-----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, INk1qcjTTIpSdjEAyxf8kWkb+3aBhmG+mhGSozL2R1jqoQGh/MPcGWibSaWx8dHH 05cS+5W4M+38v4HyZC5KPQ== 0000820027-03-000247.txt : 20030403 0000820027-03-000247.hdr.sgml : 20030403 20030403161033 ACCESSION NUMBER: 0000820027-03-000247 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030131 FILED AS OF DATE: 20030403 EFFECTIVENESS DATE: 20030403 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AXP MONEY MARKET SERIES INC CENTRAL INDEX KEY: 0000049698 IRS NUMBER: 411254759 STATE OF INCORPORATION: MN FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-02591 FILM NUMBER: 03638806 BUSINESS ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: T33/52 CITY: MINNEAPLOS STATE: MN ZIP: 55440 BUSINESS PHONE: 6123722772 MAIL ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: T33/52 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 FORMER COMPANY: FORMER CONFORMED NAME: IDS CASH MANAGEMENT FUND INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: IDS MONEY MARKET SERIES INC DATE OF NAME CHANGE: 19920917 N-30D 1 s6322.txt AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT AXP(R) Cash Management Fund 2003 SEMIANNUAL REPORT JAN. 31, 2003 AXP Cash Management Fund seeks to provide shareholders with maximum current income consistent with liquidity and stability of principal. - -------------------------------------------------------------------------------- (logo) (logo) American AMERICAN Express(R) EXPRESS Funds (R) - -------------------------------------------------------------------------------- Mutual Funds Can Work for You For more than six decades, American Express(R) Funds has provided investors with attractive investment opportunities. Several of our funds helped pioneer the mutual fund industry in the 1940s. Today, with 58 publicly offered funds and nearly $64 billion* in assets, American Express Funds ranks among the largest U.S. fund families. American Express Financial Corporation, the investment manager for American Express Funds, has more than 100 years of experience as a financial services provider -- a claim few other financial firms can make. With investment management offices in Minneapolis, Boston, New York, San Diego, London, Tokyo and Singapore, we strive to provide our shareholders with the high-quality service American Express is known for worldwide. At American Express Funds, we're focused on your success. Our investment managers have the strength and experience that you can count on to help you achieve your financial goals -- now and into the future. * As of December 2002. - -------------------------------------------------------------------------------- Table of Contents From the Chairman 3 Economic and Market Update 4 Fund Snapshot 6 Questions & Answers with Portfolio Management 6 Investments in Securities 8 Financial Statements 12 Notes to Financial Statements 15 Results of Meeting of Shareholders 20 - -------------------------------------------------------------------------------- 2 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT From the Chairman (photo of) Arne H. Carlson Arne H. Carlson Chairman of the board Dear Shareholders, The recent proposed Bush economic stimulus package and potential conflicts around the globe are capturing headlines. Negative investment returns persisted in 2002 and the investing public also had their confidence in the integrity of corporations shaken. While the scandals appear to be largely behind us, the recent past offers lessons on investing and on governance, which I would like to discuss with you. First, and importantly, we have learned that diversification is not just a concept but a key tactic investors can use to help preserve assets. We would encourage you to work closely with your financial advisor to build a diversified portfolio designed to match your current thoughts about risk and reward. A second lesson of 2002 is that we must have enhanced oversight of corporations to ensure their financial statements are accurate, their officers act in the interest of shareholders and their directors are truly independent. The Sarbanes-Oxley Act passed by Congress in August, is already having an impact in these areas. The American Express Funds Board is an independent body comprised of nine members who are nominated by the independent directors. American Express Financial Corporation is represented by three board members, however, they do not play a role on the nominating committee. In addition, the Funds auditors, KPMG LLP, are independent of American Express Financial Corporation. KPMG serves the interest of shareholders by supporting the work of the Board and certifying unbiased financial reports. Further, the Board has confidence in Ted Truscott, American Express Financial Corporation's Chief Investment Officer, and shares his enthusiasm in the management changes he has effected to improve the investment performance of all American Express funds. The focus of the Board and American Express Financial Corporation is simple; we strive for consistent, competitive investment performance. On behalf of the Board, Arne H. Carlson - -------------------------------------------------------------------------------- 3 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT Economic and Market Update FROM CIO WILLIAM F. "TED" TRUSCOTT (photo of) William F. "Ted" Truscott William F. "Ted" Truscott Chief Investment Officer American Express Financial Corporation Dear Shareholders, In spite of a mostly positive fourth quarter*, 2002 proved to be an extraordinarily challenging year for investors, with the benchmark stock indices - -- the Dow, the Nasdaq and the S&P 500 -- all registering percentage losses well into the double digits. While there were technical factors that put a damper on market performance last year, most notably, P/E ratios that are surprisingly high after three years of a bear market, it was corporate governance issues that fostered a general atmosphere of mistrust. The collapse of several large, high profile companies due to outright fraud and malfeasance has been -- and ought to be -- outrageous to the investing public. The magnitude of this wrongdoing is still shocking months after the fact. When many economic factors should have been giving investors reason for optimism, the steady drip of news about these companies sapped overall confidence. I believe there is ample evidence that