Prospectus Supplement - Jan. 31, 2005*

AXP(R) Diversified Bond Fund (Oct. 29, 2004)                        S-6495-99 X

The following language replaces the first paragraph under the section "Principal
Investment Strategies":

Under normal market conditions, the Fund invests at least 80% of its net assets
in bonds and other debt securities. At least 50% of the Fund's net assets will
be invested in securities like those included in the Lehman Brothers Aggregate
Bond Index (the "Index"), which are investment grade and denominated in U.S.
dollars. The Index includes securities issued by the U.S. government, corporate
bonds, and mortgage- and asset-backed securities. Although the Fund emphasizes
high- and medium-quality debt securities, it will assume some credit risk to
achieve higher yield and/or capital appreciation by buying lower-quality bonds.
The Fund may invest up to 15% in foreign investments, which may include
investments in emerging markets. The Fund will provide shareholders with at
least 60 days' notice of any change in the 80% policy.

The rest of the section remains unchanged.





S-6495-23 A (1/05)

Valid until next update
*Destroy Oct. 28, 2005