AXPSM Global
Balanced
Fund
2000 SEMIANNUAL REPORT
American
Express
Funds
(icon of) compass
The goal of AXP Global Balanced Fund is to provide a balance of growth of
capital and current income.
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An International Blend
AXP Global Balanced Fund offers a logical first step for investors who want to
have some exposure to foreign markets, but also want to avoid the greater
volatility of a portfolio consisting of only foreign stocks.
CONTENTS
From the Chairman 3
From the Portfolio Managers 3
Fund Facts 5
The 10 Largest Holdings 6
Financial Statements 7
Notes to Financial Statements 10
Investments in Securities 20
<PAGE>
(picture of) Arne H. Carlson
Arne H. Carlson
Chairman of the board
From the Chairman
The financial markets have always had their ups and downs, but in recent months
volatility has become more frequent and intense. While no one can say with
certainty what the markets will do, American Express Financial Corporation, the
Fund's investment manager, expects economic growth to continue this year,
accompanied by a modest rise in long-term interest rates. But no matter what
transpires, this is a great time to take a close look at your goals and
investments. We encourage you to:
o Consult a professional investment advisor who can help you cut through
mountains of data.
o Set financial goals that extend beyond those achievable through retirement
plans of your employer.
o Learn as much as you can about your current investments.
The portfolio managers' letter that follows provides a review of the Fund's
investment strategies and performance. The semiannual report contains other
valuable information as well. The Fund's prospectus describes its investment
objectives and how it intends to achieve those objectives. As experienced
investors know, information is vital to making good investment decisions.
So, take a moment and decide again whether the Fund's investment objectives and
management style fit with your other investments to help you reach your
financial goals. And make it a practice on a regular basis to assess your
investment options.
On behalf of the Board,
Arne H. Carlson
(picture of) Peter Lamaison
Peter Lamaison
Portfolio manager
(picture of) Ian King
Ian King
Portfolio manager
(picture of) Michael Ng
Michael Ng
Portfolio manager
From the Portfolio Managers
AXP Global Balanced Fund had a productive six months, as it benefited from
periodic rallies in global stock markets. For the first of the fiscal year --
November 1999 through April 2000 -- the total return for the Fund's Class A
shares was 8.02% (excluding the sales charge).
Stocks had everything going their way when the period began. Generally strong
corporate profit growth, low inflation and expanding economies, particularly in
the U.S., set the stage for powerful rallies in many major equity markets.
Adding fuel to the fire was increasing excitement about the potential for the
Internet, which propelled technology-related stocks to exceptionally strong
performance. For the Fund, the result was a double-digit gain after the first
two months.
But with the beginning of a new year came some concerns. The most prominent were
the red-hot U.S. economy, which, some feared, might soon spark a run-up in
inflation, and central banks' willingness to raise interest rates to head off
that possibility. Global stock markets responded by bobbing up and down for much
of the January-March quarter before ultimately going into a slump during April.
The Fund's performance followed a similar pattern, although the steadier
performance of its bond holdings mitigated the spring downturn in stocks. For
the period as a whole, the Fund recorded gains in four of the six months.
Overall, gains in European and Japanese investments were muted by declines in
the value of the euro and yen versus the U.S. dollar.
Looking more closely at the Fund's investments, leading the way on the equity
side were technology and telecommunications stocks, by far our largest area of
investment. Although they were highly volatile, they clearly made the biggest
contribution to performance. All told, stocks made up between 65% and 70% of the
portfolio, with nearly all the rest comprised by bonds, including government and
corporate issues. On a country basis, we kept the greatest portion of assets
invested in the U.S., followed by Japan, Germany, France and the United Kingdom.
As for the second half of the fiscal year, it's likely that the
inflation/interest-rate question will hang over the markets, at least over the
near term. But barring a meaningful economic downturn in the U.S., Europe, or
Japan, we expect an improving investment environment as the year progresses.
Peter Lamaison
Ian King
Michael Ng
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Fund Facts
Class A -- 6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 2000 $6.60
Oct. 31, 1999 $6.61
Decrease $0.01
Distributions -- Nov. 1, 1999 - April 30, 2000
From income $0.32
From capital gains $0.22
Total distributions $0.54
Total return* +8.02%**
Class B -- 6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 2000 $6.56
Oct. 31, 1999 $6.58
Decrease $0.02
Distributions -- Nov. 1, 1999 - April 30, 2000
From income $0.31
From capital gains $0.22
Total distributions $0.53
Total return* +7.69%**
Class Y -- 6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 2000 $6.62
Oct. 31, 1999 $6.62
Increase $ --
Distributions -- Nov. 1, 1999 - April 30, 2000
From income $0.33
From capital gains $0.22
Total distributions $0.55
Total return* +8.23%**
*Returns do not include sales load. The prospectus discusses the effect of sales
charges, if any, on the various classes.
