N-30D 1 s6322.txt AXP CASH MANAGEMENT FUND AXP(R) Cash Management Fund 2002 SEMIANNUAL REPORT American Express(R) Funds (icon of) clock AXP Cash Management Fund seeks to provide shareholders with maximum current income consistent with liquidity and stability of principal. A Cache for Cash Keeping a portion of your investment portfolio in a cash reserve is a cornerstone of a sound financial strategy. And a money market mutual fund that stresses stability of your investment principal and easy access when you need it is an excellent way to meet that need. That's what AXP Cash Management Fund is all about. CONTENTS From the Chairman 3 Portfolio Manager Q & A 3 Fund Facts 5 Financial Statements 7 Notes to Financial Statements 10 Investments in Securities 15 -------------------------------------------------------------------------------- 2 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT (picture of) Arne H. Carlson Arne H. Carlson Chairman of the board From the Chairman For most of us investors, the past several months proved to be an extremely trying time. More recently, the events of this past September and the prospect of what may follow have added to our collective concern. While nothing can change what has happened, we can control how we respond. In broad terms, I would strongly advise that you keep a focus on your long-term financial goals and not let specific events dictate your investment decisions. Ultimately, it is where you finish, not where you are at the moment, that matters most. Your financial advisor plays an essential role in this process, so please let him or her help you by reviewing your situation and plotting the proper investment course. As I have indicated in the past, the role our Board plays in your financial future is to monitor and confirm that each American Express mutual fund meets its investment objective and that its management style stays on target. We want each fund to be able to deliver to you, the shareholder, the type of performance you expect and the best results that can be obtained. Toward that end, American Express has made significant changes in its investment management capability, and will continue to make changes as it strives to provide a consistent standard of excellence. On behalf of the Board, Arne H. Carlson (picture of) Mary McQuillen Mary McQuillen Portfolio manager Portfolio Manager Q & A Q: How did the Fund perform over the six-month period ended January 31, 2002? A: The Fund's yield fell during the six-month period, reflecting a substantial decline in short-term interest rates. For the period, the Fund's Class A shares returned 1.24% and its seven-day yield was 1.53%. (The yield more closely reflects the current earnings of a money market fund than does total return.) As it always has historically, the Fund maintained a $1 per share net asset value throughout the period, in accordance with its objective. (Keep in mind that an investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the Fund.) -------------------------------------------------------------------------------- 3 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT Q: What factors affected the Fund's performance during the six-month period? A: The biggest impact on the Fund comes directly from the Federal Reserve (the Fed), which controls the market for short-term interest rates. During the period, the Fed continually reduced interest rates in an effort to jump-start the U.S. economy, which found itself in the throes of a mild recession. (Lower interest rates are designed to stimulate economic growth.) During that time, for example, the yield on three-month U.S. Treasury Bills declined from a level of 3.45% at the beginning of August to 1.73% at the end of the six-month period on January 31, 2002. At its meeting in late January, the Fed held firm on interest rates, indicating that it may be finished lowering rates for the time being. Q: What changes did you make to the Fund during the period? A: Given the expectation that interest rates were heading lower, we lengthened the Fund's average maturity during the period. Longer-term securities offered a higher interest rate and an ability to lock in those rates. That was more attractive than having to continually reinvest in shorter-term securities in a market where yields were declining. With the Fed cutting interest rates through December, this strategy remained in place throughout the period. When the Fed seemed to signal it was done cutting short-term rates in January 2002, we stopped lengthening the Fund's average maturity by the end of the period. It is also important to point out that we strive to maintain a very high level of quality in the portfolio. In fact, as the economy weakened, we eliminated some holdings issued by corporate borrowers who had seen their credit rating lowered due to difficult financial circumstances. Q: What is your outlook for the coming months? A: While there are signs that an economic recovery may be underway, I expect it to be a rather slow-moving rebound. Therefore, I