N-30D 1 s6441.txt AXP NEW DIMENSIONS FUND AXP New Dimensions Fund(R) 2001 SEMIANNUAL REPORT American Express(R) Funds (icon of) ruler AXP New Dimensions Fund seeks to provide shareholders with long-term growth of capital. Fast-track Stocks What kind of stocks have been the driving force behind the increase in the U.S. stock market in the past decade? The answer is growth stocks -- that is, stocks of companies that have a history of increasing their profits at a rapid rate. AXP New Dimensions Fund focuses primarily on growth stocks of large companies whose business prospects are enhanced by superior management, innovative marketing and/or technological advances. CONTENTS From the Chairman 3 From the Portfolio Managers 3 Fund Facts 5 The 10 Largest Holdings 6 Financial Statements (Fund) 7 Notes to Financial Statements (Fund) 10 Financial Statements (Portfolio) 18 Notes to Financial Statements (Portfolio) 21 Investments in Securities 24 (picture of) Arne H. Carlson Arne H. Carlson Chairman of the board From the Chairman The financial markets have always had their ups and downs, but in recent months volatility has become more frequent and intense. While no one can say with certainty what the markets will do, American Express Financial Corporation, the Fund's investment manager, expects economic growth to continue this year, accompanied by a modest rise in long-term interest rates. But no matter what transpires, this is a great time to take a close look at your goals and investments. We encourage you to: o Consult a professional investment advisor who can help you cut through mountains of data. o Set financial goals that extend beyond those achievable through the retirement plan of your employer. o Learn as much as you can about your current investments. The portfolio managers' letter that follows provides a review of the Fund's investment strategies and performance. The semiannual report contains other valuable information as well. The Fund's prospectus describes its investment objectives and how it intends to achieve those objectives. As experienced investors know, information is vital to making good investment decisions. So, take a moment and decide again whether the Fund's investment objectives and management style fit with your other investments to help you reach your financial goals. And make it a practice on a regular basis to assess your investment options. On behalf of the Board, Arne H. Carlson (picture of) Gordon M. Fines Gordon M. Fines Portfolio manager From the Portfolio Managers The past six months was a difficult period for most large-capitalization growth stocks, as share prices were whipsawed by sudden and frequent changes in the investment environment. Although AXP New Dimensions Fund held up relatively well in the turbulence, its Class A shares nevertheless experienced a loss of 8.72% (excluding the sales charge) for the first half of the fiscal year -- August 2000 through January 2001. The period began well enough, as the Fund took advantage of a surging stock market to record a strong gain in August, but as the monthly calendar changed, so did investor psychology. Suddenly, the focus was on a host of negatives, including a slowing economy, slumping corporate profits and the possibility that companies would sharply reduce their capital spending. NASDAQ NOSEDIVE As the concerns increased, so did the selling pressure on the stock market. Most affected was the Nasdaq Composite, a group of stocks that includes many of the leading U.S. technology names. Illustrating the magnitude of the downturn, the Nasdaq fell by nearly 40% from September through November, with Fund holdings such as EMC, Cisco Systems, Microsoft, Intel and Texas Instruments among the more prominent ones suffering declines. Some relief came when, after a relatively calm December, the market, and technology stocks in particular, got a shot in the arm from a surprise interest-rate cut by the Federal Reserve in early January. That set the stage for the market and the Fund to end the period on a positive note. While the Fund's performance was clearly penalized by the troubles in the technology sector (tech stocks comprised about a quarter of the portfolio), positive returns from other types of investments mitigated the effect. The two most notable examples were utilities and energy-related stocks, which we added to during the period and which ultimately enjoyed strong gains. Also helping pick up the slack were the Fund's health care, financial services and consumer staple stocks. As the second half of the fiscal year begins, we're continuing to take a somewhat defensive investment approach, which centers on maintaining a broad industry diversification in the portfolio and limiting holdings among more volatile stocks, particularly in the technology sector. Should the market find it difficult to make much progress in the months ahead, we think that strategy will serve the Fund well. Gordon M. Fines Note to shareholders: Gordon Fines is assisted by Doug Guffy and Anne Obermeyer in the management of AXP New Dimensions Fund. Fund Facts Class A -- 6-month performance (All figures per share) Net asset value (NAV) Jan. 31, 2001 $29.42 July 31, 2000 $36.26 Decrease $ 6.84 Distributions -- Aug. 1, 2000 - Jan. 31, 2001 From income $ 0.02 From long-term capital gains $ 3.46 Total distributions $ 3.48 Total return* -8.72% Class B -- 6-month performance (All figures per share) Net asset value (NAV) Jan. 31, 2001 $28.38 July 31, 2000 $35.22 Decrease $ 6.84 Distributions -- Aug. 1, 2000 - Jan. 31, 2001 From income $ -- From long-term capital gains $ 3.46 Total distributions $ 3.46 Total return* -9.07% Class C -- 6-month performance (All figures per share) Net asset value (NAV) Jan. 31, 2001 $28.36 July 31, 2000 $35.23 Decrease $ 6.87 Distributions -- Aug. 1, 2000 - Jan. 31, 2001 From income $ 0.03 From long-term capital gains $ 3.46 