**The total return is a hypothetical investment in the Fund with all
distributions reinvested.
<PAGE>
The 10 Largest Holdings
Percent Value
(of net assets) (as of April 30, 2000)
U.S. Treasury (United States) 2.51% $4,866,799
5.88% 2004
U.S. Treasury (United States) 2.00 3,882,640
7.50% 2016
Glaxo Wellcome ADR (United Kingdom) 1.82 3,531,375
Pfizer (United States) 1.81 3,522,493
Electronic Data Systems (United States) 1.63 3,169,375
Development Bank of Japan (Japan) 1.58 3,065,307
6.50% 2001
United Kingdom Treasury (United Kingdom) 1.55 3,017,657
8.00% 2003
Ericsson (LM) Cl B (Sweden) 1.54 2,990,172
Fannie Mae (United States) 1.50 2,910,682
Bundesschatzanweisungen (Germany) 1.49 2,895,866
4.00% 2001
Note: Certain foreign investment risks include: changes in currency exchange
rates, adverse political or economic order, and lack of similar regulatory
requirements followed by U.S. companies.
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 17.43% of net assets
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<CAPTION>
Financial Statements
Statement of assets and liabilities
AXP Global Balanced Fund
April 30, 2000 (Unaudited)
Assets
Investments in securities, at value (Note 1)
<S> <C> <C>
(identified cost $185,448,177) $192,366,080
Cash in bank on demand deposit 623,309
Dividends and accrued interest receivable 1,759,482
Receivable for investment securities sold 52,722
Unrealized appreciation on foreign currency
contracts held, at value (Notes 1 and 5) 26,735
------
Total assets 194,828,328
-----------
Liabilities
Payable for investment securities purchased 522,739
Unrealized depreciation on foreign currency
contracts held, at value (Notes 1 and 5) 489
Accrued investment management services fee 4,216
Accrued distribution fee 2,975
Accrued transfer agency fee 454
Accrued administrative services fee 320
Other accrued expenses 53,083
------
Total liabilities 584,276
-------
Net assets applicable to outstanding capital stock $194,244,052
============
Represented by
Capital stock-- $.01 par value (Note 1) $ 294,914
Additional paid-in capital 170,923,875
Undistributed net investment income 549,115
Accumulated net realized gain (loss) 15,594,963
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in
foreign currencies (Note 5) 6,881,185
---------
Total -- representing net assets applicable to
outstanding capital stock $194,244,052
============
Net assets applicable to outstanding shares: Class A $114,179,095
Class B $ 80,063,442
Class Y $ 1,515
Net asset value per share of outstanding capital stock:
Class A shares 17,291,845 $ 6.60
Class B shares 12,199,354 $ 6.56
Class Y shares 229 $ 6.62
See accompanying notes to financial statements.
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<CAPTION>
Statement of operations
AXP Global Balanced Fund
Six months ended April 30, 2000 (Unaudited)
Investment income
Income:
<S> <C>
Dividends $ 507,627
Interest 1,736,946
Less foreign taxes withheld (39,662)
-------
Total income 2,204,911
---------
Expenses (Note 2):
Investment management services fee 694,036
Distribution fee
Class A 138,588
Class B 379,235
Transfer agency fee 148,843
Incremental transfer agency fee
Class A 10,128
Class B 11,073
Administrative services fees and expenses 56,672
Compensation of board members 3,554
Custodian fees 37,467
Printing and postage 13,532
Registration fees 22,691
Audit fees 8,750
Other 553
---
Total expenses 1,525,122
Earnings credits on cash balances (Note 2) (8,432)
------
Total net expenses 1,516,690
---------
Investment income (loss) -- net 688,221
-------
Realized and unrealized gain (loss) -- net Net realized gain (loss) on :
Security transactions (Note 3) 15,804,505
Foreign currency transactions (103,539)
--------
Net realized gain (loss) on investments 15,700,966
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (3,016,257)
----------
Net gain (loss) on investments and foreign currencies 12,684,709
----------
Net increase (decrease) in net assets resulting from operations $13,372,930
===========
See accompanying notes to financial statements.
