-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G5gXjenEPRWPAAUF/Q/IfJptTgjVH9MUb2jF12dialeVD9w8aWcIXyM+UfRMHl9U t6KYo/FnJndP1CxqDTiHfg== 0000820027-01-500070.txt : 20010412 0000820027-01-500070.hdr.sgml : 20010412 ACCESSION NUMBER: 0000820027-01-500070 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010228 FILED AS OF DATE: 20010411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AXP BOND FUND INC CENTRAL INDEX KEY: 0000049697 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 411237361 STATE OF INCORPORATION: MN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-02503 FILM NUMBER: 1600458 BUSINESS ADDRESS: STREET 1: IDS TOWER 10 STREET 2: T33/52 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 BUSINESS PHONE: 6126712772 MAIL ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: T33/52 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 FORMER COMPANY: FORMER CONFORMED NAME: IDS BOND FUND INC DATE OF NAME CHANGE: 19920703 N-30D 1 s6490p.txt AXP BOND FUND AXP(R) Bond Fund 2001 SEMIANNUAL REPORT American Express(R) Funds (icon of) clock AXP Bond Fund seeks to provide shareholders with a high level of current income while attempting to conserve the value of the investment and to continue a high level of income for the longest period of time. Striking a Balance Among Bonds A bond is like an I.O.U. But with a bond, it's a corporation or the government - -- the bond issuer -- that promises to pay the money back. In return for lending money to the issuer, bond investors get paid interest. AXP Bond Fund invests mainly in bonds issued by U.S. corporations, but it also holds some U.S. government bonds, as well as foreign bonds. The portfolio manager shifts this mix as investment conditions dictate. In doing so, the Fund seeks to provide long-term return potential for investors. CONTENTS From the Chairman 3 From the Portfolio Manager 3 Fund Facts 5 The 10 Largest Holdings 6 Financial Statements 7 Notes to Financial Statements 10 Investments in Securities 19 (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 the retirement plan of your employer. o Learn as much as you can about your current investments. The portfolio manager's letter that follows provides a review of the Fund's investment strategies and performance. The semiannual report contains other valuable information as well. The Fund's prospectus describes its investment objectives and how it intends to achieve those objectives. As experienced investors know, information is vital to making good investment decisions. So, take a moment and decide again whether the Fund's investment objectives and management style fit with your other investments to help you reach your financial goals. And make it a practice on a regular basis to assess your investment options. Arne H. Carlson (picture of) Ray Goodner Ray Goodner Portfolio manager From the Portfolio Manager Declining interest rates provided the foundation for a generally good bond market during the past six months. AXP Bond Fund was well-positioned to take advantage of the opportunity as its Class A shares generated a total return of 6.40% (excluding the sales charge) for the first half of the fiscal year -- September 2000 through February 2001. After something of a shaky start last fall, the bond market had the wind mostly at its back for the rest of the period. The most important factor was that interest rates came down, as investors became increasingly convinced that economic growth was cooling off. That, they reasoned, would take upward pressure off inflation and ultimately persuade the Federal Reserve, or Fed, to reduce short-term interest rates. RATE CUT SUSTAINS RALLY While investors saw their wish for a rate cut come true in early January, their increased bond-buying had already driven rates lower and prices higher late in 2000. (Falling rates boost bond prices.) The Fed's rate cut, which was followed by another in late January, reinforced the already-positive environment and provided fuel for the rally to continue during the final two months of the period. Performing especially well over the six months were corporate bonds, which enjoyed healthy price appreciation. The trend worked to the advantage of the Fund, as I increased the amount of "corporates" in the portfolio to about two-thirds, including a fair amount of high-yield, or "junk," bonds. Concurrently, I reduced holdings among mortgage-backed and U.S. Treasury bonds. Both of those groups performed positively, though not as well as corporates. As for the rest of the fiscal year, I think economic growth will start to show some gradual improvement. If so, long-term interest rates probably will decline little, if any, in the months ahead. In such an environment, I think corporate bonds would continue to have a performance advantage over U.S. Treasury and mortgage-backed issues. Therefore, I plan to keep the bulk of the portfolio invested in corporates unless there's a significant change in the investment environment. Ray Goodner Fund Facts Class A -- 6-month performance (All figures per share) Net asset value (NAV) Feb. 28, 2001 $4.83 Aug. 31, 2000 $4.70 Increase $0.13 Distributions -- Sept. 1, 2000 - Feb. 28, 2001 From income $0.17 From long-term capital gains $ -- Total distributions $0.17 Total return* +6.40% Class B -- 6-month performance (All figures per share) Net asset value (NAV) Feb. 28, 2001 $4.83 Aug. 31, 2000 $4.70 Increase $0.13 Distributions -- Sept. 1, 2000 - Feb. 28, 2001 From income $0.15 From long-term capital gains $ -- Total distributions $0.15 Total return* +6.00% Class C -- 6-month performance (All figures per share) Net asset value (NAV) Feb. 28, 2001 $4.84 Aug. 31, 2000 $4.71 Increase $0.13 Distributions -- Sept. 1, 2000 - Feb. 28, 2001 From income $0.15 From long-term capital gains $ -- Total distributions $0.15 Total return* +6.01% Class Y -- 6-month performance (All figures per share) Net asset value (NAV) Feb. 28, 2001 $4.84 Aug. 31, 2000 $4.70 Increase $0.14 Distributions -- Sept. 1, 2000 - Feb. 28, 2001 From income $0.17 From long-term capital gains $ -- Total distributions $0.17 Total return* +6.70% * The total return is a hypothetical investment in the fund with all distributions reinvested. Returns do not include sales load. The prospectus discusses the effect of sales charges, if any, on the various classes. The 10 Largest Holdings Percent Value (of net assets) (as of Feb. 28, 2001) Govt of Canada 5.25% 2008 1.61% $58,956,900 Bistro Trust 9.50% 2002 .91 33,565,147 Union Pacific 6.65% 2011 .89 32,686,920 Qwest Communications Intl 7.50% 2008 .89 32,674,999 Ford Motor Credit 7.88% 2010 .86 31,610,400 Target 7.50% 2010 .81 29,536,271 Bank of Singapore 7.88% 2009 .80 29,436,428 New York Telephone 9.38% 2031 .79 29,059,936 Telefonica Europe 7.75% 2010 .79 28,993,524 United Mexican States 9.88% 2010 .73 26,712,500 Excludes U.S. Treasury and government agency holdings. 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 9.08% of net assets
Financial Statements Statement of assets and liabilities AXP Bond Fund, Inc. Feb. 28, 2001 (Unaudited) Assets Investments in securities, at value (Note 1) (identified cost $3,656,741,291) $3,632,843,031 Cash in bank on demand deposit 932,841 Dividends and accrued interest receivable 55,217,853 Receivable for investment securities sold 106,401,861 ----------- Total assets 3,795,395,586 ------------- Liabilities Payable for investment securities purchased 125,493,336 Dividends payable to shareholders 1,303,643 Accrued investment management services fee 48,617 Accrued distribution fee 39,834 Accrued service fee 1,465 Accrued transfer agency fee 12,361 Accrued administrative services fee 4,323 Other accrued expenses 83,861 ------ Total liabilities 126,987,440 ----------- Net assets applicable to outstanding capital stock $3,668,408,146 -------------- Represented by Capital stock-- $.01 par value (Note 1) $ 7,589,213 Additional paid-in capital 3,811,180,450 Excess of distributions over net investment income (1,900,258) Accumulated net realized gain (loss) (124,563,113) Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (23,898,146) ----------- Total-- representing net assets applicable to outstanding capital stock $3,668,408,146 ============== Net assets applicable to outstanding shares: Class A $2,235,848,696 Class B $ 905,084,595 Class C $ 4,594,473 Class Y $ 522,880,382 Net asset value per share of outstanding capital stock: Class A shares 462,601,788 $ 4.83 Class B shares 187,249,452 $ 4.83 Class C shares 949,474 $ 4.84 Class Y shares 108,120,546 $ 4.84 ----------- -------------- See accompanying notes to financial statements.