Total distributions $ 3.49 Total return* -9.06% Class Y -- 6-month performance (All figures per share) Net asset value (NAV) Jan. 31, 2001 $29.49 July 31, 2000 $36.33 Decrease $ 6.84 Distributions -- Aug. 1, 2000 - Jan. 31, 2001 From income $ 0.05 From long-tem capital gains $ 3.46 Total distributions $ 3.51 Total return* -8.64% * 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 10 Largest Holdings Percent Value (of net assets) (as of Jan. 31, 2001) Citigroup 4.43% $1,231,340,000 Exxon Mobil 3.93 1,093,950,000 General Electric 3.31 920,000,000 Enron 2.82 784,000,000 Safeway 2.73 760,050,000 Morgan Stanley, Dean Witter, Discover & Co 2.71 754,275,000 EMC 2.59 721,905,000 El Paso Energy 2.49 691,900,000 Pfizer 2.43 677,250,000 Viacom Cl B 2.38 662,400,000 For further detail about these holdings, please refer to the section entitled "Investments in Securities." (icon of) pie chart The 10 holdings listed here make up 29.82% of net assets
Financial Statements Statement of assets and liabilities AXP New Dimensions Fund Jan. 31, 2001 (Unaudited) Assets Investment in Growth Trends Portfolio (Note 1) $27,822,703,292 Capital shares receivable 16,057 ------ Total assets 27,822,719,349 -------------- Liabilities Capital shares payable 9,006 Accrued distribution fee 274,475 Accrued service fee 15,481 Accrued transfer agency fee 86,335 Accrued administrative services fee 21,803 Other accrued expenses 164,601 ------- Total liabilities 571,701 ------- Net assets applicable to outstanding capital stock $27,822,147,648 =============== Represented by Capital stock-- $.01 par value (Note 1) $ 9,527,429 Additional paid-in capital 19,673,524,103 Excess of distributions over net investment income (2,301,552) Accumulated net realized gain (loss) (208,287,755) Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 8,349,685,423 ------------- Total-- representing net assets applicable to outstanding capital stock $27,822,147,648 =============== Net assets applicable to outstanding shares: Class A $16,188,472,087 Class B $ 5,966,677,682 Class C $ 19,055,504 Class Y $ 5,647,942,375 Net asset value per share of outstanding capital stock: Class A shares 550,306,586 $ 29.42 Class B shares 210,222,263 $ 28.38 Class C shares 671,882 $ 28.36 Class Y shares 191,542,153 $ 29.49 See accompanying notes to financial statements.
Statement of operations AXP New Dimensions Fund Six months ended Jan. 31, 2001 (Unaudited) Investment income Income: Dividends $ 89,976,152 Interest 77,434,941 Less foreign taxes withheld (37,968) ------- Total income 167,373,125 ----------- Expenses (Note 2): Expenses allocated from Growth Trends Portfolio 80,650,814 Distribution fee Class A 21,493,225 Class B 30,976,586 Class C 55,562 Transfer agency fee 14,109,486 Incremental transfer agency fee Class A 845,477 Class B 695,502 Class C 2,408 Service fee-- Class Y 3,054,845 Administrative services fees and expenses 4,213,407 Compensation of board members 17,225 Registration fees 493,692 Printing and postage 773,203 Audit fees 5,562 Other 52,708 ------ Total expenses 157,439,702 Earnings credits on cash balances (Note 2) (786,169) -------- Total net expenses 156,653,533 ----------- Investment income (loss)-- net 10,719,592 ---------- Realized and unrealized gain (loss) -- net Net realized gain (loss) on: Security transactions 49,559,634 Options contracts written 769,262 ------- Net realized gain (loss) on investments 50,328,896 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (2,768,404,229) -------------- Net gain (loss) on investments and foreign currencies (2,718,075,333) -------------- Net increase (decrease) in net assets resulting from operations $(2,707,355,741) =============== See accompanying notes to financial statements.
Statements of changes in net assets AXP New Dimensions Fund Jan. 31, 2001 July 31, 2000 Six months ended Year ended (Unaudited) Operations and distributions Investment income (loss)-- net $ 10,719,592 $ 22,358,573 Net realized gain (loss) on investments 50,328,896 3,081,372,616 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (2,768,404,229) 2,332,675,599 -------------- ------------- Net increase (decrease) in net assets resulting from operations (2,707,355,741) 5,436,406,788 -------------- ------------- Distributions to shareholders from: Net investment income Class A (12,720,277) (26,128,388) Class B -- (50,708) Class C (11,368) -- Class Y (8,385,298) (15,301,634) Net realized gain Class A (1,695,350,636) (916,264,494) Class B (639,358,508) (304,244,551) Class C (1,669,548) -- Class Y (608,065,587) (339,490,042) ------------ ------------ Total distributions (2,965,561,222) (1,601,479,817) -------------- -------------- Capital share transactions (Note 3) Proceeds from sales Class A shares (Notes 2 and 5) 1,499,580,348 3,995,523,644 Class B shares 634,211,453 1,811,114,875 Class C shares 19,122,358 2,479,809 Class Y shares 836,010,462 1,945,177,559 Reinvestment of distributions at net asset value Class A shares 1,663,377,975 881,411,576 Class B shares 634,353,718 302,320,816 Class C shares 1,679,188 -- Class Y shares 616,450,885 354,791,675 Payments for redemptions Class A shares (1,481,391,298) (2,938,028,182) Class B shares (Note 2) (325,686,253) (618,330,446) Class C shares (Note 2) (1,205,953) (8,844) Class Y shares (960,882,723) (2,363,420,039) ------------ -------------- Increase (decrease) in net assets from capital share transactions 3,135,620,160 3,373,032,443 ------------- ------------- Total increase (decrease) in net assets (2,537,296,803) 7,207,959,414 Net assets at beginning of period 30,359,444,451 23,151,485,037 -------------- -------------- Net assets at end of period $27,822,147,648 $30,359,444,451 =============== =============== Undistributed (excess of distributions over) net investment income $ (2,301,552) $ 8,095,799 --------------- --------------- See accompanying notes to financial statements.