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<CAPTION>
Statements of changes in net assets
AXP Global Balanced Fund
April 30, 2000 Oct. 31, 1999
Six months ended Year ended
(Unaudited)
Operations and distributions
<S> <C> <C>
Investment income (loss)-- net $ 688,221 $ 1,572,774
Net realized gain (loss) on investments 15,700,966 13,220,022
Net change in unrealized appreciation
(depreciation) on investments and on
translation of assets and liabilities
in foreign currencies (3,016,257) 4,019,807
---------- ---------
Net increase (decrease) in net assets
resulting from operations 13,372,930 18,812,603
---------- ----------
Distributions to shareholders from:
Net investment income
Class A (460,788) (973,744)
Class B (188,858) (249,587)
Class Y (7) (17)
Net realized gain
Class A (7,922,899) (240,294)
Class B (5,406,811) (167,699)
Class Y (108) (4)
---- --
Total distributions (13,979,471) (1,631,345)
----------- ----------
Capital share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 25,876,158 46,282,778
Class B shares 14,236,492 26,427,578
Reinvestment of distributions at net asset value
Class A shares 7,831,573 1,128,600
Class B shares 5,514,192 410,277
Class Y shares 115 21
Payments for redemptions
Class A shares (19,186,089) (21,271,472)
Class B shares (Note 2) (7,074,679) (9,950,199)
---------- ----------
Increase (decrease) in net assets from capital
share transactions 27,197,762 43,027,583
---------- ----------
Total increase (decrease) in net assets 26,591,221 60,208,841
Net assets at beginning of period 167,652,831 107,443,990
----------- -----------
Net assets at end of period $194,244,052 $167,652,831
============ ============
Undistributed net investment income $ 549,115 $ 510,547
------------ ------------
See accompanying notes to financial statements.
</TABLE>
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Notes to Financial Statements
AXP Global Balanced Fund
(Unaudited as to April 30, 2000)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a series of AXP Global Series, Inc. and is registered under the
Investment Company Act of 1940 (as amended) as a diversified open-end management
investment company. The Fund invests primarily in equity and debt securities of
companies throughout the world. AXP Global Series, Inc. has 10 billion
authorized shares of capital stock that can be allocated among the separate
series as designated by the board.
The Fund offers Class A, Class B and Class Y shares. o Class A shares are sold
with a front-end sales charge.
o Class B shares may be subject to a contingent deferred sales charge and
automatically convert to Class A shares during the ninth calendar year of
ownership.
o Class Y shares have no sales charge and are offered only to qualifying
institutional investors.
All classes of shares have identical voting, dividend and liquidation rights.
The distribution fee, incremental transfer agency fee and service fee (class
specific expenses) differ among classes. Income, expenses (other than class
specific expenses) and realized and unrealized gains or losses on investments
are allocated to each class of shares based upon its relative net assets.
The Fund's significant accounting policies are summarized below:
Use of estimates
Preparing financial statements that conform to generally accepted accounting
principles requires management to make estimates (e.g., on assets and
liabilities) that could differ from actual results.
Valuation of securities
All securities are valued at the close of each business day. Securities traded
on national securities exchanges or included in national market systems are
valued at the last quoted sales price. Debt securities are generally traded in
the over-the-counter market and are valued at a price that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Securities for which market quotations are not readily available are valued at
fair value according to methods selected in good faith by the board. Short-term
securities maturing in more than 60 days from the valuation date are valued at
the market price or approximate market value based on current interest rates;
those maturing in 60 days or less are valued at amortized cost.
Option transactions
To produce incremental earnings, protect gains, and facilitate buying and
selling of securities for investments, the Fund may buy and write options traded
on any U.S. or foreign exchange or in the over-the-counter market where
completing the obligation depends upon the credit standing of the other party.
The Fund also may buy and sell put and call options and write covered call
options on portfolio securities as well as write cash-secured put options. The
risk in writing a call option is that the Fund gives up the opportunity for
profit if the market price of the security increases. The risk in writing a put
option is that the Fund may incur a loss if the market price of the security
decreases and the option is exercised. The risk in buying an option is that the
Fund pays a premium whether or not the option is exercised. The Fund also has
the additional risk of being unable to enter into a closing transaction if a
liquid secondary market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Fund will
realize a gain or loss when the option transaction expires or closes. When an
option is exercised, the proceeds on sales for a written call option, the
purchase cost for a written put option or the cost of a security for a purchased
put or call option is adjusted by the amount of premium received or paid.
Futures transactions
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund also may buy and write put and call options on these futures contracts.
Risks of entering into futures contracts and related options include the
possibility of an illiquid market and that a change in the value of the contract
or option may not correlate with changes in the value of the underlying
securities.
Upon entering into a futures contract, the Fund is required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the contract is closed
or expires.
Foreign currency translations and foreign currency contracts
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the statement of operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes.
The Fund may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate fluctuation.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation and/or
depreciation are determined using foreign currency exchange rates from an
independent pricing service. The Fund is subject to the credit risk that the
other party will not complete its contract obligations.
Federal taxes
The Fund's policy is to comply with all sections of the Internal Revenue Code
that apply to regulated investment companies and to distribute substantially all
of its taxable income to shareholders. No provision for income or excise taxes
is thus required.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred losses on
certain futures contracts, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes, and losses deferred due to
"wash sale" transactions. The character of distributions made during the year
from net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
Dividends to shareholders
Dividends from net investment income, declared and paid each calendar quarter,
are reinvested in additional shares of the Fund at net asset value or payable in
cash. Capital gains, when available, are distributed along with the last income
dividend of the calendar year.
