N-Q 1 fixedincome-nq.txt AXP FIXED INCOME SERIES, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-2503 ------------ AXP FIXED INCOME SERIES, INC. -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 50606 AXP Financial Center, Minneapolis, Minnesota 55474 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Leslie L. Ogg - 901 S. Marquette Avenue, Suite 2810, Minneapolis, MN 55402-3268 -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (612) 330-9283 ----------------- Date of fiscal year end: 8/31 -------------- Date of reporting period: 5/31 -------------- PORTFOLIO HOLDINGS FOR AXP(R) DIVERSIFIED BOND FUND AT MAY 31, 2005 Investments in Securities AXP Diversified Bond Fund May 31, 2005 (Unaudited) (Percentages represent value of investments compared to net assets) Bonds (100.1%) Issuer Coupon Principal Value(a) rate amount Foreign government (2.1%) Bundesrepublik Deutschland (European Monetary Unit) 01-04-07 6.00% 12,913,000(c) $16,836,756 Pemex Project Funding Master Trust (U.S. Dollar) 12-15-14 7.38 10,926,000(c) 12,242,583 United Kingdom Treasury (British Pound) 12-07-06 7.50 8,906,000(c) 16,941,833 United Mexican States (U.S. Dollar) 09-27-34 6.75 6,891,000(c) 7,280,342 Total 53,301,514 U.S. government obligations & agencies (23.5%) Federal Home Loan Bank 05-22-06 2.88 27,255,000 27,052,277 04-18-08 4.13 5,615,000 5,654,412 Federal Home Loan Mtge Corp 06-15-08 3.88 51,935,000 51,985,377 03-18-09 3.76 6,890,000 6,840,867 01-15-12 5.75 38,075,000 41,574,549 11-15-13 4.88 17,226,000 17,961,826 Federal Natl Mtge Assn 04-13-06 2.15 33,200,000 32,788,752 08-15-08 3.25 86,170,000 84,469,866 02-15-09 3.25 2,990,000 2,916,679 U.S. Treasury 08-15-07 2.75 39,415,000 38,702,140 05-15-15 4.13 35,115,000 35,455,194 08-15-23 6.25 90,504,000(o) 111,503,734 02-15-26 6.00 109,577,000 133,114,688 02-15-31 5.38 3,635,000 4,209,784 Total 594,230,145 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Commercial mortgage-backed(f)/ Asset-backed securities (13.6%) AAA Trust Series 2005-2 Cl A1 11-26-35 3.19% $19,507,491(d,k) $19,507,490 Aesop Funding II LLC Series 2002-1A Cl A1 (AMBAC) 10-20-06 3.85 5,908,333(d,l) 5,914,145 Series 2004-2A Cl A1 (FGIC) 04-20-08 2.76 2,000,000(d,l) 1,960,250 AmeriCredit Automobile Receivables Trust Series 2002-C Cl 4A (FSA) 02-12-09 3.55 2,660,000(l) 2,652,709 Series 2004-CA Cl A3 (AMBAC) 03-06-09 3.00 5,500,000(l) 5,451,017 Series 2004-DF Cl A3 (FSA) 07-06-09 2.98 4,300,000(l) 4,236,846 Series 2005-BM Cl A3 (MBIA) 02-06-10 4.05 8,750,000(g,l) 8,729,489 ARG Funding Series 2005-1A Cl A3 (MBIA) 04-20-10 4.29 6,300,000(d,l) 6,277,605 Banc of America Commercial Mtge Series 2004-5 Cl A4 11-10-41 4.94 3,600,000 3,687,084 Series 2005-1 Cl A4 11-10-42 5.03 3,600,000 3,711,164 Bear Stearns Commercial Mtge Securities Series 2004-PWR6 Cl A6 11-11-41 4.83 5,000,000 5,074,050 Series 2004-T16 Cl A3 02-13-46 4.03 3,240,000 3,213,610 California State Teachers' Retirement System Trust Series 2002-C6 Cl A3 11-20-14 4.46 6,680,945(d) 6,729,734 Capital Auto Receivables Asset Trust Series 2005-1 Cl A4 07-15-09 4.05 7,100,000(g) 7,104,438 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Commercial mortgage-backed(f)/ Asset-backed securities (cont.) Capital One Auto Finance Trust Series 2005-BSS Cl A3 11-15-09 4.08% $4,700,000(g) $4,699,786 Carmax Auto Owner Trust Series 2005-1 Cl A4 03-15-10 4.35 2,400,000 2,416,606 Citigroup Commercial Mtge Trust Series 2005-EMG Cl A1 09-20-51 4.15 13,000,000(d) 12,972,577 Commercial Mtge Pass-Through Ctfs Series 2004-CNL Cl A1 09-15-14 3.31 6,000,000(d,k) 6,000,600 Series 2004-LB3A Cl A3 07-10-37 5.09 5,200,000 5,360,333 Series 2004-LB3A Cl A4 07-10-37 5.23 4,450,000 4,625,544 CS First Boston Mtge Securities Series 2002-CKS4 Cl A1 11-15-36 4.49 5,014,185 5,046,870 Series 2004-C1 Cl A2 01-15-37 3.52 3,000,000 2,937,306 Federal Natl Mtge Assn 11-01-10 4.47 1,653,262 1,653,907 11-01-12 4.84 1,177,006 