Statement of operations AXP Bond Fund, Inc. Six months ended Feb. 28, 2001 (Unaudited) Investment income Income: Dividends $ 2,484,770 Interest 134,091,466 ----------- Total income 136,576,236 ----------- Expenses (Note 2): Investment management services fee 8,529,856 Distribution fee Class A 2,714,549 Class B 4,282,673 Class C 10,489 Transfer agency fee 2,031,016 Incremental transfer agency fee Class A 123,172 Class B 90,707 Class C 185 Service fee -- Class Y 234,826 Administrative services fees and expenses 807,172 Compensation of board members 8,350 Custodian fees 117,761 Printing and postage 275,129 Registration fees 55,042 Audit fees 20,625 Other 85,866 ------ Total expenses 19,387,418 Earnings credits on cash balances (Note 2) (208,326) -------- Total net expenses 19,179,092 ---------- Investment income (loss) -- net 117,397,144 Realized and unrealized gain (loss) -- net Net realized gain (loss) on: Security transactions (Note 3) (11,939,284) Foreign currency transactions (646,797) Futures contracts (243,181) -------- Net realized gain (loss) on investments (12,829,262) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liablities in foreign currencies 114,226,555 ----------- Net gain (loss) on investments and foreign currencies 101,397,293 ----------- Net increase (decrease) in net assets resulting from operations $218,794,437 ============ See accompanying notes to financial statements.
Statements of changes in net assets AXP Bond Fund, Inc. Feb. 28, 2001 Aug. 31, 2000 Six months ended Year ended (Unaudited) Operations and distributions Investment income (loss)-- net $ 117,397,144 $ 253,801,433 Net realized gain (loss) on investments (12,829,262) (83,535,520) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 114,226,555 (10,199,341) ----------- ----------- Net increase (decrease) in net assets resulting from operations 218,794,437 160,066,572 ----------- ----------- Distributions to shareholders from: Net investment income Class A (76,469,757) (166,972,232) Class B (26,910,313) (62,651,422) Class C (66,154) (3,602) Class Y (16,974,974) (23,178,750) ----------- ----------- Total distributions (120,421,198) (252,806,006) ------------ ------------ Capital share transactions (Note 4) Proceeds from sales Class A shares (Note 2) 141,356,115 337,981,402 Class B shares 111,052,539 212,775,426 Class C shares 3,802,037 979,718 Class Y shares 221,614,464 203,898,586 Reinvestment of distributions at net asset value Class A shares 56,461,611 115,353,529 Class B shares 23,479,384 53,865,113 Class C shares 61,240 2,440 Class Y shares 17,279,374 23,031,446 Payments for redemptions Class A shares (251,291,604) (755,695,893) Class B shares (Note 2) (120,666,952) (466,608,253) Class C shares (Note 2) (290,452) (45,775) Class Y shares (114,527,297) (131,383,807) ------------ ------------ Increase (decrease) in net assets from capital share transactions 88,330,459 (405,846,068) ---------- ------------ Total increase (decrease) in net assets 186,703,698 (498,585,502) Net assets at beginning of period 3,481,704,448 3,980,289,950 ------------- ------------- Net assets at end of period $3,668,408,146 $3,481,704,448 ============== ============== Undistributed (excess of distributions over) net investment income $ (1,900,258) $ 1,123,796 -------------- -------------- See accompanying notes to financial statements.
Notes to Financial Statements AXP Bond Fund, Inc. (Unaudited as to Feb. 28, 2001) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Fund is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. The Fund invests primarily in corporate bonds and other debt securities. Class C shares of the Fund were offered to the public on June 26, 2000. Prior to this date, American Express Financial Corporation (AEFC) purchased 431 shares of capital stock at $4.64 per share, which represented the initial capital in Class C. The Fund offers Class A, Class B, Class C 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 (CDSC) and automatically convert to Class A shares during the ninth calendar year of ownership. o Class C shares may be subject to a CDSC. 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 accounting principles generally accepted in the United States of America requires management to make estimates (e.g., on assets and liabilities) that could differ from actual results. Valuation of securities All securities are valued at the close of each business day. Securities traded on national securities exchanges or included in national market systems are valued at the last quoted sales price. Debt securities are generally traded in the over-the-counter market and are valued at a price that reflects fair value as quoted by dealers in these securities or by an independent pricing service. Securities for which market quotations are not readily available are valued at fair value according to methods selected in good faith by the board. Short-term securities maturing in more than 60 days from the valuation date are valued at the market price or approximate market value based on current interest rates; those maturing in 60 days or less are valued at amortized cost. Option transactions To produce incremental earnings, protect gains, and facilitate buying and selling of securities for investments, the 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 options on debt securities or futures are exercised, the Fund will realize a gain or loss. When other options are 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 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. Illiquid securities As of Feb 28, 2001, investments in securities included issues that are illiquid. The Fund currently limits investments in illiquid securities to 10% of net assets, at market value, at the time of purchase. The aggregate value of such securities as of Feb. 28, 2001 was $12,410,484 representing 0.34% of net assets. According to board guidelines, certain unregistered securities are determined to be liquid and are not included within the 10% limitation specified above. Securities purchased on a when-issued basis Delivery and payment for securities that have been purchased by the Fund on a forward-commitment or when-issued basis can take place one month or more after the transaction date. During this period, such securities are subject to market fluctuation, and they may affect the Fund's net assets the same as owned securities. The Fund designates cash or liquid securities at least equal to the amount of its commitment. As of Feb. 28, 2001, the Fund has entered into outstanding when-issued or forward commitments of $43,640,625. 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 the 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 daily and payable monthly, when available, 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. 2. EXPENSES AND SALES CHARGES The Fund has agreements with 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 0.52% to 0.395% annually. 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 0.05% to 0.025% 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 $19.50 o Class B $20.50 o Class C $20.00 o Class Y $17.50 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 and Class C shares. Under a Shareholder Service Agreement, the Fund pays the Distributor 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 $1,625,925, $357,830 and $352 for Class A, Class B and Class C, respectively, for the six months ended Feb. 28, 2001. During the six months ended Feb. 28, 2001, the Fund's custodian and transfer agency fees were reduced by $208,326 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 $1,760,645,866 and $1,775,853,187, respectively, for the six months ended Feb. 28, 2001. Realized gains and losses are determined on an identified cost basis. Income from securities lending amounted to $5,951 for the six months ended Feb. 28, 2001. The risks to the Fund of securities lending are that the borrower may not provide additional collateral when required or return the securities when due. 4. CAPITAL SHARE TRANSACTIONS Transactions in shares of capital stock for the periods indicated are as follows: Six months ended Feb. 28, 2001 Class A Class B Class C Class Y Sold 29,777,980 23,397,088 797,885 46,856,859 Issued for reinvested distributions 11,930,541 4,959,827 12,869 3,645,488 Redeemed (53,170,529) (25,525,203) (61,339) (24,125,099) ----------- ----------- ------- ----------- Net increase (decrease) (11,462,008) 2,831,712 749,415 26,377,248 ----------- --------- ------- ---------- Year ended Aug. 31, 2000 Class A Class B Class C* Class Y Sold 71,649,017 45,011,759 209,329 43,266,929 Issued for reinvested distributions 24,445,884 11,410,989 519 4,886,509 Redeemed (160,122,036) (98,987,039) (9,789) (27,864,427) ------------ ----------- ------ ----------- Net increase (decrease) (64,027,135) (42,564,291) 200,059 20,289,011 ----------- ----------- ------- ---------- * Inception date was June 26, 2000. 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 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 Feb. 28, 2001. 6. CAPITAL LOSS CARRY-OVER For federal income tax purposes, the Fund has a capital loss carry-over of $111,090,648 as of Aug. 31, 2000, that will expire in 2007 through 2009 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 carry-over has been offset or expires. 7. NEW ACCOUNTING PRONOUNCEMENT In November 2000, the AICPA issued a revised Audit and Accounting Guide, Audits of Investment Companies, which is effective for fiscal years beginning after Dec. 15, 2000. Adopting the revised Guide is not expected to have a significant impact on the Fund's financial position, results of operations or changes in its net assets.