conditions are not as bad as the markets seem to think. While corporate earnings have been weak, the economy grew at the respectable rate of about 3% last year, compared to 0.1% in 2001. A portion of the softness in earnings can be attributed to excess capacity added in the late `90s. KEY POINTS - -- If you are rebalancing your portfolio, we encourage moderate changes from stocks to bonds. - -- Interest rates are the lowest they have been in 40 years. - -- There is ample evidence that conditions are not as bad as the markets seem to think. - -------------------------------------------------------------------------------- 4 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT Economic and Market Update Interest rates are another bright spot. They are the lowest they have been in 40 years, which has added to consumer and business purchasing power. There's no better illustration of this than the housing market, which has remained vigorous. Finally, the business productivity gains we've seen since the mid-`90s are remarkable, making products and services less expensive. The macroeconomic picture, while not ideal, is certainly positive. For these reasons, I'm cautiously optimistic about market prospects for 2003. Of course, there are still risks. Much of what happens this year will depend on external factors, such as whether or not more scandals arise and the implications of potential conflict in Iraq. In the short term, military action in Iraq would almost certainly produce an oil price spike; if that increase became severe enough for a significant period of time, it would create inflationary pressures that could endanger economic growth. In addition to stocks, some bond categories offer opportunity. Though we believe U.S. Treasuries are currently overvalued, select corporate, high-yield and municipal issues may provide competitive returns this year. Speak to your financial advisor to learn more about different asset classes. After three years of negative stock market returns, many individual investors are rebalancing portfolios with regard to risk and return. If you are repositioning, we would encourage moderate changes from stocks to bonds. The risk inherent in emotion-based repositioning is that you will go too far too fast. I encourage gradual movement across categories. Should interest rates move at all in 2003, it's likely that they'll go up, which will have a negative impact on most bonds. Continue to invest according to your individual timeframe and financial goals. As always, thank you for investing with American Express Funds. William F. Truscott * Please see portfolio manager Q&A for fiscal period economic coverage. - -------------------------------------------------------------------------------- 5 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT Fund Snapshot AS OF JAN. 31, 2003 PORTFOLIO MANAGER Portfolio manager Jerri I. Cohen, CFA Tenure/since 12/02 Years in industry 20 FUND OBJECTIVE For investors seeking maximum current income consistent with liquidity and conservation of capital. Inception dates A: 10/6/75 B: 3/20/95 C: 6/26/00 Y: 3/20/95 Ticker symbols A: IDSXX B: ACBXX C: -- Y: IDYXX Total net assets $5.876 billion Number of holdings approximately 260 STYLE MATRIX Shading within the style matrix indicates areas in which the Fund generally invests. DURATION SHORT INT. LONG X HIGH MEDIUM QUALITY LOW 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 $1.00 per share, it is possible to lose money by investing in the Fund. Questions & Answers WITH PORTFOLIO MANAGEMENT Jerri Cohen joined American Express Financial Corporation in December 2002, and is leading a team that is managing AXP Cash Management Fund's portfolio. She has 20 years of industry experience. Prior to joining the firm she managed money market funds at Zurich Scudder Investments. Below she discusses the Fund's positioning and performance. Q: How did the Fund perform for the six-month period ended Jan. 31, 2003? A: The Fund's Class A shares returned 0.52% for the period, and its seven-day yield was 0.54%. Q: What factors significantly impacted performance of the Fund? A: In an environment where interest rates remained at the lowest levels since the early 1960s, the Fund still managed to generate a competitive return. In the early months of the period, short-term interest rates remained relatively stable. However, they began to drift lower as it became clear that the rate of growth in the U.S. economy was slowing. The Federal Reserve responded by reducing short-term interest rates by 0.50% to 1.25% on Nov. 6. As a result, the benchmark yield on three-month U.S. Treasury bills fell from about 1.65% to 1.15% during the six-month period ended Jan. 31. While rates remained quite low, wary investors continued to show a preference for less volatile investment choices such as AXP Cash Management Fund, rather than the unpredictable stock market. - -------------------------------------------------------------------------------- 6 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT Questions & Answers Q: Did you make significant changes to the Fund during this period? A: Throughout the period, the Fund's focus remained first and foremost on investing assets in an effective manner without taking undue risk. The Fund continues to seek investments that allow it to generate a competitive yield while maintaining a stable net asset value. Q: What is your outlook for the coming months? A: We expect the economy to continue to expand at a very modest pace and we expect inflation to remain tame. Productivity gains should lead to improved corporate profits. Given this scenario, it appears likely that interest rates will be relatively stable through at least the first half of the year. The one major uncertainty yet to unfold is the volatile situation in the Middle East. Q: How are you positioning the Fund in light of your outlook? A: We continue to try to position the Fund in an effort to maximize the yield generated without taking unnecessary risks. Since we don't anticipate a near-term rise in interest rates, we are trying to own securities on the longer end of the money market spectrum, which typically pay higher interest rates. At the same time, we will continue to closely monitor developments affecting the economy and the interest rate market and strive to adjust our portfolio strategy in an appropriate way to help benefit our shareholders.