Notes to Financial Statements AXP New Dimensions Fund (Unaudited as to Jan. 31, 2001) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Fund is a series of AXP New Dimensions Fund, Inc. and is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. AXP New Dimensions Fund, Inc. has 10 billion authorized shares of capital stock that can be allocated among the separate series as designated by the board. Class C shares of the Fund were offered to the public on June 26, 2000. Prior to this date, American Express Financial Corporation (AEFC) purchased 55 shares of capital stock at $36.36 per share, which represented the initial capital in Class C. The Fund offers Class A, Class B, Class C and Class Y shares. o Class A shares are sold with a front-end 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 level of distribution fee, incremental transfer agency fee and service 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. Investment in Growth Trends Portfolio The Fund invests all of its assets in the Growth Trends Portfolio (the Portfolio), a series of Growth Trust (the Trust), an open-end investment company that has the same objectives as the Fund. The Portfolio invests primarily in common stocks of companies showing potential for significant growth and operating in areas where economic or technological changes are occurring. The Fund records daily its share of the Portfolio's income, expenses and realized and unrealized gains and losses. The financial statements of the Portfolio are included elsewhere in this report and should be read in conjunction with the Fund's financial statements. The Fund records its investment in the Portfolio at the value that is equal to the Fund's proportionate ownership interest in the Portfolio's net assets. The percentage of the Portfolio owned by the Fund as of Jan. 31, 2001, was 99.99%. Valuation of securities held by the Portfolio is discussed in Note 1 of the Portfolio's "Notes to financial statements" (included elsewhere in this report). 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 and liabilities) that could differ from actual results. 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 the 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 primarily because of deferred losses on certain futures contracts, the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes, and losses deferred due to "wash sale" transactions. 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 An annual dividend from net investment income, declared and paid at the end of the calendar year, when available, is reinvested in additional shares of the Fund at net asset value or payable in cash. Capital gains, when available, are distributed along with the income dividend. 2. EXPENSES AND SALES CHARGES In addition to the expenses allocated from the Portfolio, the Fund accrues its own expenses as follows: The Fund has an agreement with AEFC to provide administrative services. 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 0.05% 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 Fund pays AECSC an annual fee per shareholder account for this service as follows: o Class A $19.00 o Class B $20.00 o Class C $19.50 o Class Y $17.00 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 up to 0.25% of the Fund's average daily net assets attributable to Class A shares and up to 1.00% for Class B and Class C shares. Under a Shareholder Service Agreement, the Fund pays the Distributor a fee for service provided to shareholders by financial advisors and other servicing agents. The fee is calculated at a rate of 0.10% of the Fund's average daily net assets attributable to Class Y shares. Sales charges received by the Distributor for distributing Fund shares were $17,618,565 for Class A, $2,267,923 for Class B and $2,411 for Class C for the six months ended Jan. 31, 2001. During the six months ended Jan. 31, 2001, the Fund's transfer agency fees were reduced by $786,169 as a result of earnings credits from overnight cash balances. 3. CAPITAL SHARE TRANSACTIONS Transactions in shares of capital stock for the periods indicated are as follows: Six months ended Jan. 31, 2001 Class A Class B Class C Class Y Sold 44,052,106 19,163,929 579,195 24,326,265 Issued for reinvested distributions 59,625,157 23,559,244 62,400 22,063,384 Redeemed (43,681,857) (10,008,696) (38,029) (29,036,267) ----------- ----------- ------- ----------- Net increase (decrease) 59,995,406 32,714,477 603,566 17,353,382 ---------- ---------- ------- ---------- Year ended July 31, 2000 Class A Class B Class C* Class Y Sold 114,459,462 53,344,051 68,563 55,613,142 Issued for reinvested distributions 24,952,705 8,773,389 -- 10,042,221 Redeemed (83,901,714) (17,881,413) (247) (67,928,524) ----------- ----------- ---- ----------- Net increase (decrease) 55,510,453 44,236,027 68,316 (2,273,161) ---------- ---------- ------ ---------- * Inception date was June 26, 2000. 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, 2001. 5. FUND MERGER As of the close of business on July 14, 2000, AXP New Dimensions Fund acquired the assets and assumed the identified liabilities of Strategist Growth Trends Fund. The aggregate net assets of AXP New Dimensions Fund immediately before the acquisition were $31,912,587,006. The merger was accomplished by a tax-free exchange of 845,723 shares of Strategist Growth Trends Fund valued at $30,939,754. In exchange for the Strategist Growth Trends Fund shares and net assets, AXP New Dimensions Fund issued the following number of shares: Shares Net assets Class A 809,645 $30,939,754 Strategist Growth Trends Fund's net assets at that date consisted of capital stock of $15,851,698 and unrealized appreciation of $15,088,056. 6. NEW ACCOUNTING PRONOUNCEMENT In November 2000, the AICPA issued a revised Audit and Accounting Guide, Audits of Investment Companies, which is effective for fiscal years beginning after Dec. 15, 2000. Adopting the revised Guide is not expected to have a significant impact on the Fund's financial position, results of operations or changes in its net assets.
