<DOCUMENT>
<TYPE>N-30D
<SEQUENCE>1
<FILENAME>s6440v.txt
<DESCRIPTION>AXP NEW DIMENSIONS FUND
<TEXT>
AXP(R)
New
Dimensions(R)
Fund
2002 ANNUAL REPORT
(Prospectus Enclosed)
AXP New Dimensions Fund seeks to provide shareholders with long-term growth of
capital.
(This annual report includes a prospectus that describes in detail the Fund's
objective, investment strategy, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.)
American
Express(R)
Funds
AMERICAN
EXPRESS(R)
<PAGE>
(photo of) Arne H. Carlson
From the Chairman
Arne H. Carlson Chairman of the board
Dear Shareholders,
It is a very difficult period for investors caused by corporate management
misconduct and its impact on the market as well as the economy. The integrity of
corporations at large is being questioned. However, there is optimism that the
resulting reforms will give Americans the kind of integrity they deserve. Many
corporate leaders are strongly supportive of these reforms. We all have a right
to expect financial statements to be fully accurate and business leaders to
place the interests of shareholders above personal desires. Your Board is truly
independent, comprised of 12 members (nominated by independent members) and
three recommended by American Express Financial Corporation. These individuals
come from a variety of geographic areas with the diverse skill sets necessary to
oversee the operations of the Fund. Investment performance is, and remains, our
primary concern.
The Fund's auditors, KPMG LLP, are truly independent of American Express
Financial Corporation. KPMG serves the interest of shareholders by supporting
the work of the Board and certifying unbiased financial reports.
The Board has confidence in Ted Truscott, American Express Financial
Corporation's new Chief Investment Officer, and shares his enthusiasm in the
management changes he has effected to improve the investment performance of all
American Express funds. These changes include the hiring of several new
portfolio managers and investment leaders and the addition of eight sub-advised
funds. The focus of the Board and American Express Financial Corporation is
simple; we strive for consistent, competitive investment performance.
If you were a shareholder of record on September 14, you will receive a proxy
statement for a shareholder meeting to be held on November 13, 2002. Please take
time to consider each proposal and vote promptly.
On behalf of the Board,
Arne H. Carlson
CONTENTS
From the Chairman 2
Economic and Market Update 3
Fund Snapshot 5
Questions & Answers with Portfolio Management 6
The Fund's Long-term Performance 9
Investments in Securities 10
Financial Statements (Portfolio) 14
Notes to Financial Statements (Portfolio) 17
Independent Auditors' Report (Portfolio) 21
Financial Statements (Fund) 22
Notes to Financial Statements (Fund) 25
Independent Auditors' Report (Fund) 33
Board Members and Officers 34
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2 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
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,
Major U.S. financial markets lost ground for the three-month period ending July
31, 2002, although a late rally put them above earlier lows. The same factors
that have driven markets down for most of the year so far were still in play
during this period. These include concerns about the truthfulness of accounting
practices and the perception that stocks remain too expensive relative to
company earnings. I expect we'll need to see consistent improvement in earnings
before stocks rebound significantly. If corporate revenue growth becomes
apparent and widespread, it will effectively make stock valuations cheaper.
Increased demand should then have a positive impact on prices.
Economic fundamentals have continued to look positive despite volatility in the
financial markets. Inflation and interest rates remain low, unemployment and job
growth are at reasonable levels, and there are signs that business spending is
beginning to pick up. In addition, a weaker dollar should help U.S. companies
that export goods overseas, even though it crimps our wallets when we travel
abroad. These and other factors make it highly unlikely that we will experience
a so-called "double-dip" recession. I remain optimistic about the direction of
the economy and believe that, eventually, markets will start paying attention to
these very favorable conditions.
Nevertheless, we should remember that risk still exists. For one, bonds have
been experiencing their own bear market. This has created something of a credit
crunch for businesses, as liquidity declines and spreads widen. Related to this
has been a crisis of confidence -- the unfortunate legacy of recent corporate
scandal. In some cases, investors who thought they were buying high-quality
corporate bonds were actually getting riskier high-yield securities due to
dishonest accounting. Everyone agrees that some type of reform is needed, but
the challenge for regulators will be to discourage misleading practices without
sacrificing entrepreneurial incentive. Prudent regulation will boost confidence,
while misguided efforts will simply make markets less efficient.