AVERAGE ANNUAL TOTAL RETURNS as of Jan. 31, 2003 Class A Class B Class C Class Y (Inception dates) (10/6/75) (3/20/95) (6/26/00) (3/20/95) NAV(1) NAV(2) After CDSC(3) NAV(2) After CDSC(4) NAV(1) 6 months* +0.52% +0.16% -3.84% +0.16% -0.84% +0.54% 1 year +1.21% +0.43% -3.57% +0.44% +0.44% +1.23% 5 years +4.13% +3.35% +3.17% N/A N/A +4.15% 10 years +4.22% N/A N/A N/A N/A N/A Since inception N/A +3.78% +3.78% +2.53% +2.53% +4.58%
* Not annualized. (1) Sales charge is not applicable to these shares. Class Y shares available to institutional investors only. (2) Excluding sales charge. (3) Returns at maximum contingent deferred sales charge (CDSC). CDSC applies as follows: first year 5%; second and third year 4%; fourth year 3%; fifth year 2%; sixth year 1%; no sales charge thereafter. (4) 1% CDSC applies to redemptions made within the first year of purchase. Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that your shares, when redeemed, may be worth more or less than the original cost. The performance shown for each class of shares will vary due to differences in sales charges and fees. Short term performance may be higher or lower than the figures shown. Visit americanexpress.com for current information. - -------------------------------------------------------------------------------- 7 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT Investments in Securities AXP Cash Management Fund Jan. 31, 2003 (Unaudited) (Percentages represent value of investments compared to net assets) U.S. government agencies (23.2%) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Federal Home Loan Bank Disc Nts 02-07-03 1.25% $30,500,000 $30,493,646 02-14-03 1.26 25,600,000 25,588,352 02-21-03 1.25 41,000,000 40,971,528 04-11-03 1.22 16,100,000 16,062,353 04-11-03 1.24 35,800,000 35,714,915 Federal Home Loan Mtge Corp Disc Nts 02-20-03 1.25 40,900,000 40,873,125 02-27-03 1.27 20,900,000 20,880,830 02-28-03 1.24 18,200,000 18,183,074 02-28-03 1.25 33,200,000 33,168,875 03-06-03 1.27 19,700,000 19,677,066 03-07-03 1.24 23,100,000 23,072,947 03-13-03 1.28 41,100,000 41,041,547 03-14-03 1.25 60,000,000 59,914,583 03-27-03 1.27 62,900,000 62,780,176 03-27-03 1.28 33,300,000 33,236,064 03-31-03 1.25 36,300,000 36,226,896 03-31-03 1.28 45,100,000 45,007,357 04-03-03 1.24 74,100,000 73,944,936 04-10-03 1.25 75,300,000 75,122,920 Federal Natl Mtge Assn Disc Nts 02-05-03 1.25 18,900,000 18,897,375 02-05-03 1.26 40,000,000 39,994,422 02-26-03 1.27 19,500,000 19,482,802 03-05-03 1.27 34,000,000 33,961,769 03-05-03 1.28 34,900,000 34,860,292 03-06-03 1.25 30,800,000 30,764,708 03-12-03 1.27 25,500,000 25,464,916 03-12-03 1.28 34,300,000 34,252,437 03-19-03 1.26 40,000,000 39,935,600 03-19-03 1.28 70,400,000 70,284,857 03-20-03 1.29 34,000,000 33,942,960 03-26-03 1.26 10,900,000 10,879,781 03-26-03 1.28 50,000,000 49,905,778 04-02-03 1.24 50,000,000 49,897,083 04-02-03 1.25 36,600,000 36,523,750 04-09-03 1.24 35,000,000 34,919,228 04-09-03 1.28 41,200,000 41,101,852 04-30-03 1.21 24,500,000 24,427,534 Total U.S. government agencies (Cost: $1,361,458,334) $1,361,458,334 Certificates of deposit (6.8%) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Abbey Natl Yankee 02-11-03 1.31% $23,300,000 $23,300,000 02-13-03 1.32 25,000,000 25,000,000 02-21-03 1.33 25,000,000 25,000,000 03-12-03 1.32 25,500,000 25,500,000 Banque Nationale de Paris Yankee 02-06-03 1.55 24,000,000 24,000,000 02-19-03 1.33 27,000,000 27,000,000 02-24-03 1.33 25,900,000 25,900,000 Canadian Imperial Bank Yankee 05-02-03 1.27 29,700,000 29,700,000 Credit Suisse First Boston NY Yankee 01-16-04 1.38 50,000,000(c) 50,000,000 Westdeutsche Landesbank Yankee 02-07-03 1.32 22,000,000 22,000,000 02-18-03 1.33 41,100,000 41,100,000 02-24-03 1.33 30,000,000 30,000,000 03-03-03 1.34 20,000,000 20,000,000 03-11-03 1.29 11,000,000 11,000,000 04-02-03 1.31 19,300,000 19,300,000 Total certificates of deposit (Cost: $398,800,000) $398,800,000 Commercial paper (69.8%) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Asset-backed (37.5%) Alpine Securitization 02-07-03 1.80% $23,000,000(b) $22,993,100 02-13-03 1.28 20,000,000(b) 19,991,467 02-14-03 1.34 21,000,000(b) 20,989,838 04-23-03 1.27 40,000,000(b) 39,885,699 04-24-03 1.27 13,000,000(b) 12,962,394 Amsterdam Funding 02-24-03 1.34 16,000,000(b) 15,986,302 02-28-03 1.30 15,000,000(b) 14,985,375 03-20-03 1.27 7,700,000(b) 7,687,233 03-24-03 1.29 31,000,000(b) 30,943,347 03-25-03 1.29 31,000,000(b) 30,942,461 04-01-03 1.29 7,600,000(b) 7,583,995 See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 8 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT Commercial paper (continued) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Asset-backed (cont.) Barton Capital 03-06-03 1.29% $19,900,000(b) $19,876,468 03-11-03 1.26 30,049,000(b) 30,009,035 03-14-03 1.29 25,900,000(b) 25,861,949 03-17-03 1.29 21,000,000(b) 20,966,890 CAFCO 02-20-03 1.33 22,000,000(b) 21,984,557 02-24-03 1.33 22,000,000(b) 21,981,306 02-25-03 1.33 20,000,000(b) 19,982,267 03-04-03 1.33 21,400,000(b) 21,375,491 03-24-03 1.26 26,000,000(b) 25,953,590 Charta 02-18-03 1.34 13,500,000(b) 13,491,458 02-20-03 1.34 26,500,000(b) 26,481,259 02-27-03 1.34 25,800,000(b) 25,775,031 02-27-03 1.35 13,500,000(b) 13,486,838 03-21-03 1.30 