7. FINANCIAL HIGHLIGHTS The tables below show certain important financial information for evaluating the Fund's results. Fiscal period ended July 31, Per share income and capital changes(a) Class A 2001(b) 2000 1999 1998 1997 Net asset value, beginning of period $36.26 $31.21 $27.59 $25.69 $18.54 Income from investment operations: Net investment income (loss) -- .02 .06 .13 .15 Net gains (losses) (both realized and unrealized) (3.36) 7.14 5.31 3.67 7.80 Total from investment operations (3.36) 7.16 5.37 3.80 7.95 Less distributions: Dividends from net investment income (.02) (.05) (.06) (.17) (.13) Distributions from realized gains (3.46) (2.06) (1.69) (1.73) (.67) Total distributions (3.48) (2.11) (1.75) (1.90) (.80) Net asset value, end of period $29.42 $36.26 $31.21 $27.59 $25.69 Ratios/supplemental data Net assets, end of period (in millions) $16,188 $17,777 $13,568 $10,559 $8,663 Ratio of expenses to average daily net assets(c) .94%(d) .90% .86% .82% .91% Ratio of net investment income (loss) to average daily net assets .20%(d) .19% .24% .55% .73% Portfolio turnover rate (excluding short-term securities) 14% 34% 34% 38% 32% Total return(e) (8.72%) 23.16% 20.04% 16.19% 43.81% (a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Six months ended Jan. 31, 2001 (Unaudited). (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.
Fiscal period ended July 31, Per share income and capital changes(a) Class B 2001(b) 2000 1999 1998 1997 Net asset value, beginning of period $35.22 $30.54 $27.19 $25.38 $18.38 Income from investment operations: Net investment income (loss) (.04) (.24) (.10) -- (.02) Net gains (losses) (both realized and unrealized) (3.34) 6.98 5.14 3.57 7.73 Total from investment operations (3.38) 6.74 5.04 3.57 7.71 Less distributions: Dividends from net investment income -- -- -- (.03) (.04) Distributions from realized gains (3.46) (2.06) (1.69) (1.73) (.67) Total distributions (3.46) (2.06) (1.69) (1.76) (.71) Net asset value, end of period $28.38 $35.22 $30.54 $27.19 $25.38 Ratios/supplemental data Net assets, end of period (in millions) $5,967 $6,252 $4,070 $2,515 $1,552 Ratio of expenses to average daily net assets(c) 1.70%(d) 1.66% 1.63% 1.58% 1.67% Ratio of net investment income (loss) to average daily net assets (.56%)(d) (.57%) (.53%) (.23%) (.02%) Portfolio turnover rate (excluding short-term securities) 14% 34% 34% 38% 32% Total return(e) (9.07%) 22.20% 19.13% 15.31% 42.72% (a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Six months ended Jan. 31, 2001 (Unaudited). (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.
Fiscal period ended July 31, Per share income and capital changes(a) Class C 2001(b) 2000(c) Net asset value, beginning of period $35.23 $35.52 Income from investment operations: Net investment income (loss) (.03) (.01) Net gains (losses) (both realized and unrealized) (3.35) (.28) Total from investment operations (3.38) (.29) Less distributions: Dividends from net investment income (.03) -- Distributions from realized gains (3.46) -- Total distributions (3.49) -- Net asset value, end of period $28.36 $35.23 Ratios/supplemental data Net assets, end of period (in millions) $19 $2 Ratio of expenses to average daily net assets(d) 1.70%(e) 1.66%(e) Ratio of net investment income (loss) to average daily net assets (.68%)(e) (.74%)(e) Portfolio turnover rate (excluding short-term securities) 14% 34% Total return(f) (9.06%) (.82%) (a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Six months ended Jan. 31, 2001 (Unaudited). (c) Inception date was June 26, 2000. (d) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (e) Adjusted to an annual basis. (f) Total return does not reflect payment of a sales charge.
Fiscal period ended July 31, Per share income and capital changes(a) Class Y 2001(b) 2000 1999 1998 1997 Net asset value, beginning of period $36.33 $31.24 $27.62 $25.72 $18.56 Income from investment operations: Net investment income (loss) .01 .05 .09 .15 .18 Net gains (losses) (both realized and unrealized) (3.34) 7.19 5.30 3.68 7.81 Total from investment operations (3.33) 7.24 5.39 3.83 7.99 Less distributions: Dividends from net investment income (.05) (.09) (.08) (.20) (.16) Distributions from realized gains (3.46) (2.06) (1.69) (1.73) (.67) Total distributions (3.51) (2.15) (1.77) (1.93) (.83) Net asset value, end of period $29.49 $36.33 $31.24 $27.62 $25.72 Ratios/supplemental data Net assets, end of period (in millions) $5,648 $6,328 $5,513 $4,575 $3,745 Ratio of expenses to average daily net assets(c) .78%(d) .74% .77% .75% .76% Ratio of net investment income (loss) to average daily net assets .36%(d) .35% .33% .62% .88% Portfolio turnover rate (excluding short-term securities) 14% 34% 34% 38% 32% Total return(e) (8.64%) 23.35% 20.12% 16.28% 44.02% (a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Six months ended Jan. 31, 2001 (Unaudited). (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.