Other
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date or upon receipt of
ex-dividend notification in the case of certain foreign securities. Interest
income, including level-yield amortization of premium and discount, is accrued
daily.
As of April 30, 2000, AEFC owned 229 shares of Class Y.
2. EXPENSES AND SALES CHARGES
The Fund has agreements with American Express Financial Corporation (AEFC) to
manage its portfolio and provide administrative services. Under an Investment
Management Services Agreement, AEFC determines which securities will be
purchased, held or sold. The management fee is a percentage of the Fund's
average daily net assets in reducing percentages from 0.79% to 0.67% annually.
Effective with the new Investment Management Services Agreement, the fee may be
adjusted upward or downward by a performance incentive adjustment based on a
comparison of the performance of Class A shares of AXP Global Balanced Fund to
the Lipper Global Flexible Fund Index. The maximum adjustment is 0.12% of the
Fund's average daily net assets after deducting 1% from the performance
difference. If the performance difference is less than 1%, the adjustment will
be zero. The adjustment decreased the fee by $43,503 for the period.
Under an Administrative Services Agreement, the Fund pays AEFC a fee for
administration and accounting services at a percentage of the Fund's average
daily net assets in reducing percentages from 0.06% to 0.035% annually. A minor
portion of additional administrative service expenses paid by the Fund are
consultants' fees and fund office expenses. Under this agreement, the Fund also
pays taxes, audit and certain legal fees, registration fees for shares,
compensation of board members, corporate filing fees and any other expenses
properly payable by the Fund and approved by the board.
Under a separate Transfer Agency Agreement, American Express Client Service
Corporation (AECSC) maintains shareholder accounts and records. The Fund pays
AECSC an annual fee per shareholder account for this service as follows:
o Class A $19
o Class B $20
o Class Y $17
The Fund has agreements with American Express Financial Advisors Inc. (the
Distributor) for distribution and shareholder services. Under a Plan and
Agreement of Distribution, the Fund pays a distribution fee at an annual rate up
to 0.25% of the Fund's average daily net assets attributable to Class A shares
and up to 1.00% for Class B shares.
Under a Shareholder Service Agreement, the Fund's Class Y shares pay a fee for
service provided to shareholders by financial advisors and other servicing
agents. The fee is calculated at a rate of 0.10% of the Fund's average daily net
assets attributable to Class Y shares.
Sales charges received by the Distributor for distributing Fund shares were
$212,794 for Class A and $32,740 for Class B for the six months ended April 30,
2000. The Fund also pays custodian fees to American Express Trust Company, an
affiliate of AEFC.
During the six months ended April 30, 2000, the Fund's custodian and transfer
agency fees were reduced by $8,432 as a result of earnings credits from
overnight cash balances.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $107,108,705 and $94,812,374, respectively, for the six
months ended April 30, 2000. Realized gains and losses are determined on an
identified cost basis.
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<CAPTION>
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
Six months ended April 30, 2000
Class A Class B Class Y
<S> <C> <C> <C>
Sold 3,841,503 2,124,649 --
Issued for reinvested distributions 1,178,972 832,844 18
Redeemed (2,843,000) (1,053,850) --
---------- ---------- ---
Net increase (decrease) 2,177,475 1,903,643 18
Year ended Oct. 31, 1999
Class A Class B Class Y
Sold 7,301,407 4,184,530 --
Issued for reinvested distributions 179,232 65,566 3
Redeemed (3,333,319) (1,571,092) --
---------- ---------- ---
Net increase (decrease) 4,147,320 2,679,004 3
</TABLE>
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5. FOREIGN CURRENCY CONTRACTS
As of April 30, 2000, the Fund has foreign currency exchange contracts that
obligate it to deliver currencies at specified future dates. The unrealized
appreciation and/or depreciation on these contracts is included in the
accompanying financial statements. See "Summary of significant accounting
policies." The terms of the open contracts are as follows:
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
May 2, 2000 318,080 349,346 $-- $489
U.S. Dollar European Monetary Unit
May 25, 2000 1,150,000 1,817,196 26,735 --
British Pound U.S. Dollar
Total $26,735 $489
6. BANK BORROWINGS
The Fund has a revolving credit agreement with U.S. Bank, N.A., whereby the Fund
is permitted to have bank borrowings for temporary or emergency purposes to fund
shareholder redemptions. The Fund must have asset coverage for borrowings not to
exceed the aggregate of 333% of advances equal to or less than five business
days plus 367% of advances over five business days. The agreement, which enables
the Fund to participate with other American Express mutual funds, permits
borrowings up to $200 million, collectively. Interest is charged to each Fund
based on its borrowings at a rate equal to the Federal Funds Rate plus 0.30% or
the Eurodollar Rate (Reserve Adjusted) plus 0.20%. Borrowings are payable up to
90 days after such loan is executed. The Fund also pays a commitment fee equal
to its pro rata share of the amount of the credit facility at a rate of 0.05%
per annum. The Fund had no borrowings outstanding during the six months ended
April 30, 2000.