8. FINANCIAL HIGHLIGHTS The tables below show certain important financial information for evaluating the Fund's results. Fiscal period ended Aug. 31, Per share income and capital changes(a) Class A 2001(b) 2000 1999 1998 1997 Net asset value, beginning of period $4.70 $4.82 $5.11 $5.22 $4.99 Income from investment operations: Net investment income (loss) .17 .33 .33 .36 .35 Net gains (losses) (both realized and unrealized) .13 (.12) (.25) (.03) .23 Total from investment operations .30 .21 .08 .33 .58 Less distributions: Dividends from net investment income (.17) (.33) (.33) (.36) (.35) Distributions from realized gains -- -- (.04) (.08) -- Total distributions (.17) (.33) (.37) (.44) (.35) Net asset value, end of period $4.83 $4.70 $4.82 $5.11 $5.22 Ratios/supplemental data Net assets, end of period (in millions) $2,236 $2,229 $2,591 $2,709 $2,646 Ratio of expenses to average daily net assets(c) .94%(d) .93% .86% .83% .84% Ratio of net investment income (loss) to average daily net assets 6.86%(d) 7.04% 6.56% 6.79% 6.86% Portfolio turnover rate (excluding short-term securities) 52% 64% 57% 43% 50% Total return(e) 6.40% 4.67% 1.64% 6.30% 12.06% (a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Six months ended Feb. 28, 2001 (Unaudited). (c) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (d) Adjusted to an annual basis. (e) Total return does not reflect payment of a sales charge.
Fiscal period ended Aug. 31, Per share income and capital changes(a) Class B 2001(b) 2000 1999 1998 1997 Net asset value, beginning of period $4.70 $4.82 $5.11 $5.22 $4.99 Income from investment operations: Net investment income (loss) .15 .30 .29 .32 .31 Net gains (losses) (both realized and unrealized) .13 (.13) (.24) (.03) .23 Total from investment operations .28 .17 .05 .29 .54 Less distributions: Dividends from net investment income (.15) (.29) (.30) (.32) (.31) Distributions from realized gains -- -- (.04) (.08) -- Total distributions (.15) (.29) (.34) (.40) (.31) Net asset value, end of period $4.83 $4.70 $4.82 $5.11 $5.22 Ratios/supplemental data Net assets, end of period (in millions) $905 $867 $1,093 $1,057 $913 Ratio of expenses to average daily net assets(c) 1.70%(d) 1.69% 1.63% 1.59% 1.60% Ratio of net investment income (loss) to average daily net assets 6.10%(d) 6.28% 5.79% 6.03% 6.10% Portfolio turnover rate (excluding short-term securities) 52% 64% 57% 43% 50% Total return(e) 6.00% 3.88% .87% 5.50% 11.21% (a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Six months ended Feb. 28, 2001 (Unaudited). (c) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (d) Adjusted to an annual basis. (e) Total return does not reflect payment of a sales charge.
Fiscal period ended Aug. 31, Per share income and capital changes(a) Class C 2001(b) 2000(c) Net asset value, beginning of period $4.71 $4.64 Income from investment operations: Net investment income (loss) .15 .04 Net gains (losses) (both realized and unrealized) .13 .07 Total from investment operations .28 .11 Less distributions: Dividends from net investment income (.15) (.04) Distributions from realized gains -- -- Total distributions (.15) (.04) Net asset value, end of period $4.84 $4.71 Ratios/supplemental data Net assets, end of period (in millions) $5 $1 Ratio of expenses to average daily net assets(d) 1.72%(e) 1.69%(e) Ratio of net investment income (loss) to average daily net assets 6.28%(e) 6.80%(e) Portfolio turnover rate (excluding short-term securities) 52% 64% Total return(f) 6.01% 2.58% (a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Six months ended Feb. 28, 2001 (Unaudited). (c) Inception date was June 26, 2000. (d) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (e) Adjusted to an annual basis. (f) Total return does not reflect payment of a sales charge.
Fiscal period ended Aug. 31, Per share income and capital changes(a) Class Y 2001(b) 2000 1999 1998 1997 Net asset value, beginning of period $4.70 $4.82 $5.11 $5.22 $4.99 Income from investment operations: Net investment income (loss) .17 .34 .33 .36 .36 Net gains (losses) (both realized and unrealized) .14 (.12) (.24) (.03) .23 Total from investment operations .31 .22 .09 .33 .59 Less distributions: Dividends from net investment income (.17) (.34) (.34) (.36) (.36) Distributions from realized gains -- -- (.04) (.08) -- Total distributions (.17) (.34) (.38) (.44) (.36) Net asset value, end of period $4.84 $4.70 $4.82 $5.11 $5.22 Ratios/supplemental data Net assets, end of period (in millions) $523 $385 $296 $224 $116 Ratio of expenses to average daily net assets(c) .78%(d) .77% .77% .76% .70% Ratio of net investment income (loss) to average daily net assets 7.04%(d) 7.20% 6.67% 6.90% 7.01% Portfolio turnover rate (excluding short-term securities) 52% 64% 57% 43% 50% Total return(e) 6.70% 4.84% 1.71% 6.40% 12.21% (a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Six months ended Feb. 28, 2001 (Unaudited). (c) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (d) Adjusted to an annual basis. (e) Total return does not reflect payment of a sales charge.