Financial Statements Statement of assets and liabilities Growth Trends Portfolio Jan. 31, 2001 (Unaudited) Assets Investments in securities, at value (Note 1) (identified cost $19,397,332,840) $27,747,024,293 Cash in bank on demand deposit 757,508 Dividends and accrued interest receivable 11,299,927 Receivable for investment securities sold 123,378,170 ----------- Total assets 27,882,459,898 -------------- Liabilities Payable for investment securities purchased 31,326,923 Payable upon return of securities loaned (Note 4) 27,636,000 Accrued investment management services fee 383,698 Other accrued expenses 322,155 ------- Total liabilities 59,668,776 ---------- Net assets $27,822,791,122 =============== See accompanying notes to financial statements.
Statement of operations Growth Trends Portfolio Six months ended Jan. 31, 2001 (Unaudited) Investment income Income: Dividends $ 89,976,435 Interest 77,385,916 Less foreign taxes withheld (37,969) ------- Total income 167,324,382 ----------- Expenses (Note 2): Investment management services fee 79,575,392 Compensation of board members 31,650 Custodian fees 900,800 Audit fees 16,875 Other 145,671 ------- Total expenses 80,670,388 Earnings credits on cash balances (Note 2) (19,320) ------- Total net expenses 80,651,068 ---------- Investment income (loss)-- net 86,673,314 ---------- Realized and unrealized gain (loss) -- net Net realized gain (loss) on: Security transactions (Note 3) 49,545,141 Options contracts written (Note 5) 769,264 ------- Net realized gain (loss) on investments 50,314,405 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (2,768,398,216) -------------- Net gain (loss) on investments and foreign currencies (2,718,083,811) -------------- Net increase (decrease) in net assets resulting from operations $(2,631,410,497) =============== See accompanying notes to financial statements.
Statements of changes in net assets Growth Trends Portfolio Jan. 31, 2001 July 31, 2000 Six months ended Year ended (Unaudited) Operations Investment income (loss)-- net $ 86,673,314 $ 160,182,795 Net realized gain (loss) on investments 50,314,405 3,084,866,684 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (2,768,398,216) 2,336,373,939 -------------- ------------- Net increase (decrease) in net assets resulting from operations (2,631,410,497) 5,581,423,418 Net contributions (withdrawals) from partners 92,423,230 1,602,569,804 ---------- ------------- Total increase (decrease) in net assets (2,538,987,267) 7,183,993,222 Net assets at beginning of period 30,361,778,389 23,177,785,167 -------------- -------------- Net assets at end of period $27,822,791,122 $30,361,778,389 =============== =============== See accompanying notes to financial statements.
Notes to Financial Statements Growth Trends Portfolio (Unaudited as to Jan. 31, 2001) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Growth Trends Portfolio (the Portfolio) is a series of Growth Trust (the Trust) and is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. Growth Trends Portfolio invests primarily in common stocks of U.S. and foreign companies showing potential for significant growth and operating in areas where economic or technological changes are occurring. The Declaration of Trust permits the Trustees to issue non-transferable interests in the Portfolio. The Portfolio'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 and liabilities) that could differ from actual results. Valuation of securities All securities are valued at the close of each business day. Securities traded on national securities exchanges or included in national market systems are valued at the last quoted sales price. Debt securities are generally traded in the over-the-counter market and are valued at a price that reflects fair value as quoted by dealers in these securities or by an independent pricing service. Securities for which market quotations are not readily available are valued at fair value according to methods selected in good faith by the board. Short-term securities maturing in more than 60 days from the valuation date are valued at the market price or approximate market value based on current interest rates; those maturing in 60 days or less are valued at amortized cost. Option transactions To produce incremental earnings, protect gains and facilitate buying and selling of securities for investments, the Portfolio may buy and write options traded on any U.S. or foreign exchange or in the over-the-counter market where completing the obligation depends upon the credit standing of the other party. The Portfolio also may buy and sell put and call options and write covered call options on portfolio securities as well as write cash-secured put options. The risk in writing a call option is that the Portfolio gives up the opportunity for profit if the market price of the security increases. The risk in writing a put option is that the Portfolio may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Portfolio pays a premium whether or not the option is exercised. The Portfolio also has the additional risk of being unable to enter into a closing transaction if a liquid secondary market does not exist. Option contracts are valued daily at the closing prices on their primary exchanges and unrealized appreciation or depreciation is recorded. The Portfolio will realize a gain or loss when the option transaction expires or closes. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option or the cost of a security for a purchased put or call option is adjusted by the amount of premium received or paid. Futures transactions To gain exposure to or protect itself from market changes, the Portfolio may buy and sell financial futures contracts traded on any U.S. or foreign exchange. The Portfolio also may buy and write put and call options on these futures contracts. Risks of entering into futures contracts and related options include the possibility of an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. Upon entering into a futures contract, the Portfolio is required to deposit either cash or securities in an amount (initial margin) equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Portfolio each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Portfolio recognizes a realized gain or loss when the contract is closed or expires. Foreign currency translations and foreign currency contracts Securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars. Foreign currency amounts related to the purchase or sale of securities and income and expenses are translated at the exchange rate on the transaction date. The effect of changes in foreign exchange rates on realized and unrealized security gains or losses is reflected as a component of such gains or losses. In the statement of operations, net realized gains or losses from foreign currency transactions, if any, may arise from sales of foreign currency, closed forward contracts, exchange gains or losses realized between the trade date and settlement date on securities transactions, and other translation gains or losses on dividends, interest income and foreign withholding taxes. The Portfolio may enter into forward foreign currency exchange contracts for operational purposes and to protect against adverse exchange rate fluctuation. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Portfolio and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates from an independent pricing service. The Portfolio is subject to the credit risk that the other party will not complete its contract obligations. Federal taxes For federal income tax purposes the Portfolio qualifies as a partnership and each investor in the Portfolio is treated as the owner of its proportionate share of the net assets, income, expenses and realized and unrealized gains and losses of the Portfolio. As a "pass-through" entity, the Portfolio therefore does not pay any income dividends or capital gain distributions. Other Security transactions are accounted for on the date securities are purchased or sold. Dividend income is recognized on the ex-dividend date and interest income, including level-yield amortization of premium and discount, is accrued daily. 2. FEES AND EXPENSES The Trust, on behalf of the Portfolio, has an Investment Management Services Agreement with AEFC to manage its portfolio. Under this agreement, AEFC determines which securities will be purchased, held or sold. The management fee is a percentage of the Portfolio's average daily net assets in reducing percentages from 0.6% to 0.48% annually. The fee may be adjusted upward or downward by a performance incentive adjustment based on a comparison of the performance of Class A shares of AXP New Dimensions Fund to the Lipper Large-Cap Growth Index. The maximum adjustment is 0.12% of the Portfolio's average daily net assets after deducting 1% from the performance difference. If the performance difference is less than 1%, the adjustment will be zero. The adjustment increased the fee by $5,256,249 for the six months ended Jan. 31, 2001. Under the agreement, the Trust also pays taxes, brokerage commissions and nonadvisory expenses, which include custodian fees, audit and certain legal fees, fidelity bond premiums, registration fees for units, office expenses, consultants' fees, compensation of trustees, corporate filing fees, expenses incurred in connection with lending securities of the Portfolio and any other expenses properly payable by the Trust or Portfolio and approved by the board. During the six months ended Jan. 31, 2001, the Portfolio's custodian fees were reduced by $19,320 as a result of earnings credits from overnight cash balances. The Portfolio also pays custodian fees to American Express Trust Company, an affiliate of AEFC. According to a Placement Agency Agreement, American Express Financial Advisors Inc. acts as placement agent of the Trust's units. 3. SECURITIES TRANSACTIONS Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated $5,260,610,003 and $3,924,626,513, respectively, for the six months ended Jan. 31, 2001. For the same period, the portfolio turnover rate was 14%. Realized gains and losses are determined on an identified cost basis. Brokerage commissions paid to brokers affiliated with AEFC were $740,945 for the six months ended Jan. 31, 2001. 