1,218,590 10-01-13 5.11 539,060 561,344 GE Capital Commercial Mtge Series 2001-3 Cl A1 06-10-38 5.56 7,619,870 7,882,737 Series 2004-C2 Cl A2 03-10-40 4.12 3,000,000 2,975,310 GMAC Commercial Mtge Securities Series 1999-C1 Cl B 05-15-33 6.30 5,800,000 6,188,948 Series 2004-C3 Cl A4 12-10-41 4.55 4,700,000 4,709,239 Series 2004-C3 Cl A5 12-10-41 4.86 5,500,000 5,585,690 See accompanying notes to investments in securities. -------------------------------------------------------------------------------- 1 -- AXP DIVERSIFIED BOND FUND -- PORTFOLIO HOLDINGS AT MAY 31, 2005 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Commercial mortgage-backed(f)/ Asset-backed securities (cont.) Greenwich Capital Commercial Funding Series 2005-GG3 Cl A1 08-10-42 3.92% $3,536,041 $3,524,301 Honda Auto Receivables Owner Trust Series 2005-1 Cl A3 10-21-08 3.53 4,500,000 4,477,905 JPMorgan Chase Commercial Mtge Securities Series 2002-CIB5 Cl A1 10-12-37 4.37 3,856,372 3,874,430 Series 2003-CB6 Cl A1 07-12-37 4.39 7,809,419 7,817,150 Series 2003-CB6 Cl A2 07-12-37 5.26 4,200,000 4,384,645 Series 2003-LN1 Cl A1 10-15-37 4.13 3,503,311 3,467,320 Series 2003-ML1A Cl A1 03-12-39 3.97 3,060,796 3,022,750 Series 2004-CBX Cl A3 01-12-37 4.18 3,000,000 2,981,328 Series 2004-CBX Cl A5 01-12-37 4.65 5,000,000 5,031,168 Series 2005-CB11 Cl A3 08-12-37 5.20 4,700,000 4,879,381 LB-UBS Commercial Mtge Trust Series 2002-C2 Cl A3 06-15-26 5.39 7,360,000 7,697,220 Series 2002-C4 Cl A4 09-15-26 4.56 5,200,000 5,228,924 Series 2002-C4 Cl A5 09-15-31 4.85 6,000,000 6,108,921 Series 2003-C8 Cl A2 11-15-27 4.21 7,500,000 7,494,600 Series 2003-C8 Cl A3 11-15-27 4.83 5,250,000 5,358,413 Series 2004-C2 Cl A3 03-15-29 3.97 3,275,000 3,180,975 Series 2004-C4 Cl A3 06-15-29 4.99 3,000,000(k) 3,111,796 Series 2004-C6 Cl A2 08-15-29 4.19 5,250,000 5,218,658 Series 2004-C6 Cl A4 08-15-29 4.58 1,275,000 1,283,882 Series 2004-C7 Cl A2 10-15-29 3.99 5,400,000 5,332,500 Series 2004-C8 Cl A2 12-15-29 4.20 5,800,000 5,782,136 Long Beach Auto Receivables Trust Series 2004-C Cl A3 (FSA) 09-15-09 3.40 4,000,000(l) 3,971,600 Metris Master Trust Series 2001-2 Cl C 11-20-09 4.99 3,425,000(d,k) 3,425,000 Series 2004-2 Cl D 10-20-10 6.53 1,200,000(d,k) 1,219,560 Series 2004-2 Cl M 10-20-10 3.48 2,700,000(k) 2,701,755 Series 2005-1A Cl D 03-21-11 4.99 1,375,000(d,k) 1,367,850 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Commercial mortgage-backed(f)/ Asset-backed securities (cont.) Morgan Stanley Auto Loan Trust Series 2004-HB2 Cl A3 03-16-09 2.94% $4,300,000 $4,238,403 Morgan Stanley Capital I Series 2003-IQ4 Cl A1 05-15-40 3.27 5,656,002 5,416,572 Series 2004-HQ4 Cl A5 04-14-40 4.59 3,600,000 3,620,412 Series 2004-IQ8 Cl A2 06-15-40 3.96 5,115,000 5,082,505 Morgan Stanley, Dean Witter Capital I Series 2002-TOP7 Cl A2 01-15-39 5.98 5,900,000 6,406,614 Nissan Auto Lease Trust Series 2004-A Cl A3 08-15-07 2.90 3,000,000 2,967,841 Nissan Auto Receivables Owner Trust Series 2003-A Cl A4 07-15-08 2.61 2,500,000 2,466,050 Series 2005-A Cl A3 10-15-08 3.54 5,475,000 5,442,205 Popular ABS Mtge Pass-Through Trust Series 2005-A Cl AF2 06-25-35 4.49 2,660,000 2,666,452 Prudential Commercial Mtge Trust Series 2003-PWR1 Cl A1 02-11-36 3.67 4,398,585 4,303,520 Residential Asset Securities Series 2002-KS1 Cl AI4 (AMBAC) 11-25-29 5.86 2,260,181(l) 2,261,017 Triad Auto Receivables Owner Trust Series 2005-A Cl A3 (AMBAC) 03-12-10 4.05 7,600,000(l) 7,605,776 Wachovia Bank Commercial Mtge Trust Series 2005-C16 Cl A2 10-15-41 4.38 2,000,000 2,003,393 Series 2005-C16 Cl A3 10-15-41 4.62 5,500,000 5,531,756 WFS Financial Owner Trust Series 2004-3 Cl A3 03-17-09 3.30 5,000,000 4,955,410 World Omni Auto Receivables Trust Series 2005-A Cl A3 06-12-09 3.54 7,500,000 7,463,025 Total 343,460,137 Mortgage-backed securities (37.8%)(f,h) Adjustable Rate Mtge Trust Series 2004-2 Cl 6A1 02-25-35 5.28 6,168,914(j) 6,261,483 