don't look for a significant change in the interest rate environment in the near term. Farther out, if the Federal Reserve reverses its course of 2001 and begins raising short-term rates, I anticipate reducing the Fund's average maturity. The degree of that reduction depends on market conditions, but if the trend of interest rates is up, owning holdings for a shorter-term and reinvesting in securities more often at higher rates of interest will benefit shareholders. As always, I will focus on following a prudent investment approach in order to maintain the Fund's stable net asset value. Mary McQuillen Note to shareholders: In January 2002, Mary McQuillen succeeded Terry Seierstad as portfolio manager of AXP Cash Management Fund. -------------------------------------------------------------------------------- 4 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT Fund Facts Class A -- 6-month performance (All figures per share) Net asset value (NAV) Jan. 31, 2002 $1.00 July 31, 2001 $1.00 Increase $ -- Distributions -- Aug. 1, 2001 - Jan. 31, 2002 From income $0.01 From long-term capital gains $ -- Total distributions $0.01 Total return* +1.24% 7-day yield** +1.53% Class B -- 6-month performance (All figures per share) Net asset value (NAV) Jan. 31, 2002 $1.00 July 31, 2001 $1.00 Increase $ -- Distributions -- Aug. 1, 2001 - Jan. 31, 2002 From income $0.01 From long-term capital gains $ -- Total distributions $0.01 Total return* +0.85% 7-day yield** +0.77% -------------------------------------------------------------------------------- 5 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT Class C -- 6-month performance (All figures per share) Net asset value (NAV) Jan. 31, 2002 $1.00 July 31, 2001 $1.00 Increase $ -- Distributions -- Aug. 1, 2001 - Jan. 31, 2002 From income $0.01 From long-term capital gains $ -- Total distributions $0.01 Total return* +0.86% 7-day yield** +0.77% Class Y -- 6-month performance (All figures per share) Net asset value (NAV) Jan. 31, 2002 $1.00 July 31, 2001 $1.00 Increase $ -- Distributions -- Aug. 1, 2001 - Jan. 31, 2002 From income $0.01 From long-term capital gains $ -- Total distributions $0.01 Total return* +1.25% 7-day yield** +1.54% * 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 yield quotation more closely reflects the current earnings of the money market fund than the total return quotation. -------------------------------------------------------------------------------- 6 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT
Financial Statements Statement of assets and liabilities AXP Cash Management Fund Jan. 31, 2002 (Unaudited) Assets Investments in securities, at value (Note 1) (identified cost $6,570,981,059) $6,570,981,059 Cash in bank on demand deposit 20,701,707 Capital shares receivable 154,338 Accrued interest receivable 3,643,762 --------- Total assets 6,595,480,866 ------------- Liabilities Dividends payable to shareholders 1,884,482 Capital shares payable 96,230 Accrued investment management services fee 54,822 Accrued distribution fee 6,718 Accrued transfer agency fee 38,822 Accrued administrative services fee 4,143 Other accrued expenses 859,139 ------- Total liabilities 2,944,356 --------- Net assets applicable to outstanding capital stock $6,592,536,510 ============== Represented by Capital stock -- $.01 par value (Note 1) $ 65,925,996 Additional paid-in capital 6,526,610,493 Undistributed net investment income 21 -- Total -- representing net assets applicable to outstanding capital stock $6,592,536,510 ============== Net assets applicable to outstanding shares: Class A $6,067,741,596 Class B $ 323,398,419 Class C $ 2,163,431 Class Y $ 199,233,064 Net asset value per share of outstanding capital stock: Class A shares 6,067,570,992 $ 1.00 Class B shares 323,545,478 $ 1.00 Class C shares 2,163,514 $ 1.00 Class Y shares 199,319,603 $ 1.00 ----------- --------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 7 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT
Statement of operations AXP Cash Management Fund Six months ended Jan. 31, 2002 (Unaudited) Investment income Income: Interest $102,355,342 ------------ Expenses (Note 2): Investment management services fee 10,137,218 Distribution fee Class B 1,231,182 Class C 7,223 Transfer agency fee 6,453,517 Incremental transfer agency fee Class A 532,846 Class B 29,383 Class C 164 Administrative services fees and expenses 812,976 Compensation of board members 20,568 Custodian fees 186,414 Printing and postage 1,370,620 Registration fees 423,469 Audit fees 18,000 Other 12,237 ------ Total expenses 21,235,817 Earnings credits on cash balances (Note 2) (319,026) -------- Total net expenses 20,916,791 ---------- Investment income (loss) -- net 81,438,551 ---------- Realized and unrealized gain (loss) -- net Net realized gain (loss) on security transactions (Note 3) 34,785 ------ Net increase (decrease) in net assets resulting from operations $ 81,473,336 ============
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 8 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT
Statements of changes in net assets AXP Cash Management Fund Jan. 31, 2002 July 31, 2001 Six months ended Year ended (Unaudited) Operations and distributions Investment income (loss) -- net $ 81,438,551 $ 328,942,921 Net realized gain (loss) on investments 34,785 6,061 ------ ----- Net increase (decrease) in net assets resulting from operations 81,473,336 328,948,982 ---------- ----------- Distributions to shareholders from: Net investment income Class A (76,400,283) (309,127,272) Class B (2,736,541) (11,336,961) Class C (14,735) (16,835) Class Y (2,287,117) (8,461,719) ---------- ---------- Total distributions (81,438,676) (328,942,787) ----------- ------------ Capital share transactions at constant $1 net asset value Proceeds from sales Class A shares 7,624,977,798 16,621,476,728 Class B shares 253,879,024 404,002,096 Class C shares 5,540,071 1,970,087 Class Y shares 108,610,630 324,334,535 Reinvestment of distributions at net asset value Class A shares 76,711,859 309,605,354 Class B shares 2,719,072 11,198,696 Class C shares 13,768 16,103 Class Y shares 2,313,483 8,512,225 Payments for redemptions Class A shares (7,782,523,245) (16,220,392,217) Class B shares (Note 2) (205,760,341) (375,077,786) Class C shares (Note 2) (4,255,501) (1,123,023) Class Y shares (85,791,483) (300,272,985) ----------- ------------ Increase (decrease) in net assets from capital share transactions (3,564,865) 784,249,813 ---------- ----------- Total increase (decrease) in net assets (3,530,205) 784,256,008 Net assets at beginning of period 6,596,066,715 5,811,810,707 ------------- ------------- Net assets at end of period $ 6,592,536,510 $ 6,596,066,715 =============== ================ Undistributed net investment income $ 21 $ 146 --------------- ----------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 9 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT Notes to Financial Statements AXP Cash Management Fund (Unaudited as to Jan. 31, 2002) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Fund is a series of AXP Money Market Series, Inc. and is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. The Fund invests in money market securities. AXP Money Market Series, Inc. has 10 billion authorized shares of capital stock that can be allocated among the separate series as designated by the board. The Fund offers Class A, Class B, Class C and Class Y shares. o Class A shares have no 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 and incremental transfer agency 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, liabilities and contingent assets and liabilities) that could differ from actual results. Valuation of securities Pursuant to Rule 2a-7 of the 1940 Act, all securities are valued daily at amortized cost, which approximates market value, in order to maintain a constant net asset value of $1 per share. 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. 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, are reinvested in additional shares of the Fund at net asset value or payable in cash. -------------------------------------------------------------------------------- 10 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT Other Security transactions are accounted for on the date securities are purchased or sold. Interest income, including amortization of premium and discount, is accrued daily. 2. EXPENSES AND SALES CHARGES The Fund has agreements with American Express Financial Corporation (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 0.36% to 0.25% 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 0.03% to 0.02% 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 incremental transfer agency fee is the amount charged to the specific classes for the additional expense above the fee for Class Y. The Fund pays AECSC an annual fee per shareholder account for this service as follows: o Class A $24.00 o Class B $25.00 o Class C $24.50 o Class Y $22.00 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 of 0.75% of the Fund's average daily net assets attributable to Class B and Class C shares. Sales charges received by the Distributor for distributing Fund shares were $1,083,624 for Class B and $4,470 for Class C for the six months ended Jan. 31, 2002. During the six months ended Jan. 31, 2002, the Fund's custodian and transfer agency fees were reduced by $319,026 as a result of earnings credits from overnight cash balances. 3. SECURITIES TRANSACTIONS Cost of purchases and proceeds from sales of securities aggregated $16,973,568,454 and $16,985,112,810, respectively, for the six months ended Jan. 31, 2002. Realized gains and losses are determined on an identified cost basis. -------------------------------------------------------------------------------- 11 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT 4. 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 Jan. 31, 2002. 5. FINANCIAL HIGHLIGHTS The tables below show certain important financial information for evaluating the Fund's results.