17,000,000(b) 16,970,533 03-21-03 1.33 20,000,000(b) 19,964,533 Ciesco LP 03-13-03 1.27 3,100,000(b) 3,095,626 Corporate Receivables 02-10-03 1.32 29,900,000(b) 29,890,133 02-19-03 1.34 19,000,000(b) 18,987,270 02-21-03 1.33 12,000,000(b) 11,991,133 03-04-03 1.33 22,000,000(b) 21,974,804 04-08-03 1.26 27,000,000(b) 26,937,630 CXC 02-18-03 1.34 9,800,000(b) 9,793,799 03-07-03 1.32 27,900,000(b) 27,865,218 03-13-03 1.33 26,000,000(b) 25,961,578 03-20-03 1.33 26,000,000(b) 25,954,854 04-22-03 1.27 21,000,000(b) 20,940,733 Delaware Funding 02-06-03 1.53 25,000,000(b) 24,994,688 02-11-03 1.33 25,000,000(b) 24,990,764 02-19-03 1.29 27,000,000(b) 26,982,585 04-03-03 1.30 15,000,000(b) 14,966,958 Edison Asset Securitization 02-19-03 1.35 24,000,000(b) 23,983,800 04-01-03 1.31 6,875,000(b) 6,860,240 04-04-03 1.30 28,000,000(b) 27,937,311 05-01-03 1.30 30,000,000(b) 29,903,583 05-21-03 1.26 11,693,000(b) 11,648,391 Enterprise Funding 02-19-03 1.34 14,541,000(b) 14,531,258 02-20-03 1.34 10,000,000(b) 9,992,928 03-07-03 1.30 5,718,000(b) 5,710,980 03-17-03 1.28 20,900,000(b) 20,867,303 04-03-03 1.27 8,023,000(b) 8,005,735 Fairway Finance 03-03-03 1.27 11,448,000(b) 11,435,884 03-25-03 1.29 24,000,000(b) 23,955,280 03-25-03 1.30 14,154,000(b) 14,127,422 04-04-03 1.30 20,000,000(b) 19,955,222 04-10-03 1.30 28,800,000(b) 28,729,280 07-17-03 1.29 15,222,000(b) 15,132,156 Falcon Asset Securitization 02-28-03 1.28 18,000,000(b) 17,982,720 03-17-03 1.29 10,000,000(b) 9,984,233 04-15-03 1.29 22,500,000(b) 22,441,144 04-21-03 1.28 21,200,000(b) 21,140,452 05-12-03 1.29 41,325,000(b) 41,176,919 Fleet Funding 02-11-03 1.35 22,000,000(b) 21,991,750 02-19-03 1.33 16,491,000(b) 16,480,033 02-19-03 1.34 12,500,000(b) 12,491,625 02-25-03 1.34 22,000,000(b) 21,980,347 04-04-03 1.29 21,000,000(b) 20,953,345 04-24-03 1.26 23,000,000(b) 22,933,990 Kitty Hawk Funding 02-13-03 1.33 13,553,000(b) 13,546,992 03-03-03 1.35 20,300,000(b) 20,277,163 03-10-03 1.33 27,000,000(b) 26,963,093 03-21-03 1.30 9,815,000(b) 9,797,987 04-11-03 1.26 26,500,000(b) 26,436,003 04-15-03 1.28 19,000,000(b) 18,950,684 Old Line Funding 02-03-03 1.35 23,000,000(b) 22,998,275 02-05-03 1.32 21,331,000(b) 21,327,871 02-06-03 1.35 13,248,000(b) 13,245,516 02-12-03 1.33 20,000,000(b) 19,991,872 02-13-03 1.31 14,209,000(b) 14,202,795 04-04-03 1.26 13,000,000(b) 12,971,790 04-21-03 1.27 11,000,000(b) 10,969,344 Park Avenue Receivables 02-03-03 1.31 24,500,000(b) 24,498,217 02-20-03 1.27 25,051,000(b) 25,034,209 02-21-03 1.29 25,000,000(b) 24,982,083 02-27-03 1.28 22,000,000(b) 21,979,662 03-11-03 1.26 43,065,000(b) 43,007,723 See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 9 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT Commercial paper (continued) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Asset-backed (cont.) Preferred Receivables Funding 02-24-03 1.26% $3,000,000(b) $2,997,585 04-07-03 1.30 26,000,000(b) 25,938,972 Receivables Capital 02-03-03 1.59 16,000,000(b) 15,998,587 02-18-03 1.34 18,708,000(b) 18,696,162 03-12-03 1.33 26,000,000(b) 25,962,538 03-13-03 1.27 23,000,000(b) 22,967,544 03-17-03 1.34 21,000,000(b) 20,965,607 04-03-03 1.30 11,000,000(b) 10,975,769 Sheffield Receivables 02-04-03 1.34 13,000,000(b) 12,998,548 02-13-03 1.35 11,000,000(b) 10,995,050 02-26-03 1.27 18,300,000(b) 18,283,860 02-26-03 1.28 9,100,000(b) 9,091,911 03-05-03 1.29 10,350,000(b) 10,338,132 03-17-03 1.30 24,180,000(b) 24,141,581 04-23-03 1.26 32,000,000(b) 31,909,279 Variable Funding Capital 02-10-03 1.33 27,500,000(b) 27,490,856 03-04-03 1.30 23,000,000(b) 22,974,253 03-07-03 1.33 17,142,000(b) 17,120,468 03-18-03 1.27 21,000,000(b) 20,966,663 Windmill Funding 02-04-03 1.32 22,800,000(b) 22,797,492 03-03-03 1.30 22,000,000(b) 21,976,167 03-11-03 1.29 21,000,000(b) 20,971,405 03-28-03 1.26 25,500,000(b) 25,450,913 04-01-03 1.29 22,900,000(b) 22,851,773 Total 2,202,815,914 Banks and savings & loans (10.6%) ABN Amro North America Finance 02-28-03 1.35 9,200,000 9,190,685 03-27-03 1.32 13,840,000 13,812,597 04-07-03 1.29 30,000,000 29,930,125 04-08-03 1.29 28,000,000 27,933,780 ANZ (Delaware) 04-07-03 1.29 29,000,000 28,932,454 Barclays U.S. Funding 03-04-03 1.35 13,100,000 13,084,771 03-13-03 1.32 24,000,000 23,964,800 03-17-03 1.33 16,000,000 15,973,991 Deutsche Bank Financial LLC 02-10-03 1.32 30,000,000 29,990,138 05-15-03 1.29 25,000,000 24,908,087 Dexia Bank (Delaware) LLC 03-06-03 1.33 24,900,000 24,869,643 03-10-03 1.32 52,900,000 52,828,233 03-10-03 1.33 25,000,000 24,965,826 KBC Bank 03-17-03 1.28 20,000,000 19,968,711 Nordea North America 02-03-03 1.55 5,000,000 4,999,569 04-08-03 1.28 27,500,000 27,435,467 Societe Generale North America 02-04-03 1.34 13,000,000 12,998,548 02-12-03 1.34 49,000,000 48,979,971 02-21-03 1.34 15,000,000 14,988,833 02-26-03 1.33 22,500,000 22,479,219 02-26-03 1.34 21,400,000 21,380,160 03-07-03 1.30 29,000,000 28,964,394 03-18-03 1.34 27,000,000 26,954,944 04-01-03 1.30 32,200,000 32,131,396 Westdeutsche Landesbank Girozentrale 01-27-04 1.37 42,500,000(b) 41,926,250 Total 623,592,592 Broker dealers (5.5%) Goldman Sachs Group 02-05-03 1.78 19,900,000 19,896,064 Merrill Lynch 03-05-03 1.36 18,000,000(c) 18,000,000 11-19-03 1.40 25,000,000(c) 25,000,000 Morgan Stanley 02-04-03 1.34 27,000,000 