4. LENDING OF PORTFOLIO SECURITIES As of Jan. 31, 2001, securities valued at $27,048,000 were on loan to brokers. For collateral, the Portfolio received $27,636,000 in cash. Income from securities lending amounted to $3,389 for the six months ended Jan. 31, 2001. The risks to the Portfolio of securities lending are that the borrower may not provide additional collateral when required or return the securities when due. 5. OPTIONS CONTRACTS WRITTEN Contracts and premium amounts associated with options contracts written are as follows: Six months ended Jan. 31, 2001 Puts Contracts Premium Balance July 31, 2000 -- $ -- Opened 5,000 1,098,987 Closed (5,000) (1,098,987) ------ ---------- Balance Jan. 31, 2001 -- $ -- ------ ---------- 6. NEW ACCOUNTING PRONOUNCEMENT In November 2000, the AICPA issued a revised Audit and Accounting Guide, Audits of Investment Companies, which is effective for fiscal years beginning after Dec. 15, 2000. Adopting the revised Guide is not expected to have a significant impact on the Portfolio's financial position, results of operations or changes in its net assets. Investments in Securities Growth Trends Portfolio Jan. 31, 2001 (Unaudited) (Percentages represent value of investments compared to net assets) Common stocks (94.3%) Issuer Shares Value(a) Aerospace & defense (0.3%) United Technologies 1,000,000 $74,980,000 Airlines (1.5%) AMR 400,000(b) 15,636,000 Southwest Airlines 12,600,000 394,758,000 Total 410,394,000 Banks and savings & loans (4.0%) State Street 3,000,000 338,790,000 USA Education 2,700,000 169,641,000 Wells Fargo 12,000,000 618,120,000 Total 1,126,551,000 Beverages & tobacco (1.6%) Anheuser-Busch 1,750,000 75,880,000 Coca-Cola 2,000,000 116,000,000 Philip Morris 5,600,000 246,400,000 Total 438,280,000 Chemicals (0.5%) Air Products & Chemicals 3,900,000 147,303,000 Communications equipment & services (4.3%) CIENA 700,000(b) 63,043,750 Corning 6,500,000 368,615,000 JDS Uniphase 7,600,000(b) 416,575,000 Motorola 3,800,000 86,678,000 Nokia ADR Cl A 5,093,700(c) 174,968,595 Nortel Networks 2,000,000(c) 76,460,000 Total 1,186,340,345 Computer software & services (3.9%) Microsoft 10,000,000(b) 610,625,000 Oracle 11,000,000(b) 320,375,000 Siebel Systems 1,000,000(b) 66,312,500 VERITAS Software 1,000,000(b) 94,875,000 Total 1,092,187,500 Computers & office equipment (14.1%) AOL Time Warner 10,300,000(b) 541,368,000 Automatic Data Processing 7,500,000 448,950,000 Cisco Systems 17,000,000(b) 636,437,500 Comverse Technology 600,000(b) 67,987,500 EMC 9,500,000(b) 721,905,000 Hewlett-Packard 4,000,000 146,960,000 Intl Business Machines 5,000,000 560,000,000 Juniper Networks 500,000(b) 53,343,750 Sanmina 2,000,000(b) 97,250,000 Solectron 14,000,000(b) 557,900,000 Sun Microsystems 3,500,000(b) 106,968,750 Total 3,939,070,500 Electronics (5.8%) Applied Materials 3,300,000(b) 166,031,250 Applied Micro Circuits 1,000,000(b) 73,500,000 Intel 14,000,000 518,000,000 Maxim Integrated Products 4,000,000(b) 244,250,000 PMC-Sierra 400,000(b) 30,225,000 Texas Instruments 13,000,000 569,400,000 Total 1,601,406,250 Energy (5.4%) Chevron 4,800,000 399,744,000 Exxon Mobil 13,000,000 1,093,950,000 Total 1,493,694,000 Energy equipment & services (1.1%) Halliburton 7,200,000 296,568,000 Financial services (9.2%) Citigroup 22,000,000 1,231,340,000 Fannie Mae 3,400,000 252,212,000 MBNA 10,000,000 361,900,000 Morgan Stanley, Dean Witter, Discover & Co 8,900,000 754,275,000 Total 2,599,727,000 Health care (7.5%) ALZA 4,800,000(b) 198,720,000 Amgen 2,500,000(b) 175,781,250 Bristol-Myers Squibb 5,000,000 309,450,000 Guidant 1,600,000(b) 79,200,000 Medtronic 7,200,000 388,800,000 Pfizer 15,000,000 677,250,000 Schering-Plough 5,000,000 252,000,000 Total 2,081,201,250 Health care services (2.8%) Cardinal Health 4,800,000 457,440,000 HCA-The Healthcare 7,400,000 276,834,000 Manor Care 1,700,000(b) 32,725,000 Total 766,999,000 Household products (1.2%) Colgate-Palmolive 2,800,000 168,224,000 Kimberly-Clark 2,400,000 155,400,000 Total 323,624,000 Industrial equipment & services (0.7%) Illinois Tool Works 3,000,000 196,500,000 Insurance (3.1%) American Intl Group 7,100,000 603,642,000 Marsh & McLennan 2,300,000 248,745,000 Total 852,387,000 Leisure time & entertainment (2.4%) Viacom Cl B 12,000,000(b) 662,400,000 Media (1.6%) Comcast Special Cl A 4,000,000(b) 171,250,000 Gannett 3,000,000 190,200,000 Sony ADR 1,000,000(c) 73,550,000 Total 435,000,000 Multi-industry conglomerates (7.0%) General Electric 20,000,000(e) 920,000,000 Minnesota Mining & Mfg 3,800,000 420,470,000 Robert Half Intl 3,200,000(b) 85,600,000 Tyco Intl 8,600,000(c) 529,760,000 Total 1,955,830,000 Restaurants & lodging (0.8%) Marriott Intl Cl A 5,000,000 230,800,000 Retail (8.7%) Costco Wholesale 9,000,000(b) 416,250,000 Home Depot 5,000,000 241,000,000 Safeway 15,000,000(b) 760,050,000 Target 9,300,000 353,214,000 Wal-Mart Stores 10,000,000 568,000,000 Walgreen 2,400,000 98,256,000 Total 2,436,770,000 Utilities -- electric (0.4%) Duke Energy 3,000,000 109,710,000 Utilities -- gas (5.3%) El Paso Energy 11,000,000 691,900,000 Enron 9,800,000 784,000,000 Total 1,475,900,000 Utilities -- telephone (1.1%) Qwest Communications Intl 400,000(b) 