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<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
Fiscal period ended Oct. 31,
Per share income and capital changesa
Class A
2000c 1999 1998 1997b
<S> <C> <C> <C> <C>
Net asset value, beginning of period $6.61 $5.79 $5.33 $5.00
Income from investment operations:
Net investment income (loss) .03 .09 .10 .09
Net gains (losses) (both realized
and unrealized) .50 .82 .48 .31
Total from investment operations .53 .91 .58 .40
Less distributions:
Dividends from net investment income (.03) (.07) (.11) (.07)
Distributions from realized gains (.51) (.02) (.01) --
Total distributions (.54) (.09) (.12) (.07)
Net asset value, end of period $6.60 $6.61 $5.79 $5.33
Ratios/supplemental data
Net assets, end of period (in millions) $114 $100 $63 $31
Ratio of expenses to average daily
net assetsd,e 1.32%f 1.40% 1.49% 1.45%f
Ratio of net investment income (loss)
to average daily net assets 1.04%f 1.43% 1.86% 2.18%f
Portfolio turnover rate (excluding
short-term securities) 53% 99% 74% 44%
Total returng 8.02% 15.53% 11.01% 8.10%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b For the period from Nov. 13, 1996 (commencement of operations) to Oct. 31,
1997.
c Six months ended April 30, 2000 (Unaudited).
d Expense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
e AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the
annual ratios of expenses would have been 1.53% and 2.29% for Class A, for
the periods ended 1998 and 1997, respectively.
f Adjusted to an annual basis.
g Total return does not reflect payment of a sales charge.
</TABLE>
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<TABLE>
<CAPTION>
Fiscal period ended Oct. 31,
Per share income and capital changesa
Class B Class Y
2000c 1999 1998 1997b 2000c 1999 1998 1997b
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $6.58 $5.77 $5.31 $5.00 $6.62 $5.79 $5.33 $5.00
Income from investment operations:
Net investment income (loss) .01 .03 .06 .06 .03 .09 .12 .10
Net gains (losses) (both realized
and unrealized) .50 .83 .48 .30 .52 .84 .47 .31
Total from investment operations .51 .86 .54 .36 .55 .93 .59 .41
Less distributions:
Dividends from net investment income (.02) (.03) (.07) (.05) (.04) (.08) (.12) (.08)
Distributions from realized gains (.51) (.02) (.01) -- (.51) (.02) (.01) --
Total distributions (.53) (.05) (.08) (.05) (.55) (.10) (.13) (.08)
Net asset value, end of period $6.56 $6.58 $5.77 $5.31 $6.62 $6.62 $5.79 $5.33
Ratios/supplemental data
Net assets, end of period (in millions) $80 $68 $44 $19 $-- $-- $-- $--
Ratio of expenses to average daily
net assetsd,e 2.08%f 2.16% 2.25% 2.22%f 1.05%f 1.15% 1.42% 1.30%f
Ratio of net investment income
(loss) to average daily net assets .30%f .66% 1.10% 1.41%f 1.36%f 1.65% 2.02% 2.46%f
Portfolio turnover rate (excluding
short-term securities) 53% 99% 74% 44% 53% 99% 74% 44%
Total returng 7.69% 14.89% 10.18% 7.31% 8.23% 15.76% 11.17% 8.24%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b For the period from Nov. 13, 1996 (commencement of operations) to Oct. 31,
1997.
c Six months ended April 30, 2000 (Unaudited).
d Expense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
e AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the
annual ratios of expenses would have been 2.29% and 2.96% for Class B and
1.46% and 2.14% for Class Y, for the periods ended 1998 and 1997,
respectively.
f Adjusted to an annual basis.
g Total return does not reflect payment of a sales charge.