26,996,985 02-07-03 1.33 27,000,000 26,994,015 03-11-03 1.29 13,400,000 13,381,754 03-18-03 1.29 20,000,000 19,967,750 04-16-03 1.27 45,000,000 44,882,525 04-25-03 1.27 40,000,000 39,882,878 Salomon Smith Barney 02-03-03 1.34 31,200,000 31,197,685 02-06-03 1.33 7,200,000 7,198,670 02-11-03 1.77 21,700,000 21,689,331 02-26-03 1.33 27,000,000 26,975,063 Total 322,062,720 Energy (0.6%) BP America 03-05-03 1.33 11,500,000 11,486,404 Chevron UK Investment 03-06-03 1.34 8,700,000 8,689,314 03-11-03 1.33 13,200,000(b) 13,181,469 Total 33,357,187 See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 10 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT Commercial paper (continued) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity Financial services (7.5%) AEGON Funding 02-25-03 1.34% $15,000,000(b) $14,986,600 03-18-03 1.35 25,000,000(b) 24,957,813 03-20-03 1.35 37,100,000(b) 37,034,611 03-21-03 1.35 24,000,000(b) 23,956,800 03-24-03 1.28 24,000,000(b) 23,956,480 04-14-03 1.28 27,000,000(b) 26,930,880 04-17-03 1.28 29,100,000(b) 29,022,399 04-24-03 1.27 21,000,000(b) 20,939,252 Intl Lease Finance 02-13-03 1.34 18,000,000 17,991,960 02-25-03 1.33 21,900,000 21,880,582 02-25-03 1.35 7,294,000 7,287,435 02-27-03 1.34 26,400,000 26,374,451 03-14-03 1.33 21,300,000 21,267,736 04-07-03 1.35 22,968,000 22,912,016 04-08-03 1.29 17,500,000 17,458,613 04-28-03 1.26 25,000,000 24,924,750 Southern Co Funding 02-11-03 1.33 9,100,000(b) 9,096,638 02-14-03 1.33 12,100,000(b) 12,094,189 03-11-03 1.32 11,500,000(b) 11,483,977 03-11-03 1.33 6,500,000(b) 6,490,875 03-18-03 1.28 10,600,000(b) 10,583,040 04-25-03 1.27 30,000,000(b) 29,912,157 Total 441,543,254 Food (0.9%) Cargill 02-05-03 1.62 12,955,000(b) 12,952,668 02-14-03 1.30 17,400,000(b) 17,391,832 Cargill Global Funding 02-03-03 1.69 22,000,000(b) 21,997,934 Total 52,342,434 Multi-industry conglomerates (2.9%) BOC Group 02-06-03 1.35% $25,000,000(b) $24,995,313 03-04-03 1.30 24,000,000(b) 23,973,133 GE Capital Intl Funding 02-25-03 1.35 21,500,000(b) 21,480,650 02-28-03 1.35 22,000,000(b) 21,977,725 03-21-03 1.34 20,300,000(b) 20,263,731 03-24-03 1.34 21,200,000(b) 21,159,755 04-01-03 1.27 22,000,000(b) 21,954,209 General Electric Capital 06-04-03 1.27 17,408,000 17,333,059 Total 173,137,575 Utilities -- electric (1.1%) UBS Americas 03-31-03 1.27 10,109,000 10,088,316 UBS Finance (Delaware) 03-03-03 1.32 25,600,000 25,571,841 03-19-03 1.33 7,431,000 7,418,371 03-26-03 1.33 23,300,000 23,254,377 Total 66,332,905 Utilities -- telephone (3.1%) Vodafone AirTouch 02-04-03 1.77 30,000,000(b) 29,995,575 02-10-03 1.78 28,700,000(b) 28,687,229 02-12-03 1.65 26,800,000(b) 26,786,488 02-12-03 1.78 21,800,000(b) 21,788,143 02-13-03 1.33 25,000,000(b) 24,988,917 02-14-03 1.33 25,000,000(b) 24,987,993 02-18-03 1.34 27,000,000(b) 26,982,915 Total 184,217,260 Total commercial paper (Cost: $4,099,401,841) $4,099,401,841 Total investments in securities (Cost: $5,859,660,175)(d) $5,859,660,175 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, 2003. (d) Also represents the cost of securities for federal income tax purposes at Jan. 31, 2003. - -------------------------------------------------------------------------------- 11 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT
Financial Statements Statement of assets and liabilities AXP Cash Management Fund Jan. 31, 2003 (Unaudited) Assets Investments in securities, at value (Note 1) (identified cost $5,859,660,175) $5,859,660,175 Cash in bank on demand deposit 17,044,063 Capital shares receivable 154,025 Accrued interest receivable 865,881 ------- Total assets 5,877,724,144 ------------- Liabilities Dividends payable to shareholders 935,376 Capital shares payable 387,560 Accrued investment management services fee 48,755 Accrued distribution fee 21,913 Accrued transfer agency fee 8,209 Accrued administrative services fee 3,686 Other accrued expenses 378,464 ------- Total liabilities 1,783,963 --------- Net assets applicable to outstanding capital stock $5,875,940,181 -------------- Represented by Capital stock -- $.01 par value (Note 1) $ 58,771,451 Additional paid-in capital 5,818,305,626 Excess of distributions over net investment income (1,139,497) Accumulated net realized gain (loss) 2,601 ----- Total -- representing net assets applicable to outstanding capital stock $5,875,940,181 ============== Net assets applicable to outstanding shares: Class A $5,250,875,078 Class B $ 362,078,810 Class C $ 4,577,112 Class Y $ 258,409,181 Net asset value per share of outstanding capital stock: Class A shares 5,251,712,440 $ 1.00 Class B shares 362,314,896 $ 1.00 Class C shares 4,578,128 $ 1.00 Class Y shares 258,539,629 $ 1.00 ----------- --------------
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 12 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT
Statement of operations AXP Cash Management Fund Six months ended Jan. 31, 2003 (Unaudited) Investment income Income: Interest $50,553,859 ----------- Expenses (Note 2): Investment management services fee 9,191,980 Distribution fee Class A 448,982 Class B 1,410,649 Class C 17,973 Transfer agency fee 6,723,729 Incremental transfer agency fee Class A 536,247 Class B 37,159 Class C 426 Administrative services fees and expenses 747,485 Compensation of board members 24,008 Custodian fees 215,000 Printing and postage 1,204,994 Registration fees 380,355 Audit fees 18,125 Other 35,773 ------ Total expenses 20,992,885 Expenses waived/reimbursed by AEFC (Note 2) (26,978) ------- 20,965,907 Earnings credits on cash balances (Note 2) (235,742) -------- Total net expenses 20,730,165 ---------- Investment income (loss) -- net 29,823,694 ---------- Net increase (decrease) in net assets resulting from operations $29,823,694 ===========
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 13 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT
Statements of changes in net assets AXP Cash Management Fund Jan. 31, 2003 July 31, 2002 Six months ended Year ended (Unaudited) Operations and distributions Investment income (loss) -- net $ 29,823,694 $ 122,004,892 Net realized gain (loss) on investments -- 37,386 ---------- ----------- Net increase (decrease) in net assets resulting from operations 29,823,694 122,042,278 ---------- ----------- Distributions to shareholders from: Net investment income Class A (29,144,520) (114,798,111) Class B (644,028) (3,590,767) Class C (7,971) (22,053) Class Y (1,166,671) (3,594,108) ---------- ----------- Total distributions (30,963,190) (122,005,039) ---------- ----------- Capital share transactions at constant $1 net asset value Proceeds from sales Class A shares (Note 2) 3,822,573,724 15,251,379,851 Class B shares 218,552,166 557,524,233 Class C shares 10,224,329 12,962,225 Class Y shares 157,587,281 212,427,535 Reinvestment of distributions at net asset value Class A shares 28,990,097 115,021,206 Class B shares 646,826 3,560,788 Class C shares 7,669 20,690 Class Y shares 1,144,335 3,612,868 Payments for redemptions Class A shares (4,365,873,638) (15,748,777,409) Class B shares (Note 2) (236,673,124) (454,014,609) Class C shares (Note 2) (9,213,145) (10,288,817) Class Y shares (102,897,215) (187,522,143) ------------ ------------ Increase (decrease) in net assets from capital share transactions (474,930,695) (244,093,582) ------------ ------------ Total increase (decrease) in net assets (476,070,191) (244,056,343) Net assets at beginning of period 6,352,010,372 6,596,066,715 ------------- ------------- Net assets at end of period $ 5,875,940,181 $ 6,352,010,372 =============== ================
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 14 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT Notes to Financial Statements AXP Cash Management Fund (Unaudited as to Jan. 31, 2003) 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) (the 1940 Act) as a diversified, open-end management investment company. 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 invests primarily in money market instruments. 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. - -------------------------------------------------------------------------------- 15 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT 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. Other Security transactions are accounted for on the date securities are purchased or sold. Interest income, including amortization of premium and discount, is recognized 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 fee at an annual rate of 0.75% of the Fund's average daily net assets attributable to Class B and Class C shares. Effective Jan. 1, 2003, the Fund has an agreement to pay a fee at an annual rate of 0.10% of the Fund's average daily net assets attributable to Class A shares and the fee for Class B will increase to 0.85% of the Fund's average daily net assets. As of Jan. 31, 2003, the additional 0.10% for Class B has not been implemented. Sales charges received by the Distributor for distributing Fund shares were $1,414,575 for Class B and $5,072 for Class C for the six months ended Jan. 31, 2003. Effective Jan. 1, 2003, AEFC and its affiliates may limit the expenses of one or more classes for the purpose of increasing its yield. This expense limitation policy may be revised or terminated at any time without notice. As of Jan. 31, 2003, AEFC and its affiliates waived certain fees and expenses to 1.36% for Class B and 1.36% for Class C. - -------------------------------------------------------------------------------- 16 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT During the six months ended Jan. 31, 2003, the Fund's custodian and transfer agency fees were reduced by $235,742 as a result of earnings credits from overnight cash balances. 3. SECURITIES TRANSACTIONS Cost of purchases and proceeds from sales of securities aggregated $14,100,851,518 and $14,575,435,000, respectively, for the six months ended Jan. 31, 2003. Realized gains and losses are determined on an identified cost basis. 4. BANK BORROWINGS The Fund has a revolving credit agreement with Deutsche Bank, whereby the Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. The agreement went into effect Sept. 24, 2002. The Fund must maintain asset coverage for borrowings of at least 300%. The agreement, which enables the Fund to participate with other American Express mutual funds, permits borrowings up to $500 million, collectively. Interest is charged to each Fund based on its borrowings at a rate equal to either the LIBOR plus 0.50%, the IBOR plus 0.50% or the higher of the Federal Funds Rate plus 0.25% and the Prime Lending Rate. Borrowings are payable within 60 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 0.09% per annum. Prior to this agreement, the Fund had a revolving credit agreement that permitted borrowings up to $200 million with U.S. Bank, N.A. The Fund had no borrowings outstanding during the six months ended Jan. 31, 2003. 