What I think all investors need to understand is that we're still working
through the excess capacity and inflated demand forecasts that were created in
the late `90s. This process has been painful, but it has helped to reorient
expectations to levels that are more sustainable. Historically speaking, the
late `90s were an aberration and will likely not be repeated soon.
--------------------------------------------------------------------------------
3 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
Economic and Market Update
However, a more sober outlook need not be cause for special concern. We should
all ask ourselves, "Have my goals changed in the last couple of years?" For many
of us, the answer will be "no." If you're saving for long-term goals like
retirement, I would still advise a substantial weighting in equities for your
portfolio. Over time, stocks will probably continue to outperform bonds or other
investments. And if you're in retirement or getting close, you may want to
invest more heavily in bonds and cash, with a smaller portion devoted to
equities.
See your financial advisor or retirement plan administrator for more information
about different types of securities and asset allocation.
As always, thank you for investing with American Express Financial Advisors.
William F. Truscott
Key points
-- Economic fundamentals remain positive.
-- Credit "crunch" for business sector persists.
-- Re-evaluation of personal financial goals key.
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4 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
Fund Snapshot
AS OF JULY 31, 2002
PORTFOLIO MANAGER
Portfolio manager Gordon Fines
Tenure/since 1/1/91
Years in industry 35
FUND OBJECTIVE
For investors seeking long-term growth of capital.
Inception dates
A: 8/1/68 B: 3/20/95 C: 6/26/00 Y: 3/20/95
Ticker symbols
A: INNDX B: INDBX C: ANDCX Y: IDNYX
Total net assets $16.858 billion
Number of holdings approximately 110
STYLE MATRIX
Shading within the style matrix indicates areas in which the Fund generally
invests.
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
PORTFOLIO ASSET MIX
Percentage of portfolio assets
(pie graph)
Common stocks 97.2%
Preferred stocks 0.6%
Cash equivalents 2.2%
TOP FIVE SECTORS
Percentage of portfolio assets
Financial services 9.5%
Retail 9.5
Health care 7.4
Multi-industry conglomerates 6.6
Health care services 6.3
TOP TEN HOLDINGS
Percentage of portfolio assets
Wal-Mart Stores 3.6%
Citigroup 3.6
Microsoft 3.3
3M 3.0
Viacom Cl B 2.8
Bank of America 2.8
General Electric 2.7
Philip Morris 2.6
Exxon Mobil 2.6
Johnson & Johnson 2.6
Stock prices of established companies that pay dividends may be less volatile
than the stock market as a whole. There are special risk considerations
associated with international investing related to market, currency, economic,
political and other factors.
Fund holdings are subject to change.
--------------------------------------------------------------------------------
5 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
Questions & Answers
WITH PORTFOLIO MANAGEMENT
Q: How did the Fund perform for the 12-month period ended July 31, 2002?
A: The past year was one in which a series of negative events took a toll on
equity markets, hitting large company growth stocks especially hard. As a
result, AXP New Dimensions Fund returned -21.14% for the year (Class A
shares, excluding sales charges), still managing to outperform its
benchmark, the S&P 500 Index, which returned -23.63%. By comparison, the
Lipper Large-Cap Growth Funds Index returned -27.98% over the same time
frame.
Q: What factors significantly impacted performance?
A: From the start of the period, equity markets have been facing an uphill
battle. We began the period in the midst of a mild recession, which had
already taken a significant toll on stocks. The situation grew even worse
when the terrorist attacks of September 11, 2001 seized the nation's
attention. Markets initially declined in dramatic fashion, but quickly
rebounded in the closing months of 2001 as investors seemed to sense that
the country and the economy were bouncing back quickly from the tragedy.
The new year began with large-cap stocks again suffering from a loss of
investor confidence, as fallout from disclosures related to the collapse
of Enron began to take center stage. Similar problems quickly spread to
several other prominent companies, and as 2002 progressed, enthusiasm for
stocks was difficult to find. By the middle of summer, investor confidence
reached a low point, and the stock market (as measured by the S&P 500
Index) dipped to its lowest level in four years. Except for a brief bounce
at the end of July, investors found themselves facing significant losses,
even in stocks of what are generally perceived as high-quality companies.