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<TABLE>
<CAPTION>
Investments in Securities
AXP Global Balanced Fund
April 30, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (60.1%)
Issuer Shares Value(a)
Australia (1.0%)(c)
Media (0.3%)
<S> <C> <C>
News 52,035 $660,771
Metals (0.7%)
Broken Hill Proprietary 56,000 603,010
WMC 171,000 709,972
Total 1,312,982
Brazil (0.3%)(c)
Banks and savings & loans
Uniao de Bancos Brasileiros GDR 21,070 525,433
Chile (--%)(c)
Utilities -- telephone
Compania de Telecomunicaciones de Chile ADR 127 2,350
Finland (1.5%)(c)
Communications equipment & services
Nokia 35,296 2,024,728
Sonera 15,269 839,803
Total 2,864,531
France (3.4%)(c)
Banks and savings & loans (0.7%)
Banque Natl de Paris 17,204 1,390,410
Computers & office equipment (0.8%)
Cap Gemini 7,881 1,547,557
Energy (1.3%)
Total Petroleum Cl B 16,684 2,531,444
Industrial equipment & services (0.5%)
Castorama Dubois 4,154 906,336
Metals (0.1%)
Usinor 14,517 190,703
Germany (0.9%)(c)
Banks and savings & loans (0.4%)
Deutsche Bank 11,410 766,552
Computers & office equipment (0.4%)
SAP 1,475 867,577
Miscellaneous (0.1%)
Epcos 1,226(b) 172,533
Ireland (0.3%)(c)
Banks and savings & loans
Allied Irish Banks 64,002 638,572
Israel (0.2%)(c)
Miscellaneous
Partner Communications ADR 33,482(b) 357,839
Italy (1.0%)(c)
Banks and savings & loans (0.7%)
Instituto Bancario San Paolo di Torino 103,366 1,447,138
Utilities -- telephone (0.3%)
Telecom Italia Mobile 52,595 502,048
Japan (10.5%)(c)
Automotive & related (0.6%)
Toyota Motor 22,000 1,093,940
Computers & office equipment (1.5%)
Canon 23,000 1,052,085
Fujitsu 35,000 991,713
Hitachi Software Engineering 7,700 787,861
Total 2,831,659
Electronics (1.8%)
Hitachi 78,000 931,710
Kyocera 4,300 719,487
Matsushita Communication Industrial 4,000 627,436
Rohm 3,600 1,206,723
Total 3,485,356
Financial services (0.3%)
Nomura Securities 24,000 604,472
Furniture & appliances (0.5%)
Matsushita Electric Industrial 35,000 926,895
Media (0.8%)
Sony 13,000 1,493,865
Metals (0.4%)
Nippon Steel 324,000 729,034
Multi-industry conglomerates (0.6%)
Secom 15,000 1,258,392
Paper & packaging (0.6%)
OJI Paper 175,000 1,098,662
Retail (1.1%)
FamilyMart 32,700 1,199,055
Marui 53,000 996,250
Total 2,195,305
Textiles & apparel (0.3%)
Asahi Glass 71,000 623,251
Utilities -- telephone (2.0%)
Nippon Telegraph & Telephone 143 1,774,341
Nippon Television Network 660 493,190
NTT Data 38 506,690
NTT Mobile Communication Network 40 1,337,099
Total 4,111,320
Netherlands (1.0%)(c)
Insurance (0.6%)
Fortis 43,271 1,088,080
Miscellaneous (0.4%)
United Pan-Europe Communications 22,365(b) 813,891
Singapore (0.4%)(c)
Banks and savings & loans
Overseas Union Bank 156,454 715,114
Spain (0.5%)(c)
Energy
Repsol-YPF 43,693 893,729
Sweden (1.5%)(c)
Communications equipment & services
Ericsson (LM) Cl B 33,631 2,990,172
United Kingdom (8.1%)(c)
Aerospace & defense (0.5%)
British Aerospace 150,730 924,486
Communications equipment & services (0.5%)
Marconi 72,699 907,061
Health care (2.2%)
Glaxo Wellcome ADR 114,513 3,531,375
SmithKline Beecham 65,493 895,656
Total 4,427,031
Insurance (0.6%)
Prudential 73,980 1,135,523
Leisure time & entertainment (0.9%)
EMI Group ADR 180,529 1,728,330
Retail (0.8%)
Tesco 434,432 1,481,053
Utilities -- gas (0.6%)
BG Group 188,800 1,125,655
Utilities -- telephone (2.0%)
COLT Telecom Group 36,126(b) 1,534,716
Vodafone AirTouch 543,712 2,492,636
Total 4,027,352
United States (29.4%)
Chemicals (1.0%)
Du Pont (EI) de Nemours 40,300 1,911,731
Computer software & services (1.6%)
Microsoft 17,800(b) 1,241,550
Oracle 22,700(b) 1,814,581
Total 3,056,131
Computers & office equipment (5.9%)
America Online 30,500(b) 1,824,281
Cisco Systems 19,666(b) 1,363,407