Series 2005-3 Cl 7A1 07-25-35 5.09 6,322,750(j) 6,392,604 Banc of America Mtge Securities Series 2004-E Cl B1 06-25-34 4.04 2,949,433(j) 2,957,013 Series 2004-F Cl B1 07-25-34 4.14 5,306,348(j) 5,372,572 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Mortgage-backed securities (cont.) Bank of America Alternative Loan Trust Series 2003-11 Cl 1A1 01-25-34 6.00% $7,816,600 $7,961,911 Series 2003-11 Cl 4A1 01-25-19 4.75 3,897,485 3,897,904 Series 2004-3 Cl 1A1 04-25-34 6.00 12,323,739 12,689,606 Countrywide Alternative Loan Trust Series 2003-11T1 Cl A1 07-25-18 4.75 4,708,478 4,695,324 Series 2004-28CB Cl 6A1 01-25-35 6.00 7,528,966 7,759,680 Series 2005-6CB Cl 1A1 04-25-35 7.50 6,288,905 6,612,463 Countrywide Home Loans Series 2004-12 Cl 1M 08-25-34 4.65 3,546,039(j) 3,556,251 CS First Boston Mtge Securities Series 2003-29 Cl 8A1 11-25-18 6.00 4,160,818 4,258,339 Series 2004-AR5 Cl CB1 06-25-34 4.43 3,373,534(j) 3,329,110 Federal Home Loan Mtge Corp 05-01-13 4.50 3,448,126 3,461,167 02-01-17 6.50 2,086,735 2,174,092 04-01-17 8.00 19,199 20,699 05-01-17 6.00 2,204,426 2,285,241 05-01-18 5.50 4,836,222 4,969,477 08-01-18 5.00 15,091,802 15,287,735 10-01-18 5.00 9,582,744 9,703,886 02-01-23 6.00 16,086,676 16,622,395 10-01-23 5.50 6,709,154 6,859,103 12-01-23 6.00 12,576,797 12,985,901 08-01-24 8.00 661,675 717,158 10-01-28 7.00 89,828 94,868 12-01-30 5.50 2,503,690 2,551,880 04-01-33 5.50 12,563,627 12,805,840 04-01-33 6.00 8,847,230 9,175,387 06-01-33 5.50 8,678,174 8,818,218 07-01-33 5.00 5,459,758 5,460,611 Collateralized Mtge Obligation 04-15-15 4.50 13,700,000 13,788,639 01-15-18 6.50 4,098,406 4,372,034 03-15-22 7.00 1,922,099 1,919,391 02-15-27 5.00 10,070,000 10,195,506 10-15-27 5.00 21,553,000 21,992,375 06-15-28 5.00 13,925,000 14,226,533 12-15-28 5.50 6,005,000 6,184,799 02-15-33 5.50 9,300,542 9,592,762 Interest Only 02-15-14 7.40 4,054,186(i) 300,253 10-15-22 14.56 11,429,796(i) 738,254 Federal Natl Mtge Assn 03-01-08 7.00 1,747,250 1,815,503 08-01-11 8.50 1,993,797 2,118,381 02-01-13 4.83 6,345,102 6,485,266 02-01-13 5.02 5,765,019 5,959,783 See accompanying notes to investments in securities. -------------------------------------------------------------------------------- 2 -- AXP DIVERSIFIED BOND FUND -- PORTFOLIO HOLDINGS AT MAY 31, 2005 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Mortgage-backed securities (cont.) Federal Natl Mtge Assn (cont.) 04-01-13 7.00% $5,324,514 $5,532,506 04-01-14 6.50 1,203,346 1,256,161 08-01-16 6.00 5,113,412 5,301,008 12-01-16 5.50 7,530,439 7,741,439 06-01-17 6.50 4,686,184 4,900,715 08-01-17 6.00 9,906,571 10,294,871 08-01-17 6.50 3,072,916 3,216,915 09-01-17 6.00 1,450,773 1,504,011 09-01-17 6.50 3,295,401 3,439,831 12-01-17 6.50 1,527,341 1,594,281 01-01-18 5.50 6,857,451 7,058,266 02-01-18 5.50 11,362,092 11,689,122 03-01-18 5.50 17,808,398 18,353,759 04-01-18 5.00 7,694,774 7,789,641 05-01-18 5.50 3,506,412 3,609,113 05-01-18 6.00 11,573,881 11,999,764 06-01-18 4.50 6,514,659 6,499,128 06-01-18 5.00 7,957,952 8,063,404 07-01-18 4.50 4,170,647 4,160,704 08-01-18 4.50 8,563,364 8,535,935 10-01-18 5.00 5,023,774 5,087,278 10-01-18 6.00 2,567,094 2,661,546 12-01-18 5.00 6,414,912 6,493,999 06-01-20 4.50 4,550,000(g) 4,528,670 06-01-20 6.00 24,000,000(g) 24,862,511 04-01-23 8.50 761,949 823,349 07-01-23 5.00 7,589,799 7,646,533 09-01-23 5.50 11,080,842 11,316,902 09-01-23 6.50 705,145 736,988 01-01-24 6.50 166,331 173,842 05-01-24 6.00 8,934,594 9,236,533 06-01-24 9.00 640,887 694,345 02-01-25 8.00 220,605 238,732 09-01-25 8.00 476,185 515,114 03-01-26 7.00 1,150,789 1,219,330 07-01-28 5.50 3,109,468 3,167,729 08-01-28 5.50 5,432,794 5,534,585 09-01-28 7.50 1,417,903 1,524,224 12-01-28 5.50 10,787,522 10,989,642 01-01-29 6.50 5,254,004 5,476,953 04-01-29 5.00 18,515,272 18,514,752 05-01-29 6.50 3,710,095 3,864,764 06-01-29 7.00 9,254 9,783 09-01-29 7.00 6,469,485 6,838,911 