class A............... 590 782 990 1,590
AXP New Dimensions - Class A Pro Forma..... 590 782 990 1,590
- --------------------------------------------------------------------------------------
Strategist High Yield...................... 188 582 1,002 2,174
AXP Extra Income - Class A................. 598 806 1,031 1,679
AXP Extra Income - Class A Pro Forma....... 598 806 1,031 1,679
- --------------------------------------------------------------------------------------
Strategist Quality Income.................. 361 1,097 1,855 3,847
AXP Selective - Class A.................... 595 797 1,015 1,646
AXP Selective - Class A Pro Forma.......... 595 797 1,015 1,646
- --------------------------------------------------------------------------------------
Strategist Special Growth.................. 230 710 1,216 2,610
AXP Research Opportunities - Class A....... 617 865 1,133 1,897
AXP Research Opportunities - Class A
Pro Forma.................................. 617 865 1,133 1,897
- --------------------------------------------------------------------------------------
Strategist Tax-Free High Yield............. 328 1,001 1,698 3,552
AXP High Yield Tax-Exempt - Class A........ 578 743 923 1,444
AXP High Yield Tax-Exempt - Class A
Pro Forma.................................. 578 743 923 1,444
- --------------------------------------------------------------------------------------
</TABLE>

16
<PAGE>
<TABLE>
<CAPTION>
1 3 5 10
FUND YEAR YEARS YEARS YEARS
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Strategist Total Return.................... $133 $ 415 $ 719 $1,584
AXP Managed Allocation - Class A........... 586 770 969 1,545
AXP Managed Allocation - Class A
Pro Forma.................................. 586 770 969 1,545
- --------------------------------------------------------------------------------------
Strategist World Growth.................... 288 883 1,504 3,179
AXP Global Growth - Class A................ 627 895 1,183 2,005
AXP Global Growth - Class A Pro Forma...... 627 895 1,183 2,005
- --------------------------------------------------------------------------------------
Strategist World Income.................... 349 1,062 1,798 3,740
AXP Global Bond - Class A.................. 623 883 1,163 1,962
AXP Global Bond - Class A Pro Forma........ 623 883 1,163 1,962
- --------------------------------------------------------------------------------------
Strategist World Technologies.............. 324 989 1,679 3,515
AXP Innovations - Class A.................. 608 838 1,087 1,800
AXP Innovations - Class A Pro Forma........ 608 838 1,087 1,800
- --------------------------------------------------------------------------------------
</TABLE>

C. THE REORGANIZATION

TERMS OF THE REORGANIZATION. The Board has approved the Agreement, a copy of
which is attached as Exhibit 1. The Agreement provides for Reorganization on the
following terms:

- - The Reorganization is scheduled to occur on the first day that the NYSE is
open for business following shareholder approval and receipt of any necessary
regulatory approvals, but may occur on any later date agreed to by the Funds.

- - The Strategist Fund will transfer all of its assets to the AXP Fund and, in
exchange, the AXP Fund will assume the Strategist Fund's stated liabilities
and issue Class A shares.

- - The AXP Fund will issue Class A shares to the Strategist Fund in an amount
equal to the value of the assets received by the AXP Fund, less the
liabilities assumed by the AXP Fund in the transaction. These shares will
immediately be distributed by the Strategist Fund to its shareholders in
proportion to their holdings in the Strategist Fund. As a result,
shareholders of the Strategist Fund will become Class A shareholders of the
AXP Fund.

- - Neither the Strategist Fund nor the shareholders of the Strategist Fund will
pay any sales charge in connection with the Reorganization.

- - The net asset value of both Funds will be computed as of 3:00 p.m. Central
time, on the closing date.

17
<PAGE>
- - After the Reorganization, the Strategist Fund will be deregistered as a
mutual fund and terminated under state law.

CONDITIONS TO CLOSING THE REORGANIZATION. The completion of the Reorganization
is subject to certain conditions described in the Agreement, including:

- - The Strategist Fund will have declared and paid a dividend that will
distribute all of the Fund's taxable income, if any, to the shareholders of
the Strategist Fund for the taxable years ending at or prior to the closing.

- - The Funds will have received any approvals, consents or exemptions from the
SEC or any regulatory body necessary to carry out the Reorganization.

- - A registration statement on Form N-14 will have been filed with the SEC and
declared effective for each of the Funds.

- - The shareholders of the Strategist Funds will have approved the Agreement.

- - The Funds will have received an opinion of tax counsel that the proposed
Reorganization will be tax-free for each Fund and its shareholders.

TERMINATION OF THE AGREEMENT. The Agreement and the transactions contemplated
by it may be terminated and abandoned by resolutions of the Board of the
Strategist Fund or the AXP Fund at any time prior to closing. In the event of a
termination, there will be no liability for damages on the part of either the
Strategist Fund or the AXP Fund or the directors, officers or shareholders of
either Fund.

TAX STATUS OF THE REORGANIZATION. The Reorganization is expected to be tax-free
for federal income tax purposes and will not take place unless the Strategist
Fund and the AXP Fund receive a satisfactory opinion from the law firm of
Ropes & Gray, substantially to the effect that:

- - The transfer of the Strategist Fund's assets to the AXP Fund in exchange for
Class A shares of the AXP Fund and the assumption of the Strategist Fund's
liabilities, followed by the distribution of those shares to the Strategist
Fund's shareholders and the termination of the Strategist Fund will be a
"reorganization" within the meaning of Section 368(a)(1) of the Internal
Revenue Code of 1986 (the "Code"), and the Strategist Fund and the
corresponding AXP Fund will each be

18
<PAGE>
a "party to the reorganization" within the meaning of Section 368(b) of the
Code.

- - No gain or loss will be recognized by the Strategist Fund upon the transfer
of all of its assets to the AXP Fund or on the distribution by the Strategist
Fund of Class A shares of the AXP Fund to Strategist Fund shareholders.

- - No gain or loss will be recognized by the AXP Fund upon the receipt of the
Strategist Fund's assets solely in exchange for the issuance of the AXP
Fund's Class A shares to the Strategist Fund and the assumption of all of the
Strategist Fund's liabilities by the AXP Fund.

- - The basis of the assets of the Strategist Fund acquired by the AXP Fund will
be, in each instance, the same as the basis of those assets in the hands of
the Strategist Fund immediately before the transfer.

- - The tax holding period of the assets of the Strategist Fund in the hands of
the AXP Fund will include the Strategist Fund's tax holding period for those
assets.

- - The shareholders of the Strategist Fund will not recognize gain or loss upon
the exchange of all their shares of the Strategist Fund solely for the AXP
Fund Class A shares as part of the Reorganization.

- - The basis of the Class A shares of the AXP Fund received by the Strategist
Fund shareholders in the Reorganization will be the same as the basis of the
shares of the Strategist Fund surrendered in exchange.

- - The tax holding period of the Class A shares of the AXP Fund received by the
Strategist Fund shareholders will include, for each shareholder, the tax
holding period of the shares of the Strategist Fund surrendered in exchange,
provided that the Class A shares of the AXP Fund were held as capital assets
on the date of the exchange.

REASONS FOR THE PROPOSED REORGANIZATION AND BOARD DELIBERATIONS. The Board
believes that the proposed Reorganization will be advantageous to the Strategist
Fund shareholders for several reasons. The Board considered the following
matters, among others, in approving the Reorganization.

- - TERMS AND CONDITIONS OF THE REORGANIZATION. The Board considered the terms
and conditions of the Reorganization as described in the previous paragraphs.

19
<PAGE>
- - TAX CONSEQUENCES. The Board considered the tax-free nature of the
Reorganization.

- - CONTINUITY OF INVESTMENT. The Board took into account the fact that,
following the Reorganization, shareholders of the Strategist Funds will be
invested in a fund holding an identical investment securities portfolio, with
identical investment objectives, policies, and restrictions.

- - CONTINUED NO-LOAD PURCHASES. The Board took into account that shareholders of
the Strategist Fund will be able to make future purchases of shares of the
AXP Fund on a no-load basis.

- - EXPENSE RATIOS. Following the Reorganization, the expense ratio for the AXP
Fund is expected to be lower than the expense ratio of the Strategist Fund.
The Reorganization is expected to eliminate or reduce costs associated with
maintaining separate funds, including costs of separate audits, printing
costs and blue sky fees. The Strategist Fund has been unable to attract
sufficient assets to operate effectively without significant expense
subsidization. Since commencement of operations, AEFC has been waiving a
portion of its fees. AEFC has committed to continue capping fees through the
end of the 2000 fiscal year for the Strategist Fund, although waivers can be
discontinued at any time after that. AEFC does not expect to waive fees
indefinitely and, without continued fee waivers or growth in assets, the
Strategist Fund's expense ratios would likely exceed those of many other
funds with similar investment objectives. This could have an adverse impact
on the Strategist Fund's performance. As a result, it is possible that the
Strategist Fund's asset base will decline and the Strategist Fund's expense
ratio will rise even higher as fixed costs are spread over a shrinking asset
base.

The AXP Fund, on the other hand, has achieved viable size. Certain fixed
shareholder expenses (such as accounting fees, printing costs and blue sky
expenses) are expected to be lower for the AXP fund than they would be for
the Strategist Fund if AEFC discontinued waiving fees. Thus, Strategist Fund
shareholders will experience lower per share fixed costs by holding AXP Fund
shares than they would if they continued to hold shares in the Strategist
Fund. Expense ratios for each of the Funds for the last fiscal year are
shown under the heading "Fees and Expenses".

- - POTENTIAL BENEFITS TO AEFC AND ITS AFFILIATES. Although not a reason for
approving the Reorganization, as part of its deliberations the Board also
considered the potential benefits from the Reorganization

20
<PAGE>
that could be realized by AEFC and its affiliates. The Board recognized that
the potential benefits to AEFC consist principally of the elimination of
expenses incurred in duplicative efforts to administer two separate funds.
AEFC also will benefit to the extent it no longer waives its fees. The Board
also noted, however, that shareholders of the Strategist Funds will benefit
directly from any decrease in overall operating ratios resulting from the
proposed Reorganization.

- - COSTS. The Board considered the fact that AEFC has agreed to bear the costs
of effecting the Reorganization.

- - ALTERNATIVE SOLUTIONS. The Board determined that the Reorganization provided
greater benefits to shareholders than other options, such as the liquidation
of the Strategist Fund. Liquidating the Strategist Fund would require most
shareholders, subject to federal income taxation, to recognize either gains
or losses in the current tax year when many shareholders might prefer to
defer those gains or losses. Another alternative, a voluntary exchange into
the corresponding AXP Fund, generally also would require shareholders to
recognize a gain or loss for tax purposes. The Reorganization, on the other
hand, is expected to be achieved on a tax-free basis resulting in a deferral
of any gain or loss for federal income tax purposes. Any shareholder who does
not want to participate in the Reorganization may redeem shares. This would
be a taxable event for the shareholder similar to what would happen if the
Strategist Fund was liquidated.

BOARDS' DETERMINATION. After considering the factors described above and other
relevant information, at a meeting held on March 10, 2000, the Strategist Fund
Board members, including a majority of the Independent Directors, found that
participation in the Reorganization is in the best interests of the Strategist
Fund and that the interests of existing shareholders of the Fund will not be
diluted as a result of the Reorganization. The Independent Directors were
advised, in their deliberations, by special counsel as to their fiduciary duties
under state law and the Investment Company Act of 1940 (the "1940 Act"), and met
separately on a number of occasions with counsel prior to approving the
Reorganization. In addition, AEFC agreed that, following the Reorganization, it
will provide the Independent Directors with the same level of indemnification
for their actions as directors of the Fund as is currently provided by the Fund.

The Board of Directors of the AXP Fund approved the Agreement at a meeting held
on March 8-9, 2000. The Board members considered the terms of the Agreement, the
provisions intended to avoid the dilution of

21
<PAGE>
shareholder interests and the anticipated tax consequences of the
Reorganization. The Board found that participation in the Reorganization is in
the best interests of the AXP Fund and that the interests of existing
shareholders of the Fund will not be diluted as a result of the Reorganization.

D. INFORMATION CONCERNING THE MEETING

RECOMMENDATION AND VOTE REQUIRED. The Board recommends that shareholders
approve the proposed Agreement. The Agreement must be approved by a majority of
the Fund's shares voted at the meeting. If the Agreement is not approved, the
Board will consider what further action should be taken.

VOTING. Each share is entitled to one vote. For those of you who cannot come to
the meeting, the Board is asking permission to vote for you. The shares will be
voted as you instruct. Signed proxy cards returned without instructions will be
voted in favor of the proposal.

All votes count toward a quorum, regardless of how they are voted (For, Against
or Abstain). Broker non-votes will be counted toward a quorum but not toward the
approval of the proposal. Broker non-votes are shares for which the underlying
owner has not voted and the broker holding the shares does not have authority to
vote.

REVOKING YOUR PROXY. If your plans change and you can attend the meeting,
simply inform the Secretary at the meeting that you will be voting your shares
in person. Also, if you change your mind after you vote, you may change your
vote or revoke it by writing us or by sending another card.

SIMULTANEOUS MEETINGS. The meeting of your Fund will be held simultaneously
with meetings of the other funds in the Strategist Fund Group. If any
shareholder objects to the holding of simultaneous meetings, the shareholder may
move for an adjournment of his or her Fund's meeting to a time immediately after
the simultaneous meetings so that a meeting of that Fund may be held separately.
If a shareholder makes this motion, the persons named as proxies will take into
consideration the reasons for the objection in deciding whether to vote in favor
of the adjournment.

SOLICITATION OF PROXIES. The Board is asking for your vote and for you to vote
as promptly as possible. AEFC will pay the expenses for the proxy material and
the postage. Supplementary solicitations may be made by mail, telephone,
electronic means or personal contact. The expenses of supplementary solicitation
will be paid by AEFC.

22
<PAGE>
DISSENTERS' RIGHT OF APPRAISAL. Under Sections 302A.471 and 302A.473 of the
Minnesota Business Corporation Act, Strategist Fund shareholders are entitled to
assert dissenters' rights in connection with the Reorganization and obtain
payment of the "fair value" of their shares, provided that they comply with the
requirements of Minnesota law. A copy of the relevant provisions is attached as
Exhibit 2.

Notwithstanding the provisions of Minnesota law, the SEC has taken the position
that use of state appraisal procedures by a mutual fund would be a violation of
Rule 22c-1, the forward pricing rule, under the 1940 Act. This rule states that
no mutual fund may redeem its shares other than at net asset value next computed
after receipt of a request for redemption. It is the SEC's position that Rule
22c-1 supersedes appraisal provisions in state statutes.

In the interest of ensuring equal valuation for all shareholders, dissenters'
rights will be determined in accordance with the SEC's interpretation. As a
result, if any shareholder elects to exercise dissenters' rights under Minnesota
law, the Strategist Fund intends to submit this question to a court of competent
jurisdiction. In that event, a dissenting shareholder would not receive any
payment until the end of the court proceeding.

OTHER BUSINESS. The Board does not know at this time of any other business to
come before the meetings. If something does come up, the proxies will use their
best judgment to vote for you on the matter.

ADJOURNMENT. In the event that not enough votes are received by the time
scheduled for the meeting, the persons named as proxies may move for one or more
adjournments of the meeting for a period of not more than 120 days in the
aggregate to allow further solicitation of shareholders on the proposal. Any
adjournment requires the affirmative vote of a majority of the shares present at
the meeting. The persons named as proxies will vote in favor of adjournment
those shares they are entitled to vote that have voted in favor of the
proposals. They will vote against any adjournment those shares that have voted
against any of the proposals. AEFC will pay the costs of any additional
solicitation and of any adjourned meeting.

23
<PAGE>
E. CAPITALIZATION AND OWNERSHIP OF FUND SHARES

CAPITALIZATION. The following table shows the capitalization of the Strategist
Fund and the AXP Fund as of February 29, 2000 and on a pro forma basis, assuming
the proposed Reorganization had taken place.

TABLE E-1.
CAPITALIZATION
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
NET ASSET VALUE SHARES
FUND NET ASSETS PER SHARE OUTSTANDING
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------
Strategist Balanced............. $ 1,121,480 $14.19 79,051
AXP Mutual - Class A............ 2,845,139,084 11.80 241,151,956
AXP Mutual - Class A
Pro Forma....................... 2,846,260,564 11.80 241,246,997
- -----------------------------------------------------------------------------------
Strategist Emerging Markets..... 838,627 5.57 150,488
AXP Emerging Markets -
Class A......................... 345,604,086 6.63 52,129,590
AXP Emerging Markets - Class A
Pro Forma....................... 346,442,713 6.63 52,256,080
- -----------------------------------------------------------------------------------
Strategist Equity............... 1,268,457 33.36 38,021
AXP Stock - Class A............. 3,435,951,038 26.88 127,833,144
AXP Stock - Class A
Pro Forma....................... 3,437,219,495 26.88 127,880,334
- -----------------------------------------------------------------------------------
Strategist Equity Income........ 911,061 8.90 102,388
AXP Diversified Equity Income -
Class A......................... 1,753,394,316 8.06 217,495,354
AXP Diversified Equity Income -
Class A Pro Forma............... 1,754,305,377 8.06 217,608,389
- -----------------------------------------------------------------------------------
Strategist Government Income.... 839,068 4.55 184,345
AXP Federal Income - Class A.... 1,333,443,659 4.67 285,435,290
AXP Federal Income - Class A
Pro Forma....................... 1,334,282,727 4.67 285,614,962
- -----------------------------------------------------------------------------------
Strategist Growth............... 30,296,472 58.84 514,904
AXP Growth - Class A............ 6,211,706,008 53.38 116,377,239
AXP Growth - Class A
Pro Forma....................... 6,242,002,480 53.38 116,944,801
- -----------------------------------------------------------------------------------
Strategist Growth Trends........ 29,539,340 37.92 779,012
AXP New Dimensions - Class A.... 17,183,848,180 35.80 480,021,047
AXP New Dimensions - Class A
Pro Forma....................... 17,213,387,520 35.80 480,846,168
- -----------------------------------------------------------------------------------
Strategist High Yield........... 1,695,722 3.73 454,423
AXP Extra Income - Class A...... 2,501,563,029 3.75 667,793,439
AXP Extra Income - Class A
Pro Forma....................... 2,503,258,751 3.75 668,245,632
- -----------------------------------------------------------------------------------
</TABLE>

24
<PAGE>

<TABLE>
<CAPTION>
NET ASSET VALUE SHARES
FUND NET ASSETS PER SHARE OUTSTANDING
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------
Strategist Quality Income....... $ 740,918 $ 8.68 85,385
AXP Selective - Class A......... 1,014,413,269 8.46 119,970,541
AXP Selective - Class A
Pro Forma....................... 1,015,154,187 8.46 120,058,120
- -----------------------------------------------------------------------------------
Strategist Special Growth....... 1,913,631 5.99 319,504
AXP Research Opportunities -
Class A......................... 555,284,904 7.60 73,040,677
AXP Research Opportunities -
Class A Pro Forma............... 557,198,535 7.60 73,292,471
- -----------------------------------------------------------------------------------
Strategist Tax-Free High
Yield........................... 785,483 4.24 185,369
AXP High Yield Tax-Exempt -
Class A......................... 4,794,230,093 4.27 1,123,660,941
AXP High Yield Tax-Exempt -
Class A Pro Forma............... 4,795,015,576 4.27 1,123,844,895
- -----------------------------------------------------------------------------------
Strategist Total Return......... 868,449 12.73 68,215
AXP Managed Allocation -
Class A......................... 1,879,003,429 10.22 183,876,234
AXP Managed Allocation -
Class A Pro Forma............... 1,879,871,878 10.22 183,961,209
- -----------------------------------------------------------------------------------
Strategist World Growth......... 1,093,025 11.46 95,390
AXP Global Growth - Class A..... 1,576,608,728 10.30 153,028,755
AXP Global Growth - Class A
Pro Forma....................... 1,577,701,753 10.30 153,134,874
- -----------------------------------------------------------------------------------
Strategist World Income......... 597,880 5.56 107,505
AXP Global Bond - Class A....... 501,761,454 5.57 90,123,823
AXP Global Bond - Class A
Pro Forma....................... 502,359,334 5.57 90,231,162
- -----------------------------------------------------------------------------------
Strategist World Technologies... 2,448,011 22.60 108,321
AXP Innovations - Class A....... 16,240,712 22.69 715,673
AXP Innovations - Class A
Pro Forma....................... 18,688,723 22.69 823,562
- -----------------------------------------------------------------------------------
</TABLE>

OWNERSHIP OF FUND SHARES. The following table provides information on
shareholders who owned more than 5% of any Fund's outstanding shares as of
February 29, 2000. As of that date, AEFC or its parent company, American Express
Company, held more than 25% of the outstanding shares of each of the Strategist
Funds. Under the 1940 Act, any person who owns more than 25% of the voting
securities of a company is presumed to "control" the company. Under this
definition, as shown below, AEFC and American Express are deemed to be
controlling persons of the Strategist Funds. As of February 29, 2000, officers
and directors of each of the Funds as a group owned less than 1% of the
outstanding shares of each of the Funds.

25
<PAGE>
TABLE E-2.
OWNERSHIP OF FUND SHARES*
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PERCENT OF AXP
CLASS A SHARES
NUMBER OF PERCENT OF HELD FOLLOWING THE
FUND 5% OWNERS SHARES HELD SHARES HELD REORGANIZATION
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------
Strategist
Balanced............. AEFC (1) 52,033 65.8% 0.03%
AXP Mutual........... None -- -- --
- ----------------------------------------------------------------------------------
Strategist Emerging
Markets.............. AEFC 120,595 80.0% 0.19%
AXP Emerging
Markets.............. None -- -- --
- ----------------------------------------------------------------------------------
Strategist Equity.... AEFC 28,661 75.4% 3.15%
AXP Stock............ None -- -- --
- ----------------------------------------------------------------------------------
Strategist Equity
Income............... AEFC 82,394 80.5% 0.04%
AXP Diversified
Equity Income........ None -- -- --
- ----------------------------------------------------------------------------------
Strategist Government AEFC 134,197 72.8% 0.05%
Income............... (2) 17,348 9.4% **
(3) 10,947 5.9% **
AXP Federal Income... None -- -- --
- ----------------------------------------------------------------------------------
Strategist Growth.... (4) 402,401 78.2% 0.38%
AXP Growth........... None -- -- --
- ----------------------------------------------------------------------------------
Strategist Growth
Trends............... (4) 621,855 79.8% 0.14%
AXP New Dimensions... None -- -- --
- ----------------------------------------------------------------------------------
Strategist High AEFC 165,462 36.4% 0.03%
Yield................ (5) 123,529 27.4% 0.02%
(6) 104,720 23.0% 0.01%
AXP Extra Income..... None -- -- --
- ----------------------------------------------------------------------------------
Strategist Quality AEFC 71,657 83.9% 0.06%
Income............... (7) 5,328 6.2% **
AXP Selective........ None -- -- --
- ----------------------------------------------------------------------------------
Strategist Special
Growth............... AEFC 163,702 51.2% 0.18%
AXP Research
Opportunities........ None -- -- --
- ----------------------------------------------------------------------------------
</TABLE>

26
<PAGE>

* For the AXP Fund, 5% ownership is shown for Class A shares.

** Less than 0.01%

(1) AEFC, a Delaware corporation, is located at IDS Tower 10, Minneapolis, MN
55440-0010.

(2) Norrine F. Baggett, 326 East Southfield Road, Shreveport, LA 71105.

(3) Nadia Hamidian, 22 68th Street, Guttenberg, NJ 07093.

(4) American Express Company, a Delaware corporation, the parent company of
AEFC, is located at American Express Tower, World Financial Center, New
York, NY 10285.

(5) American Latvian Association in the US, Inc., 400 Hurley Ave., Rockville,
MD 20850.

(6) Latvijas Brivibas Fonds LTD, 400 Hurley Ave., Rockville, MD 20850.

(7) Barbara B. Ismel, 328 West 86th No. 2C, New York, NY 10024.

(8) John L. and Rosana L. Warren, 4971 Little Cub Creek Road, Evergreen, CO
80439.

(9) Peter L. Rowe and Fredda Rosenblatt, 6887 Palm Grove Court, West Palm
Beach, FL 33418.

(10) William J. and Frances M. Russell, 1443 Creekside Court, Vienna, VA 22182.

27
<PAGE>
F. EXPERTS

The audited financial statements for the Strategist Fund and the AXP Fund
included in or incorporated by reference in this proxy statement/ prospectus or
the Statement of Additional Information, have been audited by KPMG LLP,
independent auditors for the Funds, whose reports are included in the annual
report. The financial statements have been incorporated in this document in
reliance on KPMG's reports given on their authority as experts in auditing and
accounting matters.

G. ADDITIONAL INFORMATION ABOUT THE FUNDS' BUSINESSES

The following table shows where in each Fund's prospectus you can find
additional information about the business of the Fund.

TABLE G-1.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
HEADING IN PROSPECTUS
TYPE OF INFORMATION STRATEGIST FUND AXP FUND
<S> <C> <C>
- -------------------------------------------------------------------------------------
Investment objective Goal Goal
- -------------------------------------------------------------------------------------
Principal investment strategies Investment Strategy Investment Strategy
- -------------------------------------------------------------------------------------
Principal risks Risks Risks
- -------------------------------------------------------------------------------------
Fee table Fees and Expenses Fees and Expenses
- -------------------------------------------------------------------------------------
Management Management Management
- -------------------------------------------------------------------------------------
Fund share price Valuing Fund Shares Valuing Fund Shares
- -------------------------------------------------------------------------------------
Buying and selling fund shares Purchasing Shares; Purchasing Shares;
Exchanging/Selling Exchanging/Selling
Shares Shares
- -------------------------------------------------------------------------------------
Distributions and taxes Distributions and Distributions and
Taxes Taxes
- -------------------------------------------------------------------------------------
Financial highlights Financial Highlights Financial Highlights
- -------------------------------------------------------------------------------------
</TABLE>

28
<PAGE>
TABLE G-2.
DATES OF FUND DOCUMENTS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SEMI-ANNUAL
ANNUAL REPORT
REPORT (IF APPLICABLE)
PROSPECTUS SAI (FOR PERIOD (FOR PERIOD
FUND (DATED) (DATED) ENDED) ENDED)
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------
Strategist Balanced........... 11/29/99 11/29/99 9/30/99 NA
AXP Mutual.................... 11/29/99 11/29/99 9/30/99 NA
- -------------------------------------------------------------------------------------
Strategist Equity............. 11/29/99 11/29/99 9/30/99 NA
AXP Stock..................... 11/29/99 11/29/99 9/30/99 NA
- -------------------------------------------------------------------------------------
Strategist Equity Income...... 11/29/99 11/29/99 9/30/99 NA
AXP Diversified Equity
Income........................ 11/29/99 11/29/99 9/30/99 NA
- -------------------------------------------------------------------------------------
Strategist Emerging Markets... 12/30/99 12/30/99 10/31/99 NA
AXP Emerging Markets.......... 12/30/99 12/30/99 10/31/99 NA
- -------------------------------------------------------------------------------------
Strategist Government Income.. 7/30/99 7/30/99 5/31/99 11/30/99
AXP Federal Income............ 7/30/99 7/30/99 5/31/99 11/30/99
- -------------------------------------------------------------------------------------
Strategist Growth............. 9/29/99 9/29/99 7/31/99 1/31/00
AXP Growth.................... 9/29/99 9/29/99 7/31/99 1/31/00
- -------------------------------------------------------------------------------------
Strategist Growth Trends...... 9/29/99 9/29/99 7/31/99 1/31/00
AXP New Dimensions............ 9/29/99 9/29/99 7/31/99 1/31/00
- -------------------------------------------------------------------------------------
Strategist High Yield......... 7/30/99 7/30/99 5/31/99 11/30/99
AXP Extra Income.............. 7/30/99 7/30/99 5/31/99 11/30/99
- -------------------------------------------------------------------------------------
Strategist Quality Income..... 7/30/99 7/30/99 5/31/99 11/30/99
AXP Selective................. 7/30/99 7/30/99 5/31/99 11/30/99
- -------------------------------------------------------------------------------------
Strategist Special Growth..... 9/29/99 9/29/99 7/31/99 1/31/00
AXP Research Opportunities.... 9/29/99 9/29/99 7/31/99 1/31/00
- -------------------------------------------------------------------------------------
Strategist Tax-Free High
Yield......................... 1/28/00 1/28/00 11/30/99 NA
AXP High Yield Tax-Exempt..... 1/28/00 1/28/00 11/30/99 NA
- -------------------------------------------------------------------------------------
Strategist Total Return....... 11/29/99 11/29/99 9/30/99 NA
AXP Managed Allocation........ 11/29/99 11/29/99 9/30/99 NA
- -------------------------------------------------------------------------------------
Strategist World Growth....... 12/30/99 12/30/99 10/31/99 NA
AXP Global Growth............. 12/30/99 12/30/99 10/31/99 NA
- -------------------------------------------------------------------------------------
Strategist World Income....... 12/30/99 12/30/99 10/31/99 NA
AXP Global Bond............... 12/30/99 12/30/99 10/31/99 NA
- -------------------------------------------------------------------------------------
Strategist World
Technologies.................. 12/30/99 12/30/99 10/31/99 NA
AXP Innovations............... 3/15/00 3/15/00 10/31/99 NA
- -------------------------------------------------------------------------------------
</TABLE>

Each Fund is subject to the information requirements of the Securities Exchange
Act of 1934 and the 1940 Act and files reports, proxy materials and other
information with the SEC. These reports, proxy materials and other information
can be inspected and copied at the Public Reference Room maintained by the SEC
at 450 Fifth Street, N.W., Washington, D.C., the Midwest Regional Office of the
SEC at 500 West Madison Street, Suite 400, Chicago, Illinois 60611, and the
Northeast Regional Office of the SEC at 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of these materials also can be obtained from the
Public Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. In addition, copies of these documents may be viewed
on-line or downloaded from the SEC's website at http://www.sec.gov.

29
<PAGE>
EXHIBIT 1

FORM OF
AGREEMENT AND PLAN OF REORGANIZATION

This Agreement and Plan of Reorganization dated as of March 10, 2000 (the
"Agreement") is between Strategist Growth and Income Fund, Inc. (the "Strategist
Corporation"), a Minnesota corporation, on behalf of Strategist Balanced Fund
(the "Acquired Fund"), a series of capital stock of the Strategist Corporation,
and AXP Investment Series, Inc. (the "AXP Corporation"), a Minnesota
corporation, on behalf of AXP Mutual (the "Acquiring Fund"), a series of capital
stock of the AXP Corporation. The Acquired Fund and the Acquiring Fund are
feeder funds investing in a single master trust.

In consideration of the mutual promises, the parties agree as follows:

1. SHAREHOLDER APPROVAL

The Acquired Fund will call a meeting of its shareholders for the purpose of
approving the Agreement and the transactions it contemplates (the
"Reorganization"). The Acquiring Fund agrees to furnish data and information,
as reasonably requested, for the proxy statement to be furnished to
shareholders of the Acquired Fund.

2. REORGANIZATION

a. Plan of Reorganization. At the closing, the Strategist Corporation will
convey all of the assets of the Acquired Fund to the Acquiring Fund. The
Acquiring Fund will assume all liabilities of the Acquired Fund, reflected on
an unaudited statement of assets and liabilities, as of the Closing. At the
Closing, the AXP Corporation will deliver Class A shares of the Acquiring
Fund, including fractional shares, to the Strategist Corporation. The number
of shares will be determined by dividing the value of the net assets of the
Acquired Fund, computed as described in paragraph 3(a), by the net asset value
of one share of the Acquiring Fund, computed as described in paragraph 3(b).
The Acquired Fund will not pay a sales charge on the receipt of Acquiring Fund
shares in exchange for the assets of the Acquired Fund. In addition, the
shareholders of the Acquired Fund will not pay a sales charge on distribution
to them of Class A shares of the Acquiring Fund.

b. Closing and Effective Time of the Reorganization. The Reorganization and
all related acts necessary to complete the Reorganization (the

30
<PAGE>
"Closing") will occur on the first day on which the New York Stock Exchange
(the "NYSE") is open for business following approval of shareholders of the
Acquired Fund and receipt of all necessary regulatory approvals, or such later
date as the parties may agree.

3. VALUATION OF NET ASSETS

a. The value of the net assets of the Acquired Fund will be computed as of the
close of regular trading on the NYSE on the day of Closing (the "Valuation
Date") using the valuation procedures in the Acquiring Fund's prospectus.

b. The net asset value per share of Class A shares of the Acquiring Fund will
be determined as of the close of regular trading on the NYSE on the Valuation
Date, using the valuation procedures in the Acquiring Fund's prospectus.

c. At the Closing, the Acquired Fund will provide the Acquiring Fund with a
copy of the computation showing the valuation of the Acquired Fund's net
assets on the Valuation Date. The Acquiring Fund will provide the Acquired
Fund with a copy of the computation showing the determination of the net asset
value per share of Class A shares of the Acquiring Fund on the Valuation Date.
Both computations will be certified by an officer of American Express
Financial Corporation.

4. LIQUIDATION AND DISSOLUTION OF THE ACQUIRED FUND

a. As soon as practicable after the Valuation Date, the Strategist Corporation
will liquidate the Acquired Fund and distribute Class A shares of the
Acquiring Fund to the Acquired Fund's shareholders of record. The Acquiring
Fund will establish shareholder accounts in the names of each Acquired Fund
shareholder, representing the respective pro rata number of full and
fractional shares of the Acquiring Fund due to each shareholder. All issued
and outstanding shares of the Acquired Fund will simultaneously be cancelled
on the books of the Strategist Corporation. Shareholder accounts will be
established by the Acquiring Fund or its transfer agent in accordance with
instructions from the Strategist Corporation.

b. Immediately after the Valuation Date, the share transfer books of the
Strategist Corporation relating to the Acquired Fund will be closed and no
further transfer of shares will be made.

31
<PAGE>
c. Promptly after the distribution, the Acquiring Fund or its transfer agent
will notify each shareholder of the Acquired Fund of the number of Class A
shares distributed to the shareholder and confirm the registration in the
shareholder's name.

d. As promptly as practicable after the liquidation of the Acquired Fund, and
in no event later than twelve months from the date of the Closing, the
Acquired Fund will be dissolved.