Investments in Securities AXP Bond Fund, Inc. Feb. 28, 2001 (Unaudited) (Percentages represent value of investments compared to net assets) Bonds (90.8%) Issuer Coupon Principal Value(a) rate amount Government obligations & agencies (10.3%) Federal Republic of Brazil (U.S. Dollar) 01-11-06 10.25% $15,000,000(c) $14,870,077 01-15-20 12.75 7,000,000(c) 6,877,500 Govt of Canada (U.S. Dollar) 11-05-08 5.25 60,000,000(c) 58,956,900 Govt Trust Certs Israel 11-15-01 9.25 2,451,112 2,494,178 People's Republic of China (U.S. Dollar) 01-15-96 9.00 10,000,000(c) 10,167,500 Resolution Funding Corp Zero Coupon 10-15-02 6.19 24,660,000(f) 22,785,100 10-15-12 6.29 52,025,000(f) 27,316,247 U.S. Treasury 11-15-01 7.50 64,900,000 66,147,378 11-15-16 7.50 93,045,000 113,238,555 TIPS 01-15-07 3.38 5,900,000(j) 6,543,519 01-15-08 3.63 20,000,000(j) 22,052,804 United Mexican States (U.S. Dollar) 02-01-10 9.88 25,000,000(c) 26,712,500 Total 378,162,258 Mortgage-backed securities (26.6%) Federal Home Loan Mtge Corp 07-01-07 6.50 58,070 58,015 10-01-09 6.00 6,835,900 6,862,406 03-01-13 5.50 8,653,376 8,499,190 04-01-15 7.50 18,276,135 18,973,090 04-01-17 8.00 276,572 287,895 08-01-24 8.00 4,145,329 4,292,986 12-01-27 6.00 9,149,326 8,964,588 10-01-28 7.00 30,349,484 30,738,261 11-01-29 7.00 18,902,355 19,138,706 Collateralized Mtge Obligation 03-15-22 7.00 10,000,000 9,945,265 07-15-22 7.00 12,000,000 12,426,360 Federal Natl Mtge Assn 07-01-08 6.50 5,849,729 5,937,336 01-01-09 5.50 5,367,245 5,314,118 01-15-09 5.25 30,000,000 29,287,470 06-15-09 6.38 65,000,000 67,995,850 11-01-09 9.00 1,113 1,161 06-01-10 6.50 12,733,974 12,924,681 08-01-11 8.50 13,049,758 13,519,814 04-01-13 6.00 11,011,748 10,984,213 05-01-13 6.50 28,755,651 29,077,380 08-01-13 6.00 26,249,985 26,184,345 10-01-13 6.00 12,332,306 12,301,469 11-01-13 6.00 30,470,813 30,394,619 03-01-14 5.50 28,701,432 28,185,740 03-01-14 6.00 3,499,642 3,490,891 04-01-14 6.50 8,217,101 8,309,037 06-01-14 6.00 6,712,429 6,695,644 07-01-14 6.00 7,856,309 7,831,807 06-01-15 6.00 22,618,625 22,548,085 07-01-15 6.00 991,784 988,691 04-01-23 8.50 4,872,420 5,128,492 05-01-23 6.50 24,821,139 24,958,896 08-01-23 6.50 1,668,332 1,677,592 09-01-23 6.50 3,035,851 3,052,699 11-01-23 6.50 5,703,799 5,726,728 01-01-24 6.50 38,114,842 38,195,419 02-01-24 6.50 5,275,157 5,296,363 05-01-24 6.00 41,929,914 41,454,848 06-01-24 9.00 3,770,900 3,993,108 02-01-25 8.00 2,282,228 2,362,106 09-01-25 6.50 16,976,110 16,992,067 09-01-25 8.00 4,536,972 4,692,953 02-01-26 6.00 16,956,068 16,654,080 03-01-26 7.00 11,971,199 12,143,345 06-01-28 6.00 26,008,636 25,472,338 08-01-28 6.50 19,913,854 19,876,416 10-01-28 6.00 17,376,855 17,018,544 11-01-28 6.50 9,882,437 9,857,731 12-01-28 6.00 19,874,686 19,446,188 12-01-28 6.50 4,462,107 4,453,719 01-01-29 6.50 29,963,732 29,907,400 03-01-29 6.50 17,870,001 17,821,608 05-01-29 6.50 23,744,516 23,680,215 06-01-29 7.00 84,167 85,114 07-01-29 7.00 30,973,475 31,321,927 09-01-29 7.00 80,529,393 81,467,703 04-01-30 6.00 45,000,000(m) 43,959,375 Collateralized Mtge Obligation 05-18-26 5.00 15,000,000 14,243,832 Govt Natl Mtge Assn 02-15-24 8.00 1,805,809 1,875,224 02-15-25 9.00 656,820 685,555 06-15-26 8.00 2,645,443 2,737,214 08-15-26 8.00 4,498,322 4,654,369 Prudential Bache Collateralized Mtge Obligation 04-01-19 7.97 4,390,662 4,500,997 Total 977,553,278 Aerospace & defense (1.2%) Boeing Capital Medium-term Sr Nts Series X 01-27-10 7.22 10,000,000 10,641,600 Compass Aerospace Company Guaranty Series B 04-15-05 10.13 3,750,000 750,000 Fairchild Company Guaranty 04-15-09 10.75 6,000,000 4,800,000 Goodrich (BF) 07-01-01 9.63 10,000,000 10,066,100 L-3 Communications Sr Sub Nts Series B 05-01-07 10.38 5,000,000 5,350,000 United Technologies 11-15-19 8.88 10,000,000 12,165,800 Total 43,773,500 Airlines (0.8%) Continental Airlines Series 1996B 10-15-13 7.82 4,187,947 4,347,508 Series A 09-15-17 6.65 12,314,599 12,252,288 Delta Air Lines 05-15-10 10.13 10,000,000 11,148,500 Total 27,748,296 Automotive & related (1.7%) Ford Motor Credit 06-15-10 7.88 30,000,000 31,610,400 02-01-11 7.38 10,000,000 10,206,170 Lear Company Guaranty Series B 05-15-09 8.11 15,000,000 14,870,550 MSX Intl Company Guaranty 01-15-08 11.38 5,885,000 5,178,800 Total 61,865,920 Banks and savings & loans (2.6%) Bank of America Sub Nts 01-15-11 7.40 8,000,000 8,355,360 Bank of Singapore (U.S. Dollar) Sub Nts 08-10-09 7.88 28,000,000(c,d) 29,436,428 Central Fidelity Capital Company Guaranty Series A 04-15-27 7.04 16,500,000(o) 16,616,655 Comerica Bank Sub Nts 10-01-08 6.00 9,780,000 9,493,485 FleetBoston Financial 09-15-05 7.25 22,000,000 23,308,560 Union Planters Capital Company Guaranty 12-15-26 8.20 4,000,000 3,586,320 Washington Mutual Capital Company Guaranty 06-01-27 8.38 6,291,000 6,234,947 Total 97,031,755 Building materials & construction (0.7%) Nortek Sr Sub Nts 03-01-04 9.88 1,740,000 1,744,350 Sr Nts Series B 03-15-07 9.25 1,000,000 976,250 09-01-07 9.13 3,330,000 3,288,375 Pulte Sr Nts 12-15-03 7.00 7,700,000 7,547,386 WCI Communities Sr Sub Nts 02-15-11 10.63 10,525,000(d) 10,682,875 Total 24,239,236 Chemicals (1.7%) Allied Waste North America Company Guaranty Series B 01-01-09 7.88 