10-01-30 7.00 2,370,691 2,506,064 09-01-31 7.00 1,115,297 1,187,989 03-01-32 5.50 1,963,345 2,000,131 06-01-32 7.00 3,874,695 4,113,396 07-01-32 6.50 2,585,212 2,699,836 08-01-32 7.00 1,652,553 1,746,001 09-01-32 6.00 17,012,133 17,515,964 09-01-32 6.50 3,012,997 3,155,864 10-01-32 6.00 1,988,104 2,053,835 10-01-32 6.50 3,068,762 3,192,726 11-01-32 6.00 1,972,750 2,038,000 11-01-32 7.00 1,865,949 1,970,473 01-01-33 6.00 13,952,646 14,348,743 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Mortgage-backed securities (cont.) Federal Natl Mtge Assn (cont.) 02-01-33 6.50% $666,909 $698,872 03-01-33 5.50 16,701,687 16,988,145 03-01-33 6.00 5,321,177 5,511,839 03-01-33 6.50 7,126,671 7,407,173 04-01-33 5.50 14,139,775 14,396,841 04-01-33 6.00 26,971,689 27,987,383 05-01-33 5.50 24,276,333 24,672,460 07-01-33 4.85 6,615,675(j) 6,620,306 07-01-33 5.00 707,494 708,221 07-01-33 5.50 9,610,598 9,755,628 08-01-33 5.50 978,079 992,838 11-01-33 7.00 7,620,934 8,046,564 12-01-33 4.96 8,717,885(j) 8,807,544 12-01-33 5.50 6,218,281 6,312,119 12-01-33 6.50 18,757,506 19,495,789 01-01-34 6.50 1,355,475 1,415,515 07-01-34 6.50 10,271,403 10,675,908 08-01-34 4.53 6,421,919(j) 6,435,598 09-01-34 4.84 1,876,589(j) 1,893,674 12-01-34 4.40 2,646,833(j) 2,640,613 Collateralized Mtge Obligation 12-25-26 8.00 4,484,739 4,754,450 Interest Only 12-25-12 13.29 3,617,977(i) 188,632 12-25-31 1.19 3,177,371(i) 512,316 First Horizon Alternative Mtge Securities Series 2004-AA4 Cl A1 10-25-34 5.43 5,924,098 6,047,083 Series 2005-AA2 Cl 2A1 04-25-35 5.45 6,406,834 6,544,773 Series 2005-AA3 Cl 3A1 05-25-35 5.44 6,698,461 6,814,411 Govt Natl Mtge Assn 02-15-24 8.00 229,606 248,684 06-15-26 8.00 246,070 266,509 08-15-26 8.00 245,691 266,098 07-15-33 5.00 7,282,181 7,347,141 10-15-33 5.00 5,878,624 5,930,087 10-15-33 5.50 15,611,059 15,962,189 Collateralized Mtge Obligation Interest Only 01-20-32 0.00 2,698,834(i) 288,899 08-20-32 0.00 11,521,816(i) 1,607,433 Harborview Mtge Loan Trust Series 2004-3 Cl B1 05-19-34 4.39 4,350,867(j) 4,298,430 IndyMac Index Mtge Loan Trust Series 2005-AR3 Cl 3A1 04-25-35 5.34 3,955,830(j) 4,015,444 Series 2005-AR8 Cl AX1 Interest Only 04-25-35 4.50 224,701,000(i,j) 2,949,201 Master Adjustable Rate Mtge Trust Series 2004-5 Cl B1 07-25-34 4.41 4,161,751(j) 4,176,941 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Mortgage-backed securities (cont.) Master Alternative Loans Trust Series 2004-4 Cl 2A1 05-25-34 6.00% $1,696,731 $1,741,101 Series 2004-7 Cl 8A1 08-25-19 5.00 5,061,437 5,088,212 Series 2004-8 Cl 7A1 09-25-19 5.00 7,102,492 7,142,408 Series 2005-1 Cl 2A1 02-25-35 6.00 12,111,196 12,461,374 Structured Adjustable Rate Mtge Loan Series 2004-3AC Cl B1 03-25-34 4.93 5,568,989(j) 5,670,790 Series 2004-5 Cl B1 05-25-34 4.62 4,238,722(j) 4,192,943 Structured Asset Securities Series 2003-33H Cl 1A1 10-25-33 5.50 16,150,567 16,230,719 Washington Mutual Series 2003-AR10 Cl A7 10-25-33 4.07 6,650,000(j) 6,655,105 Series 2004-CB2 Cl 6A 07-25-19 4.50 4,402,681 4,316,256 Series 2004-CB4 Cl 22A 12-25-19 6.00 5,460,658 5,639,091 Wells Fargo Mtge Backed Securities Trust Series 2005-5 Cl 2A1 05-25-35 5.50 10,983,295 11,175,748 Series 2005-AR1 Cl 1A1 02-25-35 4.57 10,283,381(j) 10,283,998 Total 956,933,504 Aerospace & defense (0.1%) L-3 Communications 06-15-12 7.63 2,000,000 2,130,000 07-15-13 6.13 190,000 188,100 Moog Sr Sub Nts 01-15-15 6.25 165,000 165,000 Total 2,483,100 Automotive & related (0.5%) Ford Motor 10-01-28 6.63 2,095,000 1,654,889 02-01-29 6.38 2,300,000 1,776,313 Lear Series B 08-01-14 5.75 7,210,000 6,572,643 Nissan Motor Acceptance 03-08-10 4.63 1,855,000(d) 1,856,094 Total 11,859,939 Banks and savings & loans (2.9%) Banknorth Group Sr Nts 05-01-08 3.75 3,960,000 3,927,647 JPMorgan Chase & Co 03-01-15 4.75 6,760,000 6,729,506 See accompanying notes to investments in securities. -------------------------------------------------------------------------------- 