5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE AXP CORPORATION ON BEHALF OF
THE ACQUIRING FUND

The AXP Corporation represents and warrants to the Strategist Corporation as
follows:

a. Organization, Existence, etc. The AXP Corporation is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Minnesota and has the power to carry on its business as it is now being
conducted.

b. Registration as Investment Company. The Acquiring Fund is a series of the
AXP Corporation, registered under the Investment Company Act of 1940 (the
"1940 Act") as an open-end, management investment company.

c. Capitalization. The Acquiring Fund has authorized capital of 10,000,000,000
shares of common stock, par value $0.01 per share. All of the outstanding
shares have been duly authorized and are validly issued, fully paid and
non-assessable. Since the Acquiring Fund is engaged in the continuous offering
and redemption of its shares, the number of outstanding shares may vary daily.

d. Financial Statements. The audited financial statements as of the end of the
last fiscal year, and the subsequent unaudited semi-annual financial
statements, if any (the "Acquiring Fund Financial Statements"), fairly present
the financial position of the Acquiring Fund, and the results of its
operations and changes in its net assets for the periods shown.

e. Shares to be Issued Upon Reorganization. The shares to be issued in
connection with the Reorganization will be duly authorized and, at the time of
the Closing, will be validly issued, fully paid and non-assessable.

f. Authority Relative to the Agreement. The AXP Corporation has the power to
enter into and carry out the obligations described in this

32
<PAGE>
Agreement. The Agreement and the transactions contemplated by it have been
duly authorized by the Board of Directors and no other proceedings by the AXP
Corporation or the Acquiring Fund are necessary.

g. No Violation. The AXP Corporation is not in violation of its Articles of
Incorporation or By-Laws (the "Articles") or in default in the performance of
any material agreement to which it is a party. The execution of this Agreement
and the completion of the transactions contemplated by it will not conflict
with, or constitute a breach of, any material contract or other instrument to
which the Acquiring Fund is subject. Nor will the transactions result in any
violation of the provisions of the Articles or any law, administrative
regulation or administrative or court decree applicable to the Acquiring Fund.

h. Liabilities. There are no liabilities of the Acquiring Fund other than:

- liabilities disclosed in the Acquiring Fund Financial Statements

- liabilities incurred in the ordinary course of business subsequent to the
date of the latest annual or semi-annual financial statements, or

- liabilities previously disclosed to the Strategist Corporation, none of
which has been materially adverse to the business, assets or results of
operation of the Acquiring Fund.

i. Litigation. There is no litigation, administrative proceeding or
investigation before any court or governmental body currently pending or, to
the knowledge of the Acquiring Fund, threatened, that would materially and
adversely affect the Acquiring Fund, its financial condition or the conduct of
its business, or that would prevent or hinder completion of the transactions
contemplated by this Agreement. The Acquiring Fund knows of no facts that
might form the basis for the institution of any such litigation, proceeding or
investigation and is not a party to or subject to the provisions of any order,
decree or judgment.

j. Contracts. Except for contracts and agreements previously disclosed to the
Strategist Corporation, the Acquiring Fund is not a party to or subject to any
material contract, debt instrument, plan, lease, franchise, license or permit.

k. Taxes. The federal tax returns of the Acquiring Fund have been filed for
all taxable years since commencement of its operations. The Acquiring Fund has
qualified and will qualify as a regulated investment company under the
Internal Revenue Code with respect to each taxable year since commencement of
its operations.

33
<PAGE>
l. Registration Statement. The Acquiring Fund will file a registration
statement on Form N-14 (the "Registration Statement") with the Securities and
Exchange Commission under the Securities Act of 1933 (the "1933 Act") relating
to the shares to be issued in the Reorganization. At the time the Registration
Statement becomes effective, at the time of the shareholders' meeting and at
the Closing, the Registration Statement will not contain an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein not misleading. However, none of the representations and
warranties in this subsection apply to statements in, or omissions from, the
Registration Statement made in reliance on information furnished by the
Strategist Corporation for use in the Registration Statement.

6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE STRATEGIST CORPORATION ON
BEHALF OF THE ACQUIRED FUND

The Strategist Corporation represents and warrants to the AXP Corporation as
follows:

a. Organization, Existence, etc. The Strategist Corporation is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Minnesota and has the power to carry on its business as it is now
being conducted.

b. Registration as Investment Company. The Acquired Fund is a series of the
Strategist Corporation, registered under the 1940 Act as an open-end,
management investment company.

c. Capitalization. The Acquired Fund has authorized capital of 10,000,000,000
shares of common stock, par value $0.01 per share. All of the outstanding
shares have been duly authorized and are validly issued, fully paid and
non-assessable. Since the Acquired Fund is engaged in the continuous offering
and redemption of its shares, the number of outstanding shares may vary daily.

d. Financial Statements. The audited financial statements as of the end of the
last fiscal year, and the subsequent unaudited semi-annual financial
statements, if any, (the "Acquired Fund Financial Statements") fairly present
the financial position of the Acquired Fund, and the results of its operations
and changes in its net assets for the periods shown.

e. Authority Relative to the Agreement. The Strategist Corporation has the
power to enter into and to carry out its obligations under this Agreement. The
Agreement and the transactions contemplated by it

34
<PAGE>
have been duly authorized by the Board of Directors and no other proceedings
by the Strategist Corporation or the Acquired Fund are necessary.

f. No Violation. The Strategist Corporation is not in violation of its
Articles or in default in the performance of any material agreement to which
it is a party. The execution of this Agreement and the completion of the
transactions contemplated by it will not conflict with or constitute a breach
of, any material contract to which the Acquired Fund is subject. Nor will the
transactions result in any violation of the provisions of the Articles or any
law, administrative regulation or administrative or court decree applicable to
the Acquired Fund.

g. Liabilities. There are no liabilities of the Acquired Fund other than:

- liabilities disclosed in the Acquired Fund Financial Statements

- liabilities incurred in the ordinary course of business subsequent to the
date of the latest annual or semi-annual financial statements, or

- liabilities previously disclosed to the AXP Corporation, none of which has
been materially adverse to the business, assets or results of operation of
the Acquired Fund.

h. Litigation. There is no litigation, administrative proceeding or
investigation before any court or governmental body currently pending or, to
the knowledge of the Acquired Fund, threatened, that would materially and
adversely affect the Acquired Fund, its financial condition or the conduct of
its business, or that would prevent or hinder completion of the transactions
contemplated by this Agreement. The Acquired Fund knows of no facts that might
form the basis for the institution of any such litigation, proceeding or
investigation and is not a party to or subject to the provisions of any order,
decree or judgment.

i. Contracts. Except for contracts and agreements previously disclosed to the
AXP Corporation, the Acquired Fund is not a party to or subject to any
material contract, debt instrument, plan, lease, franchise, license or permit.

j. Taxes. The federal tax returns of the Acquired Fund have been filed for all
taxable years since commencement of its operations. The Acquired Fund has
qualified and will qualify as a regulated investment company under the
Internal Revenue Code with respect to each taxable year since commencement of
its operations.

k. Fund Securities. All securities listed in the schedule of investments of
the Acquired Fund as of the Closing will be owned by the Acquired

35
<PAGE>
Fund free and clear of any encumbrances, except as indicated in the schedule.

l. Registration Statement. The Acquired Fund will cooperate with the Acquiring
Fund and will furnish information relating to the Strategist Corporation and
the Acquired Fund required in the Registration Statement. At the time the
Registration Statement becomes effective, at the time of the shareholders'
meeting and at the Closing, the Registration Statement, as it relates to the
Strategist Corporation or the Acquired Fund, will not contain an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein not misleading. However, the representations and
warranties in this subsection apply only to statements in or omissions from
the Registration Statement made in reliance upon information furnished by the
Strategist Corporation for use in the Registration Statement.

7. CONDITIONS TO OBLIGATIONS OF THE AXP CORPORATION

The obligations of the AXP Corporation with respect to the Reorganization are
subject to the satisfaction of the following conditions:

a. Shareholder Approval. This Agreement will have been approved by the
affirmative vote of the holders of the majority of the outstanding shares of
common stock of the Acquired Fund.

b. Representations, Warranties and Agreements. The Strategist Corporation and
the Acquired Fund will have complied with this Agreement and each of the
representations and warranties in this Agreement will be true in all material
respects as of the Closing. An officer of the Strategist Corporation will
provide a certificate to the AXP Corporation confirming that, as of the
Closing, the representations and warranties set forth in Section 6 are true
and correct and that there have been no material adverse changes in the
financial condition, results of operations, business, properties or assets of
the Acquired Fund since the date of its last financial statement, except as
otherwise indicated in any financial statements, certified by an officer of
the Strategist Corporation, and delivered to the AXP Corporation on or prior
to the last business day before the Closing.

c. Regulatory Approvals.

- The Registration Statement referred to in Section 5(l) will be effective and
no stop orders under the 1933 Act will have been issued.

- All necessary approvals, consents and exemptions from federal and state
regulatory authorities will have been obtained.

36
<PAGE>
d. Tax Opinion. The AXP Corporation will have received the opinion of Ropes &
Gray dated as of the Closing, as to the federal income tax consequences of the
Reorganization to the Acquiring Fund and its shareholders. For purposes of
rendering their opinion, Ropes & Gray may rely, as to factual matters, upon
the statements made in this Agreement, the proxy statement which will be
distributed to the shareholders of the Acquired Fund, and other written
representations as an officer of the Strategist Corporation and the AXP
Corporation, respectively will have verified as of Closing. The opinion of
Ropes & Gray will be to the effect that: (i) neither the Acquired Fund nor the
Acquiring Fund will recognize any gain or loss upon the transfer of the assets
of the Acquired Fund to, and assumption of its liabilities by, the Acquiring
Fund in exchange for shares of the Acquiring Fund and upon the distribution of
the shares to the Acquired Fund shareholders in exchange for their shares of
the Acquired Fund; (ii) the shareholders of the Acquired Fund who receive
shares of the Acquiring Fund in the Reorganization will not recognize any gain
or loss on the exchange of their shares of the Acquired Fund for the shares of
the Acquiring Fund; (iii) the holding period and the basis of the shares
received by the Acquired Fund shareholders will be the same as the holding
period and the basis of the shares of the Acquired Fund surrendered in the
exchange; (iv) the holding period and the basis of the assets acquired by the
Acquiring Fund will be the same as the holding period and the basis of the
assets to the Acquired Fund immediately prior to the Reorganization.

e. Opinion of Counsel. The AXP Corporation will have received an opinion of
counsel for the Acquired Fund, dated as of the Closing, to the effect that:
(i) the Strategist Corporation is a corporation duly organized and validly
existing under the laws of the state of Minnesota; (ii) the Acquired Fund is a
series of the Strategist Corporation, an open-end investment company
registered under the 1940 Act; (iii) this Agreement and the Reorganization
have been duly authorized and approved by all requisite action of the
Strategist Corporation and the Acquired Fund and this Agreement has been duly
executed by, and is a valid and binding obligation of, the Acquired Fund.

f. Declaration of Dividend. The Strategist Corporation will have declared a
dividend with respect to the Acquired Fund which, together with all previous
dividends, will have the effect of distributing to the Acquired Fund's
shareholders all of the Acquired Fund's investment company taxable income for
the taxable years ending on or prior to the Closing (computed without regard
to deduction for dividends paid) and

37
<PAGE>
all of its net capital gain realized in taxable years ending on or prior to
the Closing (after reduction for capital loss carry forward).

8. CONDITIONS TO OBLIGATIONS OF THE STRATEGIST CORPORATION

The obligations of the Strategist Corporation with respect to the
Reorganization are subject to the satisfaction of the following conditions:

a. Shareholder Approval. This Agreement will have been approved by the
affirmative vote of the holders of the majority of the outstanding shares of
common stock of the Acquired Fund.

b. Representations, Warranties and Agreements. The Acquiring Fund will have
complied with this Agreement and each of the representations and warranties in
this Agreement will be true in all material respects as of the Closing. An
officer of the AXP Corporation will provide a certificate to the Strategist
Corporation confirming that, as of the Closing, the representations and
warranties set forth in Section 5 are true and correct and that there have
been no material adverse changes in the financial condition, results of
operations, business, properties or assets of the Acquiring Fund since the
date of its last financial statement, except as otherwise indicated in any
financial statements, certified by an officer of the AXP Corporation, and
delivered to the Strategist Corporation on or prior to the last business day
before the Closing.

c. Regulatory Approvals.

- The Registration Statement referred to in Section 5(l) will be effective and
no stop orders under the 1933 Act will have been issued.

- All necessary approvals, consents and exemptions from federal and state
regulatory authorities will have been obtained.

d. Tax Opinion. The Strategist Corporation will have received the opinion of
Ropes & Gray dated as of the Closing, as to the federal income tax
consequences of the Reorganization to the Acquired Fund and its shareholders.
For purposes of rendering their opinion, Ropes & Gray may rely, as to factual
matters, upon the statements made in this Agreement, the proxy statement which
will be distributed to the shareholders of the Acquired Fund, and other
written representations as an officer of the Strategist Corporation and the
AXP Corporation, respectively will have verified as of Closing. The opinion of
Ropes & Gray will be to the effect that: (i) neither the Acquired Fund nor the
Acquiring Fund will recognize any gain or loss upon the transfer of the assets
of the Acquired Fund to, and assumption of its liabilities by, the Acquiring

38
<PAGE>
Fund in exchange for shares of the Acquiring Fund and upon the distribution of
the shares to the Acquired Fund shareholders in exchange for their shares of
the Acquired Fund; (ii) the shareholders of the Acquired Fund who receive
shares of the Acquiring Fund in the Reorganization will not recognize any gain
or loss on the exchange of their shares of the Acquired Fund for the shares of
the Acquiring Fund; (iii) the holding period and the basis of the shares
received by the Acquired Fund shareholders will be the same as the holding
period and the basis of the shares of the Acquired Fund surrendered in the
exchange; (iv) the holding period and the basis of the assets acquired by the
Acquiring Fund will be the same as the holding period and the basis of the
assets to the Acquired Fund immediately prior to the Reorganization.

e. Opinion of Counsel. The Strategist Corporation will have received the
opinion of counsel for the Acquiring Fund, dated as of the Closing, to the
effect that: (i) the AXP Corporation is a corporation duly organized and
validly existing under the laws of the state of Minnesota; (ii) the Acquiring
Fund is a series of the AXP Corporation, an open-end investment company
registered under the 1940 Act; (iii) this Agreement and the Reorganization
have been authorized and approved by all requisite action of the AXP
Corporation and the Acquiring Fund and this Agreement has been duly executed
by, and is a valid and binding obligation of, the AXP Corporation; and
(iv) the shares to be issued in the Reorganization are duly authorized and
upon issuance in accordance with this Agreement will be validly issued, fully
paid and non-assessable shares of the Acquiring Fund.

9. AMENDMENT; TERMINATION; NON-SURVIVAL OF COVENANTS, WARRANTIES AND
REPRESENTATIONS

a. This Agreement may be amended in writing if authorized by the respective
Boards of Directors. The Agreement may be amended at any time before or after
approval by the shareholders of the Acquired Fund, but after shareholder
approval, no amendment shall be made that substantially changes the terms of
paragraphs 2 or 3.

b. At any time prior to the Closing, any of the parties may waive in writing
(i) any inaccuracies in the representations and warranties made to it and (ii)
compliance with any of the covenants or conditions made for its benefit.

c. The Strategist Corporation may terminate this Agreement at any time prior
to the Closing by notice to the AXP Corporation if a material

39
<PAGE>
condition to its performance or a material covenant of the AXP Corporation is
not fulfilled on or before the date specified for its fulfillment or a
material breach of this Agreement is made by the AXP Corporation and is not
cured.

d. The AXP Corporation may terminate this Agreement at any time prior to the
Closing by notice to the Strategist Corporation if a material condition to its
performance or a material covenant of the Strategist Corporation is not
fulfilled on or before the date specified for its fulfillment or a material
breach of this Agreement is made by the Strategist Corporation and is not
cured.

e. This Agreement may be terminated by any party at any time prior to the
Closing, whether before or after approval by the shareholders of the Acquired
Fund, without any liability on the part of either party or its respective
directors, officers, or shareholders, on written notice to the other party,
and shall be terminated without liability as of the close of business on
December 31, 2000, or a later date agreed upon by the parties, if the Closing
is not on or prior to that date.

f. The representations, warranties and covenants contained in this Agreement,
or in any document delivered in connection with this Agreement, will survive
the Reorganization.

10. EXPENSES

The expenses of the reorganization, whether or not the Reorganization is
completed, will be borne by American Express Financial Corporation.

11. GENERAL

a. Headings. The headings contained in this Agreement are for reference
purposes only and will not affect the meaning or interpretation of this
Agreement. Nothing in this Agreement is intended to confer upon any other
person any rights or remedies by reason of this Agreement.

b. Governing Law. This Agreement will be governed by the laws of the state of
Minnesota.

12. INDEMNIFICATION

Each party will indemnify and hold the other and its officers and directors
(each an "Indemnitee") harmless from and against any liability or other cost
and expense, in connection with the defense or disposition of any action,
suit, or other proceeding, before any court or administrative

40
<PAGE>
or investigative body in which the Indemnitee may be involved as a party, with
respect to actions taken under this Agreement. However, no Indemnitee will be
indemnified against any liability or expense arising by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the Indemnitee's position.

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be signed.

Strategist Growth and Income Fund, Inc.
on behalf of Strategist Balanced Fund

<TABLE>
<S> <C>
By /s/ James A. Mitchell
------------------------
James A. Mitchell
President

AXP Investment Series, Inc.
on behalf of AXP Mutual

By /s/ Leslie L. Ogg
------------------------
Leslie L. Ogg
Vice President
</TABLE>

The undersigned is a party to this Agreement for the purposes of Sections 3c and
10 only.

American Express Financial Corporation

<TABLE>
<S> <C>
By /s/ Pamela J. Moret
------------------------
Pamela J. Moret
Senior Vice President
</TABLE>

41
<PAGE>
EXHIBIT 2

MINNESOTA BUSINESS CORPORATION ACT
SECTIONS 302A.471 AND 302A.473

Minnesota law requires that we provide you with a copy of the state law on
dissenters' rights. Notwithstanding the provisions of the law set out below, the
SEC has taken the position that use of state appraisal procedures by a
registered mutual fund such as the Strategist Fund would be a violation of
Rule 22c-1, the forward pricing rule, under the 1940 Act. As a result, if any
shareholder elects to exercise dissenters' rights under Minnesota law, the
Strategist Fund intends to submit this question to a court of competent
jurisdiction. In that event, a dissenting shareholder would not receive any
payment until the end of the court proceeding.

302A.471. RIGHTS OF DISSENTING SHAREHOLDERS

SUBDIVISION 1. ACTIONS CREATING RIGHTS. A shareholder of a corporation may
dissent from, and obtain payment for the fair value of the shareholder's shares
in the event of, any of the following corporate actions:

(a) An amendment of the articles that materially and adversely affects the
rights or preferences of the shares of the dissenting shareholder in that
it:

(1) alters or abolishes a preferential right of the shares;

(2) creates, alters, or abolishes a right in respect of the redemption of
the shares, including a provision respecting a sinking fund for the
redemption or repurchase of the shares;

(3) alters or abolishes a preemptive right of the holder of the shares to
acquire shares, securities other than shares, or rights to purchase
shares or securities other than shares;

(4) excludes or limits the right of a shareholder to vote on a matter, or to
cumulate votes, except as the right may be excluded or limited through
the authorization or issuance of securities of an existing or new class
or series with similar or different voting rights; except that an
amendment to the articles of an issuing public corporation that provides
that section 302A.671 does not apply to a control share acquisition does
not give rise to the right to obtain payment under this section;

42
<PAGE>
(b) A sale, lease, transfer, or other disposition of all or substantially all of
the property and assets of the corporation, but not including a transaction
permitted without shareholder approval in section 302A.661, subdivision 1,
or a disposition in dissolution described in section 302A.725, subdivision
2, or a disposition pursuant to an order of a court, or a disposition for
cash on terms requiring that all or substantially all of the net proceeds of
disposition be distributed to the shareholders in accordance with their
respective interests within one year after the date of disposition;

(c) A plan of merger, whether under this chapter or under chapter 322B, to which
the corporation is a party, except as provided in subdivision 3;

(d) A plan of exchange, whether under this chapter or under chapter 322B, to
which the corporation is a party as the corporation whose shares will be
acquired by the acquiring corporation, if the shares of the shareholder are
entitled to be voted on the plan; or

(e) Any other corporate action taken pursuant to a shareholder vote with respect
to which the articles, the bylaws, or a resolution approved by the board
directs that dissenting shareholders may obtain payment for their shares.

SUBDIVISION 2. BENEFICIAL OWNERS.

(a) A shareholder shall not assert dissenters' rights as to less than all of the
shares registered in the name of the shareholder, unless the shareholder
dissents with respect to all the shares that are beneficially owned by
another person but registered in the name of the shareholder and discloses
the name and address of each beneficial owner on whose behalf the
shareholder dissents. In that event, the rights of the dissenter shall be
determined as if the shares as to which the shareholder has dissented and
the other shares were registered in the names of different shareholders.

(b) The beneficial owner of shares who is not the shareholder may assert
dissenters' rights with respect to shares held on behalf of the beneficial
owner, and shall be treated as a dissenting shareholder under the terms of
this section and section 302A.473, if the beneficial owner submits to the
corporation at the time of or before the assertion of the rights a written
consent of the shareholder.

43
<PAGE>
SUBDIVISION 3. RIGHTS NOT TO APPLY.

(a) Unless the articles, the bylaws, or a resolution approved by the board
otherwise provide, the right to obtain payment under this section does not
apply to a shareholder of the surviving corporation in a merger, if the
shares of the shareholder are not entitled to be voted on the merger.

(b) If a date is fixed according to section 302A.445, subdivision 1, for the
determination of shareholders entitled to receive notice of and to vote on
an action described in subdivision 1, only shareholders as of the date
fixed, and beneficial owners as of the date fixed who hold through
shareholders, as provided in subdivision 2, may exercise dissenters' rights.

SUBDIVISION 4. OTHER RIGHTS. The shareholders of a corporation who have a right
under this section to obtain payment for their shares do not have a right at law
or in equity to have a corporate action described in subdivision 1 set aside or
rescinded, except when the corporate action is fraudulent with regard to the
complaining shareholder or the corporation.

302A.473. PROCEDURES FOR ASSERTING DISSENTERS' RIGHTS
SUBDIVISION 1. DEFINITIONS.

(a) For purposes of this section, the terms defined in this subdivision have the
meanings given them.

(b) "Corporation" means the issuer of the shares held by a dissenter before the
corporate action referred to in section 302A.471, subdivision 1 or the
successor by merger of that issuer.

(c) "Fair value of the shares" means the value of the shares of a corporation
immediately before the effective date of the corporate action referred to in
section 302A.471, subdivision 1.

(d) "Interest" means interest commencing five days after the effective date of
the corporate action referred to in section 302A.471, subdivision 1, up to
and including the date of payment, calculated at the rate provided in
section 549.09 for interest on verdicts and judgments.

SUBDIVISION 2. NOTICE OF ACTION. If a corporation calls a shareholder meeting
at which any action described in section 302A.471, subdivision 1 is to be voted
upon, the notice of the meeting shall inform each shareholder of the right to
dissent and shall include a copy of section 302A.471 and this

44
<PAGE>
section and a brief description of the procedure to be followed under these
sections.

SUBDIVISION 3. NOTICE OF DISSENT. If the proposed action must be approved by
the shareholders, a shareholder who is entitled to dissent under section
302A.471 and who wishes to exercise dissenters' rights must file with the
corporation before the vote on the proposed action a written notice of intent to
demand the fair value of the shares owned by the shareholder and must not vote
the shares in favor of the proposed action.

SUBDIVISION 4. NOTICE OF PROCEDURE; DEPOSIT OF SHARES.

(a) After the proposed action has been approved by the board and, if necessary,
the shareholders, the corporation shall send to all shareholders who have
complied with subdivision 3 and to all shareholders entitled to dissent if
no shareholder vote was required, a notice that contains:

(1) The address to which a demand for payment and certificates of
certificated shares must be sent in order to obtain payment and the date
by which they must be received;

(2) Any restrictions on transfer of uncertificated shares that will apply
after the demand for payment is received;

(3) A form to be used to certify the date on which the shareholder, or the
beneficial owner on whose behalf the shareholder dissents, acquired the
shares or an interest in them and to demand payment; and

(4) A copy of section 302A.471 and this section and a brief description of
the procedures to be followed under these sections.

(b) In order to receive the fair value of the shares, a dissenting shareholder
must demand payment and deposit certificated shares or comply with any
restrictions on transfer of uncertificated shares within 30 days after the
notice required by paragraph (a) was given, but the dissenter retains all
other rights of a shareholder until the proposed action takes effect.

SUBDIVISION 5. PAYMENT; RETURN OF SHARES.

(a) After the corporate action takes effect, or after the corporation receives a
valid demand for payment, whichever is later, the corporation shall remit to
each dissenting shareholder who has complied with

45
<PAGE>
subdivisions 3 and 4 the amount the corporation estimates to be the fair
value of the shares, plus interest, accompanied by:

(1) The corporation's closing balance sheet and statement of income for a
fiscal year ending not more than 16 months before the effective date of
the corporate action, together with the latest available interim
financial statements;

(2) An estimate by the corporation of the fair value of the shares and a
brief description of the method used to reach the estimate; and

(3) A copy of section 302A.471 and this section, and a brief description of
the procedure to be followed in demanding supplemental payment.

(b) The corporation may withhold the remittance described in paragraph (a) from
a person who was not a shareholder on the date the action dissented from was
first announced to the public or who is dissenting on behalf of a person who
was not a beneficial owner on that date. If the dissenter has complied with
subdivisions 3 and 4, the corporation shall forward to the dissenter the
materials described in paragraph (a), a statement of the reason for
withholding the remittance, and an offer to pay to the dissenter the amount
listed in the materials if the dissenter agrees to accept that amount in
full satisfaction. The dissenter may decline the offer and demand payment
under subdivision 6. Failure to do so entitled the dissenter only to the
amount offered. If the dissenter makes demand, subdivision 7 and 8 apply.

(c) If the corporation fails to remit payment within 60 days of the deposit of
certificates or the imposition of transfer restrictions on uncertificated
shares, it shall return all deposited certificates and cancel all transfer
restrictions. However, the corporation may again give notice under
subdivision 4 and require deposit or restrict transfer at a later time.

SUBDIVISION 6. SUPPLEMENTAL PAYMENT; DEMAND. If a dissenter believes that the
amount remitted under subdivision 5 is less than the fair value of the shares
plus interest, the dissenter may give written notice to the corporation of the
dissenter's own estimate of the fair value of the shares, plus interest, within
30 days after the corporation mails the remittance under subdivision 5, and
demand payment of the difference. Otherwise, a dissenter is entitled only to the
amount remitted by the corporation.

46
<PAGE>
SUBDIVISION 7. PETITION; DETERMINATION. If the corporation receives a demand
under subdivision 6, it shall, within 60 days after receiving the demand, either
pay to the dissenter the amount demanded or agreed to by the dissenter after
discussion with the corporation or file in a court a petition requesting that
the court determine the fair value of the shares, plus interest. The petition
shall be filed in the county in which the registered office of the corporation
is located, except that a surviving foreign corporation that receives a demand
relating to the shares of a constituent domestic corporation shall file the
petition in the county in this state in which the last registered office of the
constituent corporation was located. The petition shall name as parties all
dissenters who have demanded payment under subdivision 6 and who have not
reached agreement with the corporation. The corporation shall, after filing the
petition, serve all parties with a summons and copy of the petition under the
rules of civil procedure. Nonresidents of this state may be served by registered
or certified mail or by publication as provided by law. Except as otherwise
provided, the rules of civil procedures apply to this proceeding. The
jurisdiction of the court is plenary and exclusive. The court may appoint
appraisers, with powers and authorities the court deems proper, to receive
evidence on and recommend the amount of the fair value of the shares. The court
shall determine whether the shareholder or shareholders in question have fully
complied with the requirements of this section, and shall determine the fair
value of the shares, taking into account any and all factors the court finds
relevant, computed by any method or combination of methods that the court, in
its discretion, sees fit to use, whether or not used by the corporation or by a
dissenter. The fair value of the shares as determined by the court is binding on
all shareholders, wherever located. A dissenter is entitled to judgment in cash
for the amount by which the fair value of the shares as determined by the court,
plus interest, exceeds the amount, if any, remitted under subdivision 5, but
shall not be liable to the corporation for the amount, if any, by which the
amount, if any, remitted to the dissenter under subdivision 5 exceeds the fair
value of the shares as determined by the court, plus interest.

SUBDIVISION 8. COSTS; FEES; EXPENSES.

(a) The court shall determine the costs and expenses of a proceeding under
subdivision 7, including the reasonable expenses and compensation of any
appraisers appointed by the court, and shall assess those costs and expenses
against the corporation, except that the court may assess part or all of
those costs and expenses against a dissenter

47
<PAGE>
whose action in demanding payment under subdivision 6 is found to be
arbitrary, vexatious, or not in good faith.

(b) If the court finds that the corporation has failed to comply substantially
with this section, the court may assess all fees and expenses of any experts
or attorneys as the court deems equitable. These fees and expenses may also
be assessed against a person who has acted arbitrarily, vexatiously, or not
in good faith in bringing the proceeding, and may be awarded to a party
injured by those actions.

(c) The court may award, in its discretion, fees and expenses to an attorney for
the dissenters out of the amount awarded to the dissenters, if any.

<PAGE>

AXP(SM) Emerging Markets Fund

Prospectus

Dec. 30, 1999

AXP Emerging Markets Fund seeks to provide shareholders with long-term capital
growth.

Please note that this Fund:

o is not a bank deposit

o is not federally insured

o is not endorsed by any bank or government agency

o is not guaranteed to achieve its goal

Like all mutual funds, the Securities and Exchange Commission has not approved
or disapproved these securities or passed upon the adequacy of this prospectus.
Any representation to the contrary is a criminal offense.

<PAGE>

Table of Contents

TAKE A CLOSER LOOK AT:

The Fund 3p

Goal 3p

Investment Strategy 3p

Risks 4p

Past Performance 6p

Fees and Expenses 8p

Management 9p

Buying and Selling Shares 9p

Valuing Fund Shares 9p

Investment Options 10p

Purchasing Shares 11p

Transactions through Third Parties 14p

Sales Charges 14p

Exchanging/Selling Shares 18p

Distributions and Taxes 23p

Master/Feeder Structure 25p

Financial Highlights 27p

FUND INFORMATION KEY

Goal and Investment Strategy
The Fund's particular investment goal and the strategies it intends to use in
pursuing its goal.

Risks
The major risk factors associated with the Fund.

Fees and Expenses
The overall costs incurred by an investor in the Fund, including sales charges
and annual expenses.

Management
The individual or group designated by the investment manager to handle the
Fund's day-to-day management.

Master/Feeder Structure
Describes the Fund's investment structure.

Financial Highlights
Tables showing the Fund's financial performance.

<PAGE>

The Fund

GOAL

AXP Emerging Markets Fund (the Fund) seeks to provide shareholders with
long-term capital growth. Because any investment involves risk, achieving this
goal cannot be guaranteed.

The Fund seeks to achieve its goal by investing all of its assets in a master
portfolio rather than by directly investing in and managing its own portfolio of
securities. The master portfolio has the same goal and investment policies as
the Fund.

INVESTMENT STRATEGY

The Fund's assets primarily are invested in equity securities of companies in
emerging market countries. Emerging markets are countries characterized as
developing or emerging by either the World Bank or the United Nations. Under
normal market conditions, at least 65% of the Fund's total assets will be
invested in companies located in at least three different emerging market
countries. Included within this 65% are the securities of companies that earn
50% or more of their total revenues from goods or services produced in emerging
market countries or from sales made in emerging market countries.

The selection of geographic regions is the primary decision in building the
investment portfolio.

In pursuit of the Fund's goal, American Express Financial Corporation (AEFC),
the Fund's investment manager, chooses investments by:

o Considering opportunities and risks within emerging market countries.

o Determining the percentage of assets to invest in a particular country
based upon its economic outlook, political environment, and growth rate
(the Fund may invest a significant portion of its assets in a particular
country or region).

o Identifying companies with:

-- effective management,

-- financial strength,

-- prospects for growth and development, and

-- high demand for their products or services.

o Identifying securities with sufficient liquidity in trading volume(however,
AEFC may invest up to 10% of the Fund's net assets in illiquid securities).

<PAGE>

o Buying securities of those companies AEFC considers to be industry market
leaders offering the best opportunity for long-term growth.

In evaluating whether to sell a security, AEFC considers, among other factors,
whether:

-- the security is overvalued relative to alternative investments, and

-- the company or the security continues to meet the standards described
above.

Because the economies of emerging markets can change much more rapidly than that
of the U.S., AEFC will focus on the risks associated with potential currency
devaluations or sharp changes in monetary policy. If AEFC believes economic or
political developments may result in lower share prices, it will attempt to
reduce the investments in that country.

AEFC closely monitors the Fund's exposure to foreign currency fluctuations. From
time to time, AEFC may purchase derivative instruments to hedge against currency
fluctuations. Additionally, the Fund may utilize derivative instruments to
produce incremental earnings and to increase flexibility.

Although not a primary investment strategy, the Fund also may invest in other
instruments such as money market securities and debt securities.

During weak or declining markets, the Fund may invest more of its assets in
money market securities. Although the Fund primarily will invest in these
securities to avoid losses, this type of investing also could prevent the Fund
from achieving its investment objective. During these times, AEFC may make
frequent securities trades that could result in increased fees, expenses and
taxes.

For more information on strategies and holdings, see the Fund's Statement of
Additional Information (SAI) and the annual/semiannual reports.

RISKS

This Fund is designed for long-term investors with above-average risk tolerance.
Please remember that with any mutual fund investment you may lose money.
Principal risks associated with an investment in the Fund include:

Market Risk

Foreign/Emerging Markets Risk

Liquidity Risk

Style Risk

Sector/Concentration Risk

<PAGE>

Market Risk
The market may drop and you may lose money. Market risk may affect a single
issuer, sector of the economy, industry, or the market as a whole. The market
value of all securities may move up and down, sometimes rapidly and
unpredictably.

Foreign/Emerging Markets Risk
The following are all components of foreign/emerging markets risk:

Country risk includes the political, economic, and other conditions of a
country. These conditions include lack of publicly available information, less
government oversight (including lack of accounting, auditing, and financial
reporting standards), the possibility of government-imposed restrictions, and
even the nationalization of assets.

Currency risk results from the constantly changing exchange rate between local
currency and the U.S. dollar. Whenever the Fund holds securities valued in a
foreign currency or holds the currency, changes in the exchange rate add or
subtract from the value of the investment.

Custody risk refers to the process of clearing and settling trades. It also
covers holding securities with local agents and depositories. Low trading
volumes and volatile prices in less developed markets make trades harder to
complete and settle. Local agents are held only to the standard of care of the
local market. Governments or trade groups may compel local agents to hold
securities in designated depositories that are not subject to independent
evaluation. The less developed a country's securities market is, the greater the
likelihood of problems occurring.

Emerging Markets risk includes the dramatic pace of change (economic, social,
and political) in these countries as well as the other considerations listed
above. These markets are in early stages of development and are extremely
volatile. They can be marked by extreme inflation, devaluation of currencies,
dependence on trade partners, and hostile relations with neighboring countries.

Liquidity Risk
Securities may be difficult or impossible to sell at the time that the Fund
would like. The Fund may have to lower the selling price, sell other
investments, or forego an investment opportunity.

Style Risk
AEFC purchases growth stocks based on the expectation that the companies will
have strong growth in earnings. The price paid often reflects an expected rate
of growth. If that growth fails to occur, the price of the stock may decline
quickly.

Sector/Concentration Risk
Investments that are concentrated in a particular issuer, geographic region, or
industry will be more susceptible to changes in price (the more you diversify,
the more you spread risk).

<PAGE>

PAST PERFORMANCE

The following bar chart and table indicate the risks and variability of
investing in the Fund by showing:

o how the Fund's performance has varied for each full calendar year that the
Fund has existed, and

o how the Fund's average annual total returns compare to other recognized
indexes.

How the Fund has performed in the past does not indicate how the Fund will
perform in the future.

Class A Performance (based on calendar years)
+6.26%

________________________________________________________________________________
1989 1990 1991 1992 1993 1994 1995 1996 1997

-30.26%
1998

During the period shown in the bar chart, the highest return for a calendar
quarter was +27.35% (quarter ending June 1998) and the lowest return for a
calendar quarter was -27.03% (quarter ending September 1998).

The 5% sales charge applicable to Class A shares of the Fund is not reflected in
the bar chart; if reflected, returns would be lower than those shown. The
performance of Class B and Class Y may vary from that shown above because of
differences in sales charges and fees.

The Fund's year to date return as of Sept. 30, 1999 was +30.21%.

<PAGE>

________________________________________________________________________________
Average Annual Total Returns (as of Dec. 31, 1998)
________________________________________________________________________________
1 year Since inception

Emerging Markets:

Class A -33.75% -14.20%a

Class B -33.58% -14.38%a

Class Y -30.23% -12.07%a

MSCI Emerging Markets Free Index -25.34% -17.92%b

Lipper Emerging Markets Fund Index -26.87% -17.98%b

a Inception date was Nov. 13, 1996.
b Measurement period started Dec. 1, 1996.