10,625,000 10,226,563 Lyondell Chemical Sr Sub Nts 05-01-09 10.88 6,200,000 6,355,000 Waste Management Company Guaranty 05-15-09 6.88 20,000,000 19,559,399 Sr Nts 10-01-07 7.13 15,000,000 14,906,850 07-15-28 7.00 12,500,000 11,044,863 Total 62,092,675 Communications equipment & services (1.6%) Celcaribe Sr Nts 03-15-04 13.50 6,120,000 3,978,000 Deutsche Telecom Intl Finance (U.S. Dollar) Company Guaranty 06-15-30 8.25 7,600,000(c) 7,655,640 Equinix Sr Nts 12-01-07 13.00 3,360,000 2,318,400 Fairpoint Communications Sr Sub Nts 05-01-10 12.50 3,000,000 2,940,000 GTE California 09-01-09 6.70 10,000,000 10,084,900 KMC Telecom Holdings Sr Nts 05-15-09 13.50 2,500,000 800,000 Nextel Communications Sr Nts 02-01-11 9.50 9,000,000(d) 8,437,500 NTL Communications Sr Nts Series B 10-01-10 11.88 9,500,000 9,452,500 Price Communications Wireless Company Guaranty Series B 12-15-06 9.13 7,000,000 7,280,000 Voicestream Wireless/ Voicestream Wireless Holdings Sr Nts 11-15-09 10.38 6,123,523 6,827,728 Total 59,774,668 Computers & office equipment (0.5%) Adaptec Cv Sub Nts 02-01-04 4.75 5,442,000 4,572,913 AOL Time Warner Zero Coupon Cv 12-06-19 4.34 5,650,000(f) 2,895,738 Globix Sr Nts 02-01-10 12.50 12,925,000 5,363,874 Nvidia Cv 10-15-07 4.75 1,900,000 1,491,500 Solectron Zero Coupon Cv 11-20-20 3.25 10,428,000(f) 4,996,055 Total 19,320,080 Electronics (1.3%) Advanced Energy Inds Cv 11-15-06 5.25 4,863,000 3,938,738 Celestica (U.S. Dollar) Zero Coupon Cv 08-01-20 3.41 8,792,000(c,f) 3,725,610 Conexant Systems Cv 02-01-07 4.00 8,937,000 5,094,090 Cv Sub Nts 02-01-07 4.00 1,420,000(d) 821,470 Corning Zero Coupon Cv 11-08-15 2.00 5,671,000(f) 3,437,760 Lam Research Cv Sub Nts 09-01-02 5.00 5,802,000 5,995,207 Reliance Electric 04-15-03 6.80 6,000,000 6,046,020 Semtech Cv 02-01-07 4.50 3,957,000 3,239,794 02-01-07 4.50 1,125,000(d) 913,838 STMicroelectronics (U.S. Dollar) Zero Coupon Cv 11-16-10 3.75 4,370,000(c,d,f) 2,780,413 Thomas & Betts 01-15-06 6.50 9,200,000 7,240,887 Triquint Semiconductor Cv Sub Nts 03-01-07 4.00 5,229,000 3,248,516 Total 46,482,343 Energy (2.8%) Ashland Medium-term Nts Series J 08-15-05 7.83 14,000,000 14,732,382 Devon Energy Cv Deb 08-15-08 4.90 6,416,000 6,383,920 Grant Prideco Sr Nts 12-01-07 9.63 3,900,000(d) 4,095,000 Kerr-McGee 04-01-01 10.00 9,650,000 9,676,576 Lodestar Holdings Company Guaranty 05-15-05 11.50 7,500,000(b) 300,000 Newfield Exploration Sr Nts 03-01-11 7.63 6,500,000 6,451,250 PDV America Sr Nts 08-01-03 7.88 15,000,000 14,832,975 Petroliam Nasional (U.S. Dollar) 08-15-15 7.75 20,000,000(c,d) 19,719,800 Phillips Petroleum 05-25-10 8.75 15,000,000 17,381,640 Pioneer Natl Resources Sr Nts 08-15-07 8.25 9,500,000 9,547,500 Total 103,121,043 Energy equipment & services (0.2%) Diamond Offshore Drilling Cv Sub Nts 02-15-07 3.75 5,948,000 6,570,756 Financial services (3.1%) Barclays North America Capital 05-15-21 9.75 13,600,000 14,345,688 Citigroup Sub Nts 10-01-10 7.25 20,000,000 21,137,200 First Union- Lehman Brothers Cl A3 Series 1997-C2 12-18-07 6.65 20,000,000 20,693,314 GenAmerica Capital Company Guaranty 06-30-27 8.52 8,000,000(d) 7,767,064 Indah Kiat Finance Mauritius (U.S. Dollar) Company Guaranty 07-01-07 10.00 9,225,000(c) 2,536,875 LaBranche Sr Nts 08-15-04 9.50 6,930,000 7,319,951 Sr Sub Nts 03-02-07 12.00 2,545,000 2,767,688 Ohio Savings Capital Company Guaranty 06-03-27 9.50 9,500,000(d) 9,467,415 Osprey Trust/Osprey 1 01-15-03 8.31 10,000,000(d) 10,315,200 Providian Financial Cv Sr Nts 08-15-05 3.25 3,070,000 2,941,766 Salomon Smith Barney Holdings 01-15-03 6.13 15,000,000 15,179,100 Total 114,471,261 Health care (0.2%) Allergan Zero Coupon Cv 11-01-20 2.50 4,000,000(d,f) 2,659,600 11-01-20 2.13 632,000(f) 406,850 Teva Pharmaceuticals Finance LLC Cv Sr Nts 10-15-05 1.50 3,171,000(d) 3,321,623 Total 6,388,073 Health care services (1.2%) AmeriSource Health Cv 12-01-07 5.00 3,950,000(d) 5,088,667 HCA-The Healthcare 09-01-10 8.75 7,415,000 7,795,019 Paracelsus Healthcare Sr Sub Nts 08-15-06 10.00 13,100,000(b) 5,240,000 Tenet Healthcare Sr Sub Nts Series B 12-01-08 8.13 22,700,000 23,012,124 Triad Hospitals Holdings Company Guaranty Series B 05-15-09 11.00 2,165,000 2,324,669 Total 43,460,479 Industrial equipment & services (0.3%) Laidlaw (U.S. Dollar) 05-15-06 7.65 17,000,000(b,c) 6,375,000 Motors & Gears Sr Nts Series D 11-15-06 10.75 3,530,000 3,388,800 Total 9,763,800 Insurance (3.1%) American General Institute Capital Company Guaranty Series A 12-01-45 7.57 10,000,000(d) 9,466,350 Americo Life Sr Sub Nts 06-01-05 9.25 9,400,000 9,047,500 Executive Risk Capital Company Guaranty Series B 02-01-27 8.68 11,500,000 11,365,266 Florida Windstorm (MBIA Insured) 02-25-19 7.13 10,000,000(d,k) 10,124,300 Sr Nts (MBIA Insured) 08-25-07 6.85 15,000,000(d,k) 15,381,720 Nationwide CSN Trust 02-15-25 9.88 17,000,000(d) 17,338,504 New York Life Insurance 12-15-23 7.50 6,000,000(d) 5,696,370 Principal Mutual 03-01-44 8.00 10,000,000(d) 8,954,110 SAFECO Capital Trust Company Guaranty 07-15-37 8.07 11,400,000 9,460,142 Zurich Capital Trust Company Guaranty 06-01-37 8.38 15,785,000(d) 16,004,569 Total 112,838,831 Leisure time & entertainment (0.8%) Six Flags Sr Nts 02-01-09 