3 -- AXP DIVERSIFIED BOND FUND -- PORTFOLIO HOLDINGS AT MAY 31, 2005 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Banks and savings & loans (cont.) KFW Intl Finance (U.S. Dollar) 10-17-05 2.50% $18,400,000(c) $18,328,277 Washington Mutual Bank FA Sub Nts 06-15-11 6.88 4,790,000 5,347,249 08-15-14 5.65 8,981,000 9,503,155 Wells Fargo Bank NA Sub Nts 02-01-11 6.45 27,852,000 30,626,978 Total 74,462,812 Beverages & tobacco (--%) Cott Beverages 12-15-11 8.00 1,135,000 1,203,100 Broker dealers (0.3%) Goldman Sachs Group 07-15-13 4.75 5,900,000 5,877,049 Morgan Stanley 03-01-13 5.30 2,480,000 2,559,583 Total 8,436,632 Building materials & construction (0.1%) Louisiana-Pacific Sr Nts 08-15-10 8.88 2,260,000 2,564,671 Norcraft Companies/Finance Sr Sub Nts 11-01-11 9.00 570,000 572,850 Total 3,137,521 Cable (0.8%) Comcast 03-15-11 5.50 13,580,000 14,156,199 CSC Holdings Sr Nts 12-15-07 7.88 1,500,000 1,565,625 DIRECTV Holdings LLC/Finance Sr Nts 03-15-13 8.38 406,000 449,645 Echostar DBS 10-01-14 6.63 935,000(d) 937,338 Sr Nts 10-01-08 5.75 750,000 746,250 Kabel Deutschland (U.S. Dollar) 07-01-14 10.63 480,000(c,d) 512,400 Videotron Ltee (U.S. Dollar) 01-15-14 6.88 1,055,000(c) 1,056,319 Total 19,423,776 Cellular telecommunications (0.1%) Nextel Communications Sr Nts 10-31-13 6.88 1,875,000 2,001,563 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Chemicals (0.2%) Airgas 10-01-11 9.13% $1,500,000 $1,620,000 Compass Minerals Group 08-15-11 10.00 1,000,000 1,090,000 Georgia Gulf Sr Nts 12-15-13 7.13 1,525,000 1,570,750 INVISTA 05-01-12 9.25 600,000(d) 652,500 MacDermid 07-15-11 9.13 575,000 618,125 Total 5,551,375 Energy (0.7%) Chesapeake Energy Sr Nts 06-15-14 7.50 152,000 164,540 08-15-14 7.00 1,045,000 1,102,475 01-15-16 6.88 165,000 172,425 Encore Acquisition Sr Sub Nts 04-15-14 6.25 1,175,000 1,145,625 Newfield Exploration Sr Nts 03-01-11 7.63 2,500,000 2,712,500 Sr Sub Nts 08-15-12 8.38 380,000 412,300 Nexen (U.S. Dollar) 03-10-35 5.88 4,695,000(c) 4,634,683 Occidental Petroleum Sr Nts 01-15-12 6.75 5,520,000 6,215,592 Peabody Energy Series B 03-15-13 6.88 1,640,000 1,722,000 Total 18,282,140 Energy equipment & services (0.6%) Grant Prideco Escrow 12-15-09 9.00 800,000 880,000 Halliburton 10-15-10 5.50 12,305,000 12,866,550 Key Energy Services Series C 03-01-08 8.38 1,250,000 1,287,500 Pride Intl Sr Nts 07-15-14 7.38 495,000 543,263 Total 15,577,313 Finance companies (1.1%) Citigroup Sr Nts 05-29-15 4.70 23,535,000(g) 23,591,932 GMAC 09-15-11 6.88 5,313,000 4,633,435 Total 28,225,367 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Financial services (1.9%) Archstone-Smith Operating Trust 05-01-15 5.25% $8,470,000 $8,590,790 BCP Crystal US Holdings Sr Sub Nts 06-15-14 9.63 225,000 252,563 Capital One Financial 06-01-15 5.50 7,060,000 7,119,142 Pricoa Global Funding I 06-15-08 4.35 6,885,000(d) 6,912,196 01-15-10 4.20 26,410,000(d) 26,255,765 Total 49,130,456 Food (0.7%) Burns Philp Capital Property (U.S. Dollar) Sr Sub Nts 02-15-11 10.75 940,000(c) 1,038,700 Del Monte Sr Sub Nts 12-15-12 8.63 385,000 419,650 Kraft Foods 11-01-11 5.63 6,510,000 6,854,574 06-01-12 6.25 7,801,000 8,533,818 Total 16,846,742 Health care services (0.7%) Cardinal Health 06-15-15 4.00 14,919,000 13,775,130 Community Health Systems Sr Sub Nts 12-15-12 6.50 310,000 308,450 DaVita Sr Nts 03-15-13 6.63 465,000(d) 469,650 HCA Sr Nts 03-15-14 5.75 2,000,000 1,958,572 NeighborCare Sr Sub Nts 11-15-13 6.88 1,160,000 1,183,200 Triad Hospitals Sr Nts 05-15-12 7.00 1,000,000 1,040,000 Total 18,735,002 Home building (0.2%) DR Horton 12-01-07 7.50 1,000,000 1,059,823 01-15-09 5.00 990,000 985,003 KB Home 01-15-15 5.88 955,000 935,664 Meritage Homes Sr Nts 03-15-15 6.25 445,000(d) 416,075 WCI Communities 03-15-15 6.63 910,000(d) 825,825 Total 4,222,390 See accompanying notes to investments in