For purposes of this calculation we assumed:

o a sales charge of 5% for Class A shares,

o sales at the end of the period and deduction of the applicable contingent
deferred sales charge (CDSC) for Class B shares,

o no sales charge for Class Y shares, and

o no adjustments for taxes paid by an investor on the reinvested income and
capital gains.

Morgan Stanley Capital International (MSCI) Emerging Markets Free Index is an
unmanaged market capitalization-weighted index compiled from a composite of
securities markets of 26 emerging market countries. The index reflects
reinvestment of all distributions and changes in market prices, but excludes
brokerage commissions or other fees.

Lipper Emerging Markets Fund Index, an unmanaged index published by Lipper
Analytical Services Inc., includes 31 funds that are generally similar to the
Fund, although some funds in the index may have somewhat different investment
policies or objectives.

<PAGE>

FEES AND EXPENSES

Fund investors pay various expenses. The table below describes the fees and
expenses that you may pay if you buy and hold shares of the Fund.

________________________________________________________________________________
Shareholder Fees (fees paid directly from your investment)
________________________________________________________________________________
Class A Class B Class Y

Maximum sales charge (load)
imposed on purchases(a)(as a percentage
of offering price) 5% none none

Maximum deferred sales charge (load)
imposed on sales (as a percentage of
offering price at time of purchase) none 5% none
________________________________________________________________________________
Annual Fund operating expenses(b) (expenses that are deducted from Fund assets)
________________________________________________________________________________

As a percentage of average
daily net assets: Class A Class B Class Y

Management fees 1.10% 1.10% 1.10%

Distribution (12b-1) fees 0.25% 1.00% 0.00%

Other expenses(c) 0.76% 0.78% 0.86%

Total 2.11% 2.88% 1.96%

a This charge may be reduced depending on your total investments in American
Express mutual funds. See "Sales Charges."
b Both in this table and the following example, fund operating expenses
include expenses charged by both the Fund and its Master Portfolio as
described under "Management." Expenses for Class A, Class B and Class Y are
based on actual expenses for the last fiscal year, restated to reflect
current fees.
c Other expenses include an administrative services fee, a shareholder
services fee for Class Y, a transfer agency fee and other nonadvisory
expenses.

<PAGE>

Example

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

Assume you invest $10,000 and the Fund earns a 5% annual return. The operating
expenses remain the same each year. If you hold your shares until the end of the
years shown, your costs would be:

1 year 3 years 5 years 10 years

Class A(a) $703 $1,128 $1,578 $2,824

Class B(b) $691 $1,192 $1,619 $3,025(d)

Class B(c) $291 $ 892 $1,519 $3,025(d)

Class Y $199 $ 616 $1,058 $2,290

a Includes a 5% sales charge.
b Assumes you sold your Class B shares at the end of the period and incurred
the applicable CDSC.
c Assumes you did not sell your Class B shares at the end of the period.
d Based on conversion of Class B shares to Class A shares in the ninth year
of ownership.

This example does not represent actual expenses, past or future. Actual expenses
may be higher or lower than those shown.

MANAGEMENT

The Fund's assets are invested in Emerging Markets Portfolio (the Portfolio),
which is managed by AEFC and its London based subsidiary, American Express Asset
Management International Inc. Ian King, co-portfolio manager, joined AEFC in
1995. He has managed the assets of the Portfolio since November 1996. He also is
a member of the portfolio management team for Total Return Portfolio. Prior to
joining AEFC he was director of Lehman Brothers Global Asset Management Ltd.
from 1992 to 1995.

Julian A.S. Thompson, co-portfolio manager of the Portfolio, joined AEFCin 1999.
Prior to joining AEFC, from 1993-1999, he was an Investment Manager - Emerging
Markets for Stewart Ivory, a Scottish investment company.

Buying and Selling Shares

VALUING FUND SHARES

The public offering price for Class A is the net asset value (NAV) adjusted for
the sales charge. For Class B and Class Y, it is the NAV.

The NAV is the value of a single Fund share. The NAV usually changes daily, and
is calculated at the close of business of the New York Stock Exchange, normally
3 p.m. Central Time (CT), each business day (any day the New York Stock Exchange
is open).

<PAGE>

Fund shares may be purchased through various third-party organizations,
including 401(k) plans, banks, brokers and investment advisers. Where authorized
by the Fund, orders will be priced at the NAV next computed after receipt by the
organization or their selected agent.

The Fund's investments are valued based on market quotations, or where market
quotations are not readily available, based on methods selected in good faith by
the board. If the Fund's investment policies permit it to invest in securities
that are listed on foreign stock exchanges that trade on weekends or other days
when the Fund does not price its shares, the value of the Fund's underlying
investments may change on days when you could not buy or sell shares of the
Fund. Please see the SAI for further information.

INVESTMENT OPTIONS

1. Class A shares are sold to the public with a sales charge at the time of
purchase and an annual distribution (12b-1) fee.

2. Class B shares are sold to the public with a CDSC and an annual
distribution (12b-1) fee.

3. Class Y shares are sold to qualifying institutional investors without a
sales charge or distribution fee. Please see the SAI for information on
eligibility to purchase Class Y shares.
________________________________________________________________________________
Investment options summary:
________________________________________________________________________________
Class A Maximum sales charge of 5%

Initial sales charge waived or reduced for certain purchases

Annual distribution fee of 0.25% of average daily net assets*

Lower annual expenses than Class B shares

Class B No initial sales charge

CDSC on shares sold in the first six years (maximum of 5%
in first year, reduced to 0% after year six)

CDSC waived in certain circumstances

Shares convert to Class A in ninth year of ownership

Annual distribution fee of 1.00% of average daily net assets*

Higher annual expenses than Class A shares

Class Y No initial sales charge

No annual distribution fee

Service fee of 0.10% of average daily net assets

Available only to certain qualifying institutional investors

* The Fund has adopted a plan under Rule 12b-1 of the Investment Company Act
of 1940 that allows it to pay distribution and servicing-related fees for
the sale of Class A and Class B shares. Because these fees are paid out of
the Fund's assets on an on-going basis, the fees may cost long-term
shareholders more than paying other types of sales charges imposed by some
mutual funds.

<PAGE>

Should you purchase Class A or Class B shares?

If your investments in American Express mutual funds total $250,000 or more,
Class A shares may be the better option. If you qualify for a waiver of the
sales charge, Class A shares will be the best option.

If you invest less than $250,000, consider how long you plan to hold your
shares. Class B shares have a higher annual distribution fee and a CDSC for six
years. To help you determine what is best for you, consult your financial
advisor.

Class B shares convert to Class A shares in the ninth calendar year of
ownership. Class B shares purchased through reinvested dividends and
distributions also will convert to Class A shares in the same proportion as the
other Class B shares.

PURCHASING SHARES

To purchase shares through a brokerage account or from entities other than
American Express Financial Advisors Inc., please consult your selling agent. The
following section explains how you can purchase shares from American Express
Financial Advisors (the Distributor).

If you do not have a mutual fund account, you need to establish one. Your
financial advisor will help you fill out and submit an application. Once your
account is set up, you can choose among several convenient ways to invest.

When you purchase shares for a new or existing account, your order will be
priced at the next NAV calculated after your order is accepted by the Fund. If
your application does not specify which class of shares you are purchasing, we
will assume you are investing in Class A shares.

Important: When you open an account, you must provide your correct Taxpayer
Identification Number (TIN), which is either your Social Security or Employer
Identification number.

If you do not provide the correct TIN, you could be subject to backup
withholding of 31% of taxable distributions and proceeds from certain sales and
exchanges. You also could be subject to further penalties, such as:

o a $50 penalty for each failure to supply your correct TIN,

o a civil penalty of $500 if you make a false statement that results in no
backup withholding, and

o criminal penalties for falsifying information.

You also could be subject to backup withholding, if the IRS notifies us to do
so, because you failed to report required interest or dividends on your tax
return.

<PAGE>
________________________________________________________________________________
How to determine the correct TIN
________________________________________________________________________________

For this type of account: Use the Social Security or Employer
Identification number of:

Individual or joint account The individual or one of the owners
listed on the joint account

Custodian account of a minor The minor
(Uniform Gifts/Transfers to Minors Act)

A revocable living trust The grantor-trustee
(the person who puts the money into the
trust)

An irrevocable trust, pension trust The legal entity (not the personal
or estate representative or trustee, unless no
legal entity is designated in the
account title)

Sole proprietorship The owner

Partnership The partnership

Corporate The corporation

Association, club or tax-exempt The organization
organization

For details on TIN requirements, contact your financial advisor to obtain a copy
of federal Form W-9, "Request for Taxpayer Identification Number and
Certification." You also may obtain the form on the Internet at
(http://www.irs.ustreas.gov/prod/forms_pubs).

Three ways to invest
________________________________________________________________________________
1 By mail:
________________________________________________________________________________

Once your account has been established, send your check with the account number
on it to:

American Express Funds
P.O. Box 74
Minneapolis, MN 55440-0074

Minimum amounts

Initial investment: $2,000

Additional investments: $100

Account balances: $300

Qualified accounts: none

If your account balance falls below $300, you will be asked to increase it to
$300 or establish a scheduled investment plan. If you do not do so within 30
days, your shares can be sold and the proceeds mailed to you.

<PAGE>
________________________________________________________________________________
2 By scheduled investment plan:
________________________________________________________________________________

Contact your financial advisor for assistance in setting up one of the following
scheduled plans:

o automatic payroll deduction,

o bank authorization,

o direct deposit of Social Security check, or

o other plan approved by the Fund.

Minimum amounts

Initial investment: $100

Additional investments: $50/mo. for qualified accounts; $100/mo. for
nonqualified accounts

Account balances: none (on active plans with monthly payments)

If your account balance is below $2,000, you must make payments at least
monthly.
________________________________________________________________________________
3 By wire or electronic funds transfer:
________________________________________________________________________________

If you have an established account, you may wire money to:

Norwest Bank Minnesota
Routing Transit No. 091000019
Give these instructions:
Credit American Express Financial Advisors Account #0000030015 for personal
account # (your account number) for (your name). Please remember that you need
to provide all 10 digits.

If this information is not included, the order may be rejected, and all money
received by the Fund, less any costs the Fund or American Express Client Service
Corporation (AECSC) incurs, will be returned promptly.

Minimum amounts

Each wire investment: $1,000

<PAGE>

Transactions Through Third Parties

You may buy or sell shares through certain 401(k) plans, banks, broker-dealers,
financial advisors or other investment professionals. These organizations may
charge you a fee for this service and may have different policies. Some policy
differences may include different minimum investment amounts, exchange
privileges, fund choices and cutoff times for investments. The Fund and the
Distributor are not responsible for the failure of one of these organizations to
carry out its obligations to its customers. Some organizations may receive
compensation from the Distributor or its affiliates for shareholder
recordkeeping and similar services. When authorized by the Fund, some
organizations may designate selected agents to accept purchase or sale orders on
the Fund's behalf. To buy or sell shares through third parties or determine if
there are policy differences, please consult your selling agent. For other
pertinent information related to buying or selling shares, please refer to the
appropriate section in the prospectus.

SALES CHARGES

Class A -- initial sales charge alternative

When you purchase Class A shares, you pay a 5% sales charge on the first $50,000
of your total investment and less on investments after the first $50,000:

Total investment Sales charge as percentage of:(a)

Public offering priceb Net amount invested

Up to $50,000 5.0% 5.26%

Next $50,000 4.5 4.71

Next $400,000 3.8 3.95

Next $500,000 2.0 2.04

$1,000,000 or more 0.0 0.00

a To calculate the actual sales charge on an investment greater than $50,000
and less than $1,000,000, you must total the amounts of all increments that
apply.
b Offering price includes a 5% sales charge.

The sales charge on Class A shares may be lower than 5%, depending on the total
amount:

o you now are investing in this Fund,

o you have previously invested in this Fund, or

<PAGE>

o you and your primary household group are investing or have invested in
other American Express mutual funds that have a sales charge. (The primary
household group consists of accounts in any ownership for spouses or
domestic partners and their unmarried children under 21. For purposes of
this policy, domestic partners are individuals who maintain a shared
primary residence and have joint property or other insurable interests.)
AXP Tax-Free Money Fund and Class A shares of AXP Cash Management Fund do
not have sales charges.

Other Class A sales charge policies:

o IRA purchases or other employee benefit plan purchases made through a
payroll deduction plan or through a plan sponsored by an employer,
association of employers, employee organization or other similar group, may
be added together to reduce sales charges for all shares purchased through
that plan, and

o if you intend to invest $1 million over a period of 13 months, you can
reduce the sales charges in Class A by filing a letter of intent. For more
details, please see the SAI.

Waivers of the sales charge for Class A shares

Sales charges do not apply to:

o current or retired board members, officers or employees of the Fund or AEFC
or its subsidiaries, their spouses or domestic partners and unmarried
children under 21.

o current or retired American Express financial advisors, their spouses or
domestic partners and unmarried children under 21.

o investors who have a business relationship with a newly associated
financial advisor who joined the Distributor from another investment firm
provided that (1) the purchase is made within six months of the advisor's
appointment date with the Distributor, (2) the purchase is made with
proceeds of shares sold that were sponsored by the financial advisor's
previous broker-dealer, and (3) the proceeds are the result of a sale of an
equal or greater value where a sales load was assessed.

o qualified employee benefit plans offering participants daily access to
American Express mutual funds. Eligibility must be determined in advance.
For assistance, please contact your financial advisor. (Participants in
certain qualified plans where the initial sales charge is waived may be
subject to a deferred sales charge of up to 4%.)

o shareholders who have at least $1 million invested in American Express
mutual funds. If the investment is sold in the first year after purchase, a
CDSC of 1% will be charged. The CDSC will be waived only in the
circumstances described for waivers for Class B shares.

<PAGE>

o purchases made within 90 days after a sale of shares (up to the amount
sold):

-- of American Express mutual funds in a qualified plan subject to a
deferred sales charge, or

-- in a qualified plan or account where American Express Trust Company
has a recordkeeping, trustee, investment management, or investment
servicing relationship.

Send the Fund a written request along with your payment, indicating the date and
the amount of the sale.

o purchases made:

-- with dividend or capital gain distributions from this Fund or from the
same class of another American Express mutual fund that has a sales
charge,

-- through or under a wrap fee product or other investment product
sponsored by the Distributor or another authorized broker-dealer,
investment adviser, bank or investment professional,

-- within the University of Texas System ORP,

-- within a segregated separate account offered by Nationwide Life
Insurance Company or Nationwide Life and Annuity Insurance Company,

-- within the University of Massachusetts After-Tax Savings Program,

-- with the proceeds from IDS Life Real Estate Variable Annuity
surrenders, or

-- through or under a subsidiary of AEFC offering Personal Trust
Services' Asset-Based pricing alternative.

Class B -- contingent deferred sales charge (CDSC) alternative

A CDSC is based on the sale amount and the number of calendar years -- including
the year of purchase -- between purchase and sale. The following table shows how
CDSC percentages on sales decline after a purchase:

If the sale is made during the: The CDSC percentage rate is:

First year 5%

Second year 4%

Third year 4%

Fourth year 3%

Fifth year 2%

Sixth year 1%

Seventh year 0%

If the amount you are selling causes the value of your investment in Class B
shares to fall below the cost of the shares you have purchased during the last
six years including the current year, the CDSC is based on the lower of the cost
of those shares purchased or market value.

<PAGE>

Example:

Assume you had invested $10,000 in Class B shares and that your investment had
appreciated in value to $12,000 after 15 months, including reinvested dividends
and capital gain distributions. You could sell up to $2,000 worth of shares
without paying a CDSC ($12,000 current value less $10,000 purchase amount). If
you sold $2,500 worth of shares, the CDSC would apply to the $500 representing
part of your original purchase price. The CDSC rate would be 4% because the sale
was made during the second year after the purchase.

Because the CDSC is imposed only on sales that reduce your total purchase
payments, you never have to pay a CDSC on any amount that represents
appreciation in the value of your shares, income earned by your shares, or
capital gains. In addition, the CDSC rate on your sale will be based on your
oldest purchase payment. The CDSC on the next amount sold will be based on the
next oldest purchase payment.

The CDSC on Class B shares will be waived on sales of shares:

o in the event of the shareholder's death,

o held in trust for an employee benefit plan, or

o held in IRAs or certain qualified plans if American Express Trust Company
is the custodian, such as Keogh plans, tax-sheltered custodial accounts or
corporate pension plans, provided that the shareholder is:

-- at least 591/2 years old AND

-- taking a retirement distribution (if the sale is part of a transfer to
an IRA or qualified plan, or a custodian-to-custodian transfer, the
CDSC will not be waived) OR

-- selling under an approved substantially equal periodic payment
arrangement.

<PAGE>

EXCHANGING/SELLING SHARES

Exchanges

You can exchange your Fund shares at no charge for shares of the same class of
any other publicly offered American Express mutual fund. Exchanges into AXP
Tax-Free Money Fund may only be made from Class A shares. For complete
information on the other funds, including fees and expenses, read that fund's
prospectus carefully. Your exchange will be priced at the next NAV calculated
after it is accepted by that fund.

You may make up to three exchanges (11/2 round trips) within any 30-day period.
These limits do not apply to scheduled exchange programs and certain employee
benefit plans. Exceptions may be allowed with pre-approval of the Fund.

Other exchange policies:

o Exchanges must be made into the same class of shares of the new fund.

o If your exchange creates a new account, it must satisfy the minimum
investment amount for new purchases.

o Once we receive your exchange request, you cannot cancel it.

o Shares of the new fund may not be used on the same day for another
exchange.

o If your shares are pledged as collateral, the exchange will be delayed
until AECSC receives written approval from the secured party.

AECSC and the Fund reserve the right to reject any exchange, limit the amount,
or modify or discontinue the exchange privilege, to prevent abuse or adverse
effects on the Fund and its shareholders. For example, if exchanges are too
numerous or too large, they may disrupt the Fund's investment strategies or
increase its costs.

Selling Shares

You can sell your shares at any time. The payment will be mailed within seven
days after accepting your request.

When you sell shares, the amount you receive may be more or less than the amount
you invested. Your sale price will be the next NAV calculated after your request
is accepted by the Fund, minus any applicable CDSC.

<PAGE>

You can change your mind after requesting a sale and use all or part of the
proceeds to purchase new shares in the same account from which you sold. If you
reinvest in Class A, you will purchase the new shares at NAV rather than the
offering price on the date of a new purchase. If you reinvest in Class B, any
CDSC you paid on the amount you are reinvesting also will be reinvested. To take
advantage of this option, send a request within 90 days of the date your sale
request was received and include your account number. This privilege may be
limited or withdrawn at any time and may have tax consequences.

The Fund reserves the right to redeem in kind.

For more details and a description of other sales policies, please see the SAI.

<PAGE>

To sell or exchange shares held through a brokerage account or with entities
other than American Express Financial Advisors, please consult your selling
agent. The following section explains how you can exchange or sell shares held
with American Express Financial Advisors.

Requests to sell shares of the Fund are not allowed within 30 days of a
telephoned-in address change.

Important: If you request a sale of shares you recently purchased by a check or
money order that is not guaranteed, the Fund will wait for your check to clear.
It may take up to 10 days from the date of purchase before payment is made.
(Payment may be made earlier if your bank provides evidence satisfactory to the
Fund and AECSC that your check has cleared.)

Two ways to request an exchange or sale of shares
________________________________________________________________________________
1 By letter:
________________________________________________________________________________

Include in your letter:

o the name of the fund(s),

o the class of shares to be exchanged or sold,

o your mutual fund account number(s) (for exchanges, both funds must be
registered in the same ownership),

o your Social Security number or employer identification number,

o the dollar amount or number of shares you want to exchange or sell,

o signature(s) of all registered account owners,

o for sales, indicate how you want your money delivered to you, and

o any paper certificates of shares you hold.

Regular mail:

American Express Client Service Corporation
Attn: Transactions
P.O. Box 534
Minneapolis, MN 55440-0534

Express mail:

American Express Client Service Corporation
Attn: Transactions
733 Marquette Ave.
Minneapolis, MN 55402

<PAGE>
________________________________________________________________________________
2 By telephone:
________________________________________________________________________________

American Express Client Service Corporation
Telephone Transaction Service
800-437-3133

o The Fund and AECSC will use reasonable procedures to confirm authenticity
of telephone exchange or sale requests.

o Telephone exchange and sale privileges automatically apply to all accounts
except custodial, corporate or qualified retirement accounts. You may
request that these privileges NOT apply by writing AECSC. Each registered
owner must sign the request.

o Acting on your instructions, your financial advisor may conduct telephone
transactions on your behalf.

o Telephone privileges may be modified or discontinued at any time.

Minimum sale amount: $100 Maximum sale amount: $50,000

<PAGE>
________________________________________________________________________________
Three ways to receive payment when you sell shares
________________________________________________________________________________

1 By regular or express mail:

o Mailed to the address on record.

o Payable to names listed on the account.

NOTE: The express mail delivery charges you pay will vary depending on
the courier you select.
________________________________________________________________________________
2 By wire or electronic funds transfer:
________________________________________________________________________________

o Minimum wire: $1,000.

o Request that money be wired to your bank.

o Bank account must be in the same ownership as the American Express mutual
fund account.

NOTE: Pre-authorization required. For instructions, contact your
financial advisor or AECSC.
________________________________________________________________________________
3 By scheduled payout plan:
________________________________________________________________________________

o Minimum payment: $50.

o Contact your financial advisor or AECSC to set up regular payments on a
monthly, bimonthly, quarterly, semiannual or annual basis.

o Purchasing new shares while under a payout plan may be disadvantageous
because of the sales charges.

<PAGE>

Distributions and Taxes

As a shareholder you are entitled to your share of the Fund's net income and net
gains. The Fund distributes dividends and capital gains to qualify as a
regulated investment company and to avoid paying corporate income and excise
taxes.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The Fund's net investment income is distributed to you as dividends. Capital
gains are realized when a security is sold for a higher price than was paid for
it. Each realized capital gain or loss is long-term or short-term depending on
the length of time the Fund held the security. Realized capital gains and losses
offset each other. The Fund offsets any net realized capital gains by any
available capital loss carryovers. Net short-term capital gains are included in
net investment income. Net realized long-term capital gains, if any, are
distributed by the end of the calendar year as capital gain distributions.

REINVESTMENTS

Dividends and capital gain distributions are automatically reinvested in
additional shares in the same class of the Fund, unless:

o you request distributions in cash, or

o you direct the Fund to invest your distributions in the same class of any
publicly offered American Express mutual fund for which you have previously
opened an account.

We reinvest the distributions for you at the next calculated NAV after the
distribution is paid.

If you choose cash distributions, you will receive cash only for distributions
declared after your request has been processed.

<PAGE>

TAXES

Distributions are subject to federal income tax and may be subject to state and
local taxes in the year they are declared. You must report distributions on your
tax returns, even if they are reinvested in additional shares.

Income received by the Fund may be subject to foreign tax and withholding. Tax
conventions between certain countries and the U.S. may reduce or eliminate these
taxes.

If you buy shares shortly before the record date of a distribution you may pay
taxes on money earned by the Fund before you were a shareholder. You will pay
the full pre-distribution price for the shares, then receive a portion of your
investment back as a distribution, which may be taxable.

For tax purposes, an exchange is considered a sale and purchase, and may result
in a gain or loss. A sale is a taxable transaction. If you sell shares for less
than their cost, the difference is a capital loss. If you sell shares for more
than their cost, the difference is a capital gain. Your gain may be short term
(for shares held for one year or less) or long term (for shares held for more
than one year).

If you buy Class A shares of this or another American Express mutual fund and
within 91 days exchange into this Fund, you may not include the sales charge in
your calculation of tax gain or loss on the sale of the first fund you
purchased. The sales charge may be included in the calculation of your tax gain
or loss on a subsequent sale of this Fund.

Selling shares held in an IRA or qualified retirement account may subject you to
federal taxes, penalties and reporting requirements. Please consult your tax
advisor.

Important: This information is a brief and selective summary of some of the tax
rules that apply to this Fund. Because tax matters are highly individual and
complex, you should consult a qualified tax advisor.

<PAGE>

Master/Feeder Structure

This Fund uses a master/feeder structure. This means that the Fund (a feeder
fund) invests all of its assets in the Portfolio (the master fund). Other feeder
funds also invest in the Portfolio. The master/feeder structure offers the
potential for reduced costs because it spreads fixed costs of portfolio
management over a larger pool of assets. The Fund may withdraw its assets from
the Portfolio at any time if the Fund's board determines that it is best. In
that event, the board would consider what action should be taken, including
whether to hire an investment advisor to manage the Fund's assets directly or to
invest all of the Fund's assets in another pooled investment entity. Here is an
illustration of the structure:

Investors buy shares in the Fund

The Fund buys units in the Portfolio

The Portfolio invests in securities, such as stocks or bonds

Other feeders may include mutual funds and institutional accounts. These feeders
buy the Portfolio's securities on the same terms and conditions as the Fund and
pay their proportionate share of the Portfolio's expenses. However, their
operating costs and sales charges are different from those of the Fund.
Therefore, the investment returns for other feeders are different from the
returns of the Fund.

<PAGE>

YEAR 2000

The Fund could be adversely affected if the computer systems used by AEFC and
the Fund's other service providers do not properly process and calculate
date-related information from and after Jan. 1, 2000. While Year 2000-related
computer problems could have a negative effect on the Fund, AEFC is working to
avoid such problems and to obtain assurances from service providers that they
are taking similar steps.

The companies, governments or international markets in which the Fund invests
also may be adversely affected by Year 2000 issues. To the extent a portfolio
holding is adversely affected by a Year 2000 processing issue, the Fund's return
could be adversely affected.

INVESTMENT MANAGER

The investment manager of the Portfolio is AEFC, located at IDS Tower 10,
Minneapolis, MN 55440-0010. The Portfolio pays AEFC a fee for managing its
assets. The Fund pays its proportionate share of the fee. Under the Investment
Management Services Agreement, the fee for the most recent fiscal year was 1.10%
of its average daily net assets. Under the agreement, the Portfolio also pays
taxes, brokerage commissions and nonadvisory expenses. The fee will be adjusted
based on the Fund's performance, effective Jan. 1, 2000 and will cover the
six-month period beginning July 1, 1999. AEFC is a wholly-owned subsidiary of
American Express Company, a financial services company with headquarters at
American Express Tower, World Financial Center, New York, NY 10285.

<PAGE>

Financial Highlights

Fiscal period ended Oct. 31,

Per share income and capital changes(a)
<TABLE>
<CAPTION>
Class A Class B Class Y

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999 1998 1997(b) 1999 1998 1997(b) 1999 1998 1997(b)

Net asset value, beginning of period $3.44 $5.33 $5.00 $3.39 $5.29 $5.00 $3.45 $5.33 $5.00

Income from investment operations:

Net investment income (loss) .02 .04 .01 (.05) -- (.04) .02 .04 .01

Net gains (losses) (both realized and
unrealized) 1.54 (1.79) .33 1.54 (1.76) .33 1.53 (1.78) .33

Total from investment operations 1.56 (1.75) .34 1.49 (1.76) .29 1.55 (1.74) .34

Less distributions:

Dividends from net investment income (.01) -- (.01) -- -- -- (.01) -- (.01)

Distributions from realized gains -- (.14) -- -- (.14) -- -- (.14) --

Total distributions (.01) (.14) (.01) -- (.14) -- (.01) (.14) (.01)

Net asset value, end of period $4.99 $3.44 $5.33 $4.88 $3.39 $5.29 $4.99 $3.45 $5.33

Ratios/supplemental data

Net assets, end of period (in millions) $251 $187 $243 $130 $97 $114 $-- $-- $--

Ratio of expenses to average daily net
assets(c) 2.03% 1.93% 1.90%(d,e) 2.81% 2.71% 2.67%(d,e) 1.88% .86% 1.75%
(d,e)

Ratio of net investment income (loss)
to average daily net assets .14% .82% .28%(d) (.63%) .07% (.50%)(d) 1.18% 1.03% .33%(d)

Portfolio turnover rate
(excluding short-term securities) 143% 108% 87% 143% 108% 87% 143% 108% 87%

Total return(f) 45.13% (33.74%) 6.84% 43.87% (34.24%) 6.07% 45.29% (33.66%) 6.86%
</TABLE>

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 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 During the period from Nov. 13, 1996 to Oct. 31, 1997, AEFC reimbursed the
Fund for certain expenses. Had AEFC not done so, the annual ratios of
expenses would have been 1.92%, 2.69% and 1.77% for Class A, B, and Y,
respectively.
f Total return does not reflect payment of a sales charge.

The information in these tables has been audited by , independent
auditors. The Independent auditors' report and additional information about the
performance of the Fund are contained in the Fund's annual report which, if not
included with this prospectus, may be obtained without charge.

<PAGE>

This Fund, along with the other American Express mutual funds, is distributed by
American Express Financial Advisors Inc. and can be purchased from an American
Express financial advisor or from other authorized broker-dealers or third
parties. The Funds can be found under the "Amer Express" banner in most mutual
fund quotations.

Additional information about the Fund and its investments is available in the
Fund's Statement of Additional Information (SAI), annual and semiannual reports
to shareholders. In the Fund's annual report, you will find a discussion of
market conditions and investment strategies that significantly affected the Fund
during its last fiscal year. The SAI is incorporated by reference in this
prospectus. For a free copy of the SAI, the annual report or the semiannual
report contact your selling agent American Express Client Service Corporation.

American Express Client Service Corporation
P.O. Box 534, Minneapolis, MN 55440-0534
800-862-7919 TTY: 800-846-4852

Web site address:
http://www.americanexpress.com/advisors

You may review and copy information about the Fund, including the SAI, at the
Securities and Exchange Commission's (Commission) Public Reference Room in
Washington, D.C. (for information about the public reference room call
1-800-SEC-0330). Reports and other information about the Fund are available on
the Commission's Internet site at (http://www.sec.gov). Copies of this
information may be obtained by writing and paying a duplicating fee to the
Public Reference Section of the Commission, Washington, D.C. 20549-6009.

Investment Company Act File #811-5696

TICKER SYMBOL

Class A: IDEAX Class B: IEMBX Class Y: N/A

S-6354-99 E (12/99)

<PAGE>

Independent Auditors' Report

THE BOARD AND SHAREHOLDERS
AXP GLOBAL SERIES, INC.

We have audited the accompanying statement of assets and liabilities of AXP
Emerging Markets Fund (a series of AXP Global Series, Inc.) as of October 31,
1999, the related statement of operations for the year then ended, and the
statements of changes in net assets for each of the years in the two-year period
ended October 31, 1999, and the financial highlights for each of the years in
the two-year period ended October 31, 1999 and for the period from November 13,
1996 (commencement of operations) to October 31, 1997. These financial
statements and the financial highlights are the responsibility of fund
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AXP Emerging Markets Fund as of
October 31, 1999, and the results of its operations, changes in its net assets
and the financial highlights for the periods stated in the first paragraph
above, in conformity with generally accepted accounting principles.

/s/ KPMG LLP
KPMG LLP
Minneapolis, Minnesota
December 3, 1999

Financial Statements

Statement of assets and liabilities
AXP Emerging Markets Fund

Oct. 31, 1999

Assets
<S> <C>
Investments in Emerging Markets Portfolio (Note 1) $381,317,568
------------

Liabilities
Accrued distribution fee 5,100
Accrued transfer agency fee 2,918
Accrued administrative services fee 975
Other accrued expenses 55,459
------
Total liabilities 64,452
------
Net assets applicable to outstanding capital stock $381,253,116
============

Represented by
Capital stock-- $.01 par value (Note 1) $ 770,213
Additional paid-in capital 458,661,630
Undistributed net investment income 33,585
Accumulated net realized gain (loss) (129,070,204)
Unrealized appreciation (depreciation) on investments and on translation
of assets and liabilities in foreign currencies 50,857,892
----------
Total-- representing net assets applicable to outstanding capital stock $381,253,116
============
Net assets applicable to outstanding shares: Class A $251,449,491
Class B $129,748,415
Class Y $ 55,210
Net asset value per share of outstanding capital stock: Class A shares 50,436,501 $ 4.99
Class B shares 26,573,744 $ 4.88
Class Y shares 11,073 $ 4.99

See accompanying notes to financial statements.

</TABLE>

Statement of operations
AXP Emerging Markets Fund

Year ended Oct. 31, 1999

Investment income
Income:
<S> <C>
Dividends $ 6,070,074
Interest 1,690,292
Less foreign taxes withheld (415,303)
--------
Total income 7,345,063
---------
Expenses (Note 2):
Expenses allocated from Emerging Markets Portfolio 4,390,731
Distribution fee
Class A 209,520
Class B 982,226
Transfer agency fee 1,098,085
Incremental transfer agency fee
Class A 76,812
Class B 68,273
Service fee
Class A 239,826
Class B 126,954
Class Y 153
Administrative services fees and expenses 332,738
Compensation of board members 14,873
Printing and postage 171,575
Registration fees 59,940
Audit fees 5,625
Other 4,981
-----
Total expenses 7,782,312
Earnings credits on cash balances (Note 2) (15,278)
-------
Total net expenses 7,767,034
---------
Investment income (loss) -- net (421,971)
--------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions 9,383,044
Foreign currency transactions (516,064)
--------
Net realized gain (loss) on investments 8,866,980
Net change in unrealized appreciation (depreciation) on investments and
on translation of assets and liabilities in foreign currencies 110,378,637
-----------
Net gain (loss) on investments and foreign currencies 119,245,617
-----------
Net increase (decrease) in net assets resulting from operations $118,823,646
============

See accompanying notes to financial statements.
</TABLE>

Statements of changes in net assets
AXP Emerging Markets Fund

Year ended Oct. 31, 1999 1998

Operations and distributions

<S> <C> <C>
Investment income (loss)-- net $ (421,971) $ 2,097,732
Net realized gain (loss) on investments 8,866,980 (139,214,944)
Net change in unrealized appreciation (depreciation) on investments and
on translation of assets and liabilities in foreign currencies 110,378,637 (10,110,207)
----------- -----------
Net increase (decrease) in net assets resulting from operations 118,823,646 (147,227,419)
----------- ------------
Distributions to shareholders from:
Net investment income
Class A (289,880) --
Class Y (77) --
Net realized gain
Class A -- (6,690,278)
Class B -- (3,376,992)
Class Y -- (28)
---- ---
Total distributions (289,957) (10,067,298)
-------- -----------

Capital share transactions (Note 3)

Proceeds from sales
Class A shares (Note 2) 170,245,380 228,859,553
Class B shares 28,172,307 70,357,289
Class Y shares 1,545,981 69,513

Reinvestment of distributions at net asset value
Class A shares 282,640 6,531,285
Class B shares -- 3,367,493
Class Y shares 77 28
Payments for redemptions
Class A shares (184,535,441) (188,924,322)
Class B shares (Note 2) (35,974,427) (36,066,245)
Class Y shares (1,543,520) (700)
---------- ----
Increase (decrease) in net assets from capital share transactions (21,807,003) 84,193,894
----------- ----------
Total increase (decrease) in net assets 96,726,686 (73,100,823)
Net assets at beginning of year 284,526,430 357,627,253
----------- -----------
Net assets at end of year $381,253,116 $284,526,430
============ ============
Undistributed (excess of distributions over) net investment income $ 33,585 $ (409)
------------ ------------

See accompanying notes to financial statements.

</TABLE>
<PAGE>

Notes to Financial Statements

AXP Emerging Markets Fund

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) 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.

Investment in Emerging Markets Portfolio

The Fund invests all of its assets in Emerging Markets 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 growth of capital by investing primarily in stocks
of companies in developing countries offering growth potential.

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 Oct. 31, 1999 was 99.83%.
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 generally accepted accounting
principles 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.