16,848,000 Verizon 5,400,000 296,730,000 Total 313,578,000 Total common stocks (Cost: $17,897,329,225) $26,247,200,845 Short-term securities (5.4%) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity U.S. government agency (0.2%) Federal Natl Mtge Assn Disc Nt 03-07-01 5.52% $50,000,000 $49,733,125 Commercial paper (5.0%) ABN Amro NA Finance 03-12-01 5.60 14,600,000 14,509,641 03-12-01 5.64 13,200,000 13,117,865 Alabama Power 02-27-01 5.57 16,000,000 15,933,399 Alcoa 02-07-01 5.76 28,700,000 28,667,910 02-20-01 6.43 8,600,000 8,568,848 Bank 1 Canada 04-27-01 5.53 5,000,000 4,934,664 BBV Finance 07-11-01 5.37 10,500,000 10,252,060 BellSouth Capital Funding 02-14-01 5.68 17,800,000(d) 17,760,751 CAFCO 04-06-01 5.55 23,000,000(d) 22,772,843 04-10-01 5.56 25,000,000(d) 24,737,896 Cargill 02-01-01 5.79 14,300,000(d) 14,297,700 Charta 02-01-01 5.78 9,000,000(d) 8,998,555 02-22-01 6.54 16,600,000(d) 16,532,773 Ciesco LP 03-02-01 5.78 36,900,000 36,723,185 Commerzbank U.S. Finance 02-01-01 6.47 2,000,000 1,999,641 03-27-01 5.53 8,000,000 7,933,022 Corporate Receivables 04-10-01 5.53 23,500,000(d) 23,253,622 04-11-01 5.56 30,500,000(d) 30,175,599 CXC 02-07-01 6.51 24,600,000(d) 24,568,908 02-12-01 6.56 29,000,000(d) 28,936,681 02-21-01 6.39 3,300,000(d) 3,287,737 03-20-01 5.58 28,400,000(d) 28,190,217 04-20-01 5.57 24,300,000(d) 24,008,312 05-02-01 5.42 28,000,000(d) 27,619,923 05-08-01 5.33 27,500,000(d) 27,110,990 Delaware Funding 02-09-01 5.82 30,000,000(d) 29,956,425 03-09-01 6.31 18,000,000(d) 17,890,137 03-12-01 6.42 11,400,000(d) 11,327,166 04-12-01 5.56 30,000,000(d) 29,676,358 04-16-01 5.66 30,000,000(d) 29,658,125 04-18-01 5.57 25,800,000(d) 25,498,147 04-24-01 5.47 8,200,000 8,096,587 Edison Asset Securitization 02-01-01 6.50 25,000,000(d) 24,995,486 03-05-01 5.66 30,000,000(d) 29,845,174 03-06-01 5.68 20,000,000(d) 19,893,275 04-09-01 5.51 30,000,000(d) 29,690,033 04-23-01 5.58 30,400,000(d) 30,021,233 Enterprise Funding 02-02-01 6.55 28,100,000(d) 28,089,774 Falcon Asset 02-02-01 6.58 25,000,000(d) 24,990,461 02-05-01 6.56 7,500,000(d) 7,493,125 02-16-01 6.50 23,000,000(d) 22,930,849 02-26-01 5.70 30,000,000(d) 29,876,932 03-16-01 5.52 28,800,000(d) 28,607,104 04-10-01 5.58 30,000,000(d) 29,685,475 Fleet Funding 02-20-01 5.70 11,197,000(d) 11,161,667 02-28-01 5.67 20,800,000 20,708,594 03-15-01 5.64 23,300,000(d) 23,141,592 Ford Motor Credit 03-07-01 6.29 11,600,000 11,535,152 Goldman Sachs Group 02-15-01 6.37 17,700,000 17,653,168 Merrill Lynch 03-12-01 5.53 9,600,000 9,541,333 04-12-01 5.54 1,300,000 1,285,976 04-20-01 5.47 1,300,000 1,284,395 Natl Rural Utilities 02-16-01 5.68 11,400,000 11,371,272 03-15-01 5.47 14,100,000 14,008,550 Paccar Financial 02-22-01 6.54 2,500,000 2,489,876 Park Avenue Receivables 02-06-01 5.86 26,400,000(d) 26,374,260 03-01-01 5.57 16,200,000(d) 16,127,572 Preferred Receivables 02-02-01 6.57 8,200,000(d) 8,197,007 02-15-01 6.46 8,600,000(d) 8,576,923 Receivables Capital 03-22-01 5.54 26,300,000(d) 26,099,097 04-17-01 5.65 15,000,000(d) 14,826,783 Salomon Smith Barney 02-15-01 6.52 6,300,000 6,282,524 SBC Communications 02-02-01 6.51 5,500,000(d) 5,498,011 Sheffield Receivables 03-14-01 6.44 25,000,000(d) 24,832,291 03-19-01 6.41 30,000,000(d) 29,774,791 Toyota Motor Credit 02-09-01 5.77 8,300,000(d) 8,288,048 03-20-01 5.57 6,600,000(d) 6,551,336 UBS Finance 02-01-01 5.79 6,500,000 6,498,955 USAA Capital 03-09-01 5.55 16,300,000 16,207,523 Variable Funding Capital 02-23-01 6.46 30,000,000(d) 29,870,936 03-23-01 5.58 30,000,000(d) 29,764,548 04-17-01 5.45 29,500,000(d) 29,159,340 Verizon Global Funding 02-26-01 6.53 700,000 696,724 03-14-01 5.72 15,500,000 15,397,285 Verizon Network Funding 04-05-01 5.39 1,700,000 1,683,861 Windmill Funding 02-12-01 5.81 25,000,000(d) 24,951,667 03-08-01 5.63 15,300,000(d) 15,214,318 03-16-01 5.56 9,600,000(d) 9,535,232 Total 1,407,705,215 Letters of credit (0.2%) Bank of America- AES Hawaii 02-16-01 6.47 11,900,000 11,864,222 Bank of America- AES Shady Point 03-08-01 5.64 29,000,000 28,837,308 04-06-01 5.40 1,700,000 1,683,578 Total 42,385,108 Total short-term securities (Cost: $1,500,003,615) $1,499,823,448 Total investments in securities (Cost: $19,397,332,840)(f) $27,747,024,293 See accompanying notes to investments in securities. Notes to investments in securities (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. As of Jan. 31, 2001, the value of foreign securities represented 3.07% of net assets. (d) 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. (e) Security is partially or fully on loan. See Note 4 to the financial statements. (f) At Jan. 31, 2001, the cost of securities for federal income tax purposes was approximately $19,397,333,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $8,995,746,000 Unrealized depreciation (646,055,000) ------------ Net unrealized appreciation $8,349,691,000 ============== American Express(R) Funds AXP New Dimensions Fund 70100 AXP Financial Center Minneapolis, MN 55474 Ticker Symbol Class A: INNDX Class B: INDBX Class C: ANDCX Class Y: IDNYX PRSRT STD AUTO U.S. POSTAGE PAID AMERICAN EXPRESS S-6441 R (3/01) 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.