Class A Per share income and capital changes(a) Fiscal period ended July 31, 2002(f) 2001 2000 1999 1998 Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 Income from investment operations: Net investment income (loss) .01 .05 .05 .05 .05 Less distributions: Dividends from net investment income (.01) (.05) (.05) (.05) (.05) Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 Ratios/supplemental data Net assets, end of period (in millions) $6,068 $6,149 $5,438 $5,032 $3,926 Ratio of expenses to average daily net assets(c) .59%(d) .59% .58% .57% .56% Ratio of net investment income (loss) to average daily net assets 2.43%(d) 5.18% 5.37% 4.65% 5.15% Total return(e) 1.24% 5.35% 5.55% 4.71% 5.34%
See accompanying notes to financial highlights. -------------------------------------------------------------------------------- 12 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT
Class B Per share income and capital changes(a) Fiscal period ended July 31, 2002(f) 2001 2000 1999 1998 Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 Income from investment operations: Net investment income (loss) .01 .05 .05 .04 .04 Less distributions: Dividends from net investment income (.01) (.05) (.05) (.04) (.04) Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 Ratios/supplemental data Net assets, end of period (in millions) $323 $273 $232 $192 $98 Ratio of expenses to average daily net assets(c) 1.34%(d) 1.34% 1.33% 1.32% 1.32% Ratio of net investment income (loss) to average daily net assets 1.66%(d) 4.37% 4.64% 3.88% 4.38% Total return(e) .85% 4.57% 4.76% 3.94% 4.53%
Class C Per share income and capital changes(a) Fiscal period ended July 31, 2002(f) 2001 2000(b) Net asset value, beginning of period $1.00 $1.00 $1.00 Income from investment operations: Net investment income (loss) .01 .05 -- Less distributions: Dividends from net investment income (.01) (.05) -- Net asset value, end of period $1.00 $1.00 $1.00 Ratios/supplemental data Net assets, end of period (in millions) $2 $1 $-- Ratio of expenses to average daily net assets(c) 1.34%(d) 1.34% 1.33%(d) Ratio of net investment income (loss) to average daily net assets 1.52%(d) 3.88% 6.10%(d) Total return(e) .86% 4.68% .63%
See accompanying notes to financial highlights. -------------------------------------------------------------------------------- 13 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT
Class Y Per share income and capital changes(a) Fiscal period ended July 31, 2002(f) 2001 2000 1999 1998 Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 Income from investment operations: Net investment income (loss) .01 .05 .05 .05 .05 Less distributions: Dividends from net investment income (.01) (.05) (.05) (.05) (.05) Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 Ratios/supplemental data Net assets, end of period (in millions) $199 $174 $142 $124 $72 Ratio of expenses to average daily net assets(c) .57%(d) .57% .57% .56% .56% Ratio of net investment income (loss) to average daily net assets 2.43%(d) 5.18% 5.42% 4.64% 5.16% Total return(e) 1.25% 5.37% 5.56% 4.72% 5.33%