On the statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by $745,922
and accumulated net realized loss has been decreased by $516,064 resulting in a
net reclassification adjustment to decrease paid-in capital by $1,261,986.

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 0.10% to
0.05% 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. (the
Distributor) for distribution and shareholder services. Under a Plan and
Agreement of Distribution (the Plan), 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. The Plan went into effect
July 1, 1999. Under terms of a prior Plan and Agreement of Distribution (the
Prior Plan) that ended June 30, 1999, the Fund paid a distribution fee for Class
B shares at an annual rate up to 0.75% of average daily net assets. The Prior
Plan was not effective with respect to Class A 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. Under terms of a prior agreement that
ended June 30, 1999, the Fund paid a shareholder service fee for Class A and
Class B shares at a rate of 0.175% of average daily net assets. Effective July
1, 1999, the agreement for Class A and Class B shares was converted to the Plan
and Agreement of Distribution discussed above.

Sales charges received by the Distributor for distributing Fund shares were
$841,491 for Class A and $197,309 for Class B for the year ended Oct. 31, 1999.

During the year ended Oct. 31, 1999, the Fund's transfer agency fees were
reduced by $15,278 as a result of earnings credits from overnight cash balances.

3. CAPITAL SHARE TRANSACTIONS

Transactions in shares of capital stock for the years indicated are as follows:

Year ended Oct. 31, 1999

Class A Class B Class Y

Sold 38,402,305 6,532,285 317,355
Issued for reinvested distributions 77,135 -- 21
Redeemed (42,389,266) (8,663,035) (321,275)
----------- ---------- --------
Net increase (decrease) (3,909,826) (2,130,750) (3,899)
---------- ---------- ------

Year ended Oct. 31, 1998

Class A Class B Class Y

Sold 51,479,915 14,823,640 14,979
Issued for reinvested distributions 1,259,650 654,772 5
Redeemed (44,030,447) (8,384,612) (212)
----------- ---------- ----
Net increase (decrease) 8,709,118 7,093,800 14,772
--------- --------- ------

4. CAPITAL LOSS CARRYOVER

For federal income tax purposes, the Fund had a capital loss carryover of
$129,070,204 as of Oct. 31, 1999, that will expire in 2006 if not offset by
capital gains. It is unlikely the board will authorize a distribution of any net
realized capital gains until the available capital loss carryover has been
offset or expires.

5. 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 the
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 year ended Oct. 31,
1999.

6. FINANCIAL HIGHLIGHTS

"Financial highlights" showing per data and selected financial information are
presented on page 27 of the prospectus.

<PAGE>

Independent Auditors' Report

THE BOARD OF TRUSTEES AND UNITHOLDERS
WORLD TRUST

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of Emerging Markets Portfolio (a
series of World Trust) as of October 31, 1999, the related statement of
operations for the year then ended and the statements of changes in net assets
for each of the years in the two-year period ended October 31, 1999. These
financial statements are the responsibility of portfolio management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 1999, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Emerging Markets Portfolio as
of October 31, 1999, and the results of its operations and the changes in its
net assets for the periods stated in the first paragraph above, in conformity
with generally accepted accounting principles.

/s/ KPMG LLP
KPMG LLP
Minneapolis, Minnesota
December 3, 1999

Financial Statements

Statement of assets and liabilities
Emerging Markets Portfolio

Oct. 31, 1999

Assets

Investments in securities, at value (Note 1)
<S> <C>
(identified cost $355,216,355) $406,156,947
Cash in bank on demand deposit (including foreign currency holdings of $4,789,737) 7,976,073
Dividends and accrued interest receivable 424,577
Receivable for investment securities sold 935,905
Unrealized appreciation on foreign currency contracts held, at value (Notes 1 and 5) 197
U.S. government securities held as collateral (Note 4) 15,389,760
----------
Total assets 430,883,459
-----------

Liabilities
Payable for investment securities purchased 10,870,179
Unrealized depreciation on foreign currency contracts held, at value (Notes 1 and 5) 297
Payable upon return of securities loaned (Note 4) 37,893,360
Accrued investment management services fee 11,043
Other accrued expenses 154,221
-------
Total liabilities 48,929,100
----------
Net assets $381,954,359
============

See accompanying notes to financial statements.
</TABLE>

Statement of operations
Emerging Markets Portfolio

Year ended Oct. 31, 1999

Investment income
Income:
<S> <C>
Dividends $ 6,080,065
Interest 1,693,268
Less foreign taxes withheld (415,989)
--------
Total income 7,357,344
---------
Expenses (Note 2):
Investment management services fee 3,716,803
Compensation of board members 8,123
Custodian fees 638,625
Audit fees 16,875
Other 20,169
------
Total expenses 4,400,595
Earnings credits on cash balances (Note 2) (2,700)
- ------
Total net expenses 4,397,895
---------
Investment income (loss) -- net 2,959,449
---------

Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 9,404,732
Foreign currency transactions (515,999)
--------
Net realized gain (loss) on investments 8,888,733
Net change in unrealized appreciation (depreciation) on investments and
on translation of assets and liabilities in foreign currencies 110,553,123
-----------
Net gain (loss) on investments and foreign currencies 119,441,856
-----------
Net increase (decrease) in net assets resulting from operations $122,401,305
============

See accompanying notes to financial statements.
</TABLE>

Statements of changes in net assets
Emerging Markets Portfolio

Year ended Oct. 31, 1999 1998

Operations

<S> <C> <C>
Investment income (loss)-- net $ 2,959,449 $ 5,371,569
Net realized gain (loss) on investments 8,888,733 (139,437,993)
Net change in unrealized appreciation (depreciation) on investments and
on translation of assets and liabilities in foreign currencies 110,553,123 (10,113,028)
----------- -----------
Net increase (decrease) in net assets resulting from operations 122,401,305 (144,179,452)
Net contributions (withdrawals) from partners (25,443,819) 70,718,053
----------- ----------
Total increase (decrease) in net assets 96,957,486 (73,461,399)
Net assets at beginning of year 284,996,873 358,458,272
----------- -----------
Net assets at end of year $381,954,359 $284,996,873
============ ============

See accompanying notes to financial statements.
</TABLE>
<PAGE>

Notes to Financial Statements

Emerging Markets Portfolio

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Emerging Markets 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 invests
primarily in equity securities of issuers in countries with developing or
emerging markets. 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 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 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 1.10% to 1.00% annually. Effective with the new Investment
Management Services Agreement, the fee will be adjusted upward or downward by a
performance incentive adjustment based on a comparison of the performance of
Class A shares of AXP Emerging Markets Fund to the Lipper Emerging Markets 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. The first adjustment
will be made on Jan. 1, 2000 and will cover the six-month period beginning July,
1, 1999.

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 year ended Oct. 31, 1999, the Portfolio's custodian fees were reduced
by $2,700 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 $438,773,640 and $441,059,925, respectively, for the
year ended Oct. 31, 1999. For the same period, the portfolio turnover rate was
143%. Realized gains and losses are determined on an identified cost basis.

4. LENDING OF PORTFOLIO SECURITIES

As of Oct. 31, 1999, securities valued at $35,478,386 were on loan to brokers.
For collateral, the Portfolio received $22,503,600 in cash and U.S. government
securities valued at 15,389,760. Income from securities lending amounted to
$244,471 for the year ended Oct. 31, 1999. 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.

5. FOREIGN CURRENCY CONTRACTS

As of Oct. 31, 1999, the Portfolio 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> <C>
Nov. 2, 1999 317,747 1,952,873 $197 $--
U.S. Dollar South African Rand

Nov. 2, 1999 350,881 2,153,357 -- 297
U.S. Dollar South African Rand

Total $197 $297

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

Investments in Securities

Emerging Markets Portfolio
Oct. 31, 1999

(Percentages represent value of investments compared to net assets)

Common stocks (93.4%)(c)
Issuer Shares Value(a)

Argentina (1.7%)

Banks and savings & loans
<S> <C> <C>
Banco de Galicia - Buenos Aires ADR 315,000(f) $6,654,375

Brazil (10.7%)

Banks and savings & loans (3.5%)
Uniao de Bancos Brasileiros GDR 405,000 9,365,625
Unibanco-Uniao de Banco Brasileiros 87,000,000(b) 4,011,716
Total 13,377,341

Energy (2.4%)
Petroleo Brasileiro ADR 588,500(f) 9,342,438

Metals (0.9%)
Gerdau 196,465,177 3,541,808

Utilities -- electric (0.7%)
Companhia Paranaense de Energia ADR 389,000 2,577,125

Utilities -- telephone (3.2%)
Tele Sudeste Celular Participacoes ADR 188,260(b) 3,765,200
Telesp Participacoes 536,845,000(b) 8,608,222
Total 12,373,422

Chile (3.0%)

Chemicals (0.8%)
Sociedad Quimica y Minera de Chile ADR 99,440 2,889,975

Utilities -- telephone (2.2%)
Compania de Telecomunicaciones de Chile ADR 513,224 8,564,426

Egypt (2.4%)

Miscellaneous (0.6%)
Commercial Intl Bank 204,953 2,447,485

Utilities -- telephone (1.8%)
Egyptian Co for Mobile Services 255,000(b) 6,557,143

Greece (4.1%)

Banks and savings & loans (1.1%)
Commercial Bank of Greece 54,300 4,037,342
Building materials & construction (1.0%)
Titan Cement 33,000 3,658,373

Utilities -- telephone (2.0%)
Panafon Hellenic Telecom 615,800 8,141,091

Hong Kong (5.0%)

Communications equipment & services (1.7%)
China Telecom 1,906,000(b) 6,526,305

Multi-industry conglomerates (3.3%)
China Merchants Holdings Intl 9,258,000 7,329,176
Cosco Pacific Limited 7,060,000 5,225,591
Total 12,554,767

Hungary (2.5%)

Banks and savings & loans (1.4%)
OTP Bank GDR 120,526(d) 5,426,683

Utilities -- telephone (1.1%)
Matav ADR 142,000(f) 4,091,375

India (5.6%)

Automotive & related (1.8%)
Tata Engineering & Locomotive GDR 1,051,000(d) 6,726,400

Banks and savings & loans (0.5%)
State Bank of India GDR 150,000 1,996,875

Miscellaneous (1.1%)
Videsh Sanchar Nigam GDR 270,000(d) 4,306,500

Textiles & apparel (1.6%)
Reliance Inds GDR 488,000(f,d) 6,008,500

Utilities -- telephone (0.6%)
Mahanagar Telephone Nigam GDR 256,048(d) 2,112,396

Indonesia (1.5%)

Retail (0.5%)
PT Indofood Sukses Makmur Tbk 1,498,000(b) 1,770,066

Utilities -- telephone (1.0%)
Indosat 2,413,000 3,907,265

Israel (6.3%)

Banks and savings & loans (1.2%)
Bank Hapoalim 1,890,000 4,494,702

Communications equipment & services (1.2%)
ECI Telecommunications 155,000(f) 4,514,375

Financial services (1.2%)
Discount Investment 122,692 4,677,145

Miscellaneous (1.7%)
Partner Communications ADR 404,690(b) 6,373,868

Utilities -- telephone (1.0%)
Bezeq Israeli Telecommunication 936,826 3,818,332

Mexico (10.3%)

Banks and savings & loans (3.2%)
Grupo Financiero Banamex Accival 5,059,487(b) 12,628,986

Beverages & tobacco (2.2%)
Fomento Economico Mexicano ADR 252,500 8,285,156

Media (1.3%)
Grupo Televisa 120,052 5,102,210

Multi-industry conglomerates (2.1%)
Alfa Cl A 2,043,000(b) 7,840,530

Retail (1.5%)
Organizacion Soriana Cl B 1,505,000 5,572,335

Peru (0.9%)

Utilities -- telephone
Telefonica del Peru ADR 288,794 3,339,181

Philippines (0.9%)

Banks and savings & loans
Bank of the Philippine Islands 1,247,000 3,296,309

Poland (1.3%)

Electronics (0.6%)
Elecktrim Spolka Akcyjna 244,300 2,113,272

Utilities -- telephone (0.7%)
Telekomunikacja Polska GDR 530,230(b) 2,704,173

South Africa (5.7%)

Banks and savings & loans (1.8%)
Nedcor 347,000 6,824,525

Multi-industry conglomerates (2.2%)
Barlow 1,711,900 8,347,400

Paper & packaging (1.7%)
Sappi 802,400 6,649,435

South Korea (10.4%)

Banks and savings & loans (1.2%)
Hana Bank GDR 279,999(b) 2,589,991
Kookmin Bank 128,000 1,995,498
Total 4,585,489

Electronics (5.0%)
L G Cable & Machinery 394,700 8,094,723
Samsung Electronics GDR 127,740(f) 10,857,900
Total 18,952,623

Utilities -- electric (1.2%)
Korea Electric Power 155,700 4,556,123

Utilities -- telephone (3.0%)
Korea Telecom 173,000 11,639,099

Taiwan (10.9%)

Banks and savings & loans (1.0%)
Bank Sinopac 6,448,177 3,638,788

Computers & office equipment (1.4%)
Asustek Computer GDR 295,309(d) 4,163,857
Synnex Technology Intl 234,300 1,174,455
Total 5,338,312

Electronics (7.7%)
Acer Peripherals 1,467,216 3,908,567
Compal Electronics 1,595,273 5,356,134
Hon Hai Precision Inds 1,034,600(b) 7,077,812
Hon Hai Precision Inds GDR 154,000(b,d) 2,521,750
Taiwan Semiconductor Mfg 2,494,240(b) 11,087,258
Total 29,951,521

Miscellaneous (0.8%)
GVC 5,279,000 3,145,432

Thailand (4.0%)

Banks and savings & loans (2.9%)
Bangkok Bank 876,000(b) 2,036,946
Thai Farmers Bank 6,368,000(b) 8,966,697
Total 11,003,643

Media (1.1%)
BEC World Public 674,000 4,179,305

Turkey (5.3%)

Banks and savings & loans (4.2%)
Akbank T.A.S. 458,000,000 7,144,789
Yapi Kredit Finance 605,051,200 8,809,531
Total 15,954,320

Metals (1.1%)
Eregli Demir ve Celik Fabrikalari 165,342,242 4,126,936

Venezuela (0.9%)

Utilities -- telephone
Compania Anonima Nacional Telefonos de Venezuela ADR 140,000 3,613,750

Total common stocks
(Cost: $305,985,634) $356,856,751

Other (--%)

Issuer Shares Value(a)

Korea
Kookmin Bank
Rights 12,856 $78,240

Total other
(Cost: $--) $78,240
</TABLE>

Short-term securities (12.9%)

Issu er Annualized Amount Value(a)
yield on date payable at
of purchase maturity

U.S. government agencies (10.6%)
Federal Home Loan Bank Disc Nts
<S> <C> <C> <C> <C> <C>
12-01-99 5.25% $7,900,000 $7,860,748
12-03-99 5.27 6,400,000 6,367,395
Federal Home Loan Mtge Corp Disc Nt
11-29-99 5.23 5,500,000 5,475,325
Federal Natl Mtge Assn Disc Nts
11-22-99 5.17 1,400,000 1,395,193
12-02-99 5.27 3,400,000 3,382,310
12-08-99 5.28 6,100,000 6,063,332
12-17-99 5.24 4,100,000 4,070,981
01-21-00 5.63 5,900,000 5,825,385
Total 40,440,669

Commercial paper (2.3%)

BellSouth Capital Funding
11-16-99 5.30 600,000(e) 598,380
Electronic Data Systems
11-01-99 5.32 3,800,000(e) 3,798,315
Paccar Financial
11-18-99 5.31 1,500,000 1,495,592
Wal-Mart Stores
11-22-99 5.32 1,700,000(e) 1,693,993
11-30-99 5.35 600,000(e) 597,163
Windmill Funding
11-22-99 5.41 600,000(e) 597,844
Total 8,781,287

Total short-term securities
(Cost: $49,230,721) $49,221,956

Total investments in securities
(Cost: $355,216,355)(g) $406,156,947

</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.

(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 4 to the financial
statements.

(g) At Oct. 31, 1999, the cost of securities for federal income tax purposes was
$355,216,355 and the aggregate gross unrealized appreciation and depreciation
based on that cost was:

Unrealized appreciation $79,687,817
Unrealized depreciation (28,747,225)
-----------
Net unrealized appreciation $50,940,592

<PAGE>

AXPSM Global Bond Fund

PROSPECTUS

Dec. 30, 1999

American
Express(R)
Funds

AXP Global Bond Fund seeks to provide
shareholders with high total return
through income and growth of capital.
Please note that this Fund:

o is not a bank deposit

o is not federally insured

o is not endorsed by any bank or government agency

o is not guaranteed to achieve its goal

Like all mutual funds, the Securities and Exchange
Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus.
Any representation to the contrary is a criminal offense.

AMERICAN EXPRESS (logo)

<PAGE>

Table of Contents

take a closer look at:

The Fund 3p
Goal 3p
Investment Strategy 3p
Risks 4p
Past Performance 6p
Fees and Expenses 8p
Management 9p
Buying and Selling Shares 9p
Valuing Fund Shares 9p
Investment Options 10p
Purchasing Shares 11p
Transactions through Third Parties 14p
Sales Charges 14p
Exchanging/Selling Shares 18p
Distributions and Taxes 23p
Master/Feeder Structure 25p
Other Information 26p
Financial Highlights 27p

FUND INFORMATION KEY

Goal and Investment Strategy
The Fund's particular investment goal and the strategies it intends to use
in pursuing its goal.

Risks
The major risk factors associated with the Fund.

Fees and Expenses
The overall costs incurred by an investor in the Fund, including sales charges
and annual expenses.

Management
The individual or group designated by the investment manager to handle the
Fund's day-to-day management.

Master/Feeder Structure
Describes the Fund's investment structure.

Financial Highlights
Tables showing the Fund's financial performance.

<PAGE>

The Fund

GOAL

AXP Global Bond Fund (the Fund) seeks to provide shareholders with high total
return through income and growth of capital. Because any investment involves
risk, achieving this goal cannot be guaranteed.

INVESTMENT STRATEGY

The Fund is a non-diversified mutual fund that invests primarily in debt
obligations of U.S. and foreign issuers. Under normal market conditions, at
least 80% of the Fund's net assets will be invested in investment-grade
corporate or government debt obligations including money market instruments of
issuers located in at least three different countries. Although the Fund
emphasizes high and medium-quality debt securities, it will assume some credit
risk to achieve higher dividends and /or capital appreciation (by buying junk
bonds).

The selection of investment-grade government and corporate debt obligations is
the primary decision in building the portfolio.

In pursuit of the Fund's goal, American Express Financial Corporation (AEFC),
the Fund's investment manager, chooses investments by:

o Considering opportunities and risks by credit rating and currency.

o Identifying investment-grade U.S. and foreign bonds.

o Identifying below investment-grade U.S. and foreign bonds (junk bonds).

o Identifying bonds that can take advantage of currency movements and interest
rate differences among nations.

In evaluating whether to sell a security, AEFC considers, among other factors,
whether:

-- the security is overvalued, and

-- the security continues to meet the standards described above.

<PAGE>

AEFC closely monitors the Fund's exposure to foreign currency fluctuations. From
time to time, AEFC may purchase derivative instruments (such as options and
forward contracts) to hedge against currency fluctuations.

Although not a primary investment strategy, the Fund may utilize derivative
instruments to produce incremental earnings and to increase flexibility. The
Fund also may invest in other instruments, such as money market securities,
preferred stocks, and convertible securities.

For more information on strategies and holdings, see the Fund's Statement of
Additional Information (SAI) and the annual/semiannual reports.

RISKS

Please remember that with any mutual fund investment you may lose money. In
addition, since the Fund is a non-diversified mutual fund, it may concentrate
its investments in securities of fewer issuers than would a diversified fund.
Accordingly, the Fund may have more risk than mutual funds that have broader
diversification. Principal risks associated with an investment in the Fund
include:

Interest Rate Risk
Foreign/Emerging Markets Risk
Credit Risk
Liquidity Risk

Interest Rate Risk

The risk of losses attributable to changes in interest rates. This term is
generally associated with bond prices (when interest rates rise, bond prices
fall). In general, the longer the maturity of a bond, the higher its yield and
the greater its sensitivity to changes in interest rates.

<PAGE>

Foreign/Emerging Markets Risk

The following are all components of foreign/emerging markets risk:

Emerging markets risk includes the dramatic pace of change (economic, social,
and political) in emerging market countries as well as the other considerations
listed above. These markets are in early stages of development and are extremely
volatile. They can be marked by extreme inflation, devaluation of currencies,
dependence on trade partners, and hostile relations with neighboring countries.

Credit Risk

The risk that the issuer of a security, or the counterparty to a contract, will
default or otherwise become unable to honor a financial obligation (such as
payments due on a bond or a note). The price of junk bonds may react more to the
ability of the issuing company to pay interest and principal when due than to
changes in interest rates. They have greater price fluctuations and are more
likely to experience a default.

Liquidity Risk

Securities may be difficult or impossible to sell at the time that the Fund
would like. The Fund may have to lower the selling price, sell other
investments, or forego an investment opportunity.

<PAGE>

PAST PERFORMANCE

The following bar chart and table indicate the risks and variability of
investing in the Fund by showing:

o how the Fund's performance has varied for each full calendar year that the
Fund has existed, and

o how the Fund's average annual total returns compare to other recognized
indexes.

How the Fund has performed in the past does not indicate how the Fund will
perform in the future.

- -------------------------------------------------------------------------------
Class A Performance (based on calendar years)

+12.91% +15.39% +8.14% +16.43% -4.73% +19.20% +7.78% +2.98% +7.49%
1990 1991 1992 1993 1994 1995 1996 1997 1998

During the period shown in the bar chart, the highest return for a calendar
quarter was +7.96% (quarter ending

December 1991) and the lowest return for a calendar quarter was -4.49% (quarter
ending March 1994).

The Fund's year to date return as of Sept. 30, 1999 was -3.05%.

<PAGE>

Average Annual Total Returns (as of Dec. 31, 1998)
Since
inception
1 year 5 years inception(A) (B&Y)

Global Bond:

Class A +2.12% +5.18% +9.18%(a) --%

Class B +2.67% --% --% +7.57%(b)

Class Y +7.59% --% --% +8.69%(b)

Salomon Smith Barney

World Government

Bond Index +15.31% +7.85% +9.52%(c) +6.92%(d)

Lipper Global Income

Fund Index +6.33% +5.78% +8.20%(c) +8.76%(d)

(a) Inception date was May 20, 1989.
(b) Inception date was March 20, 1995.
(c) Measurement period started April 1, 1989.
(d) Measurement period started April 1, 1995.

This table shows total returns from hypothetical investments in Class A, Class B
and Class Y shares of the Fund. These returns are compared to the indexes shown
for the same periods. The performance of Classes A, B and Y vary because of
differences in sales charges and fees. Past performance for Class Y for the
periods prior to March 20, 1995 may be calculated based on the performance of
Class A, adjusted to reflect differences in sales charges, although not for
other differences in expenses.

For purposes of this calculation we assumed:

o a sales charge of 5% for Class A shares,

o sales at the end of the period and deduction of the applicable contingent
deferred sales charge (CDSC) for Class B shares,

o no sales charge for Class Y shares, and

o no adjustments for taxes paid by an investor on the reinvested income and
capital gains.

Salomon Smith Barney World Government Bond Index, an unmanaged
market-capitalization weighted benchmark, tracks the performance of the 17
government bond markets around the world. It is widely recognized by investors
as a measurement index for portfolios of government bond securities. The index
reflects reinvestment of all distributions and changes in market prices, but
excludes brokerage commissions or other fees.

Lipper Global Income Fund Index, an unmanaged index published by Lipper
Analytical Services, Inc., includes 30 funds that are generally similar to the
Fund, although some funds in the index may have somewhat different investment
policies or objectives.

<PAGE>

FEES AND EXPENSES

Fund investors pay various expenses. The table below describes the fees and
expenses that you may pay if you buy and hold shares of the Fund.

- -------------------------------------------------------------------------------
Shareholder Fees (fees paid directly from your investment)

Class A Class B Class Y

Maximum sales charge (load)
imposed on purchases(a)
(as a percentage of offering price) 5% none none

Maximum deferred sales charge (load)
imposed on sales (as a percentage of
offering price at time of purchase) none 5% none

- ------------------------------------------------------------------------------
Annual Fund operating expenses(b)(expenses that are deducted from Fund assets)

As a percentage of average daily net assets: Class A Class B Class Y

Management fees 0.74% 0.74% 0.74%

Distribution (12b-1) fees 0.25% 1.00% 0.00%

Other expenses(c) 0.28% 0.29% 0.34%

Total 1.27% 2.03% 1.08%

a This charge may be reduced depending on your total investments in American
Express mutual funds. See "Sales Charges."

b Both in this table and the following example, fund operating expenses include
expenses charged by both the Fund and its Master Portfolio as described under
"Management." Expenses for Class A, Class B and Class Y are based on actual
expenses for the last fiscal year, restated to reflect current fees.

c Other expenses include an administrative services fee, a shareholder services
fee for Class Y, a transfer agency fee and other nonadvisory expenses.

<PAGE>

Example

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

Assume you invest $10,000 and the Fund earns a 5% annual return. The operating
expenses remain the same each year. If you hold your shares until the end of the
years shown, your costs would be:

1 year 3 years 5 years 10 years

Class A(a) $623 $883 $1,163 $1,962

Class B(b) $606 $937 $1,194 $2,167d

Class B(c) $206 $637 $1,094 $2,167(d)

Class Y $110 $344 $ 596 $1,322

(a) Includes a 5% sales charge.

(b) Assumes you sold your Class B shares at the end of the period and incurred
the applicable CDSC.

(d) Based on conversion of Class B shares to Class A shares in the ninth year
of ownership.

This example does not represent actual expenses, past or future. Actual expenses
may be higher or lower than those shown.

MANAGEMENT

The Fund's assets are invested in World Income Portfolio (the Portfolio), which
is managed by AEFC. Ray Goodner, vice president and senior portfolio manager,
joined AEFC in 1977. He has managed the assets of the Fund since 1989. He also
serves as portfolio manager of Quality Income Portfolio.

Buying and Selling Shares

VALUING FUND SHARES

The public offering price for Class A is the net asset value (NAV) adjusted for
the sales charge. For Class B and Class Y, it is the NAV.

<PAGE>

INVESTMENT OPTIONS

1. Class A shares are sold to the public with a sales charge at the time of
purchase and an annual distribution (12b-1) fee.

2. Class B shares are sold to the public with a CDSC and an annual distribution
(12b-1) fee.

3. Class Y shares are sold to qualifying institutional investors without a sales
charge or distribution fee. Please see the SAI for information on eligibility to
purchase Class Y shares.

Investment options summary:

Class A Maximum sales charge of 5%

Initial sales charge waived or reduced for certain purchases

Annual distribution fee of 0.25% of average daily net assets*

Lower annual expenses than Class B shares

Class B No initial sales charge

CDSC on shares sold in the first six years (maximum of 5%
in first year, reduced to 0% after year six)

CDSC waived in certain circumstances

Shares convert to Class A in ninth year of ownership

Annual distribution fee of 1.00% of average daily net assets*

Higher annual expenses than Class A shares

Class Y No initial sales charge

No annual distribution fee

Service fee of 0.10% of average daily net assets

Available only to certain qualifying institutional investors

* The Fund has adopted a plan under Rule 12b-1 of the Investment Company Act of
1940 that allows it to pay distribution and servicing-related fees for the sale
of Class A and Class B shares. Because these fees are paid out of the Fund's
assets on an on-going basis, the fees may cost long-term shareholders more than
paying other types of sales charges imposed by some mutual funds.

<PAGE>

Should you purchase Class A or Class B shares?

PURCHASING SHARES

Important: When you open an account, you must provide your correct Taxpayer
Identification Number (TIN), which is either your Social Security or Employer
Identification number.

o a $50 penalty for each failure to supply your correct TIN,

o a civil penalty of $500 if you make a false statement that results in no
backup withholding, and

o criminal penalties for falsifying information.

You also could be subject to backup withholding, if the IRS notifies us to do
so, because you failed to report required interest or dividends on your tax
return.

<PAGE>

How to determine the correct TIN

For this type of account: Use the Social Security or Employer
Identification number of:

Individual or joint account The individual or one of the owners
listed on the joint account

Custodian account of a minor The minor
(Uniform Gifts/Transfers to Minors Act)

A revocable living trust The grantor-trustee (the person who
puts the money into the trust)

An irrevocable trust, pension trust The legal entity (not the personal
or estate representative or trustee, unless
no legal entity is designated in
the account title)

Sole proprietorship The owner

Partnership The partnership

Corporate The corporation

Association, club or tax-exempt The organization
organization

Three ways to invest

1 By mail:

Once your account has been established, send your check with the account number
on it to:

American Express Funds
P.O. Box 74
Minneapolis, MN 55440-0074

Minimum amounts

Initial investment: $2,000

Additional investments: $100

Account balances: $300

Qualified accounts: none

<PAGE>

2 By scheduled investment plan:

Contact your financial advisor for assistance in setting up one of the following
scheduled plans:

o automatic payroll deduction,

o bank authorization,

o direct deposit of Social Security check, or

o other plan approved by the Fund.

Minimum amounts

Initial investment: $100

Additional investments: $50/mo. for qualified accounts; $100/mo. for
nonqualified accounts

Account balances: none (on active plans with monthly payments)

If your account balance is below $2,000, you must make payments at least
monthly.

3 By wire or electronic funds transfer:

If you have an established account, you may wire money to:

Norwest Bank Minnesota
Routing Transit No. 091000019

Give these instructions:
Credit American Express Financial Advisors Account #0000030015 for personal
account # (your account number) for (your name). Please remember that you need
to provide all 10 digits.

Minimum amounts

Each wire investment: $1,000

<PAGE>

TRANSACTIONS THROUGH THIRD PARTIES

You may buy or sell shares through certain 401(k) plans, banks, broker-dealers,
financial advisors or other investment professionals. These organizations may
charge you a fee for this service and may have different policies. Some policy
differences may include different minimum investment amounts, exchange
privileges, fund choices, and cutoff times for investments. The Fund and the
Distributor are not responsible for the failure of one of these organizations to
carry out its obligations to its customers. Some organizations may receive
compensation from the Distributor or its affiliates for shareholder
recordkeeping and similar services. Where authorized by the Fund, some
organizations may designate selected agents to accept purchase or sale orders on
the Fund's behalf. To buy or sell shares through third parties or determine if
there are policy differences, please consult your selling agent. For other
pertinent information related to buying or selling shares, please refer to the
appropriate section in the prospectus.

SALES CHARGES

Class A -- initial sales charge alternative

When you purchase Class A shares, you pay a 5% sales charge on the first $50,000
of your total investment and less on investments after the first $50,000:

Total investment Sales charge as percentage of:(a)

Public offering price(b) Net amount invested

Up to $50,000 5.0% 5.26%

Next $50,000 4.5 4.71

Next $400,000 3.8 3.95

Next $500,000 2.0 2.04

$1,000,000 or more 0.0 0.00

(a) To calculate the actual sales charge on an investment greater than $50,000
and less than $1,000,000, you must total the amounts of all increments that
apply.

(b) Offering price includes a 5% sales charge.

The sales charge on Class A shares may be lower than 5%, depending on the total
amount:

o you now are investing in this Fund,

o you have previously invested in this Fund, or

<PAGE>

Other Class A sales charge policies:

o if you intend to invest $1 million over a period of 13 months, you can
reduce the sales charges in Class A by filing a letter of intent. For more
details, please see the SAI.

Waivers of the sales charge for Class A shares

Sales charges do not apply to:

o current or retired board members, officers or employees of the Fund or AEFC
or its subsidiaries, their spouses or domestic partners and unmarried
children under 21.

o current or retired American Express financial advisors, their spouses or
domestic partners and unmarried children under 21.

<PAGE>

o purchases made within 90 days after a sale of shares (up to the amount
sold):

-- of American Express mutual funds in a qualified plan subject to a
deferred sales charge, or

-- in a qualified plan or account where American Express Trust Company
has a recordkeeping, trustee, investment management, or investment
servicing relationship.

Send the Fund a written request along with your payment, indicating the date and
the amount of the sale.

o purchases made:

-- with dividend or capital gain distributions from this Fund or from the
same class of another American Express mutual fund that has a sales
charge,

-- through or under a wrap fee product or other investment product
sponsored by the Distributor or another authorized broker-dealer,
investment adviser, bank or investment professional,

-- within the University of Texas System ORP,

-- within a segregated separate account offered by Nationwide Life
Insurance Company or Nationwide Life and Annuity Insurance Company,

-- within the University of Massachusetts After-Tax Savings Program,

-- with the proceeds from IDS Life Real Estate Variable Annuity
surrenders, or

-- through or under a subsidiary of AEFC offering Personal Trust
Services' Asset-Based pricing alternative.

Class B -- contingent deferred sales charge (CDSC) alternative

If the sale is made during the: The CDSC percentage rate is:

First year 5%

Second year 4%

Third year 4%

Fourth year 3%

Fifth year 2%

Sixth year 1%

Seventh year 0%

<PAGE>

Example:

The CDSC on Class B shares will be waived on sales of shares:

o in the event of the shareholder's death,

o held in trust for an employee benefit plan, or

-- at least 591/2 years old AND

-- taking a retirement distribution (if the sale is part of a transfer to
an IRA or qualified plan, or a custodian-to-custodian transfer, the
CDSC will not be waived) OR

-- selling under an approved substantially equal periodic payment
arrangement.

<PAGE>

EXCHANGING/SELLING SHARES

Exchanges

Other exchange policies:

o Exchanges must be made into the same class of shares of the new fund.

o If your exchange creates a new account, it must satisfy the minimum
investment amount for new purchases.

o Once we receive your exchange request, you cannot cancel it.

o Shares of the new fund may not be used on the same day for another
exchange.

o If your shares are pledged as collateral, the exchange will be delayed
until AECSC receives written approval from the secured party.

<PAGE>

Selling Shares

You can sell your shares at any time. The payment will be mailed within seven
days after accepting your request.

You can change your mind after requesting a sale and use all or part of the
proceeds to purchase new shares in the same account from which you sold. If you
reinvest in Class A,

You will purchase the new shares at NAV rather than the offering price on the
date of a new purchase. If you reinvest in Class B, any CDSC you paid on the
amount you are reinvesting also will be reinvested. To take advantage of this
option, send a request within 90 days of the date your sale request was received
and include your account number. This privilege may be limited or withdrawn at
any time and may have tax consequences.

The Fund reserves the right to redeem in kind.

For more details and a description of other sales policies, please see the SAI.

<PAGE>

Requests to sell shares of the Fund are not allowed within 30 days of a
telephoned-in address change.

Two ways to request an exchange or sale of shares

1 By letter:

Include in your letter:

o the name of the fund(s),

o the class of shares to be exchanged or sold,

o your mutual fund account number(s) (for exchanges, both funds must be
registered in the same ownership),

o your Social Security number or Employer Identification number,

o the dollar amount or number of shares you want to exchange or sell,

o signature(s) of all registered account owners,

o for sales, indicate how you want your money delivered to you, and

o any paper certificates of shares you hold.

Regular mail:

American Express Client Service Corporation
Attn: Transactions
P.O. Box 534
Minneapolis, MN 55440-0534

Express mail:

American Express Client Service Corporation
Attn: Transactions
733 Marquette Ave.
Minneapolis, MN 55402

<PAGE>

2 By telephone:

American Express Client Service Corporation
Telephone Transaction Service
800-437-3133

o The Fund and AECSC will use reasonable procedures to confirm authenticity
of telephone exchange or sale requests.

o Acting on your instructions, your financial advisor may conduct telephone
transactions on your behalf.

o Telephone privileges may be modified or discontinued at any time.

Minimum sale amount: $100 Maximum sale amount: $50,000

<PAGE>

Three ways to receive payment when you sell shares

1 By regular or express mail:

o Mailed to the address on record.

o Payable to names listed on the account.