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, 2003(h) 2002 2001 2000 1999 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 .02 .05 .05 .05 Less distributions: Dividends from net investment income (.01) (.02) (.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) $5,251 $5,766 $6,149 $5,438 $5,032 Ratio of expenses to average daily net assets(c) .64%(d) .59% .59% .58% .57% Ratio of net investment income (loss) to average daily net assets 1.02%(d) 1.89% 5.18% 5.37% 4.65% Total return(g) .52%(i) 1.93% 5.35% 5.55% 4.71%
See accompanying notes to financial highlights. - -------------------------------------------------------------------------------- 17 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT
Class B Per share income and capital changes(a) Fiscal period ended July 31, 2003(h) 2002 2001 2000 1999 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 Less distributions: Dividends from net investment income -- (.01) (.05) (.05) (.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) $362 $380 $273 $232 $192 Ratio of expenses to average daily net assets(c) 1.36%(d),(e) 1.34% 1.34% 1.33% 1.32% Ratio of net investment income (loss) to average daily net assets .30%(d) 1.13% 4.37% 4.64% 3.88% Total return(g) .16%(i) 1.13% 4.57% 4.76% 3.94%
Class C Per share income and capital changes(a) Fiscal period ended July 31, 2003(h) 2002 2001 2000(b) Net asset value, beginning of period $1.00 $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 $1.00 Ratios/supplemental data Net assets, end of period (in millions) $5 $4 $1 $-- Ratio of expenses to average daily net assets(c) 1.36%(d),(f) 1.34% 1.34% 1.33%(d) Ratio of net investment income (loss) to average daily net assets .30%(d) .99% 3.88% 6.10%(d) Total return(g) .16%(i) 1.14% 4.68% .63%(i)
See accompanying notes to financial highlights. - -------------------------------------------------------------------------------- 18 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT
Class Y Per share income and capital changes(a) Fiscal period ended July 31, 2003(h) 2002 2001 2000 1999 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 .02 .05 .05 .05 Less distributions: Dividends from net investment income (.01) (.02) (.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) $258 $203 $174 $142 $124 Ratio of expenses to average daily net assets(c) .61%(d) .57% .57% .57% .56% Ratio of net investment income (loss) to average daily net assets 1.05%(d) 1.86% 5.18% 5.42% 4.64% Total return(g) .54%(i) 1.95% 5.37% 5.56% 4.72%
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) AEFC waived/reimbursed the Fund for certain expenses. Had AEFC not done so, the annual ratio of expenses for Class B would have been 1.38% for the period ended Jan. 31, 2003. (f) AEFC waived/reimbursed the Fund for certain expenses. Had AEFC not done so, the annual ratio of expenses for Class C would have been 1.38% for the period ended Jan. 31, 2003. (g) Total return does not reflect payment of a sales charge. (h) Six months ended Jan. 31, 2003 (Unaudited). (i) Not annualized. - -------------------------------------------------------------------------------- 19 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT Results of Meeting of Shareholders AXP CASH MANAGEMENT FUND REGULAR MEETING OF SHAREHOLDERS HELD ON NOVEMBER 13, 2002 (UNAUDITED) A brief description of each proposal voted upon at the meeting and the number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes as to each proposal is set forth below. Proposal 1 To elect the thirteen nominees specified below as Board members*. Shares Voted "For" Shares Withholding Authority to Vote Arne H. Carlson 3,007,686,582.395 193,305,573.028 Philip J. Carroll, Jr. 3,017,586,609.642 183,405,545.781 Livio D. DeSimone 3,014,640,237.476 186,351,917.947 Barbara H. Fraser 3,015,406,067.561 185,586,087.862 Ira D. Hall 3,013,852,107.077 187,140,048.346 Heinz F. Hutter 3,012,570,957.134 188,421,198.289 Anne P. Jones 3,016,297,647.278 184,694,508.145 Stephen R. Lewis, Jr. 3,020,543,282.026 180,448,873.397 Alan G. Quasha 3,015,884,550.009 185,107,605.414 Stephen W. Roszell 3,016,506,955.137 184,485,200.286 Alan K. Simpson 3,006,847,087.340 194,145,068.083 Alison Taunton-Rigby 3,017,320,059.056 183,672,096.367 William F. Truscott 3,015,657,438.339 185,334,717.084 - -------------------------------------------------------------------------------- 20 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT Proposal 2 To Amend the Articles of Incorporation/Declaration of Trust*: 2(a). To allow one vote/dollar instead of one vote/share. Shares Voted "For" Shares Voted "Against" Abstentions Broker Non-Votes 2,667,385,729.771 308,741,031.994 143,028,948.658 81,836,445.000 Proposal 6 To add a Plan and Agreement of Distribution to Class A shares. Shares Voted "For" Shares Voted "Against" Abstentions Broker Non-Votes 2,570,125,594.548 