Notes to financial highlights (a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Inception date was June 26, 2000. (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. (f) Six months ended Jan. 31, 2002 (Unaudited). -------------------------------------------------------------------------------- 14 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT Investments in Securities AXP Cash Management Fund Jan. 31, 2002 (Unaudited) (Percentages represent value of investments compared to net assets) U.S. government agencies (24.9%) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Federal Home Loan Bank Disc Nts 02-13-02 1.60% $41,500,000 $41,477,867 02-15-02 1.96 19,500,000 19,485,137 03-08-02 3.20 30,000,000 29,906,958 03-15-02 1.57 15,400,000 15,371,792 05-15-02 1.74 31,100,000 30,946,064 06-19-02 1.82 50,000,000 49,653,082 Federal Home Loan Mtge Corp Disc Nts 02-07-02 1.94 24,000,000 23,992,240 02-07-02 2.03 22,000,000 21,992,557 02-14-02 1.98 30,000,000 29,978,550 02-20-02 1.60 38,880,000 38,847,168 02-20-02 3.37 32,300,000 32,242,636 02-27-02 2.23 38,700,000 38,637,811 02-28-02 3.33 35,800,000 35,710,858 02-28-02 3.34 20,500,000 20,448,801 03-01-02 2.34 30,000,000 29,945,517 03-05-02 1.67 30,900,000 30,854,131 03-07-02 1.81 26,500,000 26,454,825 03-15-02 2.02 28,000,000 27,934,013 03-25-02 1.58 41,600,000 41,505,060 04-25-02 1.70 80,900,000 80,584,782 05-23-02 1.77 25,000,000 24,864,333 05-23-02 1.83 22,500,000 22,373,738 05-23-02 1.91 48,000,000 47,718,800 06-20-02 1.83 15,500,000 15,391,078 06-21-02 1.77 25,000,000 24,828,889 06-26-02 1.77 44,600,000 44,283,836 07-01-02 1.79 25,500,000 25,310,875 Federal Natl Mtge Assn Disc Nts 02-21-02 1.98 32,000,000 31,964,800 02-21-02 3.35 19,500,000 19,463,817 02-21-02 3.36 39,000,000 38,927,417 03-07-02 3.36 35,000,000 34,889,264 03-28-02 2.36 20,000,000 19,928,194 04-10-02 1.68 35,000,000 34,889,594 04-24-02 1.71 36,000,000 35,860,600 05-01-02 1.73 32,500,000 32,361,401 05-07-02 1.75 24,700,000 24,586,586 05-16-02 1.74 5,500,000 5,472,512 05-30-02 1.80 30,000,000 29,823,983 06-06-02 1.77 31,000,000 30,810,556 06-06-02 1.83 26,000,000 25,836,146 06-07-02 1.76 22,000,000 21,865,250 06-13-02 1.72 31,200,000 31,004,376 06-13-02 1.74 18,000,000 17,885,820 06-13-02 1.80 41,000,000 40,730,903 06-20-02 1.83 31,000,000 30,782,156 06-24-02 1.79 25,200,000 25,021,822 06-27-02 1.85 35,500,000 35,235,091 06-27-02 1.86 50,000,000 49,625,875 07-03-02 1.75 46,800,000 46,456,176 07-10-02 1.76 29,900,000 29,669,558 Student Loan Marketing Assn 06-28-02 1.81 50,000,000 49,632,500 06-28-02 1.82 27,000,000 26,800,448 Total U.S. government agencies (Cost: $1,640,266,243) $1,640,266,243 Certificates of deposit (12.4%) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Abbey Natl Yankee 06-14-02 1.86% $32,000,000 $32,000,000 BNP Paribas Yankee 02-04-02 3.37 19,500,000 19,500,000 02-05-02 3.44 25,000,000 25,000,000 02-12-02 3.48 20,000,000 20,000,000 04-08-02 1.85 25,000,000 25,000,000 04-10-02 1.84 20,000,000 20,000,000 05-30-02 2.14 26,000,000 26,000,000 06-07-02 1.98 30,000,000 30,000,000 06-11-02 1.77 25,000,000 25,000,000 06-17-02 1.70 30,000,000 30,000,000 06-25-02 1.85 27,200,000 27,200,000 07-09-02 1.85 22,100,000 22,100,000 Credit Agricole Indosuez Yankee 06-10-02 1.78 30,000,000 30,000,000 06-11-02 1.79 25,000,000 25,000,000 06-24-02 1.76 25,000,000 25,000,000 06-25-02 1.85 30,900,000 30,900,000 06-27-02 1.84 22,000,000 22,000,000 See accompanying notes to investments in securities. -------------------------------------------------------------------------------- 15 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT Certificates of deposit (continued) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Dresdner Bank Yankee 02-26-02 2.06% $30,000,000 $30,000,000 04-04-02 2.00 23,000,000 23,000,000 04-11-02 1.90 25,000,000 25,000,000 06-25-02 1.80 25,000,000 25,000,000 Toronto Dominion Bank Yankee 05-17-02 1.81 25,000,000 25,000,000 Westdeutsche Landesbank Yankee 02-14-02 3.45 26,400,000 26,400,000 04-16-02 2.05 30,000,000 30,000,000 04-26-02 2.14 26,000,000 