NOTE:The express mail delivery charges you pay will vary depending on the
courier you select.

2 By wire or electronic funds transfer:

o Minimum wire: $1,000.

o Request that money be wired to your bank.

o Bank account must be in the same ownership as the American Express mutual
fund account.

NOTE:Pre-authorization required. For instructions, contact your financial
advisor or AECSC.

3 By scheduled payout plan:

o Minimum payment: $50.

o Contact your financial advisor or AECSC to set up regular payments on a
monthly, bimonthly, quarterly, semiannual or annual basis.

o Purchasing new shares while under a payout plan may be disadvantageous
because of the sales charges.

<PAGE>

Distributions and Taxes

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

REINVESTMENTS

Dividends and capital gain distributions are automatically reinvested in
additional shares in the same class of the Fund, unless:

o you request distributions in cash, or

o you direct the Fund to invest your distributions in the same class of any
publicly offered American Express mutual fund for which you have previously
opened an account.

We reinvest the distributions for you at the next calculated NAV after the
distribution is paid.

If you choose cash distributions, you will receive cash only for distributions
declared after your request has been processed.

<PAGE>

TAXES

Income received by the Fund may be subject to foreign tax and withholding. Tax
conventions between certain countries and the U.S. may reduce or eliminate these
taxes.

Selling shares held in an IRA or qualified retirement account may subject you to
federal taxes, penalties and reporting requirements. Please consult your tax
advisor.

<PAGE>

Master/Feeder Structure

Investors buy shares in the Fund

The Fund buys units in the Portfolio

The Portfolio invests in securities, such as stocks or bonds

<PAGE>

Other Information

YEAR 2000

INVESTMENT MANAGER

The investment manager of the Portfolio is AEFC, located at IDS Tower 10,
Minneapolis, MN 55440-0010. The Portfolio pays AEFC a fee for managing its
assets. The Fund pays its proportionate share of the fee. Under the Investment
Management Services Agreement, the fee for the most recent fiscal year was 0.74%
of its average daily net assets. Under the agreement, the Portfolio also pays
taxes, brokerage commissions and nonadvisory expenses. AEFC is a wholly-owned
subsidiary of American Express Company, a financial services company with
headquarters at American Express Tower, World Financial Center, New York, NY
10285.

<PAGE>

Financial Highlights
<TABLE>
<CAPTION>

Fiscal period ended Oct. 31,
- ------------------------------------------------------------------------------
Per share income and capital changes(a)

Class A
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995

Net asset value, beginning of period $6.17 $6.26 $6.28 $6.11 $5.76

Income from investment operations:

Net investment income (loss) .33 .39 .35 .38 .35

Net gains(losses)(both realized
and unrealized) (.36) (.05) (.05) .18 .41

Total from investment operations (.03) .34 .30 .56 .76

Less distributions:

Dividends from net investment income (.26) (.29) (.28) (.39) (.33)

Distributions from realized gains (.01) (.14) (.04) -- (.02)

Excess distributions of realized gains -- -- -- -- (.06)

Total distributions (.27) (.43) (.32) (.39) (.41)

Net asset value, end of period $5.87 $6.17 $6.26 $6.28 $6.11

Ratios/supplemental data

Net assets, end of period (in millions) $598 $724 $748 $689 $548

Ratio of expenses to average daily
net assets(b) 1.22% 1.16% 1.16% 1.20% 1.25%

Ratio of net investment income (loss)

to average daily net assets 5.49% 5.86% 5.74% 5.72% 6.15%

Portfolio turnover rate

(excluding short-term securities) 48% 27% 55% 49% 92%

Total return(c) (.35%) 5.52% 4.91% 8.96% 13.58%

(a) For a share outstanding throughout the period. Rounded to the nearest cent.

(b) Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.

</TABLE>

Fiscal period ended Oct. 31,

Per share income and capital changes(a)

Class B Class Y
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>

1999 1998 1997 1996 1995(b) 1999 1998 1997 1996(f) 1995(b)

Net asset value, beginning
of period $6.17 $6.26 $6.28 $6.11 $5.74 $6.17 $6.26 $6.30 $6.11 $5.74

Income from investment operations:

Net investment income (loss) .28 .33 .31 .33 .24 .34 .40 .35 .29 .27

Net gains (losses)
(both realized and unrealized) (.35) (.04) (.05) .18 .41 (.36) (.06) (.06) .20 .41

Total from investment operations (.07) .29 .26 .51 .65 (.02) .34 .29 .49 .68

Less distributions:

Dividends from net
investment income (.22) (.24) (.24) (.34) (.24) (.27) (.29) (.29) (.30) (.27)

Distributions from
realized gains (.01) (.14) -- -- -- (.01) (.14) -- -- --

Excess distributions of
realized gains -- -- (.04) -- (.04) -- -- (.04) -- (.04)

Total distributions (.23) (.38) (.28) (.34) (.28) (.28) (.43) (.33) (.30) (.31)

Net asset value, end of period $5.87 $6.17 $6.26 $6.28 $6.11 $5.87 $6.17 $6.26 $6.30 $6.11

Ratios/supplemental data

Net assets, end of period
(in millions) $235 $263 $231 $141 $37 $-- $-- $-- $-- $2

Ratio of expenses to
average daily net assets(c) 1.98% 1.92% 1.92% 1.96% 2.05%(e) 1.07% .99% 1.01% 1.01% 1.10%(e)

Ratio of net investment
income (loss) to average
daily net assets 4.72% 5.11% 5.00% 4.96% 5.88%(e) 5.63% 6.10% 5.89% 6.06% 6.68%(e)

Portfolio turnover rate
(excluding short-term securities) 48% 27% 55% 49% 92% 48% 27% 55% 49% 92%

Total returnd (1.10%) 4.73% 4.12% 8.15% 11.67% (.19%) 5.62% 5.06% 7.35% 12.18%
</TABLE>

a For a share outstanding throughout the period. Rounded to the nearest cent.

b Inception date was March 20, 1995.

c Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.

d Total return does not reflect payment of a sales charge.

e Adjusted to an annual basis.

f Periods from Nov. 1, 1995 to Nov. 20, 1995 and from Dec. 4, 1995 to Oct.
31, 1996. From Nov. 20, 1995 to Dec. 4, 1995 there were no Class Y shares
outstanding.

The information in these tables has been audited by KPMG LLP, independent
auditors. The independent auditors' report and additional information about the
performance of the Fund are contained in the Fund's annual report which, if not
included with this prospectus, may be obtained without charge.

<PAGE>

American
Express(R)
Funds

American Express Client Service Corporation
P.O. Box 534, Minneapolis, MN 55440-0534
800-862-7919 TTY: 800-846-4852
Web site address:
http://www.americanexpress.com/advisors

Investment Company Act File #811-5696

TICKER SYMBOL

Class A: IGBFX Class B: IGLOX Class Y: N/A

AMERICAN EXPRESS (logo)

S-6309-99 N (12/99)

<PAGE>
Independent Auditors' Report

THE BOARD AND SHAREHOLDERS
AXP GLOBAL SERIES, INC.

We have audited the accompanying statement of assets and liabilities of AXP
Global Bond Fund (a series of AXP Global Series, Inc.) as of October 31, 1999,
and the related statement of operations for the year then ended and the
statements of changes in net assets for each of the years in the two-year period
ended October 31, 1999, and the financial highlights for each of the years in
the five-year period ended October 31, 1999. These financial statements and the
financial highlights are the responsibility of fund management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AXP Global Bond Fund as of
October 31, 1999, and the results of its operations, changes in its net assets
and the financial highlights for the periods stated in the first paragraph
above, in conformity with generally accepted accounting principles.

/s/ KPMG LLP
KPMG LLP
Minneapolis, Minnesota
December 3, 1999

Financial Statements

Statement of assets and liabilities
AXP Global Bond Fund

Oct. 31, 1999

Assets

<S> <C> <C>
Investment in World Income Portfolio (Note 1) $834,672,590
------------
Liabilities

Dividends payable to shareholders 1,487,547
Accrued distribution fee 10,491
Accrued transfer agency fee 4,169
Accrued administrative services fee 1,228
Other accrued expenses 68,711
------
Total liabilities 1,572,146
---------
Net assets applicable to outstanding capital stock $833,100,444
============

Represented by
Capital stock-- $.01 par value (Note 1) $ 1,420,080
Additional paid-in capital 861,262,641
Undistributed net investment income 4,062,417
Accumulated net realized gain (loss) (956,696)
Unrealized appreciation (depreciation) on investments and on
translation of assets and liabilities in foreign currencies (32,687,998)
-----------
Total-- representing net assets applicable to outstanding capital stock $833,100,444
============
Net assets applicable to outstanding shares: Class A $597,983,815
Class B $235,111,373
Class Y $ 5,256
Net asset value per share of outstanding capital stock: Class A shares 101,928,616 $ 5.87
Class B shares 40,078,489 $ 5.87
Class Y shares 896 $ 5.87

See accompanying notes to financial statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

Statement of operations
AXP Global Bond Fund

Year ended Oct 31, 1999

Investment income

Income:
<S> <C>
Dividends $ 388,236
Interest 62,139,784
Less foreign taxes withheld (330,146)
--------
Total income 62,197,874
----------
Expenses (Note 2):
Expenses allocated from World Income Portfolio 7,198,903
Distribution fee
Class A 514,769
Class B 2,113,482
Transfer agency fee 1,375,552
Incremental transfer agency fee
Class A 103,618
Class B 69,457
Service fee
Class A 809,974
Class B 305,003
Class Y 4
Administrative services fees and expenses 497,069
Compensation of board members 8,865
Reports to shareholders 219,502
Registration fees 56,193
Audit fees 7,750
Other 5,574
-----
Total expenses 13,285,715
Earnings credits on cash balances (Note 2) (39,710)
-------
Total net expenses 13,246,005
----------
Investment income (loss) -- net 48,951,869
----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (6,289,107)
Financial futures contracts (35,167)
Foreign currency transactions 828,441
Options contracts written 1,356,751
---------
Net realized gain (loss) on investments (4,139,082)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (50,584,752)
-----------
Net gain (loss) on investments and foreign currencies (54,723,834)
-----------
Net increase (decrease) in net assets resulting from operations $ (5,771,965)
============

See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

Statements of changes in net assets
AXP Global Bond Fund

Year ended Oct. 31, 1999 1998

Operations and distributions
<S> <C> <C>
Investment income (loss)-- net $48,951,869 $ 55,468,216
Net realized gain (loss) on investments (4,139,082) (12,428,331)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (50,584,752) 3,657,756
----------- ---------
Net increase (decrease) in net assets resulting from operations (5,771,965) 46,697,641
---------- ----------
Distributions to shareholders from:
Net investment income
Class A (29,946,339) (30,807,238)
Class B (9,380,167) (8,474,182)
Class Y (238) (73)
Net realized gain
Class A (1,512,779) (16,718,446)
Class B (559,859) (5,381,162)
Class Y (11) (25)
--- ---
Total distributions (41,399,393) (61,381,126)
----------- -----------
Capital share transactions (Note 3)
Proceeds from sales
Class A shares (Note 2) 102,506,438 156,778,992
Class B shares 58,324,003 82,100,674
Class Y shares 2 4,008
Reinvestment of distributions at net asset value
Class A shares 24,745,015 42,017,023
Class B shares 9,214,165 14,073,295
Class Y shares 249 98
Payments for redemptions
Class A shares (218,742,945) (212,414,877)
Class B shares (Note 2) (82,378,224) (60,697,671)
----------- -----------
Increase (decrease) in net assets from capital share transactions (106,331,297) 21,861,542
------------ ----------
Total increase (decrease) in net assets (153,502,655) 7,178,057
Net assets at beginning of year 986,603,099 979,425,042
----------- -----------
Net assets at end of year $833,100,444 $986,603,099
============ ============
Undistributed (excess of distributions over) net investment income $ 4,062,417 $ (1,879,333)
------------ ------------

See accompanying notes to financial statements.

</TABLE>

<PAGE>

Notes to Financial Statements

AXP Global Bond Fund

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 non-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.

Investment in World Income Portfolio

The Fund invests all of its assets in the World Income Portfolio (the
Portfolio), a series of World Trust, an open-end investment company that has the
same objectives as the Fund. The Portfolio seeks to provide shareholders with
high total return through income and growth of capital by investing primarily in
debt securities of U.S. and foreign issuers.

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 Oct. 31, 1999 was 99.92%.
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 generally accepted accounting
principles requires management to make estimates (e.g., on assets and
liabilities) that could differ from actual results.

Federal taxes

On the statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been decreased by
$3,683,375 and accumulated net realized loss has been decreased by $3,683,375.

Dividends to shareholders

Dividends from net investment income, declared daily 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.

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
0.04% 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.

o Class A $19.50
o Class B $20.50
o Class Y $17.50

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 $15.50 for
Class A and $16.50 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 $15.50 for Class Y.

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 Plan), 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. The Plan went into effect
July 1, 1999. Under terms of a prior Plan and Agreement of Distribution (the
prior Plan) that ended June 30, 1999, the Fund paid a distribution fee for Class
B shares at an annual rate up to 0.75% of average daily net assets. The Prior
Pan was not effective with respect to Class A shares.

Under a Shareholder Service Agreement, the Fund's Class Y shares pay a fee for
service provided 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. Under terms of a prior agreement that ended June
30, 1999, the Fund paid a shareholder service fee for Class A and Class B shares
at a rate of 0.175% of the Fund's average daily net assets. Effective July 1,
1999, the agreement for Class A and Class B shares was converted to the Plan and
Agreement of Distribution discussed above.

Sales charges received by the Distributor for distributing Fund shares were
$1,260,019 for Class A and $274,573 for Class B for the year ended Oct. 31,
1999.

During the year ended Oct. 31, 1999, the Fund's transfer agency fees were
reduced by $39,710 as a result of earnings credits from overnight cash balances.

3. CAPITAL SHARE TRANSACTIONS

Transactions in shares of capital stock for the years indicated are as follows:

Year ended Oct. 31, 1999

Class A Class B Class Y

Sold 16,985,673 9,664,557 1
Issued for reinvested distributions 4,106,641 1,529,837 41
Redeemed (36,480,185) (13,764,830) --
----------- ----------- ---
Net increase (decrease) (15,387,871) (2,570,436) 42
----------- ---------- --

Year ended Oct. 31, 1998

Class A Class B Class Y

Sold 25,531,358 13,366,363 660
Issued for reinvested distributions 6,844,665 2,293,029 16
Redeemed (34,618,602) (9,912,014) --
----------- ---------- ---
Net increase (decrease) (2,242,579) 5,747,378 676
---------- --------- ---

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 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 year ended Oct. 31,
1999.

5. CAPITAL LOSS CARRYOVER

For federal income tax purposes, the Fund had a capital loss carryover of
$831,811 as of Oct. 31, 1999, that will expire in 2007 if not offset by capital
gains. It is unlikely the board will authorize a distribution of any net
realized capital gains until the available capital loss carryover has been
offset or expires.

6. FINANCIAL HIGHLIGHTS

"Financial highlights" showing per share data and selected financial information
is presented on pages 27 and 28 of the prospectus.

<PAGE>
Independent Auditors' Report

THE BOARD OF TRUSTEES AND UNITHOLDERS
WORLD TRUST

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of World Income Portfolio (a series
of World Trust) as of October 31, 1999, and the related statement of operations
for the year then ended and the statements of changes in net assets for each of
the years in the two-year period ended October 31, 1999. These financial
statements are the responsibility of portfolio management. Our responsibility is
to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 1999, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of World Income Portfolio as of
October 31, 1999, and the results of its operations and the changes in its net
assets for the periods stated in the first paragraph above, in conformity with
generally accepted accounting principles.

/s/ KPMG LLP
KPMG LLP
Minneapolis, Minnesota
December 3, 1999

Financial Statements

Statement of assets and liabilities
World Income Portfolio

Oct. 31, 1999

Assets
Investments in securities, at value (Note 1)
<S> <C> <C>
(identified cost $843,327,889) $809,165,953
Cash in bank on demand deposit 63,646
Dividends and accrued interest receivable 22,196,436
Receivable for investment securities sold 4,803,295
U.S. government securities held as collateral (Note 4) 79,128,728
----------
Total assets 915,358,058
-----------
Liabilities
Payable for investment securities purchased 857,821
Payable upon return of securities loaned (Note 4) 79,128,728
Accrued investment management services fee 16,864
Other accrued expenses 50,493
------
Total liabilities 80,053,906
----------
Net assets $835,304,152
============

See accompanying notes to financial statements.

</TABLE>

Statement of operations
World Income Portfolio

Year ended Oct. 31, 1999

Investment income

Income:
<S> <C>
Dividends $ 388,500
Interest 62,188,093
Less foreign taxes withheld (330,380)
--------
Total income 62,246,213
----------
Expenses (Note 2):
Investment management services fee 6,861,563
Compensation of board members 9,875
Custodian fees 289,990
Audit fees 23,250
Other 23,906
------
Total expenses 7,208,584
Earnings credits on cash balances (Note 2) (4,650)
------
Total net expenses 7,203,934
---------
Investment income (loss) -- net 55,042,279
----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) (6,293,735)
Financial futures contracts (35,148)
Foreign currency transactions 829,208
Options contracts written (Note 6) 1,357,748
---------
Net realized gain (loss) on investments (4,141,927)
Net change in unrealized appreciation (depreciation) on investments and
on translation of assets and liabilities in foreign currencies (50,620,083)
-----------
Net gain (loss) on investments and foreign currencies (54,762,010)
-----------
Net increase (decrease) in net assets resulting from operations $ 280,269
============

See accompanying notes to financial statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

Statements of changes in net assets
World Income Portfolio

Year ended Oct. 31, 1999 1998

Operations
<S> <C> <C>
Investment income (loss)-- net $ 55,042,279 $ 61,053,694
Net realized gain (loss) on investments (4,141,927) (12,436,385)
Net change in unrealized appreciation (depreciation) on investments and
on translation of assets and liabilities in foreign currencies (50,620,083) 3,660,313
----------- ---------
Net increase (decrease) in net assets resulting from operations 280,269 52,277,622
Net contributions (withdrawals) from partners (153,354,231) (49,153,308)
------------ -----------
Total increase (decrease) in net assets (153,073,962) 3,124,314
Net assets at beginning of year 988,378,114 985,253,800
----------- -----------
Net assets at end of year $ 835,304,152 $988,378,114
============= ============

See accompanying notes to financial statements.

</TABLE>

<PAGE>

Notes to Financial Statements

World Income Portfolio

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

World Income 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
non-diversified, open-end management investment company. The Portfolio invests
primarily in debt securities of U.S. and foreign issuers. 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 generally accepted accounting
principles requires management to make estimates (e.g., on assets and
liabilities) that could differ from actual results.

Valuation of securities

Option transactions

Futures transactions

Foreign currency translations and foreign currency contracts

Federal taxes

Other

2. FEES AND EXPENSES

During the year ended Oct. 31, 1999, the Portfolio's custodian fees were reduced
by $4,650 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 $417,646,185 and $526,325,846, respectively, for the
year ended Oct. 31, 1999. For the same period, the portfolio turnover rate was
48%. Realized gains and losses are determined on an identified cost basis.

4. LENDING OF PORTFOLIO SECURITIES

As of Oct. 31, 1999, securities valued at $75,827,110 were on loan to brokers.
For collateral, the Portfolio received U.S. government securities valued at
$79,128,728. Income from securities lending amounted to $126,624 for the year
ended Oct. 31, 1999. 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.

5. INTEREST RATE FUTURES CONTRACTS

As of Oct. 31, 1999, investments in securities included securities valued at
$4,716,028 that were pledged as collateral to cover initial margin deposits on
616 open sales contracts. The market value of the open sales contracts as of
Oct. 31, 1999 was $69,973,750 with a net unrealized gain of $254,318.

6. OPTIONS CONTRACTS WRITTEN

Contracts and premium amounts associated with options contracts written are as
follows:

Year ended Oct. 31, 1999

Puts
Contracts Premium

Balance Oct. 31, 1998 -- $--
Opened 750 1,228,875
Closed (750) (1,228,875)
---- ----------
Balance Oct. 31, 1999 -- $--

Investments in Securities

World Income Portfolio
Oct. 31, 1999

(Percentages represent value of investments compared to net assets)

Bonds (92.5%)(c)

Issuer Coupon Principal Value(a)
rate amount

Australia (2.2%)
New South Wales Treasury
(Australian Dollar)
<S> <C> <C> <C> <C> <C>
03-01-08 8.00% 12,300,000(d) $8,340,461

Queensland Treasury
(Australian Dollar) Local Govt Guaranty
05-14-03 8.00 14,730,000 9,882,429
Total 18,222,890

Bermuda (0.1%)
Central Euro Media
(European Monetary Unit) Sr Nts Series RG
08-15-04 8.13 3,925,000 802,170

Canada (4.5%)
Abitibi-Consolidated Finance
(U.S. Dollar) Company Guaranty
08-01-09 7.88 7,900,000 7,723,258
Govt of Canada
(Canadian Dollar)
12-01-06 7.00 27,700,000 19,833,313
06-01-23 8.00 7,000,000 5,802,413
Province of Manitoba
(U.S. Dollar) Series CK
12-15-00 9.00 2,800,000 2,876,003
Rogers Cablesystems
(Canadian Dollar)
01-15-14 9.65 2,000,000 1,440,707
Total 37,675,694

Cayman Islands (0.3%)
Roil
(U.S. Dollar)
12-05-02 12.78 3,640,000(d) 2,784,600

China (1.9%)
Greater Beijing First Expressways
(U.S. Dollar) Sr Nts
06-15-04 9.25 3,500,000 1,715,000
06-15-07 9.50 8,750,000 4,112,500
People's Republic of China
(U.S. Dollar)
07-03-01 7.38 4,450,000 4,484,212
Zhuhai Highway
(U.S. Dollar) Sub Nts
07-01-08 11.50 11,350,000(d) 5,788,500
Total 16,100,212

Denmark (5.4%)
Govt of Denmark
(Danish Krone)
11-15-00 9.00 40,000,000 5,942,298
05-15-03 8.00 113,200,000 17,606,298
03-15-06 8.00 65,000,000 10,398,050
11-10-24 7.00 70,000,000 10,932,888
Total 44,879,534

France (1.2%)
Govt of France
(European Monetary Unit)
04-25-05 7.50 8,710,000 10,357,693

Germany (10.5%)
Allgemeine Hypo Bank
(European Monetary Unit)
09-02-09 5.00 40,760,000 40,905,881
Federal Republic of Germany
(European Monetary Unit)
07-22-02 8.00 18,471,330 21,256,929
11-11-04 7.50 12,600,000 14,814,481
07-04-27 6.50 9,305,512 10,663,329
Total 87,640,620

Greece (2.9%)
Hellenic Republic
(Greek Drachma)
04-01-03 8.90 4,888,000,000 16,141,253
02-19-06 6.00 2,643,000,000 7,891,912
Total 24,033,165

Indonesia (0.5%)
Indah Kiat Finance Mauritius
(U.S. Dollar) Company Guaranty
07-01-07 10.00 4,350,000 2,805,750
Tjiwi Kimia Finance Mauritius
(U.S. Dollar) Company Guaranty
08-01-04 10.00 2,450,000 1,610,875
Total 4,416,625

Italy (4.5%)
Govt of Italy
(European Monetary Unit)
01-01-04 8.50 23,821,533 28,316,914
11-01-26 7.25 7,886,283 9,615,405
Total 37,932,319

Japan (0.1%)
Nippon Express
(Japanese Yen) Cv Series 4
03-31-04 1.00 120,000,000 1,196,950

Malaysia (0.9%)
Petronas
(U.S. Dollar)
08-15-15 7.75 8,850,000(d) 7,877,752

Mexico (2.6%)
Banco Nacional de Comercio Exterior
(U.S. Dollar)
02-02-04 7.25 12,150,000 11,147,625
Imexsa Export Trust
(U.S. Dollar)
05-31-03 10.13 2,384,244(d) 2,265,032
United Mexican States
(British Pound) Medium-term Nts Series E
05-30-02 8.75 5,000,000 8,130,726
Total 21,543,383

Netherlands (0.5%)
KPNQwest
(European Monetary Unit) Sr Nts
06-01-09 7.13 3,800,000(d) 3,857,316

Norway (1.7%)
Govt of Norway
(Norwegian Krone)
11-30-04 5.75 60,000,000 7,581,171
01-15-07 6.75 48,000,000 6,335,444
Total 13,916,615

Russia (0.2%)
Rostelecom
(U.S. Dollar)
02-15-00 9.38 5,000,000 1,500,000

Slovenia (1.2%)
Republic of Slovenia
(European Monetary Unit)
06-16-04 5.75 17,750,000 9,756,465

Spain (2.6%)
Govt of Spain
(European Monetary Unit)
04-30-06 8.80 17,441,371 21,815,176

Supra-National (1.1%)
World Bank
(Japanese Yen)
06-20-00 4.50 950,000,000 9,367,967

Sweden (4.5%)
Govt of Sweden
(Swedish Krona)
02-09-05 6.00 44,500,000 5,538,134
08-15-07 8.00 185,200,000 25,672,134
Paulson Enterprenad
(Swedish Krona)
12-15-00 4.75 56,560,000 6,789,718
Total 37,999,986

United Kingdom (13.3%)
Abbey Natl First Capital
(U.S. Dollar) Sub Nts
10-15-04 8.20 5,000,000 5,202,716
COLT Telecom Group
(European Monetary Unit)
07-31-08 7.63 6,400,000 3,423,135
Texon Intl
(European Monetary Unit) Sr Nts
02-01-08 10.00 4,000,000 1,871,641
United Kingdom Treasury
(British Pound)
03-03-00 9.00 21,700,000 36,016,588
06-10-03 8.00 27,000,000 46,897,218
12-07-05 8.50 9,200,000 17,008,543
Total 110,419,841

United States (28.6%)
American Standard
(U.S. Dollar) Company Guaranty
06-01-06 7.13 7,450,000 7,699,511
Chesapeake
(U.S. Dollar)
05-01-03 9.88 1,000,000 1,090,986
Citicorp
(European Monetary Unit)
09-19-09 6.25 10,800,000 5,770,273
Cleveland Electric Illuminating
(U.S. Dollar) 1st Mtge Series B
05-15-05 9.50 3,000,000 3,151,419
Conseco
(U.S. Dollar) Medium-term Nts Series B
06-21-01 7.60 10,000,000 9,933,915
Dayton Hudson
(U.S. Dollar)
12-01-22 8.50 3,265,000 3,397,303
Executive Risk Capital
(U.S. Dollar) Company Guaranty Series B
02-01-27 8.68 3,500,000 3,490,123
Federal Natl Mtge Assn
(U.S. Dollar)
02-01-27 7.50 2,378,382 2,383,591
Federal Natl Mtge Assn Global
(Japanese Yen)
12-20-99 2.00 500,000,000 4,807,479
General Motors
(U.S. Dollar)
07-15-01 9.13 2,000,000 2,081,242
HealthSouth
(U.S. Dollar) Sr Nts
06-15-05 6.88 5,000,000 4,247,120
Nationwide CSN Trust
(U.S. Dollar)
02-15-25 9.88 7,000,000(d) 7,553,438
Newcourt Credit Group
(U.S. Dollar)
02-16-05 6.88 8,000,000(d) 7,916,344
New York Life Insurance
(U.S. Dollar)
12-15-23 7.50 7,000,000(d) 6,358,790
Overseas Private Investment
(U.S. Dollar) U.S. Govt Guaranty Series 1996A
01-15-09 6.99 7,500,000 7,526,700
PDV America
(U.S. Dollar) Sr Nts
08-01-03 7.88 3,500,000 3,139,158
Phillips Petroleum
(U.S. Dollar)
04-15-23 7.92 3,115,000 3,062,725
Questar Pipeline
(U.S. Dollar)
06-01-21 9.38 1,000,000 1,055,019
Salomon Smith Barney Holdings
(U.S. Dollar)
01-15-03 6.13 10,400,000 10,147,570
Southern California Gas
(U.S. Dollar) 1st Mtge Series BB
03-01-23 7.38 900,000 840,821
TXU Electric Capital
(U.S. Dollar) Company Guaranty
01-30-37 8.18 6,150,000 5,924,134
USX
(U.S. Dollar)
03-01-08 6.85 4,775,000 4,533,761
U S WEST Communications
(U.S. Dollar)
11-10-26 7.20 6,000,000 5,471,900
U.S. Treasury
(U.S. Dollar)
11-15-01 7.50 37,000,000(e) 38,177,118
11-15-16 7.50 67,950,000(e,f) 74,960,020
(U.S. Dollar) TIPS
01-15-07 3.38 10,000,000(g) 10,050,131
Zurich Capital
(U.S. Dollar) Company Guaranty
06-01-37 8.38 4,550,000(d) 4,411,321
Total 239,181,912

Venezuela (1.2%)
PDVSA Finance
(U.S. Dollar)
02-15-10 9.75 10,000,000(d) 9,616,567

Total bonds
(Cost: $806,568,234) $772,895,452

</TABLE>

Preferred stock & other (0.5%)(c)

Issuer Shares Value(a)

Mexico Value
<S> <C> <C>
Rights 1,000(b) $--
Pinto Totta Intl Finance 5,000(d) 4,515,625
7.77% Cm

Total preferred stock & other

(Cost: $5,000,000) $4,515,625

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

Short-term securities (3.8%)

Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity

U.S. government agencies
Federal Home Loan Bank Disc Nt
<S> <C> <C> <C> <C> <C>
12-03-99 5.27% $9,000,000 $8,954,148
Federal Home Loan Mtge Corp Disc Nts
12-10-99 5.22 5,800,000 5,764,881
01-18-00 5.60 6,900,000 6,815,855
Federal Natl Mtge Assn Disc Nts
12-02-99 5.27 6,100,000 6,068,262
12-13-99 5.30 900,000 893,880
01-20-00 5.61 3,300,000 3,257,850

Total short-term securities
(Cost: $31,759,655) $31,754,876

Total investments in securities

(Cost: $843,327,889)(h) $809,165,953

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) Negligible market value.

(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated.

(e) Security is partially or fully on loan. See Note 4 to the financial
statements.

(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
U.S. Treasury Bonds, Dec. 1999 $61,600,000

(g) 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.

(h) At Oct. 31, 1999, the cost of securities for federal income tax purposes was
$844,697,483 and the aggregate gross unrealized appreciation and depreciation
based on that cost was:

Unrealized appreciation $21,871,210
Unrealized depreciation (57,402,740)
-----------
Net unrealized depreciation $(35,531,530

<PAGE>

AXP(SM) Global Growth Fund

PROSPECTUS

Dec. 30, 1999

American
Express(R)
Funds

AXP Global Growth Fund seeks to provide

shareholders with long-term capital growth.

Please note that this Fund:

o is not a bank deposit

o is not federally insured

o is not endorsed by any bank or government agency

o is not guaranteed to achieve its goal

<PAGE>

Table of Contents

TAKE A CLOSER LOOK AT:

The Fund 3p

Goal 3p

Investment Strategy 3p

Risks 4p

Past Performance 6p

Fees and Expenses 8p

Management 9p

Buying and Selling Shares 9p

Valuing Fund Shares 9p

Investment Options 10p

Purchasing Shares 11p

Transactions through Third Parties 14p

Sales Charges 14p

Exchanging/Selling Shares 18p

Distributions and Taxes 23p

Master/Feeder Structure 25p

Financial Highlights 27p

FUND INFORMATION KEY

Goal and Investment Strategy
The Fund's particular investment goal and the strategies it intends to use in
pursuing its goal.

Risks
The major risk factors associated with the Fund.

Fees and Expenses
The overall costs incurred by an investor in the Fund, including sales charges
and annual expenses.

Management
The individual or group designated by the investment manager to handle the
Fund's day-to-day management.

Master/Feeder Structure
Describes the Fund's investment structure.

Financial Highlights
Tables showing the Fund's financial performance.

<PAGE>

The Fund

GOAL

AXP Global Growth Fund (the Fund) seeks to provide shareholders with long-term
capital growth. Because any investment involves risk, achieving this goal cannot
be guaranteed.

INVESTMENT STRATEGY

The Fund's assets primarily are invested in equity securities of companies
around the world that are positioned to meet market needs in a changing world
economy. These companies are located in developed and in emerging countries.
Under normal market conditions, at least 65% of the Fund's total assets are
invested in common stocks and convertible securities of companies located in at
least three different countries.

The selection of companies is the primary decision in building the investment
portfolio.

In pursuit of the Fund's goal, American Express Financial Corporation (AEFC),
the Fund's investment manager, chooses investments by:

o Identifying large companies around the world.

o Identifying companies with:

-- financial strength,

-- high demand for their products or services,

-- competitive market position, and

-- effective management.

o Considering opportunities and risks by country and currency.

AEFC decides how much to invest in various countries and then buys those
securities that offer the best opportunity for long-term growth.

<PAGE>

In evaluating whether to sell a security, AEFC considers, among other factors,
whether:

-- the company has met growth expectations, and

-- the company or the security continues to meet the standards described
above.

AEFC closely monitors the Fund's exposure to foreign currency fluctuations. From
time to time, AEFC may purchase derivative instruments to hedge against currency
fluctuations.

During weak or declining markets, the Fund may invest more of its assets in
money market securities. Although the Fund primarily will invest in these
securities to avoid losses, this type of investment also could prevent the Fund
from achieving its investment objective. During these times, AEFC may make
frequent securities trades that could result in increased fees, expenses, and
taxes.

For more information on strategies and holdings, see the Fund's Statement of
Additional Information (SAI) and the annual/semiannual reports.

RISKS

Market Risk

Foreign/Emerging Markets Risk

Style Risk

Market Risk

The market may drop and you may lose money. Market risk may affect a single
issuer, sector of the economy, industry, or the market as a whole. The market
value of all securities may move up and down, sometimes rapidly and
unpredictably.

<PAGE>

Foreign/Emerging Markets Risk

The following are all components of foreign/emerging markets risk:

Emerging markets risk includes the dramatic pace of change (economic, social,
and political) in these countries as well as the other considerations listed
above. These markets are in early stages of development and are extremely
volatile. They can be marked by extreme inflation, devaluation of currencies,
dependence on trade partners, and hostile relations with neighboring countries.

Style Risk

AEFC purchases growth stocks based on the expectation that the companies will
have strong growth in earnings. The price paid often reflects an expected rate
of growth. If that growth fails to occur, the price of the stock may decline
quickly.

<PAGE>

The following bar chart and table indicate the risks and variability of
investing in the Fund by showing:

o how the Fund's performance has varied for each full calendar year shown on the
chart below, and

o how the Fund's average annual total returns compare to other recognized
indexes.

How the Fund has performed in the past does not indicate how the Fund will
perform in the future.

Class A Performance (based on calendar years)

+13.85% -2.22% +39.13% -7.39% +6.36% +14.39% +7.18% +26.15%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

During the period shown in the bar chart, the highest return for a calendar
quarter was +21.19% (quarter ending December 1998) and the lowest return for a
calendar quarter was -16.89% (quarter ending September 1998).

The Fund's year to date return as of Sept. 30, 1999 was +3.67%.

<PAGE>

Average Annual Total Returns (as of Dec. 31, 1998)
<TABLE>
<CAPTION>

1 year 5 years Since inception (A) Since inception (B&Y)

Global Growth:
<S> <C> <C> <C> <C>
Class A +19.85% +7.77% +8.86%a --%

Class B +21.20% --% --% +14.50%c

Class Y +26.24% --% --% +16.07%c

MSCI All Country World

Free Index +21.97% +13.94% +11.52%b +17.52%d

Lipper International

Fund Index +12.66% +8.59% +8.30%b +12.59%d

a Inception date was May 29, 1990.

b Measurement period started June 1, 1990.

c Inception date was March 20, 1995.

d Measurement period started April 1, 1995.
</TABLE>

For purposes of this calculation we assumed:

o a sales charge of 5% for Class A shares,

o sales at the end of the period and deduction of the applicable contingent
deferred sales charge (CDSC) for Class B shares,

o no sales charge for Class Y shares, and

o no adjustments for taxes paid by an investor on the reinvested income and
capital gains.