Electronic Data Systems 46,100 3,169,375
EMC 19,300(b) 2,681,494
Sun Microsystems 28,000(b) 2,574,250
Total 11,612,807
Electronics (4.0%)
Atmel 25,559(b) 1,250,794
Corning 8,148 1,609,230
Intel 13,840 1,755,085
Micron Technology 10,000(b) 1,392,500
Natl Semiconductor 29,600(b) 1,798,199
Total 7,805,808
Energy (1.3%)
Texaco 51,000 2,524,500
Financial services (2.8%)
Citigroup 23,170 1,377,167
Fannie Mae 48,260 2,910,682
Goldman Sachs Group 13,076 1,219,337
Total 5,507,186
Health care (3.8%)
Pfizer 83,620 3,522,493
Pharmacia 24,900 1,243,444
Schering-Plough 65,824 2,653,530
Total 7,419,467
Household products (1.1%)
Colgate-Palmolive 38,860 2,219,878
Insurance (1.4%)
American Intl Group 24,087 2,642,042
Media (0.7%)
Charter Communications Cl A 88,772(b) 1,303,839
Multi-industry conglomerates (1.4%)
General Electric 17,240 2,710,990
Retail (1.0%)
Wal-Mart Stores 35,400 1,960,275
Utilities -- telephone (3.4%)
AT&T 31,410 1,466,454
Crown Castle Intl 39,300 1,508,137
Infonet Services Cl B 45,407(b) 766,243
Level 3 Communications 16,500(b) 1,468,523
SBC Communications 31,300 1,371,331
Total 6,580,688
Total common stocks
(Cost: $105,108,541) $116,649,746
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bonds (33.7%)(c)
Issuer Coupon Principal Value(a)
rate amount
Australia (0.2%)
New South Wales Treasury
(Australian Dollar)
<S> <C> <C> <C> <C> <C>
03-01-08 8.00% 200,000(d) $125,025
Queensland Treasury
(Australian Dollar) Local Govt Guaranty
05-14-03 8.00 565,000 342,320
Total 467,345
Canada (1.4%)
Govt of Canada
(Canadian Dollar)
02-01-06 7.00 1,250,000 877,143
06-01-09 5.50 640,000 412,216
Laidlaw
(U.S. Dollar)
05-15-06 7.65 250,000 92,500
Province of British Columbia
(Canadian Dollar)
12-01-06 5.25 500,000 314,431
Province of Manitoba
(U.S. Dollar) Series CK
12-15-00 9.00 750,000 759,014
Rogers Communication
(Canadian Dollar) Sr Nts
07-15-07 8.75 300,000 202,100
Total 2,657,404
China (--%)
Greater Beijing First Expressways
(U.S. Dollar) Sr Nts
06-15-07 9.50 170,000 51,000
Denmark (--%)
Govt of Denmark
(Danish Krone)
05-15-03 8.00 600,000 78,394
France (0.1%)
France Telecom
(European Monetary Unit) Cv
11-29-04 4.13 210,000 205,707
Germany (7.6%)
Allgemeine Hypo Bank
(European Monetary Unit)
09-02-09 5.00 850,000 729,629
Bundesschatzanweisungen
(European Monetary Unit)
12-14-01 4.00 3,215,000 2,895,866
Federal Republic of Germany
(European Monetary Unit)
02-18-05 4.25 950,000 835,757
01-05-06 6.00 600,000 565,585
01-04-08 5.25 1,285,000 1,161,730
07-04-08 4.75 725,000 633,281
01-04-10 5.38 650,000 594,020
06-20-16 6.00 434,598 420,630
07-04-27 6.50 1,475,000 1,484,326
01-04-30 6.25 1,900,000 1,884,665
Govt of Hungary
(European Monetary Unit)
11-21-00 5.13 2,600,000 2,373,682
Treuhandanstalt
(European Monetary Unit)
01-29-03 7.13 1,022,584 983,254
Total 14,562,425
Greece (0.2%)
Hellenic Republic
(Greek Drachma)
04-01-03 8.90 151,000,000 439,532
Italy (1.2%)
Buoni Poliennai Del Tes
(European Monetary Unit)
11-01-29 5.25 1,400,000 1,166,976
07-01-05 4.75 420,000 373,727
Govt of Italy
(European Monetary Unit)
01-01-04 8.50 800,000 808,187
Total 2,348,890
Japan (2.7%)
Development Bank of Japan
(Japanese Yen)
09-20-01 6.50 305,000,000 3,065,307
Govt of Japan
(Japanese Yen)
07-23-01 0.30 242,500,000 2,244,891
Total 5,310,198
Mexico (0.4%)
Banco Nacional de Comercio Exterior
(U.S. Dollar)
02-02-04 7.25 500,000 477,500
F Trust
(U.S. Dollar)
05-30-06 11.25 150,000(d) 162,375
United Mexican States
(British Pound) Medium-term Nts Series E
05-30-02 8.75 125,000 195,573
Total 835,448
Netherlands (0.1%)
KPNQwest
(European Monetary Unit) Sr Nts
06-01-09 7.13 300,000 269,227
Norway (0.9%)
Govt of Norway
(Norwegian Krone)
11-30-04 5.75 7,200,000 783,273