26,000,000 05-06-02 1.87 27,000,000 27,000,000 05-21-02 2.10 20,000,000 20,000,000 05-28-02 2.12 25,000,000 25,000,000 06-12-02 1.78 25,000,000 25,000,000 06-21-02 1.72 20,500,000 20,500,000 06-24-02 1.78 26,800,000 26,800,000 06-25-02 1.83 27,200,000 27,200,000 Total certificates of deposit (Cost: $816,600,000) $816,600,000 Commercial paper (62.4%) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Banks and savings & loans (20.3%) Abbey Natl North America 03-14-02 2.24% $30,000,000 $29,923,808 04-18-02 2.11 7,000,000 6,968,967 05-16-02 2.04 30,000,000 29,824,067 05-16-02 2.07 26,000,000 25,845,271 06-05-02 1.75 22,000,000 21,868,147 06-14-02 1.64 26,000,000 25,843,429 06-14-02 1.67 22,000,000 21,865,079 06-14-02 1.86 16,000,000 15,890,644 ANZ (Delaware) 02-11-02 1.87 25,000,000 24,987,014 Commerzbank U.S. Finance 02-27-02 2.02 26,000,000 25,962,069 03-13-02 1.81 20,000,000 19,959,778 03-20-02 2.53 25,000,000 24,917,750 03-20-02 2.73 30,000,000 29,893,467 04-03-02 1.78 27,700,000 27,616,923 04-08-02 1.77 24,500,000 24,420,947 07-08-02 1.83 35,100,000 34,821,404 Credit Agricole Indosuez North America 03-05-02 2.06 30,000,000 29,945,066 05-29-02 2.13 26,000,000 25,820,860 Dexia Bank (Delaware) 02-01-02 2.05 25,000,000 25,000,000 02-01-02 2.11 27,000,000 27,000,000 02-28-02 1.87 23,000,000 22,967,743 04-10-02 1.71 21,600,000 21,530,640 06-03-02 1.82 30,000,000 29,815,983 06-04-02 1.86 19,600,000 19,476,112 06-04-02 1.87 20,000,000 19,872,900 06-04-02 1.94 8,100,000 8,046,587 06-10-02 1.87 28,000,000 27,813,380 Household Bank 02-04-02 2.12 30,000,000 29,999,999 02-05-02 1.93 18,000,000 18,000,000 02-06-02 1.93 15,000,000 15,000,000 02-13-02 1.93 25,000,000 25,000,000 Nordea North America 02-25-02 3.35 15,000,000 14,966,600 02-28-02 2.81 30,000,000(b) 29,937,000 03-11-02 1.85 20,000,000 19,960,944 04-29-02 2.01 23,000,000 22,888,833 05-02-02 1.79 25,000,000 24,888,750 05-20-02 2.09 24,500,000 24,347,120 06-03-02 1.86 23,000,000 22,855,803 06-12-02 1.78 15,000,000 14,903,388 06-12-02 1.90 19,500,000 19,365,889 06-17-02 1.67 22,000,000 21,862,036 Societe Generale North America 02-07-02 1.90 11,900,000 11,896,232 02-11-02 2.26 24,900,000 24,884,368 02-11-02 2.29 29,800,000 29,781,044 02-13-02 3.42 20,000,000 19,977,200 02-14-02 3.36 15,000,000 14,981,800 03-12-02 1.84 27,000,000 26,946,180 04-15-02 1.66 25,000,000 24,916,354 06-06-02 1.98 29,000,000 28,801,632 06-24-02 1.84 27,700,000 27,498,644 Westpac Capital 02-12-02 1.88 22,500,000 22,487,075 02-20-02 3.36 23,000,000 22,959,335 04-15-02 2.24 15,100,000 15,031,719 04-17-02 2.25 20,500,000 20,404,333 05-28-02 1.87 18,000,000 17,892,120 05-28-02 1.96 24,000,000 23,849,200 06-05-02 1.98 25,000,000 24,830,361 06-14-02 1.77 30,000,000 29,804,933 Total 1,338,816,927 See accompanying notes to investments in securities. -------------------------------------------------------------------------------- 16 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT Commercial paper (continued) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Broker dealers (3.1%) Bear Stearns 02-21-02 1.80% $20,000,000(c) $20,000,000 Goldman Sachs Group 02-06-02 2.45 28,000,000 27,990,471 03-04-02 2.00 20,000,000 19,965,556 03-21-02 1.94 27,000,000(c) 27,000,000 04-09-02 1.86 20,000,000 19,931,139 07-01-02 1.89 27,000,000 26,789,063 07-02-02 1.83 17,500,000 17,366,407 07-16-02 1.89 17,500,000 17,349,609 Morgan Stanley, Dean Witter, & Co 02-04-02 1.84 25,000,000 24,996,167 Total 201,388,412 Commercial finance (1.7%) CAFCO 02-19-02 1.93 28,000,000(b) 27,972,980 Ciesco LP 02-22-02 2.05 31,000,000 30,962,930 