Supplement Dated June 16, 2000*
                    to the Prospectus Dated October 29, 1999
                of American Express(R) Variable Portfolio Funds

The following revision applies to the "Management" section of the AXPSM Variable
Portfolio - Bond Fund. The following  paragraphs replace the paragraphs on Steve
Merrell and Fred Quirsfeld:

     Frederick  Quirsfeld  and Ray Goodner  are  primarily  responsible  for the
     day-to-day operation of AXP Variable Portfolio - Bond Fund.

     Frederick  Quirsfeld,  senior vice president and senior portfolio  manager,
     joined AEFC in 1985. He became co-portfolio manager of this fund in January
     2000. He also is co-portfolio  manager of the AXP Bond Fund and has managed
     that fund since  1985.  He also  serves as vice  president  - fixed  income
     investments for the American Express mutual funds.

     Ray Goodner,  vice president and senior portfolio  manager,  joined AEFC in
     1977.  He became  co-portfolio  manager  of this fund in May 2000.  He also
     serves as  portfolio  manager of other  American  Express  Funds  including
     Quality Income Portfolio,  World Income Portfolio and AXP Variable
     Portfolio - Global Bond Fund.

The following revision applies to the "Management" section of the AXPSM Variable
Portfolio - Diversified Equity Income Fund. The following paragraph replaces the
paragraph on Kurt Winters:

         Keith Tufte joined AEFC in 1990.  He became  portfolio  manager of this
         Fund in May 2000.  He also serves as  portfolio  manager of some of the
         American  Express  Funds,  including  AXP  Blue  Chip  Advantage  Fund,
         Aggressive Growth Portfolio and co-manager of AXP Variable  Portfolio -
         Blue   Chip   Advantage   Fund.   He  has   served   as   director   of
         research-equities since 1998. Prior to that he was portfolio manager of
         Equity Income Portfolio.

The following revision applies to the "Management" section of the AXPSM Variable
Portfolio - Global Bond Fund. The following  paragraphs replace the paragraph on
Fred Quirsfeld:

     Ray  Goodner and Nic Pifer are  primarily  responsible  for the  day-to-day
     operation of AXP Variable Portfolio - Global Bond Fund.

     Ray Goodner,  vice president and senior portfolio  manager,  joined AEFC in
     1977.  He became  co-portfolio  manager  of this fund in May 2000.  He also
     serves as  portfolio  manager of other  American  Express  Funds  including
     Quality Income Portfolio,  World Income Portfolio and AXP Variable
     Portfolio - Bond Fund.

     Nic Pifer,  co-manager of the Fund, joined AEFC in 2000. From 1997 to 2000,
     Nic worked at Investment  Advisers,  Inc. where he served as vice president
     and fixed income portfolio  manager.  Prior to that he was a trader analyst
     and manager of the foreign  exchange  trading  desk at the Federal  Reserve
     Bank of New York.

The following revision applies to the "Management" section of the AXPSM Variable
Portfolio - Strategy  Aggressive  Fund. The three paragraphs on Jacob E. Herwitz
and Kent A. Kelley  following the paragraph on Louis Giglio are deleted in their
entirety.


S-6466-51 A (6/00)
*Valid until October 31, 2000.