Morgan Stanley Capital International (MSCI) All Country World Free Index is an
unmanaged index compiled from a composite of securities markets of 47 countries,
including Canada, the United States and 26 emerging market countries. The index
reflects reinvestment of all distributions and changes in market prices, but
excludes brokerage commissions or other fees.

Lipper International Fund Index, an unmanaged index published by Lipper
Analytical Services, Inc., includes 30 funds that are generally similar to the
Fund, although some funds in the index may have somewhat different investment
policies or objectives.

<PAGE>

FEES AND EXPENSES

Fund investors pay various expenses. The table below describes the fees and
expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)

Class A Class B Class Y

Maximum sales charge (load) imposed on
purchasesa
(as a percentage of offering price) 5% none none

Maximum deferred sales charge (load) imposed
on sales (as a percentage of offering price
at time of purchase) none 5% none

Annual Fund operating expensesb (expenses that are deducted from Fund assets)

As a percentage of average daily net assets: Class A Class B Class Y

Management fees 0.74% 0.74% 0.74%

Distribution (12b-1) fees 0.25% 1.00% 0.00%

Other expensesc 0.32% 0.35% 0.40%

Total 1.31% 2.09% 1.14%

a This charge may be reduced depending on your total investments in American
Express mutual funds. See "Sales Charges."

c Other expenses include an administrative services fee, a shareholder services
fee for Class Y, a transfer agency fee and other nonadvisory expenses.

<PAGE>

Example

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

Assume you invest $10,000 and the Fund earns a 5% annual return. The operating
expenses remain the same each year. If you hold your shares until the end of the
years shown, your costs would be:

1 year 3 years 5 years 10 years

Class Aa $627 $895 $1,183 $2,005

Class Bb $612 $955 $1,225 $2,225d

Class Bc $212 $655 $1,125 $2,225d

Class Y $116 $363 $ 629 $1,391

a Includes a 5% sales charge.

b Assumes you sold your Class B shares at the end of the period and incurred the
applicable CDSC.

c Assumes you did not sell your Class B shares at the end of the period.

d Based on conversion of Class B shares to Class A shares in the ninth year of
ownership.

This example does not represent actual expenses, past or future. Actual expenses
may be higher or lower than those shown.

MANAGEMENT

The Fund's assets are invested in World Growth Portfolio (the Portfolio), which
is managed by AEFC and its London-based subsidiary, American Express Asset
Management International Inc. Richard Leadem, senior vice president and
portfolio manager, joined AEFC in 1997. He became portfolio manager of World
Growth Portfolio in December 1999. Prior to joining AEFChe was a senior
portfolio manager at Mercury Asset Management from 1994 to 1997.

Buying and Selling Shares

VALUING FUND SHARES

The public offering price for Class A is the net asset value (NAV) adjusted for
the sales charge. For Class B and Class Y, it is the NAV.

<PAGE>

INVESTMENT OPTIONS

1. Class A shares are sold to the public with a sales charge at the time of
purchase and an annual distribution (12b-1) fee.

2. Class B shares are sold to the public with a CDSC and an annual distribution
(12b-1) fee.

3. Class Y shares are sold to qualifying institutional investors without a sales
charge or distribution fee. Please see the SAI for information on eligibility to
purchase Class Y shares.

Investment options summary:

Class A Maximum sales charge of 5%

Initial sales charge waived or reduced for certain purchases

Annual distribution fee of 0.25% of average daily net assets*

Lower annual expenses than Class B shares

Class B No initial sales charge

CDSC on shares sold in the first six years (maximum of 5%
in first year, reduced to 0% after year six)

CDSC waived in certain circumstances

Shares convert to Class A in ninth year of ownership

Annual distribution fee of 1.00% of average daily net assets*
Higher annual expenses than Class A shares

Class Y No initial sales charge

No annual distribution fee

Service fee of 0.10% of average daily net assets

Available only to certain qualifying institutional investors

* The Fund has adopted a plan under Rule 12b-1 of the Investment Company Act of
1940 that allows it to pay distribution and servicing-related fees for the sale
of Class A and Class B shares. Because these fees are paid out of the Fund's
assets on an on-going basis, the fees may cost long-term shareholders more than
paying other types of sales charges imposed by some mutual funds.

Should you purchase Class A or Class B shares?

PURCHASING SHARES

Important: When you open an account, you must provide your correct Taxpayer
Identification Number (TIN), which is either your Social Security or Employer
Identification number.

o a $50 penalty for each failure to supply your correct TIN,

o a civil penalty of $500 if you make a false statement that results in no
backup withholding, and

o criminal penalties for falsifying information.

You also could be subject to backup withholding, if the IRS notifies us to do
so, because you failed to report required interest or dividends on your tax
return.

How to determine the correct TIN
<S> <C>
For this type of account: Use the Social Security or Employer Identification number of:

Individual or joint account The individual or one of the owners listed on the joint account

Custodian account of a minor The minor

(Uniform Gifts/Transfers to Minors Act)

A revocable living trust The grantor-trustee (the person who puts the money into the trust)

An irrevocable trust, pension trust or
estate The legal entity (not the personal representative or trustee,
unless no legal entity is designated in the account title)

Sole proprietorship The owner

Partnership The partnership

Corporate The corporation

Association, club or tax-exempt
organization The organization
</TABLE>

Three ways to invest

1 By mail:

Once your account has been established, send your check with the
account number on it to:

American Express Funds
P.O. Box 74
Minneapolis, MN 55440-0074

Minimum amounts

Initial investment: $2,000

Additional investments: $100

Account balances: $300

Qualified accounts: none

<PAGE>

2 By scheduled investment plan:

Contact your financial advisor for assistance in setting up one of the
following scheduled plans:

o automatic payroll deduction,

o bank authorization,

o direct deposit of Social Security check, or

o other plan approved by the Fund.

Minimum amounts

Initial investment: $100

Additional investments: $50/mo. for qualified accounts; $100/mo. for
nonqualified accounts

Account balances: none (on active plans with monthly payments)

If your account balance is below $2,000, you must make payments at least
monthly.

3 By wire or electronic funds transfer:

If you have an established account, you may wire money to:

Norwest Bank Minnesota
Routing Transit No. 091000019

Give these instructions:

Credit American Express Financial Advisors Account #0000030015 for personal
account # (your account number) for (your name). Please remember that you need
to provide all 10 digits.

Minimum amounts

Each wire investment: $1,000

<PAGE>

TRANSACTIONS THROUGH THIRD PARTIES

You may buy or sell shares through certain 401(k) plans, banks, broker-dealers,
financial advisors or other investment professionals. These organizations may
charge you a fee for this service and may have different policies. Some policy
differences may include different minimum investment amounts, exchange
privileges, fund choices and cutoff times for investments. The Fund and the
Distributor are not responsible for the failure of one of these organizations to
carry out its obligations to its customers. Some organizations may receive
compensation from the Distributor or its affiliates for shareholder
recordkeeping and similar services. Where authorized by the Fund, some
organizations may designate selected agents to accept purchase or sale orders on
the Fund's behalf. To buy or sell shares through third parties or determine if
there are policy differences, please consult your selling agent. For other
pertinent information related to buying or selling shares, please refer to the
appropriate section in the prospectus.

SALES CHARGES

Class A -- initial sales charge alternative

When you purchase Class A shares, you pay a 5% sales charge on the first $50,000
of your total investment and less on investments after the first $50,000:

Total investment Sales charge as percentage of:a

Public offering priceb Net amount invested

Up to $50,000 5.0% 5.26%

Next $50,000 4.5 4.71

Next $400,000 3.8 3.95

Next $500,000 2.0 2.04

$1,000,000 or more 0.0 0.00

a To calculate the actual sales charge on an investment greater than $50,000 and
less than $1,000,000, you must total the amounts of all increments that apply.

b Offering price includes a 5% sales charge.

The sales charge on Class A shares may be lower than 5%, depending on the total
amount:

o you now are investing in this Fund,

o you have previously invested in this Fund, or

o you and your primary household group are investing or have invested in other
American Express mutual funds that have a sales charge. (The primary household
group consists of accounts in any ownership for spouses or domestic partners and
their unmarried children under 21. For purposes of this policy, domestic
partners are individuals who maintain a shared primary residence and have joint
property or other insurable interests.) AXP Tax-Free Money Fund and Class A
shares of AXP Cash Management Fund do not have sales charges.

Other Class A sales charge policies:

o IRA purchases or other employee benefit plan purchases made through a payroll
deduction plan or through a plan sponsored by an employer, association of
employers, employee organization or other similar group, may be added together
to reduce sales charges for all shares purchased through that plan, and

o if you intend to invest $1 million over a period of 13 months, you can reduce
the sales charges in Class A by filing a letter of intent. For more details,
please see the SAI.

Waivers of the sales charge for Class A shares
Sales charges do not apply to:

o current or retired board members, officers or employees of the Fund or AEFC or
its subsidiaries, their spouses or domestic partners and unmarried children
under 21.

o current or retired American Express financial advisors, their spouses or
domestic partners and unmarried children under 21.

o investors who have a business relationship with a newly associated financial
advisor who joined the Distributor from another investment firm provided that
(1) the purchase is made within six months of the advisor's appointment date
with the Distributor, (2) the purchase is made with proceeds of shares sold that
were sponsored by the financial advisor's previous broker-dealer, and (3) the
proceeds are the result of a sale of an equal or greater value where a sales
load was assessed.

o qualified employee benefit plans offering participants daily access to
American Express mutual funds. Eligibility must be determined in advance. For
assistance, please contact your financial advisor. (Participants in certain
qualified plans where the initial sales charge is waived may be subject to a
deferred sales charge of up to 4%.)

o shareholders who have at least $1 million invested in American Express mutual
funds. If the investment is sold in the first year after purchase, a CDSC of 1%
will be charged. The CDSC will be waived only in the circumstances described for
waivers for Class B shares.

o purchases made within 90 days after a sale of shares (up to the amount sold):

-- of American Express mutual funds in a qualified plan subject to a deferred
sales charge, or

-- in a qualified plan or account where American Express Trust Company has a
record keeping, trustee, investment management, or investment
servicing relationship.

Send the Fund a written request along with your payment, indicating the date and
the amount of the sale.

<PAGE>

o purchases made:

-- with dividend or capital gain distributions from this Fund or from the
same class of another American Express mutual fund that has a sales
charge,

-- through or under a wrap fee product or other investment product sponsored
by the Distributor or another authorized broker-dealer, investment
adviser, bank or investment professional,

-- within the University of Texas System ORP,

-- within a segregated separate account offered by Nationwide Life Insurance
Company or Nationwide Life and Annuity Insurance Company,

-- within the University of Massachusetts After-Tax Savings Program,

-- with the proceeds from IDS Life Real Estate Variable Annuity surrenders,
or

-- through or under a subsidiary of AEFC offering Personal Trust Services'
Asset-Based pricing alternative.

Class B -- contingent deferred sales charge (CDSC) alternative

If the sale is made during the: The CDSC percentage rate is:

First year 5%

Second year 4%

Third year 4%

Fourth year 3%

Fifth year 2%

Sixth year 1%

Seventh year 0%

<PAGE>

Example:

The CDSC on Class B shares will be waived on sales of shares:

o in the event of the shareholder's death,

o held in trust for an employee benefit plan, or

o held in IRAs or certain qualified plans if American Express Trust Company is
the custodian, such as Keogh plans, tax-sheltered custodial accounts
or corporate pension plans, provided that the shareholder is:

-- at least 59 1/2 years old AND

-- taking a retirement distribution (if the sale is part of a transfer to an
IRA or qualified plan, or a custodian-to-custodian transfer, the CDSC
will not be waived) OR

-- selling under an approved substantially equal periodic payment
arrangement.

<PAGE>

EXCHANGING/SELLING SHARES

Exchanges

Other exchange policies:

o Exchanges must be made into the same class of shares of the new fund.

o If your exchange creates a new account, it must satisfy the minimum investment
amount for new purchases.

o Once we receive your exchange request, you cannot cancel it.

o Shares of the new fund may not be used on the same day for another exchange.

o If your shares are pledged as collateral, the exchange will be delayed until
AECSC receives written approval from the secured party.

<PAGE>

Selling Shares

You can sell your shares at any time. The payment will be mailed within seven
days after accepting your request.

The Fund reserves the right to redeem in kind.

For more details and a description of other sales policies, please see the SAI.

<PAGE>

Requests to sell shares of the Fund are not allowed within 30 days of a
telephoned-in address change.

Two ways to request an exchange or sale of shares

1 By letter:

Include in your letter:

o the name of the fund(s),

o the class of shares to be exchanged or sold,

o your mutual fund account number(s) (for exchanges, both funds must
be registered in the same ownership),

o your Social Security number or Employer Identification number,

o the dollar amount or number of shares you want to exchange or sell,

o signature(s) of all registered account owners,

o for sales, indicate how you want your money delivered to you, and

o any paper certificates of shares you hold.

Regular mail:

American Express Client Service Corporation
Attn: Transactions
P.O. Box 534
Minneapolis, MN 55440-0534

Express mail:

American Express Client Service Corporation
Attn: Transactions
733 Marquette Ave.
Minneapolis, MN 55402

<PAGE>

2 By telephone:

American Express Client Service Corporation
Telephone Transaction Service
800-437-3133

o The Fund and AECSC will use reasonable procedures to confirm authenticity of
telephone exchange or sale requests.

o Telephone exchange and sale privileges automatically apply to all accounts
except custodial, corporate or qualified retirement accounts. You may request
that these privileges NOT apply by writing AECSC. Each registered owner must
sign the request.

o Acting on your instructions, your financial advisor may conduct telephone
transactions on your behalf.

o Telephone privileges may be modified or discontinued at any time.

Minimum sale amount: $100 Maximum sale amount: $50,000

<PAGE>

Three ways to receive payment when you sell shares

1 By regular or express mail:

o Mailed to the address on record.

o Payable to names listed on the account.

NOTE: The express mail delivery charges you pay will vary depending on the
courier you select.

2 By wire or electronic funds transfer:

o Minimum wire: $1,000.

o Request that money be wired to your bank.

o Bank account must be in the same ownership
as the American Express mutual fund account.

NOTE: Pre-authorization required. For instructions, contact your financial
advisor or AECSC.

3 By scheduled payout plan:

o Minimum payment: $50.

o Contact your financial advisor or AECSC
to set up regular payments on a monthly,
bimonthly, quarterly, semiannual or annual basis.

o Purchasing new shares while under a payout
plan may be disadvantageous because of the sales charges.

<PAGE>

Distributions and Taxes

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

REINVESTMENTS

Dividends and capital gain distributions are automatically reinvested in
additional shares in the same class of the Fund, unless:

o you request distributions in cash, or

o you direct the Fund to invest your distributions in the same class of any
publicly offered American Express mutual fund for which you have previously
opened an account.

We reinvest the distributions for you at the next calculated NAV after the
distribution is paid.

If you choose cash distributions, you will receive cash only for distributions
declared after your request has been processed.

<PAGE>

TAXES

Income received by the Fund may be subject to foreign tax and withholding. Tax
conventions between certain countries and the U.S. may reduce or eliminate these
taxes.

Selling shares held in an IRA or qualified retirement account may subject you to
federal taxes, penalties and reporting requirements. Please consult your tax
advisor.

<PAGE>

Master/Feeder Structure

Investors buy shares in the Fund

The Fund buys units in the Portfolio

The Portfolio invests in securities, such as stocks or bonds

<PAGE>

YEAR 2000

INVESTMENT MANAGER

The investment manager of the Portfolio is AEFC, located at IDS Tower 10,
Minneapolis, MN 55440-0010. The Portfolio pays AEFC a fee for managing its
assets. The Fund pays its proportionate share of the fee. Under the Investment
Management Services Agreement, the fee for the most recent fiscal year was 0.74%
of its average daily net assets. Under the agreement, the Portfolio also pays
taxes, brokerage commissions and nonadvisory expenses. The fee will be adjusted
based on the Fund's performance, effective Jan. 1, 2000 and will cover the
six-month period beginning July 1, 1999. AEFC is a wholly-owned subsidiary of
American Express Company, a financial services company with headquarters at
American Express Tower, World Financial Center, New York, NY 10285.

<PAGE>

Financial Highlights

Fiscal period ended Oct. 31,
Per share income and capital changesa

Class A
<TABLE>
<CAPTION>

1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>

Net asset value, beginning of period $7.80 $6.90 $7.12 $6.37 $6.96

Income from investment operations:

Net investment income (loss) .02 .02 .03 .08 .10

Net gains (losses) (both realized and
unrealized) 1.78 1.12 .39 .83 (.59)

Total from investment operations 1.80 1.14 .42 .91 (.49)

Less distributions:

Dividends from and in excess

of net investment income (.05) (.06) (.22) (.13) (.05)

Distributions from realized gains (.37) (.18) (.42) (.03) (.05)

Total distributions (.42) (.24) (.64) (.16) (.10)

Net asset value, end of period $9.18 $7.80 $6.90 $7.12 $6.37

Ratios/supplemental data

Net assets, end of period
(in millions) $1,260 $962 $889 $908 $659

Ratio of expenses to average daily
net assetsb 1.25% 1.22% 1.27% 1.37% 1.39%

Ratio of net investment income (loss)

to average daily net assets .14% .35% .60% 1.45% 1.59%

Portfolio turnover rate

(excluding short-term securities) 83% 80% 199% 134% 90%

Total returnc 23.59% 17.00% 6.22% 14.51% (6.99%)

a For a share outstanding throughout the period. Rounded to the nearest cent.

b Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.

c Total return does not reflect payment of a sales charge.
</TABLE>

<PAGE>

Fiscal period ended Oct. 31,

Per share income and capital changesa
<TABLE>
<CAPTION>

Class B Class Y

1999 1998 1997 1996 1995b 1999 1998 1997 1996 1995b
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>

Net asset value,

beginning of period $7.68 $6.79 $7.05 $6.34 $5.82 $7.81 $6.91 $7.13 $6.38 $5.82

Income from investment
operations:

Net investment income
(loss) (.05) -- -- .05 .02 .03 .02 .03 .09 .06

Net gains (losses) (both

realized and unrealized) 1.75 1.08 .35 .81 .50 1.78 1.13 .40 .83 .50

Total from investment
operations 1.70 1.08 .35 .86 .52 1.81 1.15 .43 .92 .56

Less distributions:

Dividends from and in excess

of net investment income -- (.01) (.19) (.12) -- (.05) (.07) (.23) (.14) --

Distributions from
realized gains (.37)(.18) (.42) (.03) -- (.37) (.18) (.42) (.03) --

Total distributions (.37)(.19) (.61) (.15) -- (.42) (.25) (.65) (.17) --

Net asset value, end of
period $9.01 $7.68 $6.79 $7.05 $6.34 $9.20 $7.81 $6.91 $7.13 $6.38

Ratios/supplemental data

Net assets, end of period

(in millions) $464 $295 $222 $146 $21 $26 $23 $21 $19 $24

Ratio of expenses to

average daily net assetsc 2.02% 1.99% 2.03% 2.14% 2.16%d 1.13% 1.15% 1.15% 1.19% 1.20%d

Ratio of net investment

income (loss) to average

daily net assets (.62%)(.40%)(.18%) 1.05% .85%d .24% .41% .72% 1.60% 2.37%d

Portfolio turnover rate

(excluding short-term

securities) 83% 80% 199% 134% 90% 83% 80% 199% 134% 90%

Total returne 22.66% 16.13% 5.40% 13.64% 9.04% 23.86% 17.10% 6.34% 14.71% 9.66%

a For a share outstanding throughout the period. Rounded to the nearest cent.

b Inception date was March 20, 1995.

c Effective fiscal year 1996, 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>

American
Express(R)
Funds

American Express Client Service Corporation
P.O. Box 534, Minneapolis, MN 55440-0534
800-862-7919 TTY: 800-846-4852
Web site address:
http://www.americanexpress.com/advisors

Investment Company Act File #811-5696

TICKER SYMBOL
Class A: IGLGX Class B: IDGBX Class Y: IDGYX

AMERICAN
EXPRESS (logo)

S-6334-99 N (12/99)

<PAGE>
Independent Auditors' Report

THE BOARD AND SHAREHOLDERS
AXP GLOBAL SERIES, INC.

We have audited the accompanying statement of assets and liabilities of AXP
Global Growth Fund (a series of AXP Global Series, Inc.) as of October 31, 1999,
and the related statement of operations for the year then ended, the statements
of changes in net assets for each of the years in the two-year period then
ended, and the financial highlights for each of the years in the five-year
period ended October 31, 1999. These financial statements and the financial
highlights are the responsibility of fund management. Our responsibility is to
express an opinion on these financial statements and the financial highlights
based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AXP Global Growth Fund as of
October 31, 1999, and the results of its operations, changes in its net assets
and the financial highlights for the periods stated in the first paragraph
above, in conformity with generally accepted accounting principles.

/s/ KPMG LLP
KPMG LLP
Minneapolis, Minnesota
December 3, 1999

Financial Statements

Statement of assets and liabilities
AXP Global Growth Fund

Oct. 31, 1999

Assets
<S> <C> <C>
Investment in World Growth Portfolio (Note 1) $1,750,239,747

Liabilities
Accrued distribution fee 20,417
Accrued service fee 68
Accrued transfer agency fee 1,484
Accrued administrative services fee 2,176
Other accrued expenses 95,593
------
Total liabilities 119,738
-------
Net assets applicable to outstanding capital stock $1,750,120,009
==============

Represented by
Capital stock-- $.01 par value (Note 1) $ 1,915,696
Additional paid-in capital 1,284,311,853
Undistributed net investment income 6,159,273
Accumulated net realized gain (loss) 184,029,103
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 273,704,084
-----------
Total-- representing net assets applicable to outstanding capital stock $1,750,120,009
==============
Net assets applicable to outstanding shares: Class A $1,259,965,879
Class B $ 464,279,557
Class Y $ 25,874,573
Net asset value per share of outstanding capital stock: Class A shares 137,229,208 $ 9.18
Class B shares 51,528,121 $ 9.01
Class Y shares 2,812,242 $ 9.20

See accompanying notes to financial statements.

</TABLE>

Statement of operations
AXP Global Growth Fund

Year ended Oct. 31, 1999

Investment income
Income:
<S> <C>
Dividends $ 19,815,830
Interest 3,247,037
Less foreign taxes withheld (1,327,264)
----------
Total income 21,735,603
----------
Expenses (Note 2):
Expenses allocated from World Growth Portfolio 12,238,168
Distribution fee
Class A 1,007,932
Class B 3,279,520
Transfer agency fee 2,679,647
Incremental transfer agency fee
Class A 207,442
Class B 134,337
Service fee
Class A 1,289,532
Class B 425,336
Class Y 25,042
Administrative services fees and expenses 755,853
Compensation of board members 8,925
Printing and postage 349,247
Registration fees 130,542
Audit fees 7,750
Other 8,174
-----
Total expenses 22,547,447
Earnings credits on cash balances (Note 2) (36,171)
-------
Total net expenses 22,511,276
----------
Investment income (loss) -- net (775,673)
--------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions 184,053,024
Foreign currency transactions 322,330
-------
Net realized gain (loss) on investments 184,375,354

Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 125,627,405
-----------
Net gain (loss) on investments and foreign currencies 310,002,759
-----------
Net increase (decrease) in net assets resulting from operations $309,227,086
============

See accompanying notes to financial statements.
</TABLE>

Statements of changes in net assets
AXP Global Growth Fund

Year ended Oct. 31, 1999 1998

Operations and distributions
<S> <C> <C>
Investment income (loss)-- net $ (775,673) $ 2,374,735
Net realized gain (loss) on investments 184,375,354 69,842,751
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 125,627,405 104,552,683
----------- -----------
Net increase (decrease) in net assets resulting from operations 309,227,086 176,770,169
----------- -----------
Distributions to shareholders:
From and in excess of net investment income
Class A (5,494,846) (7,470,795)
Class B (2,288) (382,513)
Class Y (142,170) (218,480)
From net realized gain
Class A (45,913,293) (21,935,266)
Class B (14,747,605) (5,756,015)
Class Y (1,056,181) (560,473)
---------- --------
Total distributions (67,356,383) (36,323,542)
----------- -----------
Capital share transactions (Note 3)

Proceeds from sales
Class A shares (Note 2) 362,979,328 632,620,737
Class B shares 151,060,171 89,227,669
Class Y shares 11,056,126 12,429,035
Reinvestment of distributions at net asset value
Class A shares 49,848,367 28,787,516
Class B shares 14,640,382 6,102,193
Class Y shares 1,198,351 778,953
Payments for redemptions
Class A shares (294,695,663) (701,086,667)
Class B shares (Note 2) (54,189,827) (49,085,247)
Class Y shares (12,905,756) (13,337,213)
----------- -----------
Increase (decrease) in net assets from capital share transactions 228,991,479 6,436,976
----------- ---------
Total increase (decrease) in net assets 470,862,182 146,883,603
Net assets at beginning of year 1,279,257,827 1,132,374,224
------------- -------------
Net assets at end of year $1,750,120,009 $1,279,257,827
============== ==============
Undistributed (excess of distributions over) net investment income $ 6,159,273 $ 1,531,548
-------------- --------------
See accompanying notes to financial statements.

</TABLE>
<PAGE>

Notes to Financial Statements

AXP Global Growth Fund

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

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 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 Oct. 31,1999 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 generally accepted accounting
principles requires management to make estimates (e.g., on assets and
liabilities) that could differ from actual results.

Federal taxes

On the statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by
$11,042,702 and accumulated net realized gain has been decreased by $322,330
resulting in a net reclassification adjustment to decrease paid-in capital by
$10,720,372.

Dividends to shareholders

An annual dividend from net investment income, declared and paid at the end of
the calendar year 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. 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.

o Class A $19
o Class B $20
o Class Y $17

Sales charges received by the Distributor for distributing Fund shares were
$3,563,804 for Class A and $314,123 for Class B for the year ended Oct. 31,
1999.

During the year ended Oct. 31, 1999, the Fund's transfer agency fees were
reduced by $36,171 as a result of earnings credits from overnight cash balances.

3. CAPITAL SHARE TRANSACTIONS

Transactions in shares of capital stock for the years indicated are as follows:

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)
---------- ---------- -------

Year ended Oct. 31, 1998

Class A Class B Class Y

Sold 82,074,721 11,336,548 1,555,777
Issued for reinvested distributions 4,209,318 900,694 113,898
Redeemed (91,946,736) (6,545,440) (1,755,402)
----------- ---------- ----------
Net increase (decrease) (5,662,697) 5,691,802 (85,727)
---------- --------- -------

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 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 year ended Oct. 31,
1999.

5. FINANCIAL HIGHLIGHTS

"Financial highlights" showing per share data and selected financial information
is presented on pages 27 and 28 of the prospectus.

<PAGE>

Independent Auditors' Report

THE BOARD OF TRUSTEES AND UNITHOLDERS
WORLD TRUST

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of World Growth Portfolio (a series
of World Trust) as of October 31, 1999, the related statement of operations for
the year then ended and the statements of changes in net assets for each of the
years in the two-year period ended October 31, 1999. These financial statements
are the responsibility of portfolio management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 1999, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of World Growth Portfolio as of
October 31, 1999, and the results of its operations and the changes in its net
assets for the periods stated in the first paragraph above, in conformity with
generally accepted accounting principles.

/s/ KPMG LLP
KPMG LLP
Minneapolis, Minnesota
December 3, 1999

Financial Statements

Statement of assets and liabilities
World Growth Portfolio

Oct. 31, 1999

Assets

Investments in securities, at value (Note 1)
<S> <C> <C>
(identified cost $1,459,365,703) $1,733,302,963
Dividends and accrued interest receivable 4,160,851
Receivable for investment securities sold 22,934,130
Unrealized appreciation on foreign currency contracts held, at value (Notes 1 and 4) 30,542
U.S. government securities held as collateral (Note 5) 8,881,203
---------
Total assets 1,769,309,689
-------------

Liabilities
Disbursements in excess of cash on demand deposit 840,025
Payable for investment securities purchased 3,902,359
Unrealized depreciation on foreign currency contracts held, at value (Notes 1 and 4) 3,554
Payable upon return of securities loaned (Note 5) 12,973,148
Accrued investment management services fee 33,842
Other accrued expenses 411,297
-------
Total liabilities 18,164,225
----------
Net assets $1,751,145,464
==============

See accompanying notes to financial statements.
</TABLE>

Statement of operations
World Growth Portfolio

Year ended Oct. 31, 1999

Investment income
Income:
<S> <C>
Dividends $ 19,826,509
Interest 3,239,130
Less foreign taxes withheld (1,327,986)
----------
Total income 21,737,653
----------
Expenses (Note 2):
Investment management services fee 11,563,612
Compensation of board members 11,226
Custodian fees 601,931
Audit fees 23,250
Other 48,869
------
Total expenses 12,248,888
Earnings credits on cash balances (Note 2) (4,057)
------
Total net expenses 12,244,831
----------
Investment income (loss) -- net 9,492,822
---------

Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 184,160,348
Foreign currency transactions 323,047
-------
Net realized gain (loss) on investments 184,483,395
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 125,692,141
-----------
Net gain (loss) on investments and foreign currencies 310,175,536
-----------
Net increase (decrease) in net assets resulting from operations $319,668,358
============

See accompanying notes to financial statements.
</TABLE>

Statements of changes in net assets
World Growth Portfolio

Year ended Oct. 31, 1999 1998

Operations
<S> <C> <C>
Investment income (loss)-- net $ 9,492,822 $ 9,469,973
Net realized gain (loss) on investments 184,483,395 69,879,530
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 125,692,141 104,617,372
----------- -----------
Net increase (decrease) in net assets resulting from operations 319,668,358 183,966,875
Net contributions (withdrawals) from partners 151,432,468 (37,038,141)
----------- -----------
Total increase (decrease) in net assets 471,100,826 146,928,734
Net assets at beginning of year 1,280,044,638 1,133,115,904
------------- -------------
Net assets at end of year $1,751,145,464 $1,280,044,638
============== ==============

See accompanying notes to financial statements.

</TABLE>
<PAGE>

Notes to Financial Statements

World Growth Portfolio

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 generally accepted accounting
principles requires management to make estimates (e.g., on assets and
liabilities) that could differ from actual results.

Valuation of securities

Option transactions

Futures transactions

Foreign currency translations and foreign currency contracts

Federal taxes

Other

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. Effective with the new Investment
Management Services Agreement, the fee will 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. The first adjustment will be made on
Jan. 1, 2000 and will cover the six-month period beginning July 1, 1999.

AEFC has a Sub-investment Advisory Agreement with American Express Asset
Management International Inc. (International), a wholly-owned subsidiary of
AEFC.

During the year ended Oct. 31, 1999, the Portfolio's custodian fees were reduced
by $4,057 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 $1,454,792,559 and $1,250,391,865, respectively, for the
year ended Oct. 31, 1999. For the same period, the portfolio turnover rate was
83%. Realized gains and losses are determined on an identified cost basis.

4. FOREIGN CURRENCY CONTRACTS

Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation

Nov. 1, 1999 1,506,980 2,485,823 $10,007 $--
British Pound U.S. Dollar
Nov. 2, 1999 2,879,820 4,751,790 20,535 --
British Pound U.S. Dollar
Nov. 3, 1999 1,273,324 2,088,391 -- 3,554
British Pound U.S. Dollar

Total $30,542 $3,554

5. LENDING OF PORTFOLIO SECURITIES

As of Oct. 31, 1999, securities valued at $11,602,231 were on loan to brokers.
For collateral, the Portfolio received $4,091,945 in cash and U.S. government
securities valued at $8,881,203. Income from securities lending amounted to
$789,755 for the year ended Oct. 31, 1999. 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.

