AXP(SM)
Global
Growth Fund
1999 ANNUAL REPORT
(PROSPECTUS ENCLOSED)
American
Express
Funds
(picture of) compass
AXP Global Growth Fund seeks to provide shareholders with long-term capital
growth.
(This annual report includes a prospectus that describes in detail the Fund's
objective, investment strategy, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send
money.)
AMERICAN
EXPRESS
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It's a Big World
After All
No one needs to be told that the world is changing rapidly. For example, some
years ago U.S. stocks accounted for about two-thirds of the total value of
stocks worldwide. Today, that figure is down to about one-third, as many foreign
stock markets have enjoyed explosive growth. AXP Global Growth Fund seeks to
take advantage of that trend by investing in companies throughout the world, not
just the United States. For the most part, these are foreign companies involved
in essential businesses such as infrastructure creation, finance and
environmental clean-up. As they prosper, AXP Global Growth Fund offers investors
the potential to prosper along with them.
AXP GLOBAL GROWTH FUND (This annual report is not part of the prospectus.)
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Table of Contents
1999 ANNUAL REPORT
The purpose of this annual report is to tell investors how the Fund performed.
From the Chairman 4
From the Portfolio Manager 4
Fund Facts 6
The 10 Largest Holdings 7
Making the Most of the Fund 8
The Fund's Long-term Performance 9
Independent Auditors' Report (Fund) 10
Financial Statements (Fund) 11
Notes to Financial Statements (Fund) 14
Independent Auditors' Report (Portfolio) 19
Financial Statements (Portfolio) 20
Notes to Financial Statements (Portfolio) 23
Investments in Securities 28
Federal Income Tax Information 37
1999 PROSPECTUS
The prospectus, which is bound into the middle of this annual report, describes
the Fund in detail.
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
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1999
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(picture of) Arne H. Carlson
Arne H. Carlson
Chairman of the board
From the Chairman
American Express(R) Funds held shareholder meetings in June 1999. Shareholders
approved all of the proposals advanced by management. Among the proposals were:
o The election of Board members and the selection of KPMG LLP as independent
auditors.
o Change in the Fund name from "IDS" to "AXP."
o A new shareholder service and distribution plan.
o A change in the investment management services agreement.
o Changes with respect to fundamental investment policies.
No other business was presented at the meeting, which was concluded by a report
to shareholders from the Investment Department of American Express Financial
Corporation.
Thanks to all of you for your effort in reviewing the proxy material and voting
your proxies.
Arne H. Carlson
(picture of) John O'Brien
John O'Brien
Portfolio manager
From the Portfolio Manager
A calmer global investment environment and healthy stock markets in Europe and
the United States set the stage for a substantial gain by AXP Global Growth Fund
during the past fiscal year. For the 12 months -- November 1998 through October
1999 -- the Fund's Class A shares (before sales charge) generated a total return
of 23.59%.
Showing few ill effects from the global financial turmoil that had hit just a
few months earlier, stocks were already on the move in most major markets when
the period began last year. Supported by continued low inflation and reductions
in short-term interest rates in the U.S. and Europe, stocks gained ground
through January. After retreating moderately in February in the face of rising
long-term interest rates in the U.S., markets moved forward again in March and
April.
AXP GLOBAL GROWTH FUND (This annual report is not part of the prospectus.)
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The ensuing months proved to be more difficult, however, especially
in the U.S., where increased concerns about potentially higher inflation and the
Federal Reserve's willingness to raise short-term interest rates often kept
stocks off balance. European markets fared somewhat better, but were still
hampered by the uncertainty in the U.S. Still, the fiscal year ended on a
sharply positive note, thanks mainly to a U.S.-led rebound in October.
ANTICIPATING IMPROVEMENT
As for the Fund, at the outset of the period I began reducing the level of cash
reserves in the portfolio to take advantage of what I expected would be an
improving investment environment. I put the extra funds to work in stocks, which
enhanced the Fund's overall performance for the year.
I kept most of the portfolio invested in Europe, chiefly in the United Kingdom,
France, Italy, Germany and the Netherlands. That strategy stemmed from the
relationship of potential corporate earnings growth to the level of stock prices
in Europe, which appeared more attractive, compared with other regions. The U.S.
market, which outperformed Europe for the 12 months, comprised the next-largest
investment exposure.