securities. -------------------------------------------------------------------------------- 4 -- AXP DIVERSIFIED BOND FUND -- PORTFOLIO HOLDINGS AT MAY 31, 2005 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Industrial services (--%) Allied Waste North America 04-15-11 6.38% $855,000 $816,525 Sr Nts 03-15-15 7.25 225,000(d) 217,125 Total 1,033,650 Industrial transportation (0.9%) ERAC USA Finance 05-01-15 5.60 5,075,000(d) 5,208,158 Greater Beijing First Expressways (U.S. Dollar) Sr Nts 06-15-07 9.50 3,640,000(b,c,m,n) -- Union Pacific 04-15-12 6.50 13,800,000 15,216,970 05-01-14 5.38 2,995,000 3,109,382 Total 23,534,510 Insurance (1.8%) Allstate Sr Nts 05-09-35 5.55 4,955,000 5,110,805 ASIF Global Financing XIX 01-17-13 4.90 13,943,000(d) 14,067,790 ING Security Life Institutional Funding 01-15-10 4.25 15,570,000(d) 15,505,602 Metropolitan Life Global Funding I Sr Nts 05-05-10 4.50 9,455,000(d) 9,502,379 Pacific Life 09-15-33 6.60 1,770,000(d) 2,065,378 Total 46,251,954 Lodging & gaming (0.3%) Boyd Gaming Sr Sub Nts 12-15-12 7.75 375,000 398,438 04-15-14 6.75 455,000 461,825 Caesars Entertainment Sr Nts 04-15-13 7.00 2,535,000 2,769,487 Hilton Hotels 12-01-12 7.63 1,250,000 1,423,050 MGM MIRAGE 10-01-09 6.00 670,000 670,000 Sr Nts 02-27-14 5.88 720,000 694,800 Mohegan Tribal Gaming Authority Sr Nts 02-15-13 6.13 540,000(d) 539,325 Sr Sub Nts 04-01-12 8.00 750,000 804,375 Station Casinos Sr Nts 04-01-12 6.00 1,000,000 1,002,500 Total 8,763,800 Machinery (0.1%) Joy Global Series B 03-15-12 8.75 1,500,000 1,680,000 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Media (1.0%) Corus Entertainment (U.S. Dollar) Sr Sub Nts 03-01-12 8.75% $395,000(c) $423,638 Dex Media West LLC/Finance Sr Nts Series B 08-15-10 8.50 1,340,000 1,463,950 Emmis Operating 05-15-12 6.88 795,000 784,069 Lamar Media 01-01-13 7.25 1,380,000 1,455,900 News America 12-15-34 6.20 6,572,000 6,794,765 Quebecor Media (U.S. Dollar) Sr Nts 07-15-11 11.13 640,000(c) 708,800 Radio One Series B 07-01-11 8.88 1,000,000 1,072,500 Shaw Communications (U.S. Dollar) Sr Nts 04-06-11 7.25 1,960,000(c) 2,087,400 Sun Media (U.S. Dollar) 02-15-13 7.63 1,500,000(c) 1,575,000 Susquehanna Media Sr Sub Nts 04-15-13 7.38 900,000 936,000 United Artists Theatre 07-01-15 9.30 8,121,862 8,121,861 Total 25,423,883 Miscellaneous (--%) United Rentals North America 02-15-12 6.50 385,000 378,744 Multi-industry (0.9%) Tyco Intl Group (U.S. Dollar) 02-15-11 6.75 21,510,000(c) 23,802,278 Paper & packaging (0.7%) Boise Cascade LLC Sr Sub Nts 10-15-14 7.13 505,000(d) 481,013 Crown Paper Sr Sub Nts 09-01-05 11.00 6,950,000(b,m,n) -- Domtar (U.S. Dollar) 12-01-13 5.38 2,910,000(c) 2,644,669 Owens-Illinois Glass Container 05-15-11 7.75 1,100,000 1,171,500 Silgan Holdings Sr Sub Nts 11-15-13 6.75 1,225,000 1,225,000 Weyerhaeuser 03-15-12 6.75 9,975,000 10,960,171 Total 16,482,353 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Real estate investment trust (0.1%) Starwood Hotels & Resorts 11-15-15 7.38% $1,275,000 $1,400,906 Retail -- general (0.2%) United Auto Group 03-15-12 9.63 530,000 556,500 Wal-Mart Stores 06-29-11 8.88 3,500,000 3,535,280 William Carter Series B 08-15-11 10.88 405,000 443,475 Total 4,535,255 Telecom equipment & services (1.9%) Qwest 03-15-12 9.13 880,000(d) 952,600 Sprint Capital 01-30-11 7.63 11,575,000 13,163,333 11-15-28 6.88 8,114,000 9,204,781 TELUS (U.S. Dollar) 06-01-11 8.00 20,552,500(c) 23,971,285 Total 47,291,999 Utilities -- electric (1.7%) CMS Energy Sr Nts 01-15-09 7.50 1,275,000 1,322,813 Dayton Power & Light 1st Mtge 10-01-13 5.63 1,425,000(d) 1,477,796 DPL Sr Nts 09-01-11 6.88 3,830,000 4,098,100 Florida Power 1st Mtge 03-01-13 4.80 1,840,000 1,856,726 IPALCO Enterprises 11-14-08 8.38 400,000 434,000 11-14-11 8.63 3,680,000 4,121,600 NorthWestern Energy 11-01-14 5.88 645,000(d) 651,450 Ohio Edison Sr Nts 05-01-15 5.45 1,195,000 1,235,058 Ohio Power Sr Nts Series H 01-15-14 4.85 7,395,000 7,468,432 