Investments in Securities

World Growth Portfolio
Oct. 31, 1999

(Percentages represent value of investments compared to net assets)

Common stocks (96.6%)(c)

Issuer Shares Value(a)

Argentina (0.2%)
Utilities -- telephone
<S> <C> <C>
Telefonica de Argentina ADR 170,000 $4,356,250

Australia (3.4%)
Energy (0.4%)
Woodside Petroleum 1,068,000 6,439,079

Metals (1.1%)
Broken Hill Proprietary 1,486,000 15,365,339
Normandy Mining 4,836,000 3,671,588
Total 19,036,927

Miscellaneous (0.3%)
Telstra 1,722,000 5,526,140

Retail (0.9%)
Woolworths 4,458,000 15,159,608

Transportation (0.7%)
Brambles Inds 465,000 13,083,148

Brazil (0.4%)
Banks and savings & loans
Uniao de Bancos Brasileiros GDR 301,558 6,973,529

Canada (1.7%)
Communications equipment & services (1.1%)
Nortel Networks 306,600 18,990,038
Utilities -- telephone (0.6%)
BCE 166,900 10,055,725

Finland (0.2%)
Communications equipment & services
Sonera Oyj 114,867 3,449,655

France (11.8%)
Banks and savings & loans (2.8%)
Banque Natl de Paris 548,440 48,171,472

Computers & office equipment (1.7%)
Cap Gemini 193,875 29,366,935

Electronics (0.7%)
SGS-Thomson Microelectronics 131,497 11,549,858

Energy (5.2%)
Elf Aquitaine 105,000 15,462,925
Total Petroleum Cl B 565,923 76,495,308
Total 91,958,233

Food (0.8%)
Sodexho Alliance 90,203 14,801,983

Industrial equipment & services (0.6%)
Castorama Dubois 33,559 10,053,640

Germany (8.6%)
Automotive & related (2.3%)
Bayerische Motoren Werke 1,290,742 41,139,252

Chemicals (1.4%)
Bayer 595,000 24,346,744

Industrial equipment & services (3.8%)
Mannesmann 415,148 65,285,760

Miscellaneous (1.1%)
Epcos 489,835(b) 19,991,982

Hong Kong (0.2%)
Communications equipment & services
China Telecom 1,148,000 3,930,849

Italy (5.6%)
Banks and savings & loans
Banca Intesa 6,003,766(f) 25,640,360
Instituto Bancario San Paolo di Torino 2,795,440 36,227,236
Unicredito Italiano 7,863,028 36,806,468
Total 98,674,064

Japan (8.6%)
Computers & office equipment (2.0%)
Canon 610,000 17,258,908
Fujitsu 610,000 18,370,498
Total 35,629,406

Electronics (2.0%)
Alps Electric 885,000 17,145,734
Hitachi 1,675,000 18,105,069
Total 35,250,803

Media (0.6%)
Sony 70,000 10,916,415

Utilities -- telephone (4.0%)
Nippon Telegraph & Telephone 2,745 42,123,436
NTT Data 1,686 26,681,053
Total 68,804,489

Mexico (1.3%)
Banks and savings & loans (0.5%)
Grupo Financiero Banamex Accival 3,160,000 7,887,676

Multi-industry conglomerates (0.4%)
Grupo Financiero Banorte 6,000,000(b) 7,488,300

Paper & packaging (0.4%)
Kimberly-Clark de Mexico 2,400,000 7,687,988

Netherlands (4.6%)
Industrial equipment & services (0.8%)
Philips Electronics 133,387 13,680,208

Insurance (2.7%)
Fortis 1,363,546(d) 46,945,084

Miscellaneous (1.1%)
United Pan-Europe Communications 255,656(b) 19,658,378

New York (0.5%)
Electronics
Corning 122,300 9,615,838

Singapore (2.2%)
Banks and savings & loans (0.5%)
Overseas Union Bank 2,151,528 9,316,775

Beverages & tobacco (0.6%)
Fraser & Neave 2,318,000 9,898,238

Financial services (1.1%)
DBS Land 10,852,500 20,103,266

South Korea (0.9%)
Utilities -- telephone
Korea Telecom ADR 468,539(b) 16,516,000

Spain (0.8%)
Building materials & construction
Fomento de Construcciones y Contractas 547,192 13,727,847

Sweden (3.9%)
Communications equipment & services
Ericsson (LM) Cl B 1,631,854 67,861,633

Switzerland (2.8%)
Banks and savings & loans
UBS 165,863 48,245,713

United Kingdom (8.7%)
Leisure time & entertainment (1.3%)
EMI Group ADR 2,942,999 23,111,545

Multi-industry conglomerates (4.0%)
General Electric 6,263,767 68,073,238

Retail (1.6%)
Great Universal Stores 1,698,912 12,895,074
Next 1,455,842 15,678,261
Total 28,573,335

Transportation (0.3%)
Stagecoach Holdings 2,054,688 5,839,867

Utilities -- gas (1.5%)
BG 4,755,895 $26,389,951

United States (30.2%)
Banks and savings & loans (0.9%)
Bank of America 256,220 16,494,163

Chemicals (2.6%)
Du Pont (EI) de Nemours 466,300 30,047,206
Monsanto 396,740 15,274,490
Total 45,321,696

Communications equipment & services (1.4%)
Lucent Technologies 379,200 24,363,600

Computers & office equipment (6.7%)
America Online 171,700(b) 22,267,343
Cisco Systems 564,200(b) 41,750,799
Electronic Data Systems 343,000 20,065,500
Hewlett-Packard 256,700 19,011,844
Yahoo! 67,260(b) 12,043,744
Total 115,139,230

Electronics (1.0%)
Intel 218,800 16,943,325

Energy (1.6%)
Texaco 458,900 28,164,988

Energy equipment & services (0.8%)
Baker Hughes 483,300 13,502,194

Financial services (2.8%)
Citigroup 239,250 12,949,406
Fannie Mae 375,590 26,572,993
Goldman Sachs Group 134,050 9,517,550
Total 49,039,949

Health care (1.7%)
Boston Scientific 573,100(b) 11,533,638
Pfizer 478,500 18,900,750
Total 30,434,388

Household products (1.4%)
Colgate-Palmolive 409,600 24,780,800

Insurance (1.7%)
American Intl Group 286,525 29,494,167

Leisure time & entertainment (0.5%)
Disney (Walt) 351,000 9,257,625

Multi-industry conglomerates (1.5%)
General Electric 196,600 26,651,588

Retail (2.5%)
Safeway 272,000(b) 9,605,000
Wal-Mart Stores 599,200 34,229,301
Total 43,834,301

Utilities -- telephone (3.1%)
AT&T 243,300 11,374,275
MCI WorldCom 232,400(b) 19,942,825
SBC Communications 441,100 22,468,531
Total 53,785,631

Total common stocks
(Cost: $1,416,823,582) $1,690,770,509

</TABLE>

Short-term securities (2.4%)

Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity

U.S. government agencies (1.9%)
Federal Home Loan Mtge Corp Disc Nts
<S> <C> <C> <C> <C> <C>
11-04-99 5.25% $300,000 $299,737
11-08-99 5.26 5,100,000 5,092,562
11-29-99 5.23 4,200,000 4,181,157
12-01-99 5.28 2,300,000 2,288,931
12-16-99 5.29 4,400,000 4,367,621
Federal Natl Mtge Assn Disc Nts
12-10-99 5.28 5,300,000 5,265,451
12-13-99 5.30 5,200,000 5,164,640
01-24-00 5.60 5,900,000 5,822,721
Total 32,482,820

Commercial paper (0.5%)
Alcoa
12-08-99 5.32 600,000 596,473
ANZ (Delaware)
12-01-99 5.33 800,000 796,025
BellSouth Capital Funding
11-08-99 5.31 1,600,000(e) 1,597,644
Falcon Asset
11-23-99 5.40 2,000,000(e) 1,992,528
Merrill Lynch
11-30-99 5.31 1,200,000 1,194,357
Windmill Funding
12-15-99 5.42 3,900,000(e) 3,872,607
Total 10,049,634

Total short-term securities
(Cost: $42,542,121) $42,532,454

Total investments in securities

(Cost: $1,459,365,703)(g) $1,733,302,963

</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.

(f) Security is partially or fully on loan. See Note 5 to the financial
statements.

(g) At Oct. 31, 1999, the cost of securities for federal income tax purposes was
$1,459,365,703 and the aggregate gross unrealized appreciation and depreciation
based on that cost was:

Unrealized appreciation $343,800,628
Unrealized depreciation (69,863,368)
-----------
Net unrealized appreciation $273,937,260

<PAGE>

AXPSM Innovations Fund

PROSPECTUS

AS REVISED MARCH 15, 2000

AXP Innovations Fund seeks to provide shareholders with long-term capital
growth.

Please note that this Fund:

o is not a bank deposit

o is not federally insured

o is not endorsed by any bank or government agency

o is not guaranteed to achieve its goal

<PAGE>

Table of Contents

TAKE A CLOSER LOOK AT:

The Fund 3p

Goal 3p

Investment Strategy 3p

Risks 4p

Past Performance 5p

Fees and Expenses 7p

Management 8p

Buying and Selling Shares 8p

Valuing Fund Shares 8p

Investment Options 9p

Purchasing Shares 10p

Transactions Through Third Parties 13p

Sales Charges 13p

Exchanging/Selling Shares 17p

Distributions and Taxes 22p

Master/Feeder Structure 24p

Other Information 25p

Financial Highlights 26p

FUND INFORMATION KEY

Goal and Investment Strategy The Fund's particular investment goal and the
strategies it intends to use in pursuing its goal.

Risks The major risk factors associated with the Fund.

Fees and Expenses The overall costs incurred by an investor in the Fund,
including sales charges and annual expenses.

Management The individual or group designated by the investment manager to
handle the Fund's day-to-day management.

Master/Feeder Structure Describes the Fund's investment structure.

Financial Highlights Tables showing the Fund's financial performance.

<PAGE>

The Fund

GOAL

AXP Innovations Fund (the Fund) seeks to provide shareholders with long-term
capital growth. Because any investment involves risk, achieving this goal cannot
be guaranteed.

INVESTMENT STRATEGY

The Fund's assets primarily are invested in equity securities of companies in
the information technology industry. Under normal market conditions, at least
65% of the Fund's total assets are invested in companies in this industry.
Investments will be in at least three different countries.

The selection of companies is the primary decision in building the investment
portfolio.

In pursuit of the Fund's goal, American Express Financial Corporation (AEFC),
the Fund's investment manager, chooses investments by:

o Identifying companies that AEFC believes to be principally engaged in the
development, advancement, production, and/or use of products or services
related to information processing, data processing, and/or information
presentation.

o Identifying companies with:

-- high demand for their products and/or services,

-- competitive market position, and

-- effective management.

o Considering opportunities and risks within the technology,
telecommunications, and media sectors.

In evaluating whether to sell a security, AEFC considers, among other factors,
whether:

-- the security is overvalued relative to alternative investments,

-- the company or the security continues to meet the standards described
above,

-- the company meets earnings expectations, and

-- the company's industry experiences a broad down-turn.

<PAGE>

Although not a primary investment strategy, the Fund also may invest in other
instruments, such as money market securities and debt securities. Additionally,
the Fund may utilize derivative instruments to produce incremental earnings, to
hedge existing positions and to increase flexibility.

For more information on strategies and holdings, see the Fund's Statement of
Additional Information (SAI) and the annual/semiannual reports.

RISKS

This Fund is designed for investors with above-average risk tolerance. Please
remember that with any mutual fund investment you may lose money. Principal
risks associated with an investment in the Fund include:

Market Risk

Sector/Concentration Risk

Style Risk

Market Risk

Sector/Concentration Risk

Investments that are concentrated in a particular issuer, geographic region, or
industry will be more susceptible to changes in price (the more you diversify,
the more you spread risk).

Style Risk

<PAGE>

PAST PERFORMANCE

The following bar chart and table indicate the risks and variability of
investing in the Fund by showing:

o how the Fund's performance has varied for each full calendar year that the
Fund has existed, and

o how the Fund's average annual total returns compare to other recognized
indexes.

How the Fund has performed in the past does not indicate how the Fund will
perform in the future.

Class A Performance (based on calendar years)

+145.12%

+41.51%

+7.56%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

During the period shown in the bar chart, the highest return for a calendar
quarter was +86.25% (quarter ending December 1999) and the lowest return for a
calendar quarter was -21.71% (quarter ending September 1998).

Prior to March 27, 2000, the Fund had not engaged in a broad public offering of
its shares, or been subject to redemption requests. It had sold shares only to a
single investor. One factor impacting the Fund's 1999 performance was the high
concentration in technology investments, particularly in securities of internet
and communication companies. These investments performed well and had a greater
effect on the Fund's performance than similar investments made by other funds
because of the high concentration, the lack of cash flows and the smaller size
of the Fund. There is no assurance that the Fund's future investments will
result in the same level of performance.

<PAGE>

Average Annual Total Returns (as of Dec. 31, 1999)

Past 1 year Since inception

Innovations:

Class A +132.87% +49.14%(a)

Class B +139.21% +50.06%(a)

Class Y +145.12% +51.60%(a)

S&P 500 Index +21.04% +25.93%(b)

Lipper Science and Technology Funds Index +113.92% +47.82%(b)

(a) Inception date was Nov. 13, 1996.

(b) Measurement period started Dec. 1, 1996.

For purposes of this calculation we assumed:

o a sales charge of 5% for Class A shares,

o sales at the end of the period and deduction of the applicable contingent
deferred sales charge (CDSC) for Class B shares,

o no sales charge for Class Y shares, and

o no adjustments for taxes paid by an investor on the reinvested income and
capital gains.

Standard & Poor's 500 Index (S&P 500 Index), an unmanaged list of common stocks,
is frequently used as a general measure of market performance. The index
reflects reinvestment of all distributions and changes in market prices, but
excludes brokerage commissions or other fees. However, the S&P 500 companies may
be generally larger than those in which the Fund invests.

Lipper Science and Technology Funds Index, an unmanaged index published by
Lipper Analytical Services, Inc., includes 10 funds that are generally similar
to the Fund, although some funds in the index may have somewhat different
investment policies or objectives.

<PAGE>

FEES AND EXPENSES

Fund investors pay various expenses. The table below describes the fees and
expenses that you may pay if you buy and hold shares of the Fund.
_______________________________________________________________________________
Shareholder Fees (fees paid directly from your investment)
_______________________________________________________________________________
Class A Class B Class Y

Maximum sales charge (load) imposed on purchases(a)
(as a percentage of offering price) 5% none none
_______________________________________________________________________________
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase)
_______________________________________________________________________________
none 5% none

_______________________________________________________________________________
Annual Fund operating expenses(b) (expenses that are deducted from Fund assets)
_______________________________________________________________________________

As a percentage of average daily net assets: Class A Class B Class Y

Management fees 0.72% 0.72% 0.72%

Distribution (12b-1) fees 0.25% 1.00% 0.00%

Other expenses(c) 0.45% 0.46% 0.53%

Total(d) 1.42% 2.18% 1.25%

(a) This charge may be reduced depending on your total investments in American
Express mutual funds. See "Sales Charges."

(b) Both in this table and the following example, fund operating expenses
include expenses charged by both the Fund and its Master Portfolio as described
under "Management." Expenses for Class A, Class B and Class Y are based on
estimated amounts for the current fiscal year.

(c) Other expenses include an administrative services fee, a shareholder
services fee for Class Y, a transfer agency fee and other nonadvisory expenses.

(d) AEFC and American Express Financial Advisors Inc. 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 1.35% for a minimum period ending
Oct. 31, 2000. Any waiver or reimbursement applies to each class on a pro rata
basis. Actual total expenses with fee waivers and expense reimbursements are
projected to be 1.35% for Class A, 2.11% for Class B and 1.18% for Class Y.

<PAGE>

Example

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

Assume you invest $10,000 and the Fund earns a 5% annual return. The operating
expenses remain the same each year. If you hold your shares until the end of the
years shown, your costs would be:

1 year 3 years 5 years 10 years

Class A(a) $646 $954 $1,283 $2,216

Class B(b) $630 $1,010 $1,316 $2,418(d)

Class B(c) $230 $710 $1,216 $2,418(d)

Class Y $136 $425 $ 735 $1,618

(a) Includes a 5% sales charge.

(b) Assumes you sold your Class B shares at the end of the period and incurred
the applicable CDSC.

(d) Based on conversion of Class B shares to Class A shares in the ninth year of
ownership.

This example does not represent actual expenses, past or future. Actual expenses
may be higher or lower than those shown.

MANAGEMENT

The Fund's assets are invested in World Technologies Portfolio (the Portfolio),
which is managed by AEFC. Louis Giglio, senior portfolio manager, joined AEFC in
January 1994 as a senior equity analyst. He has managed the assets of the
Portfolio since November 1996. He also serves as portfolio manager of AXP
Strategy Aggressive Fund and IDS Life Series Fund, Equity Portfolio. Prior to
joining AEFC he had eight years of experience as a financial analyst with Bear,
Stearns & Co. Inc. covering the microcomputer software and computer services
industries.

Buying and Selling Shares

VALUING FUND SHARES

The public offering price for Class A is the net asset value (NAV) adjusted for
the sales charge. For Class B and Class Y, it is the NAV.

<PAGE>

INVESTMENT OPTIONS

1. Class A shares are sold to the public with a sales charge at the time of
purchase and an annual distribution (12b-1) fee.

2. Class B shares are sold to the public with a CDSC and an annual distribution
(12b-1) fee.

3. Class Y shares are sold to qualifying institutional investors without a sales
charge or distribution fee. Please see the SAI for information on eligibility to
purchase Class Y shares.

Investment options summary:

Class A Maximum sales charge of 5%

Initial sales charge waived or reduced for certain
purchases

Annual distribution fee of 0.25% of average daily net
assets*

Lower annual expenses than Class B shares

Class B No initial sales charge

CDSC on shares sold in the first six years (maximum of 5%
in first year, reduced to 0% after year six)

CDSC waived in certain circumstances

Shares convert to Class A in ninth year of ownership

Annual distribution fee of 1.00% of average daily net
assets*

Higher annual expenses than Class A shares

Class Y No initial sales charge

No annual distribution fee

Service fee of 0.10% of average daily net assets

Available only to certain qualifying institutional
investors

* The Fund has adopted a plan under Rule 12b-1 of the Investment Company Act of
1940 that allows it to pay distribution and servicing-related fees for the sale
of Class A and Class B shares. Because these fees are paid out of the Fund's
assets on an on-going basis, the fees may cost long-term shareholders more than
paying other types of sales charges imposed by some mutual funds.

<PAGE>

Should you purchase Class A or Class B shares?

PURCHASING SHARES

To purchase shares purchased through a brokerage account or from entities other
than American Express Financial Advisors Inc., please consult your selling
agent. The following section explains how you can purchase shares from American
Express Financial Advisors (the Distributor).

Important: When you open an account, you must provide your correct Taxpayer
Identification Number (TIN), which is either your Social Security or Employer
Identification number.

o a $50 penalty for each failure to supply your correct TIN,

o a civil penalty of $500 if you make a false statement that results in no
backup withholding, and

o criminal penalties for falsifying information.

You also could be subject to backup withholding, if the IRS notifies us to do
so, because you failed to report required interest or dividends on your tax
return.

<PAGE>

<TABLE>
<CAPTION>
<S> <C>
How to determine the correct TIN

For this type of account: Use the Social Security or Employer Identification number of:

Individual or joint account The individual or one of the owners listed on the joint account

Custodian account of a minor The minor (Uniform Gifts/Transfers to Minors Act)

A revocable living trust The grantor-trustee (the person who puts the money into the trust)

An irrevocable trust, The legal entity (not the personal representative or trustee,
pension trust or estate unless no legal entity is designated in the account title)

Sole proprietorship The owner

Partnership The partnership

Corporate The corporation

Association, club or tax-exempt The organization
organization

</TABLE>

Three ways to invest

1 By mail:

Once your account has been established, send your check with the account number
on it to:

American Express Funds
P.O. Box 74
Minneapolis, MN 55440-0074

Minimum amounts

Initial investment: $2,000
Additional investments: $100
Account balances: $300
Qualified accounts: none

<PAGE>

2 By scheduled investment plan:

Contact your financial advisor for assistance in setting up one of the following
scheduled plans:

o automatic payroll deduction,

o bank authorization,

o direct deposit of Social Security check, or

o other plan approved by the Fund.

Minimum amounts

Initial investment: $100

Additional investments: $50/mo. for qualified accounts; $100/mo.
for nonqualified accounts

Account balances: none (on active plans with monthly payments)

If your account balance is below $2,000, you must make payments at least
monthly.

3 By wire or electronic funds transfer:

If you have an established account, you may wire money to:

Norwest Bank Minnesota
Routing Transit No. 091000019

Give these instructions: Credit American Express Financial Advisors Account
#0000030015 for personal account # (your account number) for (your name). Please
remember that you need to provide all 10 digits.

Minimum amounts Each wire investment: $1,000

<PAGE>

TRANSACTIONS THROUGH THIRD PARTIES

You may buy or sell shares through certain 401(k) plans, banks, broker-dealers,
financial advisors or other investment professionals. These organizations may
charge you a fee for this service and may have different policies. Some policy
differences may include different minimum investment amounts, exchange
privileges, fund choices and cutoff times for investments. The Fund and the
Distributor are not responsible for the failure of one of these organizations to
carry out its obligations to its customers. Some organizations may receive
compensation from the Distributor or its affiliates for shareholder
recordkeeping and similar services. Where authorized by the Fund, some
organizations may designate selected agents to accept purchase or sale orders on
the Fund's behalf. To buy or sell shares through third parties or determine if
there are policy differences, please consult your selling agent. For other
pertinent information related to buying or selling shares, please refer to the
appropriate section in the prospectus.

SALES CHARGES

Class A -- initial sales charge alternative

When you purchase Class A shares, you pay a 5% sales charge on the first $50,000
of your total investment and less on investments after the first $50,000:

Total investment Sales charge as percentage of: (a)

Public offering price(b) Net amount invested

Up to $50,000 5.0% 5.26%

Next $50,000 4.5 4.71

Next $400,000 3.8 3.95

Next $500,000 2.0 2.04

$1,000,000 or more 0.0 0.00

(a) To calculate the actual sales charge on an investment greater than $50,000
and less than $1,000,000, you must total the amounts of all increments that
apply.

(b) Offering price includes a 5% sales charge.

<PAGE>

The sales charge on Class A shares may be lower than 5%, depending on the total
amount:

o you now are investing in this Fund,

o you have previously invested in this Fund, or

Other Class A sales charge policies:

o if you intend to invest $1 million over a period of 13 months, you can
reduce the sales charges in Class A by filing a letter of intent. For more
details, please see the SAI.

Waivers of the sales charge for Class A shares

Sales charges do not apply to:

o current or retired board members, officers or employees of the Fund or AEFC
or its subsidiaries, their spouses or domestic partners and unmarried
children under 21.

o current or retired American Express financial advisors, their spouses or
domestic partners and unmarried children under 21.

<PAGE>

o purchases made within 90 days after a sale of shares (up to the amount
sold):

-- of American Express mutual funds in a qualified plan subject to a
deferred sales charge, or

-- in a qualified plan or account where American Express Trust Company has a
recordkeeping, trustee, investment management, or investment
servicing relationship.

Send the Fund a written request along with your payment, indicating the date and
the amount of the sale.

o purchases made:

-- with dividend or capital gain distributions from this Fund or from the
same class of another American Express mutual fund that has a sales
charge,

-- through or under a wrap fee product or other investment product sponsored
by the Distributor or another authorized broker-dealer, investment
adviser, bank or investment professional,

-- within the University of Texas System ORP,

-- within a segregated separate account offered by Nationwide Life Insurance
Company or Nationwide Life and Annuity Insurance Company,

-- within the University of Massachusetts After-Tax Savings Program, or

-- through or under a subsidiary of AEFC offering Personal Trust Services'
Asset-Based pricing alternative.

<PAGE>

Class B -- contingent deferred sales charge (CDSC) alternative

If the sale is made during the: The CDSC percentage rate is:

First year 5%

Second year 4%

Third year 4%

Fourth year 3%

Fifth year 2%

Sixth year 1%

Seventh year 0%

Example:

<PAGE>

The CDSC on Class B shares will be waived on sales of shares:

o in the event of the shareholder's death,

o held in trust for an employee benefit plan, or

-- at least 591/2 years old AND

-- taking a retirement distribution (if the sale is part of a transfer to an
IRA or qualified plan or a custodian-to-custodian transfer, the CDSC will
not be waived) OR

-- selling under an approved substantially equal periodic payment
arrangement.

EXCHANGING/SELLING SHARES

Exchanges

Other exchange policies:

o Exchanges must be made into the same class of shares of the new fund.

o If your exchange creates a new account, it must satisfy the minimum
investment amount for new purchases.

o Once we receive your exchange request, you cannot cancel it.

o Shares of the new fund may not be used on the same day for another
exchange.

o If your shares are pledged as collateral, the exchange will be delayed
until AECSC receives written approval from the secured party.

<PAGE>

Selling Shares

You can sell your shares at any time. The payment will be mailed within seven
days after accepting your request.

The Fund reserves the right to redeem in kind.

For more details and a description of other sales policies, please see the SAI.

<PAGE>

To sell or exchange shares held through a brokerage account or entities other
than American Express Financial Advisors, please consult your selling agent. The
following section explains how you can exchange or sell shares held with
American Express Financial Advisors.

Requests to sell shares of the Fund are not allowed within 30 days of a
telephoned-in address change.

Important: If you request a sale of shares you recently purchased by a check or
money order that is not guaranteed, the Fund will wait for your check to clear.
It may take up to 10 days before payment is made. (Payment may be made earlier
if your bank provides evidence satisfactory to the Fund and AECSC that your
check has cleared.)

Two ways to request an exchange or sale of shares

1 By letter:

Include in your letter:

o the name of the fund(s),

o the class of shares to be exchanged or sold,

o your mutual fund account number(s) (for exchanges, both funds must
be registered in the same ownership),

o your Social Security Number or Employer Identification Number,

o the dollar amount or number of shares you want to exchange or sell,

o signature(s) of all registered account owners,

o for sales, indicate how you want your money delivered to you, and

o any paper certificates of shares you hold.

Regular mail:

American Express Client Service Corporation
Attn: Transactions
P.O. Box 534
Minneapolis, MN 55440-0534

Express mail:

American Express Client Service Corporation
Attn: Transactions
733 Marquette Ave.
Minneapolis, MN 55402

<PAGE>

2 By telephone:

American Express Client Service Corporation
Telephone Transaction Service
800-437-3133

o The Fund and AECSC will use reasonable procedures to confirm authenticity
of telephone exchange or sale requests.

o Acting on your instructions, your financial advisor may conduct telephone
transactions on your behalf.

o Telephone privileges may be modified or discontinued at any time.

Minimum sale amount: $100 Maximum sale amount: $50,000

<PAGE>

Three ways to receive payment when you sell shares

1 By regular or express mail:

o Mailed to the address on record.

o Payable to names listed on the account.

NOTE: The express mail delivery charges you pay will vary depending on the
courier you select.

2 By wire or electronic funds transfer:

o Minimum wire: $1,000.

o Request that money be wired to your bank.

o Bank account must be in the same ownership as the American Express mutual
fund account.

NOTE: Pre-authorization required. For instructions, contact your financial
advisor or AECSC.

3 By scheduled payout plan:

o Minimum payment: $50.

o Contact your financial advisor or AECSC to set up regular payments on
a monthly, bimonthly, quarterly, semiannual or annual basis.

o Purchasing new shares while under a payout plan may be disadvantageous
because of the sales charges.

<PAGE>

Distributions and Taxes

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

REINVESTMENTS

Dividends and capital gain distributions are automatically reinvested in
additional shares in the same class of the Fund, unless:

o you request distributions in cash, or

o you direct the Fund to invest your distributions in the same class of any
publicly offered American Express mutual fund for which you have previously
opened an account.

We reinvest the distributions for you at the next calculated NAV after the
distribution is paid.

If you choose cash distributions, you will receive cash only for distributions
declared after your request has been processed.

<PAGE>

TAXES

Income received by the Fund may be subject to foreign tax and withholding. Tax
conventions between certain countries and the U.S. may reduce or eliminate these
taxes.

Selling shares held in an IRA or qualified retirement account may subject you to
federal taxes, penalties and reporting requirements. Please consult your tax
advisor.

<PAGE>

Master/Feeder Structure

Investors buy shares in the Fund

The Fund buys units In the Portfolio

The Portfolio invests in securities, such as stocks or bonds

<PAGE>

Other Information

YEAR 2000

INVESTMENT MANAGER

The investment manager of the Portfolio is AEFC, located at IDS Tower 10,
Minneapolis, MN 55440-0010. The Portfolio pays AEFC a fee for managing its
assets. The Fund pays its proportionate share of the fee. Under the Investment
Managerial Services Agreement, the fee for the most recent fiscal year was 0.72%
of its daily net assets. Under the agreement, the Portfolio also pays taxes,
brokerage commissions and nonadvisory expenses. AEFC is a wholly-owned
subsidiary of American Express Company, a financial services company with
headquarters at American Express Tower, World Financial Center, New York, NY
10285.

<PAGE>

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 changes(a)
<TABLE>
<CAPTION>
Class A Class B Class Y

1999 1998 1997(b) 1999 1998 1997(b) 1999 1998 1997(b)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning $5.41 $5.27 $5.00 $5.33 $5.23 $5.00 $5.41 $5.27 $5.00
of period

Income from investment operations:

Net investment income (loss) (.08) (.07) (.06) (.14) (.11) (.09) (.08) (.07) (.06)

Net gains (losses) (both realized 5.94 .21 .33 5.83 .21 .32 5.94 .21 .33
and unrealized)

Total from investment operations 5.86 .14 .27 5.69 .10 .23 5.86 .14 .27

Net asset value, end of period $11.27 $5.41 $5.27 $11.02 $5.33 $5.23 $11.27 $5.41 $5.27

Ratios/supplemental data:

Net assets, end of period $7,435 $3,572 $3,476 $220 $107 $105 $225 $108 $105
(in thousands)

Ratio of expenses to average 1.11% 1.33% 1.35%(d) 1.86% 2.08% 2.10%(d) 1.11% 1.33% 1.35%(d)
daily net assets(c)

Ratio of net investment
income (loss) to average
daily net assets (1.01%) (1.29%) (1.26%)(d) (1.76%) (2.04%) (2.00%)(d) (1.01%) (1.29%) (1.25%)(d)

Portfolio turnover rate
(excluding short-term securities) 113% 200% 164% 113% 200% 164% 113% 200% 164%

Total return(e) 108.32% 2.68% 5.38% 106.72% 1.91% 4.62% 108.32% 2.68% 5.38%

</TABLE>

(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) AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the
annual ratios of expenses would have been 1.22%, 1.63% and 2.36% for Class A,
1.97%, 2.38% and 3.11% for Class B and 1.12%, 1.63% and 2.36% for Class Y for
the periods ending 1999, 1998 and 1997, respectively.
(d) Adjusted to an annual basis.
(e) Total return does not reflect payment of a sales charge.

<PAGE>

American
Express(R)
Funds

American Express Client Service Corporation
P.O. Box 534, Minneapolis, MN 55440-0534
800-862-7919 TTY: 800-846-4852
Web site address:
http://www.americanexpress.com/advisors

Investment Company Act File #811-5696

TICKER SYMBOL

Class A: N/A Class B: N/A Class Y: N/A

American
Express(R)

S-6395-99 A (3/00)

<PAGE>

Independent Auditors' Report

THE BOARD AND SHAREHOLDER
IDS GLOBAL SERIES, INC.

We have audited the accompanying statement of assets and liabilities of AXP
Innovations Fund, (a series of IDS Global Series, Inc.) as of October 31, 1999,
and the related statement of operations for the year then ended and the
statements of changes in net assets for each of the years in the two-year period
ended October 31, 1999, and the financial highlights for the two-year period
ended October 31, 1999 and for the period from November 13, 1996 (commencement
of operations) to October 31, 1997. These financial statements and the financial
highlights are the responsibility of fund management. Our responsibility is to
express an opinion on these financial statements and the financial highlights
based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AXP Innovations Fund as of
October 31, 1999, and the results of its operations, changes in its net assets
and the financial highlights for the periods stated in the first paragraph
above, in conformity with generally accepted accounting principles.

/s/ KPMG LLP
KPMG LLP
Minneapolis, Minnesota
December 3, 1999

Financial Statements

Statement of assets and liabilities
AXP Innovations Fund

Oct. 31, 1999

Assets
Investments in World Technologies Portfolio (Note 1) $7,897,520
----------

Liabilities
<S> <C>
Accrued distribution fee 4
Accrued administrative services fee 12
Other accrued expenses 16,790
------
Total liabilities 16,806
------
Net assets applicable to outstanding capital stock $7,880,714
==========

Represented by
Capital stock-- $.01 par value (Note 1) $7,000
Additional paid-in capital 3,399,239
Accumulated net realized gain (loss) 970,722
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 3,503,753
---------
Total-- representing net assets applicable to outstanding capital stock $7,880,714
==========

Net assets applicable to outstanding shares: Class A $7,435,047
Class B $220,363
Class Y $225,304
Net asset value per share of outstanding capital stock: Class A shares 660,000 $11.27
Class B shares 20,000 $11.02
Class Y shares 20,000 $11.27

See accompanying notes to financial statements.
</TABLE>

Statement of operations
AXP Innovations Fund

Year ended Oct. 31, 1999

Investment income
Income:
<S> <C>
Dividends $6,134
Less foreign taxes withheld (328)
----
Total income 5,806
-----
Expenses (Note 2):
Expenses allocated from World Technologies Portfolio 63,721
Distribution fee
Class A 5,263
Class B 1,395
Transfer agency fee 48
Incremental transfer agency fee
Class A 2
Class B 2
Administrative services fees and expenses 2,467
Total expenses 72,898
Less expenses voluntarily reimbursed by AEFC (Note 2) (6,548)
------
Total net expenses 66,350
------
Investment income (loss) -- net (60,544)
-------

Realized and unrealized gain (loss) -- net Net realized gain (loss) on:
Security transactions 1,376,509
Foreign currency transactions (38)
Options contracts written (1,470)
------
Net realized gain (loss) on investments 1,375,001
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 2,778,956
---------
Net gain (loss) on investments and foreign currencies 4,153,957
---------
Net increase (decrease) in net assets resulting from operations $4,093,413
==========

See accompanying notes to financial statements.
</TABLE>

Statements of changes in net assets
AXP Innovations Fund

Year ended Oct. 31, 1999 1998

Operations
<S> <C> <C>
Investment income (loss)-- net $(60,544) $(52,328)
Net realized gain (loss) on investments 1,375,001 (98,943)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 2,778,956 252,692
--------- -------
Net increase (decrease) in net assets resulting from operations 4,093,413 101,421
--------- -------
Net assets at beginning of year 3,787,301 3,685,880
--------- ---------
Net assets at end of year $7,880,714 $3,787,301
========== ==========
Undistributed (excess of distributions over) net investment income $-- $70
--- ---

See accompanying notes to financial statements.

</TABLE>

<PAGE>

Notes to Financial Statements
AXP Innovations Fund

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

AXP Innovations Fund (a series of AXP Global Series, Inc.) 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.

Investment in World Technologies Portfolio

The Fund invests all of its assets in World Technologies Portfolio (the
Portfolio), a series of World Trust (the Trust), an open-end investment company
that has the same objectives as the Fund. World Technologies Portfolio invests
in technology common stocks.

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 Oct. 31, 1999 was 87.52%.
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 generally accepted accounting
principles 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 all of its
taxable income to the shareholders. No provision for income or excise taxes is
thus required.

On the statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by $60,474
and accumulated net realized gain has been decreased by $60,447 resulting in a
net reclassification adjustment to decrease additional paid-in capital by $27.

Dividends to shareholders

Other

As of Oct. 31, 1999, AEFC owned 100% of outstanding shares of AXP Innovations
Fund.

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 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. 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.

o Class A $19
o Class B $20
o Class Y $17

AEFC has agreed to waive certain fees and to absorb certain other of the Fund's
expenses until Oct. 31, 2000. Under this agreement, the Fund's total expenses
will not exceed 1.35% for Class A, 2.10% for Class B, and 1.35% for Class Y of
the Fund's average daily net assets. In addition, for the year ended Oct. 31,
1999, AEFC further voluntarily agreed to waive certain fees and expenses to
1.11% for Class A, 1.86% for Class B and 1.11% for Class Y.

3. 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 year ended Oct. 31,
1999.

<PAGE>

Independent Auditors' Report

THE BOARD OF TRUSTEES AND UNITHOLDERS
WORLD TRUST

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of World Technologies Portfolio (a
series of World Trust) as of October 31, 1999, and the related statements of
operations for the year then ended and the statements of changes in net assets
for each of the years in the two-year period ended October 31, 1999. These
financial statements are the responsibility of portfolio management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 1999, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of World Technologies Portfolio as
of October 31, 1999, and the results of its operations and the changes in its
net assets for the periods stated in the first paragraph above, in conformity
with generally accepted accounting principles.

/s/ KPMG LLP
KPMG LLP
Minneapolis, Minnesota
December 3, 1999

<PAGE>

Financial Statements

Statement of assets and liabilities
World Technologies Portfolio

Oct. 31, 1999

Assets
Investments in securities , at value (Note 1)
(identified cost $5,020,713) $9,024,121
Cash in bank on demand deposit 6,527
Receivable for investment securities sold 41,748
------
Total assets 9,072,396
---------

Liabilities
Payable for investment securities purchased 35,375
Accrued investment management services fee 164
Other accrued expenses 13,683
Total liabilities 49,222
------
Net assets $9,023,174
==========

See accompanying notes to financial statements.

Statement of operations
World Technologies Portfolio

Year ended Oct. 31, 1999

Investment income
Income:
<S> <C>
Dividends $7,008
Less foreign taxes withheld (375)
----
Total income 6,633
-----
Expenses (Note 2):
Investment management services fee 48,655
Custodian fees 11,376
Audit fees 12,750
Other 4,413
-----
Total expenses 77,194
Earnings credits on cash balances (Note 2) (4,388)
------
Total net expenses 72,806
------
Investment income (loss) -- net (66,173)
-------

Realized and unrealized gain (loss) -- net Net realized gain (loss) on :
Security transactions (Note 3) 1,572,965
Foreign currency transactions (43)
Options contracts written (Note 4) (1,680)
------
Net realized gain (loss) on investments 1,571,242
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 3,175,172
---------
Net gain (loss) on investments and foreign currencies 4,746,414
---------
Net increase (decrease) in net assets resulting from operations $4,680,241
==========

See accompanying notes to financial statements.

</TABLE>

Statements of changes in net assets
World Technologies Portfolio

Year ended Oct. 31, 1999 1998

Operations
<S> <C> <C>
Investment income (loss)-- net $(66,173) $(56,345)
Net realized gain (loss) on investments 1,571,242 (112,973)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 3,175,172 288,162
--------- -------
Net increase (decrease) in net assets resulting from operations 4,680,241 118,844
--------- -------
Net contributions (withdrawals) from partners (14,965) (3,049)
Total increase (decrease) in net assets 4,665,276 115,795
--------- -------
Net assets at beginning of year 4,357,898 4,242,103
--------- ---------
Net assets at end of year $9,023,174 $4,357,898
========== ==========

See accompanying notes to financial statements.

</TABLE>

<PAGE>

Notes to Financial Statements
World Technologies Portfolio

<PAGE>

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

World Technologies 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. World Technologies
Portfolio invests in common stocks of companies within the information
technology sector. 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 generally accepted accounting
principles requires management to make estimates (e.g., on assets and
liabilities) that could differ from actual results.