I avoided Japan for the first half of the year. This proved to be a mistake, as
that market and the yen rallied strongly. (Europe, on the other hand, was
basically flat during that time, while the euro, the new European currency,
slumped, hurting the Fund's performance.) As the period progressed, I shifted
some money into Japanese stocks. Among the emerging markets, I kept a small
exposure to Hong Kong and Singapore.
Looking forward, I remain optimistic about the potential for the Fund. Growth
stocks, the focus of the Fund, are back in favor in the U.S. and Europe; the
euro appears poised to continue its rebound; and Japan's recent improvement
seems likely to be sustained. Therefore, barring a major change in the
investment environment, I think the odds favor positive performance in the year
ahead.
John O'Brien
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1999
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Fund Facts
Class A -- 12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1999 $9.18
Oct. 31, 1998 $7.80
Increase $1.38
Distributions -- Nov. 1, 1998 - Oct. 31, 1999
From income $0.16
From capital gains $0.26
Total distributions $0.42
Total return* +23.59%**
Class B -- 12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1999 $9.01
Oct. 31, 1998 $7.68
Increase $1.33
Distributions -- Nov. 1, 1998 - Oct. 31, 1999
From income $0.11
From capital gains $0.26
Total distributions $0.37
Total return* +22.66%**
Class Y -- 12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1999 $9.20
Oct. 31, 1998 $7.81
Increase $1.39
Distributions -- Nov. 1, 1998 - Oct. 31, 1999
From income $0.16
From capital gains $0.26
Total distributions $0.42
Total return* +23.86%**
*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.
AXP GLOBAL GROWTH FUND (This annual report is not part of the prospectus.)
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The 10 Largest Holdings
Percent Value
(of net assets) (as of Oct. 31, 1999)
Total Petroleum Cl B (France) 4.37% $76,495,308
General Electric (United Kingdom) 3.89 68,073,238
Ericsson (LM) Cl B (Sweden) 3.88 67,861,633
Mannesmann (Germany) 3.73 65,285,760
UBS (Switzerland) 2.76 48,245,713
Banque Natl de Paris (France) 2.75 48,171,472
Fortis (Netherlands) 2.68 46,945,084
Nippon Telegraph & Telephone (Japan) 2.41 42,123,436
Cisco Systems (United States) 2.38 41,750,799
Bayerische Motoren Werke (Germany) 2.35 41,139,252
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 31.20% of net assets
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1999
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Making the Most of the Fund
BUILD YOUR ASSETS SYSTEMATICALLY
One of the best ways to invest in the Fund is by dollar-cost averaging -- a
time-tested strategy that can make market fluctuations work for you. To
dollar-cost average, simply invest a fixed amount of money regularly. You'll
automatically buy more shares when the Fund's share price is low, fewer shares
when it is high. The chart below shows how dollar-cost averaging works. In these
three hypothetical scenarios, you will see six months of share price
fluctuations.
This strategy does not ensure a profit or avoid a loss if the market declines.
But, if you can continue to invest regularly through changing market conditions
even when the price of your shares fall or the market declines, it can be an
effective way to accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Jan Feb Mar Apr May Jun
$15 $16 $18 $20
$10 $10 $12 $14
$ 5
Accumulated shares* Average market Your average
price per share cost per share
42.25 $15 $14.20
_______________________________________________________________________________
Jan Feb Mar Apr May Jun
$15
$10 $10 $8 $8 $10
$ 5 $5 $5
Accumulated shares* Average market Your average
price per share cost per share
85.0 $7.66 $7.05
_______________________________________________________________________________
Jan Feb Mar Apr May Jun
$15
$10 $10 $8 $6 $7
$ 5 $4 $4
Accumulated shares* Average market Your average
price per share cost per share
103.5 $6.50 $5.80
_______________________________________________________________________________
$100 invested per month. Total invested: $600
*Shares purchased is determined by dividing the amount invested per month by the
current share price.
THREE WAYS TO BENEFIT FROM A MUTUAL FUND:
o your shares increase in value when the Fund's investments do well
o you receive capital gains when the gains on investments sold by the Fund
exceed losses
o you receive income when the Fund's stock dividends, interest and short-term
gains exceed its expenses.