9.50 5,000,000(d) 5,075,000 Station Casinos Sr Nts 02-15-08 8.38 4,000,000(d) 4,020,000 Sr Sub Nts 07-01-10 9.88 5,000,000 5,237,500 Time Warner 02-01-24 7.57 5,875,000 6,031,099 United Artists Theatres Series 1995A 07-01-15 9.30 12,331,329 9,260,705 Total 29,624,304 Media (3.0%) Charter Communications Holdings/Charter Capital Sr Nts 10-01-09 10.75 7,000,000(d) 7,437,500 Charter Communications LLC/Capital Zero Coupon Sr Disc Nts 04-01-04 14.19 4,750,000(g) 3,289,375 Clear Channel Communications Cv Sr Nts 04-01-03 2.63 4,040,000 4,289,308 Comcast Zero Coupon Cv 12-19-20 .87 7,379,000(f) 6,069,228 CSC Holdings Series B 08-15-09 8.13 5,000,000 5,232,100 Sr Nts 07-15-08 7.25 14,000,000 13,978,020 Lamar Media Company Guaranty 09-15-07 8.63 9,000,000 8,820,000 News Corp 06-24-10 10.15 3,324,207(h) 3,883,737 Paxson Communications Sr Sub Nts 10-01-02 11.63 7,500,000 7,631,250 Time Warner Entertainment 03-15-23 8.38 17,000,000 18,821,210 Turner Broadcasting 07-01-13 8.38 10,000,000 11,109,000 02-01-24 8.40 19,500,000 20,373,483 Total 110,934,211 Metals (0.4%) Imexsa Export Trust (U.S. Dollar) 05-31-03 10.13 4,025,840(c,d) 3,844,678 Inco (U.S. Dollar) Cv 03-15-16 7.75 4,990,000(c) 4,840,300 WMC Finance USA (U.S. Dollar) 11-15-13 7.25 6,500,000(c) 6,739,551 Total 15,424,529 Miscellaneous (2.4%) Actuant Company Guaranty 05-01-09 13.00 90,000 90,225 Advanced Glassfiber Yarn Sr Sub Nts 01-15-09 9.88 2,000,000 1,650,000 Bistro Trust 12-31-02 9.50 32,750,000(d) 33,565,147 Continucare Cv Sr Sub Nts 10-31-02 7.00 609,756(b,d) 118,902 ECM Funding LP 06-10-02 11.92 1,078,345(h) 905,810 ERP Operating LP 03-02-11 6.95 10,000,000 9,718,050 FCB/NC Capital Company Guaranty 03-01-28 8.05 9,250,000 7,985,692 Hyder PLC (U.S. Dollar) 12-15-17 7.25 8,000,000(c,d) 6,617,440 ISG Resources 04-15-08 10.00 8,280,000 4,471,200 Normandy Yandal Operations (U.S. Dollar) Sr Nts 04-01-08 8.88 6,000,000(c) 4,800,000 NSM Steel Company Guaranty 02-01-06 12.00 6,925,000(b,d) 277,000 Omega Cabinets Sr Sub Nts 06-15-07 10.50 4,180,000 4,190,450 Penn-American Water 1st Mtge Medium-term Nts 11-01-17 7.08 13,000,000(d) 12,385,620 Resolution Performance Sr Sub Nts 11-15-10 13.50 2,050,000(d) 2,193,500 Stellex Technologies Sr Sub Nts Series B 11-01-07 9.50 6,100,000(b) 671,000 Total 89,640,036 Multi-industry conglomerates (0.9%) Jordan Inds Sr Nts 08-01-07 10.38 2,000,000 1,700,000 Sr Nts Series D 08-01-07 10.38 4,945,000 4,203,250 Prime Succession Sr Sub Nts 08-15-04 10.75 3,260,000(b) 395,275 Tyco Intl (U.S. Dollar) Zero Coupon Cv 11-17-20 1.33 3,112,000(c,f) 2,365,120 11-17-20 1.44 4,250,000(c,d,f) 3,236,673 US Inds/USI America Holding Company Guaranty 10-15-03 7.13 6,225,000 5,788,273 USI American Holdings Sr Nts Series B 12-01-06 7.25 5,285,000 4,286,463 Viacom 06-01-01 8.88 10,000,000 10,072,999 Total 32,048,053 Paper & packaging (1.9%) Abitibi-Consolidated (U.S. Dollar) 08-01-30 8.85 7,500,000(c) 7,816,125 APP China Group (U.S. Dollar) Sr Nts 03-15-05 14.00 8,500,000(c,d) 2,231,250 Carter Holt Harvey (U.S. Dollar) 12-01-04 8.88 10,500,000(c) 11,293,695 Crown Paper Sr Sub Nts 09-01-05 11.00 6,950,000(b) 156,375 Doman Inds (U.S. Dollar) 03-15-04 8.75 890,000(c) 480,600 (U.S. Dollar) Sr Nts Series B 11-15-07 9.25 3,395,000(c) 1,544,725 Intl Paper 11-15-12 5.13 9,000,000 7,357,680 Packaging Corp of America Company Guaranty 04-01-09 9.63 7,000,000 7,455,000 Pactiv 06-15-17 8.13 5,000,000 4,471,600 Quno (U.S. Dollar) Sr Nts 05-15-05 9.13 7,000,000(c) 7,324,618 Repap New Brunswick (U.S. Dollar) Sr Nts 06-01-04 9.00 8,900,000(c) 9,345,000 Stone Container Sr Nts 02-01-11 9.75 6,100,000(d) 6,252,500 Weyerhaeuser (U.S. Dollar) 01-15-04 8.50 3,000,000(c) 3,148,410 Total 68,877,578 Real estate investment trust (0.2%) Meristar Hospitality Sr Nts 01-15-11 9.13 7,650,000(d) 7,783,875 Restaurants & lodging (0.8%) Hilton Hotels 02-15-11 8.25 6,000,000 6,182,820 MGM Mirage 02-01-05 6.95 10,000,000 9,883,800 Park Place Entertainment Sr Sub Nts 09-15-08 8.88 14,000,000 14,210,000 Total 30,276,620 Retail (2.9%) Albertson's Sr Nts 02-15-11 7.50 17,000,000 17,337,960 Dairy Mart Convenience Stores Sr Sub Nts 03-15-04 10.25 5,925,000 2,429,250 Kohl's Zero Coupon Cv 06-12-20 2.20 9,545,000(f) 5,964,671 Kroger Company Guaranty 03-01-08 7.45 10,000,000 10,507,300 Sr Nts 07-15-06 8.15 13,000,000 14,196,000 Levi Strauss Sr Nts 01-15-08 11.63 6,950,000(d) 7,280,125 Lowe's Zero Coupon Cv Sr Nts 02-16-21 2.50 4,750,000(d,f) 2,939,063 Target 08-15-10 7.50 27,000,000 29,536,271 Wal-Mart CRAVE Trust 07-17-06 7.00 11,477,036(d) 11,698,428 Wal-Mart Stores 06-29-11 8.88 3,500,000 3,588,235 Total 105,477,303 Transportation (2.3%) American Architectural Company Guaranty 12-01-07 11.75 7,500,000(b) 1,912,500 ERAC USA Finance 02-15-08 6.80 10,000,000(d) 9,582,300 01-15-11 8.00 15,500,000(d) 15,873,349 Greater Beijing First Expressways (U.S. Dollar) Sr Nts 06-15-07 9.50 3,640,000(b,c) 1,437,800 Norfolk Southern Sr Nts 02-15-31 7.25 20,000,000 19,631,400 Union Pacific 01-15-11 6.65 32,700,000 32,686,920 Vectura Group Company Guaranty Series B 06-30-08 10.25 6,415,000 4,265,975 Zhuhai Highway (U.S. Dollar) Sub Nts 07-01-08 11.50 4,140,000(b,c,d) 289,800 Total 85,680,044 Utilities -- electric (6.2%) AES Sr Nts 09-15-10 9.38 4,650,000 4,894,125 Appalachian Power 1st Mtge Medium-term Nts 12-01-22 8.50 5,000,000 5,330,850 Arizona Public Service 1st Mtge Sale Lease-backed Obligation 12-30-15 8.00 6,556,000 6,704,100 Calpine Sr Nts 02-15-11 8.50 10,000,000 10,170,010 Cleveland Electric Illuminating 1st Mtge Series B 05-15-05 9.50 18,790,000 19,328,521 1st Mtge Series E 07-01-23 9.00 7,000,000 7,505,540 CMS Energy Sr Nts 05-15-02 8.13 10,000,000 10,109,000 07-01-03 8.38 15,000,000 15,224,100 Connecticut Light & Power 1st Mtge Series C 06-01-02 7.75 8,750,000 8,933,138 Edison Mission Energy Sr Nts 06-15-09 7.73 3,300,000 3,052,682 EIP Funding-PNM 10-01-12 10.25 6,156,000 6,701,175 El Paso Electric 1st Mtge Series E 05-01-11 9.40 10,000,000 11,038,500 Indiana & Michigan Power Sale Lease-backed Obligation Series F 12-07-22 9.82 4,966,039 5,771,232 Korea Electric Power (U.S. Dollar) Zero Coupon 04-01-16 10.97 35,000,000(c,g) 7,836,535 Midland Funding I Series 1991-C 07-23-02 10.33 2,393,385 2,452,757 Series 1994-C 07-23-02 10.33 1,288,578 1,320,544 Midland Funding II Series A 07-23-05 11.75 14,900,000 16,562,929 NRG Northeast Generating Company Guaranty Series A1 12-15-04 8.06 2,531,250 2,598,328 Company Guaranty Series B1 06-15-15 8.84 4,000,000 4,333,280 Ohio Edison 1st Mtge 04-01-23 7.88 6,000,000 6,089,040 Pacific Gas & Electric 1st Mtge Series 1992B 05-01-25 8.38 4,100,000 3,608,000 PSI Energy 08-01-05 6.50 10,000,000 9,749,700 RGS (AEGCO) Funding Sale Lease-backed Obligation Series F 12-07-22 9.82 4,966,044 5,771,239 Salton Sea Funding Series C 05-30-10 7.84 10,000,000 8,731,300 Sithe Independence Funding Series A 06-30-07 8.50 7,500,000 7,928,175 12-30-13 9.00 4,700,000 5,049,398 Texas Utilities Electric 01-01-05 9.45 2,596,000 2,801,375 Tucson Electric Power 10-01-09 8.50 3,250,000 3,246,025 TXU 1st Mtge 07-01-25 7.63 10,000,000 9,715,700 10-01-25 7.38 3,000,000 2,758,080 Western Massachusetts Electric 1st Mtge Series B 07-01-01 7.38 12,000,000 12,005,040 Total 227,320,418 Utilities -- gas (1.5%) Coastal Sr Deb 02-15-37 7.42 6,000,000 5,969,880 El Paso Energy Sr Nts 05-15-09 6.75 4,900,000 4,941,013 12-15-12 7.38 12,850,000 13,425,680 Sr Nts Series B 07-15-01 6.63 8,675,000 8,691,569 Questar Gas 06-01-21 9.38 8,000,000 8,402,160 Southern California Gas 1st Mtge Series BB 03-01-23 7.38 6,900,000 6,571,008 Southwest Gas 02-15-11 8.38 7,900,000 8,011,232 Total 56,012,542 Utilities -- telephone (6.8%) ALLTEL Sr Nts 03-01-06 7.50 17,470,000 18,035,679 BellSouth Capital Funding 02-15-30 7.88 24,000,000 25,826,880 Geotek Communications Escrow Cv Sr Sub Nts 05-15-01 -- 4,135,000(b,h,q) -- Global Crossing Holdings (U.S. Dollar) Sr Sub Deb 08-01-07 8.70 18,450,000(c,d) 17,852,958 Intermedia Communications Sr Nts Series B 06-01-08 8.60 1,350,000 1,323,000 McLeod USA Sr Nts 03-15-08 8.38 775,000 689,750 02-15-09 8.13 7,250,000 6,525,000 Metromedia Fiber Network Sr Nts 12-15-09 10.00 5,750,000 5,462,500 New York Telephone 07-15-31 9.38 27,200,000 29,059,936 Qwest 11-10-26 7.20 26,000,000 24,119,420 Qwest Communications Intl Sr Nts Series B 11-01-08 7.50 32,175,000 32,674,999 RSL Communications (U.S. Dollar) Company Guaranty 11-15-06 12.25 8,116,000(c) 304,350 SBC Communications 10-15-34 6.63 10,000,000 9,113,520 07-15-43 7.38 10,000,000 9,798,200 Telefonica Europe (U.S. Dollar) Company Guaranty 09-15-10 7.75 27,600,000(c) 28,993,524 United Pan-Europe Communications (U.S. Dollar) Sr Nts Series B 02-01-10 11.25 6,900,000(c) 5,571,750 Vodafone Group Company Guaranty 05-01-08 6.65 10,600,000 10,650,138 (U.S. Dollar) 02-15-10 7.75 22,700,000(c) 24,245,870 Total 250,247,474 Municipal bonds (0.8%) Atlanta Downtown Development Authority Lease Revenue Taxable Bonds Atlanta Federal Center 02-01-09 6.25 9,150,000 9,389,639 Denver City & County School District #1 Taxable-Pension-School Facilities Lease (AMBAC Insured) 12-15-12 6.94 7,700,000(k) 8,190,798 New Jersey Economic Development Authority State Pension Funding Revenue Bond (MBIA Insured) 02-15-29 7.43 4,600,000(k) 5,094,132 St. Paul Sales Tax Revenue Bonds RiverCentre Arena (FSA Insured) 11-01-19 6.94 5,000,000(k) 5,057,400 Total 27,731,969 Total bonds (Cost: $3,352,259,803) $3,331,737,208 Common stocks (0.1%) Issuer Shares Value(a) Celcaribe 995,112(b,d) $1,492,668 Continucare 945,122(b) 255,183 Intermedia Communications 4,336(b) 68,563 PhoneTel Technologies 418,000(b) 81,510 Total common stocks (Cost: $7,941,029) $1,897,924 Preferred stocks & other (1.8%) Issuer Shares Value(a) Asia Pulp & Paper Warrants 8,500(c,d) $850 CNF Trust I 5.00% Cv Series A 63,950 3,152,735 Coastal 6.63% Cv PRIDES 68,880(p) 3,220,140 Coltec Capital Trust 5.25% Cv 47,520 2,067,120 Dairy Mart Warrants 51,666(h) 517 Dominion Resources 9.50% Cv 49,960 3,122,500 Georgia-Pacific Group 7.50% Cm Cv 141,760 4,784,400 Global Crossing 6.38% Cv 64,730(b,c) 3,746,249 Intermedia Communications 13.50% Pay-in-kind Series B 5,456(n) 5,510,055 Kerr-McGee 5.50% Cv 60,690 3,178,942 Metlife Capital 8.00% Cm Cv 29,460 2,857,915 Nextel Communications 13.00% Cm Pay-in-kind Series D 7,452(n) 7,228,440 Pharmacia 6.50% Cv ACES 64,330(l) 3,184,335 SI Financing Trust 9.50% Cm 400,000 10,227,999 