Valuation of securities

Option transactions

Futures transactions

Foreign currency translations and foreign currency contracts

Federal taxes

Other

Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date and interest income,
including level-yield amortization of premium and discount, is accrued daily.

2. FEES AND EXPENSES

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.

During the year ended Oct.31,1999, the Portfolio's custodian fees were reduced
by $4,388 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 $7,599,670 and $7,758,848, respectively, for the year
ended Oct. 31, 1999. For the same period, the portfolio turnover rate was 113%.
Realized gains and losses are determined on an identified cost basis.

4. OPTIONS CONTRACTS WRITTEN

Contracts and premium amounts associated with options contracts written is as
follows:

Year ended Oct. 31, 1999

Puts Calls
Contracts Premium Contracts Premium
Balance Oct. 31, 1998 30 $ 8,910 -- $ --
Opened -- -- 40 37,879
Exercised -- -- (40) (37,879)
Closed (30) (8,910) -- --
Balance Oct. 31, 1999 -- $ -- -- $ --

See "Summary of significant accounting policies."

Investments in Securities
World Technologies Portfolio
Oct. 31, 1999

(Percentages represent value of investments compared to net assets)

Common stocks (98.5%)
Issuer Shares Value(a)

Communications equipment & services (9.1%)
<S> <C> <C>
Advanced Fibre Communications 3,000 (b) $65,625
CIENA 2,000 (b) 70,500
E-Tek Dynamics 2,000 (b) 133,249
Extreme Networks 500 (b) 40,156
Motorola 900 87,694
Network Appliance 2,000 (b) 148,000
Nokia Oyj ADR Cl A 1,000 (c) 115,563
PairGain Technologies 5,000 (b) 61,250
Tellabs 1,500 (b) 94,875
Total 816,912

Computers--Internet (24.9%)
America Online 8,000 (b) 1,037,499
At Home Corp Series A 3,082 (b) 115,190
Cisco Systems 4,000 (b) 296,000
Citrix Systems 1,000 (b) 64,125
CMGI 1,000 (b) 109,438
Commtouch Software 2,000 (b,c) 57,750
Concentric Network 3,000 (b) 76,875
InfoSpace.com 1,000 (b) 55,625
Lycos 1,000 (b) 53,500
Project Software & Development 1,000 (b) 48,125
Vignette 1,000 (b) 158,000
Yahoo! 1,000 (b) 179,063
Total 2,251,190

Computers & office equipment (24.5%)
Ariba 1,000 (b) 155,000
Dell Computer 4,000 (b) 160,500
Edify 4,500 (b) 58,219
EMC 2,000 (b) 146,000
Equant 1,000 (b,c) 97,000
Fiserv 2,500 (b) 80,000
Legato Systems 10,000 (b) 537,500
NVIDIA 2,000 (b) 44,250
Pegasus Systems 2,000 (b) 85,500
Security First Technologies 4,500 (b) 180,844
VeriSign 3,000 (b) 370,500
Veritas Software 2,000 (b) 215,750
Visual Networks 2,000 (b) 83,250
Total 2,214,313

Electronics (22.0%)
Altera 2,000 (b) 97,250
Exar 2,000 (b) 72,250
Flextronics Intl 2,500 (b) 177,500
JDS Uniphase 2,000 (b) 333,749
KLA-Tencor 1,000 (b) 79,188
PMC-Sierra 2,000 (b,c) 188,500
Power-One 2,000 (b) 40,000
Powerwave Technologies 1,000 (b) 65,063
RF Micro Devices 2,000 (b) 103,250
SDL 1,000 (b) 123,313
Siliconix 2,000 (b) 116,500
STMicroelectronics 1,000 (c) 90,875
Taiwan Semiconductor Mfg ADR 6,150 (b,c) 212,943
Teradyne 4,000 (b) 154,000
Vitesse Semiconductor 3,000 (b) 137,625
Total 1,992,006

Insurance (0.5%)
Quotesmith.com 5,000 (b) 41,250

Media (4.1%)
Emmis Communications Cl A 1,000 (b) 72,125
MediaOne Group 2,000 (b) 142,125
Reuters Group ADR 900 (c) 49,781
Univision Communications Cl A 1,200 (b) 102,075
Total 366,106

Multi-industry conglomerates (1.1%)
Electronics for Imaging 2,500 (b) 100,781

Retail (4.8%)
Amazon.com 3,000 (b) 211,875
Chemdex 3,000 (b) 114,375
Musicmaker.com 2,000 (b) 15,250
RoweCom 3,500 (b) 92,969
Total 434,469

Utilities -- telephone (7.5%)
Cable & Wireless Communications ADR 1,000 (b,c) 52,500
COLT Telecom Group ADR 2,000 (b,c) 237,000
Hellenic Telecommunications ADR 10,000 (c) 106,250
Qwest Communications Intl 2,000 (b) 72,000
RCN 2,000 (b) 95,750
Western Wireless Cl A 1,000 (b) 52,875
WinStar Communications 1,500 (b) 58,219
Total 674,594

Total common stocks
(Cost: $4,895,113) $8,891,621
</TABLE>

<PAGE>

Option purchased (1.5%)

Issuer Shares Exercise Expiration Value(a)
price date

Call
Corning 20,000 $80 Feb. 2000 $132,500

Total option purchased
(Cost: $125,600) $132,500

Total investments in securities
(Cost: $5,020,713)(d) $9,024,121

Notes to investments in securities

(a) Securities are valued by procedures described in Note 1 to the financial
statements.

(b) Non-income producing.

(c) Foreign security values are stated in U.S. dollars. As of Oct. 31, 1999, the
value of foreign securities represented 13.39% of net assets.

(d) At Oct. 31, 1999, the cost of securities for federal income tax purposes was
$5,020,713 and the aggregate gross unrealized appreciation and depreciation
based on that cost was:

Unrealized appreciation $4,131,603
Unrealized depreciation (128,195)
--------
Net unrealized appreciation $4,003,408

<PAGE>

Form of Proxy Card

Proxy Card Front

Proxy Card

[Fund name]

This Proxy is Solicited on Behalf of the Board of Directors.

The undersigned hereby appoints Heidi S. Brommer, James A. Mitchell and Eileen
J. Newhouse, or any one of them, as proxies, with full power of substitution, to
represent and to vote all of the shares of the undersigned at the special
meeting to be held on May 9, 2000, and any adjournment thereof.

TO HAVE YOUR VOTE COUNTED, YOU MUST SIGN, DATE AND RETURN THIS PROXY. IT WILL BE
VOTED AS MARKED, OR IF NOT MARKED, WILL BE VOTED "FOR" THE PROPOSAL.

THE BOARD RECOMMENDS A VOTE
"FOR" THE PROPOSAL.

_____________________________________
Signature(s)

Date _______, 2000

Owners please sign as names appear at
left. Executors, administrators,
trustees, etc., should indicate
position when signing.

Proxy Card Back

Vote on Proposal

Approve the Agreement and Plan of Reorganization between the Strategist Fund and
the AXP Fund providing for the acquisition of all of the assets of the
Strategist Fund by the AXP Fund in exchange for Class A shares of the AXP Fund
and assumption by the AXP Fund of the liabilities of the Strategist Fund, to be
followed by distribution of those Class A shares to the shareholders of the
Strategist Fund and the subsequent termination of the Strategist Fund.

For _____ Against _____ Abstain _____

<PAGE>

Statement of Additional Information

April 17, 2000

AXP Mutual
AXP Stock
AXP Diversified Equity Income
AXP Emerging Markets
AXP Federal Income
AXP Growth
AXP New Dimensions
AXP Extra Income
AXP Selective
AXP Research Opportunities
AXP High Yield Tax-Exempt
AXP Managed Allocation
AXP Global Growth
AXP Global Bond
AXP Innovations

This statement of additional information ("SAI") covers each of the funds listed
above (each an "AXP Fund") and consists of this cover page and the following
information:

1. The AXP Fund's most recent SAI, dated as shown in the table below, which
has been previously filed and is incorporated by reference.

2. The AXP Fund's most recent annual report and semi-annual report to
shareholders, if a semi-annual report has been issued subsequent to the
date of the most recent annual report, for the period shown in the table
below, which have been previously filed and are incorporated by reference.

3. The Strategist Fund's most recent SAI, dated as shown in the table below,
which has been previously filed and is incorporated by reference.

4. The Strategist Fund's most recent annual report and, if applicable,
semi-annual report to shareholders, for the period shown in the table
below, which have been previously filed and are incorporated by reference.

This SAI is not a prospectus. It should be read in conjunction with the proxy
statement/prospectus, which may be obtained by calling 1-800-862-7919 or writing
American Express Client Service Corporation, P.O. Box 534, Minneapolis, MN
55440-0534.

<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Annual Report Semi-Annual
Fund SAI (for period Report
(dated) ended) (if applicable)
(for period
ended)

Strategist Balanced 11/29/99 9/30/99 NA

AXP Mutual 11/29/99 9/30/99 NA

Strategist Equity 11/29/99 9/30/99 NA

AXP Stock 11/29/99 9/30/99 NA

Strategist Equity Income 11/29/99 9/30/99 NA

AXP Diversified Equity Income 11/29/99 9/30/99 NA

Strategist Emerging Markets 12/30/99 10/31/99 NA

AXP Emerging Markets 12/30/99 10/31/99 NA

Strategist Government Income 7/30/99 5/31/99 11/30/99

AXP Federal Income 7/30/99 5/31/99 11/30/99

Strategist Growth 9/29/99 7/31/99 1/31/00

AXP Growth 9/29/99 7/31/99 1/31/00

Strategist Growth Trends 9/29/99 7/31/99 1/31/00

AXP New Dimensions 9/29/99 7/31/99 1/31/00

Strategist High Yield 7/30/99 5/31/99 11/30/99

AXP Extra Income 7/30/99 5/31/99 11/30/99

Strategist Quality Income 7/30/99 5/31/99 11/30/99

AXP Selective 7/30/99 5/31/99 11/30/99

Strategist Special Growth 9/29/99 7/31/99 1/31/00

AXP Research Opportunities 9/29/99 7/31/99 1/31/00

Strategist Tax-Free High Yield 1/28/00 11/30/99 NA

AXP High Yield Tax-Exempt 1/28/00 11/30/99 NA

Strategist Total Return 11/29/99 9/30/99 NA

AXP Managed Allocation 11/29/99 9/30/99 NA

Strategist World Growth 12/30/99 10/31/99 NA

AXP Global Growth 12/30/99 10/31/99 NA

Strategist World Income 12/30/99 10/31/99 NA

AXP Global Bond 12/30/99 10/31/99 NA

Strategist World Technologies 12/30/99 10/31/99 NA

AXP Innovations 3/15/00 10/31/99 NA

</TABLE>

<PAGE>
AXP INNOVATIONS FUND
STRATEGIST WORLD TECHNOLOGIES FUND
INTRODUCTION TO PROPOSED FUND MERGER
OCTOBER 31, 1999

The accompanying unaudited pro forma combining statement of assets and
liabilities and the statement of operations reflect the accounts of the two
funds at and for the 12-month period ending October 31, 1999. These statements
have been derived from annual reports for AXP Innovations Fund (a series of AXP
Global Series, Inc.) and Strategist World Technologies Fund (a series of
Strategist World Fund, Inc.) as of October 31, 1999. Each Fund invests all of
its assets in World Technologies Portfolio (the Portfolio), a series of World
Trust, an open-end investment company that has the same objectives as the Funds.
The Portfolio invests in technology common stocks. Management of the Funds has
elected not to present a combining Schedule of Investments for the Portfolio
because it will not change as a result of the merger. The schedule of
investments for the Portfolio is included in the Funds' annual reports, which
are available upon request.

Under the proposed Agreement and Plan of Reorganization, shares of the
Strategist World Technologies Fund would be exchanged for Class A shares of the
AXP Innovations Fund.

The pro forma combining statements have been prepared based upon the various fee
structures of the funds in existence as of October 31, 1999.

AXP Innovations Fund
Strategist World Technologies Fund
Pro forma Combining
Statement of assets and liabilities
October 31, 1999
(Unaudited)
Strategist World
AXP Innovations Technologies
Fund Fund Combined
Assets
<S> <C> <C> <C>
Investments in World Technologies Portfolio (Note 1) $ 7,897,520 $ 1,125,654 $ 9,023,174
----------- ----------- -----------

Liabilities
Accrued distribution fee 4 - 4
Accrued administrative services fee 12 2 14
Other accrued expenses 16,790 4,447 21,237
------ ----- ------

Total liabilities 16,806 4,449 21,255
------ ----- ------

Net assets applicable
to outstanding capital stock $ 7,880,714 $ 1,121,205 $ 9,001,919
=========== =========== ===========

Represented by
Capital stock --- $.01 par value (Note 1) $ 7,000 $ 1,000 $ 8,000
Additional paid-in capital 3,399,239 484,163 3,883,402
Accumulated net realized gain (loss) 970,722 136,387 1,107,109
Unrealized appreciation (depreciation)
on investments and on translation
of assets and liabilities in foreign currencies 3,503,753 499,655 4,003,408
--------- ------- ---------

Total --- representing net assets applicable
to outstanding capital stock $ 7,880,714 $ 1,121,205 $ 9,001,919
=========== =========== ===========

Net assets applicable to outstanding shares: Class A $ 7,435,047 $ 8,556,252
Class B $ 220,363 $ 220,363
Class Y $ 225,304 $ 225,304
Net asset value per share of outstanding
capital stock: (Note 2) Class A shares 660,000 $ 11.27 100,000 $ 11.21 759,485 $ 11.27
Class B shares 20,000 $ 11.02 20,000 $ 11.02
Class Y shares 20,000 $ 11.27 20,000 $ 11.27

See accompanying notes to pro forma combining financial statements.

</TABLE>

<PAGE>

AXP Innovations Fund
Strategist World Technologies Fund
Pro forma Combining
Statement of Operations
October 31, 1999
(Unaudited)

Strategist World Pro forma
Investment income AXP Innovations Technologies Pro forma AXP Innovations
Income: Fund Fund Adjustments Fund

<S> <C> <C> <C> <C>
Dividends $ 6,134 $ 874 $ 7,008
Less foreign taxes withheld (328) (47) (375)
---- --- ----
Total Income 5,806 827 6,633
----- --- -----

Expenses:
Expenses allocated from World Technologies Portfolio 63,721 9,085 72,806
Distribution fee
Class A 5,263 1,900 7,163
Class B 1,395 1,395
Transfer agency fee 48 20 (2) a 66
Incremental transfer agency fee
Class A 2 2
Class B 2 2
Administrative services fees and expenses 2,467 504 2,971
Compensation of board members 818 818
Registration fees 414 414
Audit fees 3,600 3,600
Other 2,490 2,490
----- -----
Total Expenses 72,898 18,831 (2) 91,727
Less expenses voluntarily reimbursed by AEFC (6,548) (6,496) (13,044)
------ ------ -------
Total net expenses 66,350 12,335 (2) 78,683
------ ------ -- ------
Investment income (loss) -- net (60,544) (11,508) 2 (72,050)
------- ------- - -------

Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions 1,376,509 196,456 1,572,965
Foreign currency transactions (38) (5) (43)
Options contracts written (1,470) (210) (1,680)
------ ---- ------
Net realized gain (loss) on investments 1,375,001 196,241 1,571,242
Net change in unrealized apprciation
(depreciation) on investments and on
translation of assets and liabilities
in foreign currencies 2,778,956 396,216 3,175,172
--------- ------- ---------
Net gain (loss) on investments and foreign currencies 4,153,957 592,457 4,746,414
--------- ------- ---------
Net increase (decrease) in net assets
resulting from operations $ 4,093,413 $ 580,949 $ 2 $ 4,674,364
=========== ========= === ===========

a) Adjustment for transfer agency fee from $20 to Innovation Class A $19 per account.

See accompanying notes to pro forma combining financial statements.

</TABLE>

<PAGE>

AXP INNOVATIONS FUND
STRATEGIST WORLD TECHNOLOGIES FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED AS TO OCTOBER 31, 1999)

1. BASIS OF COMBINATION

The unaudited pro forma combining statement of assets and liabilities and the
statement of operations reflect the accounts of the two funds at and for the
12-month period ending October 31, 1999. These statements have been derived from
annual reports for AXP Innovations Fund (a series of AXP Global Series, Inc.)
and Strategist World Technologies Fund (a series of Strategist World Fund, Inc.)
as of October 31, 1999.

Each Fund invests all of its assets in World Technologies Portfolio (the
Portfolio), a series of World Trust, an open-end investment company that has the
same objectives as the Funds. The Portfolio invests in technology common stocks.
Management of the Funds has elected not to present a combining schedule of
investments for the Portfolio because it will not change as a result of the
merger. The schedule of investments for the Portfolio is included in the Funds'
annual reports, which are available upon request.

The pro forma statements give effect to the proposed transfer of the assets and
liabilities of Strategist World Technologies Fund in exchange for Class A shares
of AXP Innovations Fund under generally accepted accounting principles. The
results of operations for AXP Innovations Fund will not be restated for
Strategist World Technologies Fund's results of operations for pre-combination
periods. The pro forma statements do not reflect the expenses of either fund in
carrying out its obligation under the Agreement and Plan of Reorganization.
American Express Financial Corporation has agreed to bear the costs of effecting
the Reorganization, which is estimated at $7,500.

The pro forma combining statements should be read in conjunction with the
historical financial statements of the funds incorporated by reference in the
Statement of Additional Information.

The pro forma statement of operations give effect to the proposed transaction on
the historical operations of the surviving entity, AXP Innovations Fund, as if
the transaction had occurred at the beginning of the year presented.

2. CAPITAL SHARES

The pro forma net asset value per share assumes the issuance of additional Class
A shares of AXP Innovations Fund if the reorganization were to have taken place
on October 31, 1999. The pro forma number of Class A shares outstanding of
759,485 consists of 99,485 shares assumed to be issued to shareholders of
Strategist World Technologies Fund plus 660,000 shares of AXP Innovations Fund
outstanding as of October 31, 1999.

<PAGE>

PART C. OTHER INFORMATION

Item 15. Indemnification

The Articles of Incorporation of the registrant provide that the Fund shall
indemnify any person who was or is a party or is threatened to be made a party,
by reason of the fact that she or he is or was a director, officer, employee or
agent of the Fund, or is or was serving at the request of the Fund as a
director, officer, employee or agent of another company, partnership, joint
venture, trust or other enterprise, to any threatened, pending or completed
action, suit or proceeding, wherever brought, and the Fund may purchase
liability insurance and advance legal expenses, all to the fullest extent
permitted by the laws of the State of Minnesota, as now existing or hereafter
amended. The By-laws of the registrant provide that present or former directors
or officers of the Fund made or threatened to be made a party to or involved
(including as a witness) in an actual or threatened action, suit or proceeding
shall be indemnified by the Fund to the full extent authorized by the Minnesota
Business Corporation Act, all as more fully set forth in the By-laws filed as an
exhibit to this registration statement.

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

Any indemnification hereunder shall not be exclusive of any other rights of
indemnification to which the directors, officers, employees or agents might
otherwise be entitled. No indemnification shall be made in violation of the
Investment Company Act of 1940.

Item 16. Exhibits

(1) Articles of Incorporation, dated October 28, 1988, filed as Exhibit 1
to Registration Statement No. 33-25824, are incorporated by reference.
Articles of Amendment, dated October 10, 1990, filed as Exhibit 1 to
Registrant's Post Effective Amendment No. 9 to Registration Statement
No. 33-25824, are incorporated by reference.

(2) By-laws, dated January 12, 1989, filed as Exhibit 2 to Registration
Statement No. 33-25824, are incorporated by reference.

(3) Voting Trust Agreement: Not Applicable.

(4) Form of Agreement and Plan of Reorganization, dated March 10, 2000,
filed electronically herewith as Exhibit 1 to Part A of this
Registration Statement.

(5) Instruments Defining Rights of Security Holders: Not Applicable.

(6)(a) Investment Management Services Agreement between IDS Global Series,
Inc., on behalf of IDS Global Bond Fund and IDS Global Growth Fund, and
American Express Financial Corporation, dated March 20, 1995, filed
electronically as Exhibit 5(a) to Registrant's Post-Effective Amendment
No. 27 to Registration Statement No. 33-25824, is incorporated by
reference.

The agreement for IDS Global Bond and IDS Global Growth Fund was
assumed by corresponding Portfolios when each Fund adopted the
master/feeder structure. IDS Emerging Markets Fund and IDS Innovations
Fund are part of a master/feeder structure. Therefore, the Investment
Management Services Agreement is with the corresponding Portfolios.

(6)(b) Investment Management Services Agreement between AXP Global Series,
Inc., on behalf of AXP Global Balanced Fund, and American Express
Financial Corporation, dated July 1, 1999, is incorporated by
reference to Exhibit (d)(2) to Registrant's Post-Effective Amendment
No. 32 filed on or about Dec. 27, 1999.
<PAGE>

(7) Distribution Agreement, dated July 8, 1999, between AXP Utilities
Income Fund, Inc. and American Express Financial Advisors Inc. is
incorporated by reference to Exhibit (e) to AXP Utilities Income Fund,
Inc. Post-Effective Amendment No. 22 to Registration Statement File No.
33-20872 filed on or about August 27, 1999. Registrant's Distribution
Agreement differs from the one incorporated by reference only by the
fact that Registrant is one executing party.

(8) All employees are eligible to participate in a profit sharing plan.
Entry into the plan is Jan. 1 or July 1. The Registrant contributes
each year an amount up to 15% of their annual salaries, the maximum
deductible amount permitted under Section 404(a) of the Internal
Revenue Code.

(9)(a) Custodian Agreement between IDS Global Series, Inc., on behalf of IDS
Global Bond Fund and IDS Global Growth Fund, and American Express Trust
Company, dated March 20, 1995, filed electronically as Exhibit 8(a) to
Registrant's Post-Effective Amendment No. 27 to Registration Statement
No. 33-25824, is incorporated by reference.

(9)(b) Custodian Agreement between IDS Global Series, Inc., on behalf of IDS
Emerging Markets Fund, IDS Global Balanced Fund and IDS Innovations
Fund, and American Express Trust Company, dated November 13, 1996,
filed electronically as Exhibit 8(b) to Registrant's Post-Effective
Amendment No. 27 to Registration Statement No. 33-25824, is
incorporated by reference.

(9)(c) Addendum to the Custodian Agreement between IDS Global Series, Inc., on
behalf of IDS Global Bond Fund and IDS Global Growth Fund, American
Express Trust Company and American Express Financial Corporation, dated
May 13, 1996, filed electronically as Exhibit 8(e) to Registrant's
Post-Effective Amendment No. 27 to Registration Statement No. 33-25824,
is incorporated by reference.

(9)(d) Addendum to the Custodian Agreement between IDS Global Series, Inc., on
behalf of IDS Emerging Markets Fund and IDS Innovations Fund, American
Express Trust Company and American Express Financial Corporation, dated
November 13, 1996, filed electronically as Exhibit 8(d) to Registrant's
Post-Effective Amendment No. 27 to Registration Statement No. 33-25824,
is incorporated by reference.

(9)(e) Custodian Agreement Amendment between IDS International Fund, Inc. and
American Express Trust Company, dated October 9, 1997, filed
electronically on or about December 23, 1997 as Exhibit 8(c) to IDS
International Fund, Inc.'s Post-Effective Amendment No. 26 to
Registration Statement No. 2-92309, is incorporated by reference.
Registrant's Custodian Agreement Amendments differ from the one
incorporated by reference only by the fact that Registrant is one
executing party.

(9)(f) Custodian Agreement, dated May 13, 1999, between American Express Trust
Company and The Bank of New York is incorporated by reference to
Exhibit (g)(3) to IDS Precious Metals Fund, Inc Post-Effective
Amendment No. 33 to Registration Statement File No. 2-93745 filed on or
about May 24, 1999.

(10)(a) Plan and Agreement of Distribution dated July 1, 1999 between AXP
Discovery Fund, Inc. and American Express Financial Advisors Inc. is
incorporated by reference to Exhibit (m) to AXP Discovery Fund, Inc.
Post-Effective Amendment No. 36 to Registration Statement File No.
2-72174 filed on or about July 30, 1999. Registrant's Plan and
Agreement of Distribution differs from the one incorporated by
reference only by the fact that Registrant is one executing party.

(10)(b) Rule 18f-3 Plan, dated April 1999, is incorporated by reference to
Exhibit (o) to IDS Precious Metals Fund, Inc Post-Effective Amendment
No. 33 to Registration Statement File No. 2-93745 filed on or about May
24, 1999.

(11) Opinion and consent of counsel as to the legality of the securities
being registered is incorporated by reference to Exhibit (11) to
Registration Statement No. 333-32360 filed on or about March 13,
2000.

(12) Tax Opinion to be filed by amendment.

<PAGE>

(13)(a) Administrative Services Agreement between IDS Global Series, Inc., on
behalf of IDS Global Bond Fund and IDS Global Growth Fund, and American
Express Financial Corporation, dated March 20, 1995, filed
electronically as Exhibit 9(f) to Registrant's Post-Effective Amendment
No. 27 to Registration Statement No. 33-25824, is incorporated by
reference.

(13)(b) Administrative Services Agreement between IDS Global Series, Inc., on
behalf of IDS Emerging Markets Fund, IDS Global Balanced Fund and IDS
Innovations Fund, and American Express Financial Corporation, dated
November 13, 1996, filed electronically as Exhibit 9(g) to Registrant's
Post-Effective Amendment No. 27 to Registration Statement No. 33-25824,
is incorporated by reference.

(13)(c) Agreement and Declaration of Unitholders between IDS Global Series,
Inc., on behalf of IDS Emerging Markets Fund, and Strategist World
Fund, Inc., on behalf of Strategist Emerging Markets Fund, dated
November 13, 1996, filed electronically as Exhibit 9(h) to Registrant's
Post-Effective Amendment No. 27 to Registration Statement No. 33-25824,
is incorporated by reference.

(13)(d) Agreement and Declaration of Unitholders between IDS Global Series,
Inc., on behalf of IDS Global Bond Fund, and Strategist World Fund,
Inc., on behalf of Strategist World Income Fund, dated May 13, 1996,
filed electronically as Exhibit 9(j) to Registrant's Post-Effective
Amendment No. 27 to Registration Statement No. 33-25824, is
incorporated by reference.

(13)(e) Agreement and Declaration of Unitholders between IDS Global Series,
Inc., on behalf of IDS Global Growth Fund, and Strategist World Fund,
Inc., on behalf of Strategist World Growth Fund, dated May 13, 1996,
filed electronically as Exhibit 9(k) to Registrant's Post-Effective
Amendment No. 27 to Registration Statement No. 33-25824, is
incorporated by reference.

(13)(f) Agreement and Declaration of Unitholders between IDS Global Series,
Inc., on behalf of IDS Innovations Fund, and Strategist World Fund,
Inc., on behalf of Strategist World Technologies Fund, dated November
13, 1996, filed electronically as Exhibit 9(i) to Registrant's
Post-Effective Amendment No. 27 to Registration Statement No. 33-25824,
is incorporated by reference.

(13)(g) License Agreement, dated January 12, 1989, filed as Exhibit 9(b) to
Registrant's Post-Effective Amendment No. 1 to Registration Statement
No. 33-25824, is incorporated by reference.

(13)(h) Class Y Shareholder Service Agreement between IDS Precious Metals Fund,
Inc. and American Express Financial Advisors Inc., dated May 9, 1997,
filed electronically on or about May 27, 1997 as Exhibit 9(e) to IDS
Precious Metals Fund, Inc.'s Post-Effective Amendment No. 30 to
Registration Statement No. 2-93745, is incorporated by reference.
Registrant's Class Y Shareholder Service Agreement, on behalf of IDS
Emerging Markets Fund, IDS Global Balanced Fund, IDS Global Bond Fund
and IDS Global Growth Fund, differs from the one incorporated by
reference only by the fact that Registrant is one executing party.

(13)(i) Transfer Agency Agreement between AXP Global Series, Inc., on behalf of
AXP Emerging Markets Fund, AXP Global Balanced Fund, AXP Global Bond
Fund, AXP Global Growth Fund and AXP Innovations Fund, and American
Express Client Service Corporation, dated February 1, 1999, is
incorporated by reference to Exhibit (h)(9) to Registrant's Post-
Effective Amendment No. 32 filed on or about Dec. 27, 1999.

(13)(j) License Agreement, dated June 17, 1999 between the American Express
Funds and American Express Company, filed electronically on or about
September 23, 1999 as Exhibit (h)(4) to AXP Stock Fund, Inc's
Post-Effective Amendment No. 98 to Registration Statement No. 2-11358,
is incorporated herein by reference.

(14) Independent Auditors' Consent is filed electronically herewith.

<PAGE>

(15) Omitted Financial Statements: None.

(16)(a) Directors' Power of Attorney, to sign Amendments to this Registration
Statement, dated January 13, 2000, is incorporated by reference to
Exhibit (16)(a) to Registration Statement No. 333-32360 filed on or
about March 13, 2000.

(16)(b) Officers' Power of Attorney, to sign Amendments to this Registration
Statement, dated January 13, 2000, is incorporated by reference to
Exhibit (16)(b) to Registration Statement No. 333-32360 filed on or
about March 13, 2000.

(16)(c) Trustees' Power of Attorney, to sign Amendments to this Registration
Statement, dated January 13, 2000, is incorporated by reference to
Exhibit (16)(c) to Registration Statement No. 333-32360 filed on or
about March 13, 2000.

(16)(d) Officers' Power of Attorney, to sign Amendments to this Registration
Statement, dated January 13, 2000, is incorporated by reference to
Exhibit (16)(d) to Registration Statement No. 333-32360 filed on or
about March 13, 2000.

(17)(a) Code of Ethics adopted under Rule 17j-1 for Registrant filed
electronically on or about March 30, 2000 as Exhibit (p)(1) to AXP
Market Advantage Series, Inc.'s Post-Effective Amendment No. 24 to
Registration Statement No. 33-30770, is incorporated by reference.

(17)(b) Code of Ethics adopted under Rule 17j-1 for Registrant's investment
advisor and principal underwriter filed electronically on or about
March 30, 2000 as Exhibit (p)(2) to AXP Market Advantage Series,
Inc.'s Post-Effective Amendment No. 24 to Registration Statement No.
33-30770, is incorporated by reference.

Item 17. Undertakings

(1) The undersigned registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is a part
of this registration statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act [17
CFR 230.145c], the reoffering prospectus will contain the information
called for by the applicable registration form for reofferings by persons
who may be deemed underwriters, in addition to the information called for
by the other items of the applicable form.

(2) The undersigned registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act, each
post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.

(3) The Registrant undertakes to file by Post-Effective Amendment an Opinion of
Counsel supporting the tax consequences of the proposed reorganization
within a reasonable time after receipt of such opinion.

<PAGE>
SIGNATURES

As required by the Securities Act of 1933 this Amendment to the Registration
Statement has been signed on behalf of the Registrant, in the City of
Minneapolis and State of Minnesota on the 17th day of April, 2000.

AXP GLOBAL SERIES, INC.

By /s/ Arne H. Carlson**
Arne H. Carlson, Chief Executive Officer

By /s/ John M. Knight
John M. Knight, Treasurer

As required by the Securities Act of 1933, this Amendment to the Registration
Statement has been signed below by the following persons in the capacities
indicated on the 17th day of April, 2000.

Signature Capacity

_________________________ Director
Peter J. Anderson

/s/ H. Brewster Atwater, Jr.* Director
H. Brewster Atwater, Jr.

/s/ Arne H. Carlson* Chairman of the Board
Arne H. Carlson

/s/ Lynne V. Cheney* Director
Lynne V. Cheney

/s/ David R. Hubers* Director
David R. Hubers

/s/ Heinz F. Hutter* Director
Heinz F. Hutter

/s/ Anne P. Jones* Director
Anne P. Jones

/s/ William R. Pearce* Director
William R. Pearce

/s/ Alan K. Simpson* Director
Alan K. Simpson

/s/ John R. Thomas* Director
John R. Thomas

/s/ C. Angus Wurtele* Director
C. Angus Wurtele

*Signed pursuant to Directors' Power of Attorney, dated January 13, 2000, filed
electronically as Exhibit (16)(a) to Registration Statement No. 333-32360, by:

/s/ Leslie L. Ogg
Leslie L. Ogg

**Signed pursuant to Officers' Power of Attorney, dated January 13, 2000, filed
electronically as Exhibit (16)(b) to Registration Statement No. 333-32360, by:

/s/ Leslie L. Ogg
Leslie L. Ogg
<PAGE>
SIGNATURES

As required by the Securities Act of 1933, WORLD TRUST consents to the filing of
this Amendment to the Registration Statement signed on behalf of the Registrant,
in the City of Minneapolis and State of Minnesota on the 17th day of April,
2000.

WORLD TRUST

By /s/ Arne H. Carlson****
Arne H. Carlson, Chief Executive Officer

By /s/ John M. Knight
John M. Knight, Treasurer

As required by the Securities Act of 1933, this Amendment to the Registration
Statement has been signed below by the following persons in the capacities
indicated on the 17th day of April, 2000.

Signature Capacity

___________________________ Trustee
Peter J. Anderson

/s/ H. Brewster Atwater, Jr.*** Trustee
H. Brewster Atwater, Jr.

/s/ Arne H. Carlson*** Chairman of the Board
Arne H. Carlson

/s/ Lynne V. Cheney*** Trustee
Lynne V. Cheney

/s/ David R. Hubers*** Trustee
David R. Hubers

/s/ Heinz F. Hutter*** Trustee
Heinz F. Hutter

/s/ Anne P. Jones*** Trustee
Anne P. Jones

/s/ William R. Pearce*** Trustee
William R. Pearce

/s/ Alan K. Simpson*** Trustee
Alan K. Simpson

/s/ John R. Thomas*** Trustee
John R. Thomas

/s/ C. Angus Wurtele*** Trustee
C. Angus Wurtele

***Signed pursuant to Trustees' Power of Attorney, dated January 13, 2000, filed
electronically as Exhibit (16)(c) to Registration Statement No. 333-32360, by:

/s/ Leslie L. Ogg
Leslie L. Ogg

****Signed pursuant to Officers' Power of Attorney, dated January 13, 2000,
filed electronically as Exhibit (16)(d) to Registration Statement No. 333-32360,
by:

/s/ Leslie L. Ogg
Leslie L. Ogg
<PAGE>

CONTENTS OF THIS AMENDMENT TO THE REGISTRATION STATEMENT

This Amendment to the Registration Statement comprises the following papers and
documents:

The facing sheet.

Part A. The prospectus.

Part B. The Statement of Additional Information.

Part C.

Other information.
Exhibits.
Undertakings.

The signatures.

AXP Global Series, Inc.

EXHIBIT INDEX

Exhibit (14) Independent Auditors' Consent

Independent auditors' consent

The board and shareholders
AXP Global Series, Inc.
AXP Emerging Markets Fund
AXP Global Bond Fund
AXP Global Growth Fund
AXP Innovations Fund

The board and shareholders
Strategist World Fund, Inc.
Strategist Emerging Markets Fund
Strategist World Income Fund
Strategist World Growth Fund
Strategist World Technologies Fund

The board of trustees and unitholders
World Trust:
Emerging Markets Portfolio
World Income Portfolio
World Growth Portfolio
World Technologies Portfolio

We consent to the use of our reports included or incorporated herein by
reference and to the references to our Firm under the heading "Financial
Highlights" in the prospectuses included or incorporated herein by reference,
under the heading "INDEPENDENT AUDITORS" in the Statement of Additional
Information incorporated herein by reference and under the heading "Experts" of
the combined Proxy Statement/Prospectus on Form N-14.

/s/ KPMG LLP
KPMG LLP
Minneapolis, Minnesota
April 17, 2000