Potomac Edison 1st Mtge 11-15-14 5.35 3,195,000(d) 3,258,900 Texas Genco LLC/Financing Sr Nts 12-15-14 6.88 299,000(d) 307,223 TXU 11-15-14 5.55 2,115,000(d) 2,031,424 See accompanying notes to investments in securities. -------------------------------------------------------------------------------- 5 -- AXP DIVERSIFIED BOND FUND -- PORTFOLIO HOLDINGS AT MAY 31, 2005 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Utilities -- electric (cont.) Utilicorp Canada Finance (U.S. Dollar) 06-15-11 7.75% $1,915,000(c) $1,924,575 Westar Energy 1st Mtge 07-01-14 6.00 11,450,000 12,445,702 Total 42,633,799 Utilities -- natural gas (0.4%) ANR Pipeline 03-15-10 8.88 875,000 953,060 Colorado Interstate Gas Sr Nts 03-15-15 5.95 155,000(d) 149,963 El Paso Natural Gas Sr Nts Series A 08-01-10 7.63 735,000 775,502 Northwest Pipeline 03-01-10 8.13 2,135,000 2,321,812 Plains Exploration & Production Sr Nts 06-15-14 7.13 790,000 843,325 Southern Natural Gas 03-15-10 8.88 875,000 953,060 Southern Star Central 08-01-10 8.50 550,000 580,250 Transcontinental Gas Pipe Line Series B 08-15-11 7.00 2,250,000 2,407,499 Total 8,984,471 Bonds (continued) Issuer Coupon Principal Value(a) rate amount Utilities -- telephone (2.1%) Deutsche Telekom Intl Finance (U.S. Dollar) 07-22-13 5.25% $3,465,000(c) $3,578,756 Telecom Italia Capital (U.S. Dollar) 09-30-34 6.00 3,605,000(c,d) 3,656,155 Verizon Pennsylvania Series A 11-15-11 5.65 43,420,000 45,303,994 Total 52,538,905 Total bonds (Cost: $2,512,893,771) $2,532,241,035 Other (0.1%) Issuer Shares Value(a) Wayland Investment LLC 6,000,000(b,e,n) $2,525,880 Total other (Cost: $6,671,880) $2,525,880 Short-term securities (3.2%) Issuer Effective Amount Value(a) yield payable at maturity U.S. government agency (1.0%) Federal Home Loan Mtge Corp Disc Nt 06-07-05 2.95% $25,000,000 $24,985,660 Commercial paper (2.2%) CXC LLC 06-01-05 3.05 19,000,000 18,998,390 Nieuw Amsterdam 06-06-05 3.03 25,000,000 24,987,396 UBS Finance (Delaware) LLC 06-01-05 3.05 12,700,000 12,698,924 Total 56,684,710 Total short-term securities (Cost: $81,677,205) $81,670,370 Total investments in securities (Cost: $2,601,242,856)(p) $2,616,437,285 Notes to investments in securities (a) Securities are valued by procedures described in Note 1 to the financial statements in the most recent Semiannual Report dated Feb. 28, 2005. (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. At May 31, 2005, the value of foreign securities represented 5.7% 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 Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At May 31, 2005, the value of these securities amounted to $164,284,935 or 6.5% of net assets. (e) The share amount for Limited Liability Companies (LLC) or Limited Partnerships (LP) represents capital contributions. (f) Mortgage-backed securities represent direct or indirect participations in, or are secured by and payable from, mortgage loans secured by real property, and include single- and multi-class pass-through securities and collateralized mortgage obligations. These securities may be issued or guaranteed by U.S. government agencies or instrumentalities, or by private issuers, generally originators and investors in mortgage loans, including savings associations, mortgage bankers, commercial banks, investment bankers and special purpose entities. The maturity dates shown represent the original maturity of the underlying obligation. Actual maturity may vary based upon prepayment activity on these obligations. Unless otherwise noted, the coupon rates presented are fixed rates. (g) At May 31, 2005, the cost of securities purchased, including interest purchased, on a when-issued and/or other forward-commitment basis was $57,246,495. -------------------------------------------------------------------------------- 6 -- AXP DIVERSIFIED BOND FUND -- PORTFOLIO HOLDINGS AT MAY 31, 2005 Notes to investments in