05-15-09 5.50 9,715,000 1,033,746
Total 1,817,019
South Korea (0.1%)
F Semiconductor
(U.S. Dollar) Sr Nts
05-15-07 8.63 200,000(d) 175,018
Spain (0.2%)
Govt of Spain
(European Monetary Unit)
04-30-06 8.80 322,744 344,919
Sweden (0.2%)
Govt of Sweden
(Swedish Krona)
02-09-05 6.00 1,300,000 148,705
08-15-07 8.00 1,600,000 205,433
Paulson Enterprenad
(Swedish Krona)
12-15-00 4.75 1,000,000 110,706
Total 464,844
United Kingdom (3.9%)
United Kingdom Treasury
(British Pound)
11-06-01 7.00 1,515,000 2,385,285
06-07-02 7.00 415,000 657,299
06-10-03 8.00 1,840,000 3,017,657
04-18-05 9.50 340,000 613,399
12-07-05 8.50 425,000 749,093
Total 7,422,733
United States (14.5%)
American Standard
(U.S. Dollar) Company Guaranty
06-01-06 7.13 200,000 179,802
California Infrastructure-
Pacific Gas & Electric
(U.S. Dollar)
06-25-03 6.16 400,000 398,676
Citicorp
(European Monetary Unit)
09-19-09 6.25 1,000,000 457,653
F Burns Harbor LLC
(U.S. Dollar) Sr Nts
01-30-03 6.57 135,740(d) 133,450
Federal Natl Mtge Assn
(U.S. Dollar)
08-15-04 6.50 1,375,000 1,335,918
02-15-08 5.75 900,000 816,028
07-01-13 6.00 673,855 631,690
05-01-14 6.50 940,106 900,369
03-01-27 7.50 143,384 140,696
Ford Motor Credit
(Japanese Yen)
02-07-05 1.20 61,000,000 559,993
(U.S. Dollar)
09-10-02 6.55 400,000 391,472
Intl Paper
(European Monetary Unit)
08-11-00 5.38 560,000 484,798
Morgan (JP)
(U.S. Dollar) Sr Sub Medium-term Nts Series A
02-15-12 4.00 100,000(e) 88,651
PDVSA Finance
(U.S. Dollar)Sr Nts
02-15-10 9.75 500,000 482,500
Phillips Petroleum
(U.S. Dollar)
03-15-28 7.13 200,000 164,993
TXU Electric Capital
(U.S. Dollar) Company Guaranty
01-30-37 8.18 100,000 91,074
U.S. Treasury
(U.S. Dollar)
05-15-00 6.38 500,000 500,130
11-15-00 5.75 300,000 299,115
11-30-00 4.63 1,500,000 1,485,703
02-28-01 5.63 2,000,000 1,987,620
11-30-01 5.88 1,100,000 1,086,594
02-28-03 5.50 650,000 631,090
11-15-04 5.88 5,000,000 4,866,799
02-15-05 7.50 650,000 674,411
02-15-16 9.25 2,000,000 2,572,240
11-15-16 7.50 3,460,000 3,882,640
02-15-21 7.88 1,850,000 2,192,095
TIPS
01-15-07 3.38 200,000(f) 206,266
USX
(U.S. Dollar)
03-01-08 6.85 200,000 182,657
Zurich Capital
(U.S. Dollar) Company Guaranty
06-01-37 8.38 125,000(d) 117,840
Total 27,942,963
Total bonds
(Cost: $70,013,663) $65,393,066
Short-term securities (5.3%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (3.7%)
Federal Home Loan Bank Disc Nts
05-19-00 5.89% $1,500,000 $1,494,868
06-02-00 6.01 300,000 298,256
Federal Home Loan Mtge Corp Disc Nts
05-17-00 5.90 300,000 299,068
05-23-00 5.93 2,400,000 2,390,150
Federal Natl Mtge Assn Disc Nts
05-15-00 5.87 400,000 398,895
06-20-00 6.01 1,400,000 1,387,716
07-13-00 6.26 900,000 888,258
Total 7,157,211
Commercial paper (1.6%)
GMAC
06-28-00 6.15 3,200,000 3,166,057
Total short-term securities
(Cost: $10,325,973) $10,323,268
Total investments in securities
(Cost: $185,448,177)(g) $192,366,080
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(e) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on April 30, 2000.
(f) 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.
(g) At April 30, 2000, the cost of securities for federal income tax purposes
was approximately $185,448,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $19,185,000
Unrealized depreciation (12,267,000)
-----------
Net unrealized appreciation $6,918,000
<PAGE>
American
Express
Funds
AXP Global Balanced Fund
200 AXP Financial Center
Minneapolis, MN 55474
Ticker Symbol
Class A: IDGAX Class B: IGBBX Class Y: N/A
PRSRT STD AUTO
U.S. POSTAGE
PAID
AMERICAN EXPRESS
Distributed by American Express Financial Advisors Inc. Member NASD. American
Express Company is separate from American Express Financial Advisors Inc. and is
not a broker-dealer.
S-6346 E (6/00)