All three make up your total return. You potentially can increase your
investment if, like most investors, you reinvest your dividends and capital gain
distributions to buy additional shares of the Fund or another fund.
AXP GLOBAL GROWTH FUND (This annual report is not part of the prospectus.)
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The Fund's Long-term Performance
How $10,000 has grown in AXP Global Growth Fund
$30,000
$22,837
AXP Global Growth
Fund
Class A
$20,000
Lipper International
$10,000 Fund Index
MSCI
All Country
World Free Index
$9,500
6/1/90 10/90 10/91 10/92 10/93 10/94 10/95 10/96 10/97 10/98 10/99
Average annual total return (as of Oct. 31, 1999)
1 year 5 years Since inception
Class A +17.40% +9.22% +9.16%*
Class B +18.66% --% +14.13%**
Class Y +23.86% --% +15.44%**
*Inception date was May 29, 1990.
**Inception date was March 20, 1995.
Assumes: Holding period from 6/1/90 to 10/31/99. Returns do not reflect taxes
payable on distributions. Reinvestments of all income and capital gain
distributions for the Fund, has a value of $1,397. Also see "Past Performance"
in the Fund's currect prospectus.
On the graph above you can see how the Fund's total return compared to two
widely cited unmanged performance indexes, the Morgan Stanley Capital
International (MSCI) All Country World Free Index and the Lipper International
Fund Index. In comparing AXP Global Growth Fund (Class A) to the two indexes,
you should take into account the fact that the Fund's performance reflects the
maximum sales charge of 5%, while such charges are not reflected in the
performance of the indexes.
Your investment and return values fluctuate so that your shares, when redeemed,
may be worth more or less than the original cost. Average annual total return
figures reflect the impat of the applicable sales charge, up to a maximum 5%.
This was a period of widely fluctuating security prices. Past performance is no
guarantee of future results.
MSCI All Country World Fee 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.
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1999
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The financial statements contained in Post-Effective Amendment #32 to
Registration Statement No. 33-25824 filed on or about December 28, 1999, are
incorporated herein by reference.
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Federal Income Tax Information
(Unaudited)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
AXP Global Growth Fund
Fiscal year ended Oct. 31, 1999
Class A
Income distribution taxable as dividend income, 10.68% qualifying for deduction
by corporations.
Payable date Per share
Dec. 23, 1998 $0.15318
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 23, 1998 $0.26275
Total distributions $0.41593
The distribution of $0.41593 per share, payable Dec. 23, 1998, consisted of
$0.04440 derived from net investment income, $0.10878 from net short-term
capital gains (a total of $0.15318 taxable as dividend income) and $0.26275 from
net long-term capital gains.
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1999
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Class B
Income distribution taxable as dividend income, 10.68% qualifying for deduction
by corporations.
Payable date Per share
Dec. 23, 1998 $0.10878
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 23, 1998 $0.26275
Total distributions $0.37153
The distribution of $0.37153 per share, payable Dec. 23, 1998, consisted of
$0.10878 from net short-term capital gains (taxable as dividend income) and
$0.26275 from net long-term capital gains.
Class Y
Income distribution taxable as dividend income, 10.68% qualifying for deduction
by corporations.
Payable date Per share
Dec. 23, 1998 $0.15892
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 23, 1998 $0.26275
Total distributions $0.42167
The distribution of $0.42167 per share, payable Dec. 23, 1998, consisted of
$0.05014 derived from net investment income, $0.10878 from net short-term
capital gains (a total of $0.15892 taxable as dividend income) and $0.26275 from
net long-term capital gains.
AXP GLOBAL GROWTH FUND (This annual report is not part of the prospectus.)
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AXP Global Growth Fund
IDS Tower 10
Minneapolis, MN 55440-0010
AMERICAN EXPRESS FUNDS
PRSRT STD AUTO
U.S. POSTAGE
PAID
SPENCER, IA
PERMIT NO. 85
S-6334 N (12/99)
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.
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STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) There are pictures, icons 2) Each picture, icon and
and graphs throughout the graph is described in
annual report. parentheses.