Wayland Investment Fund LLC 6,000,000(e,h) 7,620,420 Wendys Financing 5.00% Cm Cv Series A 84,960 4,443,408 Total preferred stocks & other (Cost: $61,651,429) $64,346,025 Short-term securities (6.4%) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity U.S. government agencies (4.3%) Federal Home Loan Bank Disc Nts 03-21-01 5.43% $2,400,000 $2,392,426 04-06-01 5.29 30,000,000 29,837,816 Federal Home Loan Mtge Corp Disc Nts 03-01-01 6.10 4,800,000 4,799,126 04-10-01 5.33 15,000,000 14,909,458 Federal Natl Mtge Assn Disc Nts 03-06-01 5.47 16,900,000 16,884,592 03-08-01 6.18 9,400,000 9,387,792 03-15-01 5.39 21,900,000 21,850,906 03-19-01 5.40 10,000,000 9,971,605 03-20-01 5.49 10,000,000 9,969,610 03-23-01 5.38 30,000,000 29,897,265 04-30-01 5.06 6,300,000 6,246,091 Total 156,146,687 Commercial paper (2.1%) Alabama Power 04-12-01 5.56 5,000,000 4,967,100 Amsterdam Funding 03-19-01 5.52 5,000,000(i) 4,985,486 Electric Data Systems 04-04-01 5.18 7,900,000(i) 7,860,445 Gannett 03-12-01 5.48 5,000,000(i) 4,990,883 Kredietbank North America Finance 03-08-01 5.49 12,700,000 12,684,534 03-30-01 5.14 7,800,000 7,766,720 Morgan Stanley, Dean Witter, Discover & Co 04-30-01 5.15 7,400,000 7,336,679 Paccar Financial 05-24-01 5.25 10,400,000 10,275,994 Preferred Receivables 05-21-01 5.30 8,100,000(i) 8,006,827 SBC Communications 04-04-01 5.38 6,800,000(i) 6,764,630 Windmill Funding 04-25-01 5.04 3,100,000(i) 3,075,889 Total 78,715,187 Total short-term securities (Cost: $234,889,030) $234,861,874 Total investments in securities (Cost: $3,656,741,291)(r) $3,632,843,031 See accompanying notes to investments in securities. Notes to investments in securities (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. For long-term debt securities, item identified is in default as to payment of interest and/or principal. (c) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in the currency indicated. As of Feb. 28, 2001, the value of foreign securities represented 9.70% of net assets. (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) The share amount for Limited Liability Companies (LLC) or Limited Partnerships (LP) represents capital contributions. (f) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition. (g) For those zero coupon bonds that become coupon paying at a future date, the interest rate disclosed represents the annualized effective yield from the date of acquisition to interest reset date disclosed. (h) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). Information concerning such security holdings at Feb. 28, 2001, is as follows: Security Acquisition Cost dates Dairy Mart Warrants 11-28-95 $ -- ECM Funding LP 11.92% 2002 04-13-92 thru 02-09-00 1,078,345 Geotek Communications Escrow Cv Sr Sub Nts 2001 12-20-00 -- News Corp* 10.15% 2010 01-29-93 thru 07-11-00 3,510,016 Wayland Investment Fund LLC 05-17-00 6,671,880 * Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. (i) 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. (j) 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. (k) The following abbreviations are used in the portfolio security descriptions to identify the insurer of the issue: AMBAC -- American Municipal Bond Association Corporation FSA -- Financial Security Assurance MBIA -- Municipal Bond Investors Assurance (l) ACES (Automatically Convertible Equity Securities) are structured as convertible preferred securities. Investors receive an enhanced yield but based upon a specific formula, potential appreciation is limited. ACES pay dividends, have voting rights, are noncallable for at least three years and upon maturity, convert into shares of common stock. (m) At Feb. 28, 2001, the cost of securities purchased, including interest purchased, on a when-issued basis was $43,640,625. (n) Pay-in-kind securities are securities in which the issuer makes interest or dividend payments in cash or in additional securities. The securities usually have the same terms as the original holdings. (o) Interest rate varies either based on a predetermined schedule or to reflect current market conditions; rate shown is the effective rate on Feb. 28, 2001. (p) PRIDES (Preferred Redeemable Increased Dividend Equity Securities) are structured as convertible preferred securities. Investors receive an enhanced yield but based upon a specific formula, potential appreciation is limited. PRIDES pay dividends, have voting rights, are noncallable for three years and upon maturity, convert into shares of common stock. (q) Negligible market value. (r) At Feb. 28, 2001, the cost of securities for federal income tax purposes was approximately $3,656,741,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $ 105,280,000 Unrealized depreciation (129,178,000) ------------ Net unrealized depreciation $ (23,898,000) ------------- AXP Bond Fund 70100 AXP Financial Center Minneapolis, MN 55474 Ticker Symbol Class A: INBNX Class B: ININX Class C: N/A Class Y: IDBYX PRSRT STD AUTO U.S. POSTAGE PAID AMERICAN EXPRESS S-6490 P (4/01) This report must be accompanied or preceded by the Fund's current prospectus. 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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