securities (continued) (h) Comparable securities are held to satisfy future delivery requirements of the following open forward sale commitments at May 31, 2005: Security Principal Settlement Proceeds Value amount date receivable Federal Natl Mtge Assn 06-01-20 5.00% $ 6,150,000 6-16-05 $ 6,181,711 $ 6,219,188 06-01-20 5.50 7,000,000 6-16-05 7,156,406 7,185,934 06-01-35 5.50 72,550,000 6-13-05 73,020,441 73,524,927 06-01-35 6.00 25,000,000 6-13-05 25,597,656 25,687,500 06-01-35 6.50 19,870,000 6-13-05 20,667,281 20,639,963 (i) Interest only represents securities that entitle holders to receive only interest payments on the underlying mortgages. The yield to maturity of an interest only is extremely sensitive to the rate of principal payments on the underlying mortgage assets. A rapid (slow) rate of principal repayments may have an adverse (positive) effect on yield to maturity. The principal amount shown is the notional amount of the underlying mortgages. Interest rate disclosed represents yield based upon the estimated timing and amount of future cash flows at May 31, 2005. (j) Adjustable rate mortgage; interest rate varies to reflect current market conditions; rate shown is the effective rate on May 31, 2005. (k) Interest rate varies either based on a predetermined schedule or to reflect current market conditions; rate shown is the effective rate on May 31, 2005. (l) The following abbreviations are used in the portfolio security descriptions to identify the insurer of the issue: AMBAC -- Ambac Assurance Corporation FGIC -- Financial Guaranty Insurance Company FSA -- Financial Security Assurance MBIA -- MBIA Insurance Corporation (m) Negligible market value. (n) Identifies issues considered to be illiquid as to their marketability. These securities are valued at fair value according to methods selected in good faith by the Fund's Board of Directors. Information concerning such security holdings at May 31, 2005, is as follows: Security Acquisition Cost dates Crown Paper 11.00% Sr Sub Nts 2005 02-10-00 thru 02-14-00 $4,216,724 Greater Beijing First Expressways (U.S. Dollar) 9.50% Sr Nts 2007 09-16-98 -- Wayland Investment LLC 05-19-00 6,671,880 (o) Partially pledged as initial deposit on the following open interest rate futures contracts: Type of security Notional amount Purchase contracts U.S. Treasury Bonds, Sept. 2005, 20-year $ 66,100,000 Sale contracts U.S. Treasury Notes, Sept. 2005, 5-year 17,800,000 U.S. Treasury Notes, Sept. 2005, 10-year 252,900,000 (p) At May 31, 2005, the cost of securities for federal income tax purposes was approximately $2,601,243,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $ 35,408,000 Unrealized depreciation (20,214,000) ----------- Net unrealized appreciation $ 15,194,000 ------------ How to find information about the Fund's portfolio holdings (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii) The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at www.americanexpress.com/funds. -------------------------------------------------------------------------------- 7 -- AXP DIVERSIFIED BOND FUND -- PORTFOLIO HOLDINGS AT MAY 31, 2005 S-6495-80 C (7/05) Item 2. Control and Procedures. (a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, the registrant's principal financial officer and principal executive officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 3. Exhibits. Separate certification for the Registrant's principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) AXP FIXED INCOME SERIES, INC. By /s/ Paula R. Meyer ------------------ Paula R. Meyer President and Principal Executive Officer Date July 29, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ Paula R. Meyer ------------------ Paula R. Meyer President and Principal Executive Officer Date July 29, 2005 By /s/ Jeffrey P. Fox ------------------ Jeffrey P. Fox Treasurer and Principal Financial Officer Date July 29, 2005