03-12-02 1.72 30,000,000 29,944,100 Nestle Capital 04-24-02 2.25 20,500,000 20,395,404 Total 109,275,414 Computers & office equipment (0.1%) Electronic Data System 02-22-02 2.03 4,200,000(b) 4,195,027 Energy (0.1%) Chevron UK Investment 05-07-02 1.82 8,000,000(b) 7,961,789 Financial services (24.5%) AEGON Funding 02-04-02 2.33 24,000,000(b) 23,995,340 03-01-02 2.44 30,000,000(b) 29,943,066 04-18-02 2.26 30,000,000(b) 29,857,500 Alpine Securitization 02-01-02 1.95 11,600,000(b) 11,600,000 03-21-02 1.80 22,000,000(b) 21,947,200 Amsterdam Funding 04-24-02 1.81 12,200,000(b) 12,149,980 Barclays U.S. Funding 02-14-02 1.95 32,000,000 31,977,466 Caterpillar Financial Services 02-07-02 2.31 10,000,000 9,996,150 03-19-02 2.04 23,000,000 22,940,341 03-27-02 1.87 15,000,000 14,958,150 06-10-02 1.87 27,000,000 26,820,045 Charta 02-05-02 2.08 28,000,000(b) 27,993,529 03-05-02 1.65 29,000,000(b) 28,957,467 03-06-02 1.75 9,000,000(b) 8,985,563 Corporate Receivables 02-28-02 3.31 20,000,000(b) 19,950,500 Delaware Funding 03-28-02 1.83 30,000,000(b) 29,916,582 Edison Asset Securitization 02-08-02 1.80 23,000,000(b) 22,991,950 02-08-02 2.07 27,000,000(b) 26,989,133 02-12-02 1.80 15,000,000(b) 14,991,750 Enterprise Funding 02-07-02 1.77 9,236,000(b) 9,233,275 02-08-02 1.77 23,000,000(b) 22,992,084 02-21-02 1.77 6,325,000(b) 6,318,780 03-01-02 1.74 9,018,000(b) 9,005,796 05-20-02 1.72 10,300,000(b) 10,247,161 Falcon Asset 02-19-02 1.66 12,000,000(b) 11,990,040 02-22-02 1.72 23,000,000(b) 22,976,923 02-26-02 1.67 27,000,000(b) 26,968,688 Household Finance 05-31-02 1.78 27,000,000 26,842,028 Intl Lease Finance 02-07-02 2.37 41,000,000 40,983,805 02-08-02 2.45 28,000,000 27,986,661 02-13-02 2.34 25,000,000 24,980,500 03-11-02 2.00 23,000,000 22,951,444 03-15-02 2.37 28,000,000 27,922,907 04-01-02 2.46 19,000,000 18,923,710 04-05-02 2.12 27,000,000 26,900,303 04-23-02 2.08 26,000,000 25,878,905 Kitty Hawk Funding 02-15-02 1.68 20,300,000(b) 20,286,737 02-15-02 3.35 10,000,000(b) 9,986,972 02-15-02 3.41 3,879,000(b) 3,873,856 03-20-02 2.48 20,000,000(b) 19,935,506 Old Line Funding 02-25-02 1.67 25,000,000(b) 24,972,167 03-08-02 1.65 5,806,000(b) 5,796,686 03-15-02 1.65 7,150,000(b) 7,136,236 04-24-02 1.81 27,200,000(b) 27,088,480 Park Avenue Receivables 02-14-02 1.70 6,339,000(b) 6,335,109 03-19-02 1.80 27,000,000(b) 26,937,900 See accompanying notes to investments in securities. -------------------------------------------------------------------------------- 17 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT Commercial paper (continued) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Financial services (cont.) Preferred Receivables 02-11-02 1.75% $22,000,000(b) $21,989,306 02-22-02 1.75 22,000,000(b) 21,977,542 Receivables Capital 02-04-02 1.78 17,000,000(b) 16,997,478 05-10-02 1.90 33,000,000(b) 32,830,214 05-10-02 2.07 15,500,000(b) 15,413,079 Sheffield Receivables 02-06-02 1.77 10,000,000(b) 9,997,542 02-14-02 1.76 18,000,000(b) 17,988,560 07-19-02 2.22 18,000,000(b) 17,815,200 Southern Co Funding 02-12-02 1.80 21,400,000(b) 21,388,230 02-22-02 1.75 4,000,000(b) 3,995,917 02-25-02 1.90 25,000,000(b) 24,968,333 03-21-02 1.79 8,700,000(b) 8,679,236 03-21-02 1.86 20,000,000(b) 19,950,400 Three Rivers Funding 02-20-02 1.76 17,200,000(b) 17,184,023 Tyco Capital 02-01-02 2.35 25,000,000 25,000,000 02-01-02 3.35 25,000,000 25,000,000 03-04-02 2.05 22,000,000 21,961,164 05-08-02 1.81 30,000,000 29,856,000 Variable Funding Capital 02-19-02 2.58 30,000,000(b) 29,961,299 Verizon Global Funding 03-14-02 2.47 18,000,000(b) 17,949,570 