300,828,017.754 166,331,996.034 81,235,804.000 To add a Plan and Agreement of Distribution for Class B shares. Shares Voted "For" Shares Voted "Against" Abstentions Broker Non-Votes 215,923,005.640 34,368,777.298 13,406,522.296 2,024,650.000 * Denotes Registrant-wide proposals and voting results. - -------------------------------------------------------------------------------- 21 -- AXP CASH MANAGEMENT FUND -- 2003 SEMIANNUAL REPORT Contact Information and Services Internet Receive 24-hour access to your account information at www.americanexpress.com. Client Service Receive fund performance, fund prices, account values, recent account transactions, and make account inquiries by calling American Express Financial Advisors at (800) 862-7919 or TTY: (800) 846-4852. Telephone Transaction Service For sales and exchange, dividend payments, or reinvestments and automatic payment arrangement contact American Express Financial Advisors at (888) 723-8476. Find an American Express Financial Advisor If you are an existing American Express Financial Advisors client who has recently moved and would like to speak with a new advisor, please call your local Client Service Coordinator at (800) 803-6284. - -------------------------------------------------------------------------------- American Express(R) Funds provide investment opportunities for shareholders, all in one place. We've been managing mutual funds for over 60 years. Today, our family of funds includes 58 publicly offered funds in all style categories: growth, blend, value, and income. Our broad selection of funds allows you to build a portfolio diversified across various asset classes. Growth Funds Typically, growth investing seeks to invest in companies with the greatest earnings growth potential. Blend Funds Blend is often regarded as an investment style that incorporates both growth and value considerations in the stock selection process. Value Funds A value investment approach generally seeks to invest in undervalued stocks that are temporarily out of favor. Income/Tax-Exempt Income Funds Involves investing primarily in fixed income securities with the goal of maximizing income and often, but not always, capital appreciation. American Express(R) Funds For more complete information about our funds, including fees and expenses, please call (800) 862-7919 for prospectuses. Read them carefully before you invest. Growth Funds AXP(R) Emerging Markets Fund AXP Equity Select Fund AXP Focused Growth Fund AXP Global Growth Fund AXP Growth Fund AXP Growth Dimensions Fund AXP New Dimensions Fund(R) AXP Partners International Aggressive Growth Fund AXP Partners Small Cap Growth Fund AXP Strategy Aggressive Fund Blend Funds AXP Blue Chip Advantage Fund AXP Discovery Fund* AXP European Equity Fund AXP Global Balanced Fund AXP International Fund AXP Large Cap Equity Fund AXP Managed Allocation Fund AXP Mid Cap Index Fund AXP Partners International Core Fund AXP Partners International Small Cap Fund AXP Partners Small Cap Core Fund AXP Research Opportunities Fund AXP S&P 500 Index Fund AXP Small Cap Advantage Fund AXP Small Company Index Fund AXP Stock Fund Value Funds AXP Diversified Equity Income Fund AXP Equity Value Fund AXP Large Cap Value Fund AXP Mid Cap Value Fund AXP Mutual AXP Partners Fundamental Value Fund AXP Partners International Select Value Fund AXP Partners Select Value Fund AXP Partners Small Cap Value Fund AXP Partners Value Fund AXP Progressive Fund* Income/Tax-Exempt Income Funds AXP Bond Fund AXP Cash Management Fund** AXP Extra Income Fund AXP Federal Income Fund AXP Global Bond Fund AXP High Yield Tax-Exempt Fund AXP Insured Tax-Exempt Fund AXP Intermediate Tax-Exempt Fund AXP Selective Fund AXP State Tax-Exempt Funds AXP Tax-Exempt Bond Fund AXP Tax-Free Money Fund** AXP U.S. Government Mortgage Fund Sector Funds AXP Global Technology Fund AXP Precious Metals Fund AXP Utilities Fund These funds are also listed in the categories above. AXP(R) Partners Funds AXP Partners Fundamental Value Fund AXP Partners International Aggressive Growth Fund AXP Partners International Core Fund AXP Partners International Select Value Fund AXP Partners International Small Cap Fund AXP Partners Select Value Fund AXP Partners Small Cap Core Fund AXP Partners Small Cap Growth Fund AXP Partners Small Cap Value Fund AXP Partners Value Fund International Funds AXP Emerging Markets Fund AXP European Equity Fund AXP Global Balanced Fund AXP Global Bond Fund AXP Global Growth Fund AXP International Fund AXP Partners International Aggressive Growth Fund AXP Partners International Core Fund AXP Partners International Select Value Fund AXP Partners International Small Cap Fund * Closed to new investors. ** 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 $1.00 per share, it is possible to lose money by investing in the Fund. (4/03) AXP Cash Management Fund 70100 AXP Financial Center Minneapolis, MN 55474 americanexpress.com - -------------------------------------------------------------------------------- (logo) (logo) American AMERICAN Express(R) EXPRESS Funds (R) - -------------------------------------------------------------------------------- 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 T (4/03) -----END PRIVACY-ENHANCED MESSAGE-----