PROSPECTUS SUPPLEMENT -- June 1, 2004*

Fund (date)                                                  Prospectus Form #
AXP(R) Core Bond Fund (Sept. 29, 2003)                       S-6267-99 C (9/03)
AXP(R) Diversified Bond Fund (Oct. 30, 2003)                 S-6495-99 W (10/03)
AXP(R) Global Technology Fund (Dec. 30, 2003)                S-6395-99 G (12/03)
AXP(R) Limited Duration Bond Fund (Sept. 29, 2003)           S-6265-99 C (9/03)
AXP(R) Partners Small Cap Value Fund (July 30, 2003)         S-6239-99 E (7/03)
AXP(R) Selective Fund (July 30, 2003)                        S-6376-99 X (7/03)
AXP(R) Short Duration U.S. Government Fund (July 30, 2003)   S-6042-99 X (7/03)
AXP(R) Small Company Index Fund (Mar. 31, 2004)              S-6357-99 M (3/04)
AXP(R) U.S. Government Mortgage Fund (July 30, 2003)         S-6245-99 D (7/03)

The footnotes under the "Fees and Expenses" sections for the funds listed below
have been modified as follows:

Core Bond

(d)  Other expenses are based on estimated  amounts for the current fiscal year.
     AEFC has  contractually  agreed to waive certain fees and to absorb certain
     expenses through July 31, 2004.  Under this agreement,  total expenses will
     not  exceed  0.95%  for Class A;  1.70% for Class B;  1.70% for Class C and
     0.79% for Class Y.

Global Technology

(d)  Both in this  table and the  following  example,  fund  operating  expenses
     include  expenses  charged  by both the Fund and its  Master  Portfolio  as
     described  under  "Management."  AEFC  has  contractually  agreed  to waive
     certain fees and to absorb certain  expenses  through Oct. 31, 2004.  Under
     this agreement, total expenses will not exceed 1.82% for Class A; 2.59% for
     Class B; 2.59% for Class C and 1.63% for Class Y.

Limited Duration Bond

(d)  Other expenses are based on estimated  amounts for the current fiscal year.
     AEFC has  contractually  agreed to waive certain fees and to absorb certain
     expenses through July 31, 2004.  Under this agreement,  total expenses will
     not  exceed  0.95%  for Class A;  1.71% for Class B;  1.71% for Class C and
     0.79% for Class Y.

Partners Small Cap Value

(d)  Other expenses are based on estimated  amounts for the current fiscal year.
     AEFC has  contractually  agreed to waive certain fees and to absorb certain
     expenses  through May 31, 2005.  Under this agreement,  total expenses will
     not  exceed  1.59%  for Class A;  2.35% for Class B;  2.35% for Class C and
     1.42% for Class Y.

U.S. Government Mortgage

(d)  Other expenses are based on estimated  amounts for the current fiscal year.
     AEFC has  contractually  agreed to waive certain fees and to absorb certain
     expenses  through May 31, 2005.  Under this agreement,  total expenses will
     not  exceed  0.95%  for Class A;  1.70% for Class B;  1.70% for Class C and
     0.77% for Class Y.

New expense cap information will be added at the end of the "Fees and Expenses"
section for the funds listed below as follows:

Diversified Bond

AEFC has contractually agreed to waive certain fees and to absorb certain
expenses through Aug. 31, 2004. Under this agreement, total expenses will not
exceed 0.95% for Class A; 1.70% for Class B; 1.70% for Class C and 0.78% for
Class Y.


Selective

AEFC has contractually agreed to waive certain fees and to absorb certain
expenses through May 31, 2005. Under this agreement, total expenses will not
exceed 0.95% for Class A; 1.70% for Class B; 1.70% for Class C and 0.78% for
Class Y.

Short Duration U.S. Government

AEFC has contractually agreed to waive certain fees and to absorb certain
expenses through May 31, 2005. Under this agreement, total expenses will not
exceed 0.93% for Class A; 1.68% for Class B; 1.68% for Class C and 0.76% for
Class Y.

Small Company Index

AEFC has contractually agreed to waive certain fees and to absorb certain
expenses through Jan. 31, 2005. Under this agreement, total expenses will not
exceed 0.94% for Class A; 1.70% for Class B and 0.78% for Class Y.




S-6357-21 C (6/04)

* Valid until next prospectus update
Destroy March 31, 2005