04-02-02 2.48 15,000,000(b) 14,938,250 04-02-02 2.49 10,000,000(b) 9,958,667 04-03-02 2.50 20,000,000(b) 19,915,617 06-26-02 2.18 29,950,000(b) 29,689,435 06-26-02 2.25 27,000,000(b) 26,757,488 Verizon Network Funding 02-15-02 2.48 25,000,000 24,975,889 02-27-02 2.11 17,865,000 17,837,776 06-18-02 1.86 28,000,000 27,802,872 06-18-02 2.00 19,000,000 18,856,835 06-28-02 1.88 29,000,000 28,778,561 Windmill Funding 02-06-02 1.89 18,000,000(b) 17,995,275 02-15-02 1.68 20,000,000(b) 19,986,933 03-20-02 1.75 27,000,000(b) 26,938,313 Total 1,617,749,375 Household products (1.0%) Gillette 04-09-02 2.23 15,000,000(b) 14,938,025 04-22-02 2.19 25,000,000(b) 24,878,888 05-13-02 1.81 11,300,000(b) 11,242,935 Procter & Gamble 02-26-02 1.70 17,000,000(b) 16,979,931 Total 68,039,779 Insurance (1.4%) American General 02-22-02 3.34 40,800,000 40,720,746 American General Finance 02-11-02 2.75 24,100,000(b) 24,081,590 02-19-02 3.39 30,000,000 29,949,300 Total 94,751,636 Media (0.2%) Scripps (EW) 02-05-02 2.36 14,000,000(b) 13,996,329 Miscellaneous (1.1%) Barton Capital 02-05-02 1.73 25,000,000(b) 24,995,194 02-06-02 1.78 23,000,000(b) 22,994,314 CXC 05-14-02 2.01 27,000,000(b) 26,847,000 Total 74,836,508 Multi-industry conglomerates (2.6%) GE Capital Intl Funding 02-06-02 2.04 23,000,000(b) 22,993,483 02-12-02 2.15 30,000,000(b) 29,980,291 03-06-02 2.33 28,000,000(b) 27,940,197 04-05-02 1.74 27,000,000(b) 26,918,258 General Electric Capital 05-07-02 2.09 15,000,000 14,917,667 07-09-02 1.82 27,000,000 26,785,515 General Electric Capital Services 02-26-02 3.36 25,000,000 24,941,840 Total 174,477,251 See accompanying notes to investments in securities. -------------------------------------------------------------------------------- 18 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT Commercial paper (continued) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Utilities -- electric (4.6%) Natl Rural Utilities 02-27-02 1.75% $20,000,000 $19,974,722 03-04-02 1.71 25,000,000 24,963,188 03-04-02 1.80 27,000,000 26,958,150 03-06-02 1.75 25,200,000 25,159,575 03-08-02 1.86 14,000,000 13,974,683 03-11-02 1.81 17,000,000 16,967,521 03-12-02 1.83 22,500,000 22,455,394 UBS Finance (Delaware) 02-25-02 3.35 14,700,000 14,667,268 02-27-02 3.35 23,000,000 22,944,519 06-03-02 2.01 31,000,000 30,789,889 06-06-02 1.79 30,000,000 29,814,583 06-13-02 1.85 56,000,000 55,622,186 Total 304,291,678 Utilities -- telephone (1.6%) BellSouth 02-08-02 2.24 17,300,000(b) 17,292,465 SBC Communications 05-03-02 2.00 26,000,000(b) 25,869,213 05-03-02 2.09 31,500,000(b) 31,334,380 05-06-02 2.07 30,000,000(b) 29,838,633 Total 104,334,691 Total commercial paper (Cost: $4,114,114,816) $4,114,114,816 Total investments in securities (Cost: $6,570,981,059)(d) $6,570,981,059 Notes to investments in securities (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) 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. (c) Interest rate varies either based on a predetermined schedule or to reflect current market conditions; rate shown is the effective rate on Jan. 31, 2002. (d) Also represents the cost of securities for federal income tax purposes at Jan. 31, 2002. -------------------------------------------------------------------------------- 19 AXP CASH MANAGEMENT FUND -- SEMIANNUAL REPORT AXP Cash Management Fund 70100 AXP Financial Center Minneapolis, MN 55474 americanexpress.com Ticker Symbol Class A: IDSXX Class B: ACBXX Class C: N/A Class Y: IDYXX PRSRT STD AUTO U.S. POSTAGE PAID AMERICAN EXPRESS 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. S-6322 R (4/02)