(bar graph)
PERFORMANCE COMPARISON
For the year ended July 31, 2002
-0%
-5%
-10%
-15%
-20% (bar 1)
-25% -21.14% (bar 2) (bar 3)
-30% -23.63% -27.96%
(bar 1) AXP New Dimensions Fund Class A (excluding sales charge)
(bar 2) S&P 500 Index (unmanaged)
(bar 3) Lipper Large-Cap Growth Funds Index
(see "The Fund's Long-term Performance" for Index descriptions)
Past performance is no guarantee of future results. The 5.75% sales charge
applicable to Class A shares of the Fund is not reflected in the bar chart; if
reflected, returns would be lower than those shown. The performance of Class B,
Class C and Class Y may vary from that shown above because of differences in
sales charges and fees.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes.
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6 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
Questions & Answers
(begin callout quote)> It is likely that we'll continue to see significant
volatility in stock prices and possibly more downside movement before stocks are
able to turn the corner. (end callout quote)
Our approach throughout the period was to take a more conservative view of
growth investing. That included reducing our exposure to more volatile
segments of the market, including technology and telecommunications
stocks. This proved to be a beneficial move, as both sectors were among
the worst performing groups over the 12-month period. Weakness in energy
stocks detracted from our performance. By contrast, we were able to
capture better results by emphasizing more defensive areas of the market,
including food, beverage and tobacco stocks, retail firms, banks and
selected healthcare companies.
Q: What changes did you make to the portfolio?
A: Throughout the period, the changes we made tended to follow the theme of
de-emphasizing the volatile technology and telecommunications sectors and
putting greater focus on more defensive stocks. We also looked to add
stocks of companies that paid reasonably attractive dividends to
investors. Given the current state of the market where corporate profit
growth has been modest at best, it seems that dividend-paying stocks have
the potential to generate better returns in the near term. This is
particularly
<TABLE>
<CAPTION>
Average Annual Total Returns
as of July 31, 2002
At Net Asset
Value (NAV)(1) Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
1 year -21.14% -21.71% -21.73% -21.00%
5 years +1.34% +0.58% N/A +1.47%
10 years +10.59% N/A N/A N/A
Since inception N/A +9.71%(2) -21.14%(3) +10.70%(2)
</TABLE>
<TABLE>
<CAPTION>
With Sales Charge Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
1 year -25.68% -24.84% -21.73% -21.00%
5 years +0.15% +0.43% N/A +1.47%
10 years +9.94% N/A N/A N/A
Since inception N/A +9.71%(2) -21.14%(3) +10.70%(2)
</TABLE>
(1) Excluding sales charge.
(2) Inception date was March 20, 1995.
(3) Inception date was June 26, 2000.
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.
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7 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
Questions & Answers
true in light of the recent accounting scandals that have rocked investor
confidence in certain types of stocks that are highly dependent on growth
in earnings to generate investor interest.
Q: What is your outlook for the year ahead?
A: A number of uncertainties are hovering over the market, ranging from the
direction and impact of the war on terrorism to concerns about economic
weakness to the fear of more disclosures of corporate accounting
irregularities. Therefore, we remain cautious about the direction of the
markets for the rest of 2002. It is likely that we'll continue to see
significant volatility in stock prices and possibly more downside movement
before stocks are able to turn the corner. However, at some point, we look
for corporate earnings to begin to improve, and that should be reflected
in better stock prices in 2003.
Q: How are you positioning the Fund in light of your outlook?
A: While the market continues in this transition period, we will maintain a
more defensive approach to our stock selection process. As we begin to see
signs that corporate profits are on the mend, we will seek to position the
Fund to take advantage of the best growth opportunities that exist among
large-cap stocks. In general, our focus will be on investing in healthy
companies in a variety of industries, including many that are in a
position to generate dividends for investors.
--------------------------------------------------------------------------------
8 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
The Fund's Long-term Performance
This chart illustrates the total value of an assumed $10,000 investment in AXP
New Dimensions Fund Class A shares (from 8/1/92 to 7/31/02) as compared to the
performance of two widely cited performance indices, Standard & Poor's 500 Index
(S&P 500 Index) and the Lipper Large-Cap Growth Funds Index. In comparing the
Fund's Class A shares to these indices, you should take into account the fact
that the Fund's performance reflects the maximum sales charge of 5.75%, while
such charges are not reflected in the performance of the indices. Returns for
the Fund include the reinvestment of any distribution paid during each period.
Past performance is no guarantee of future results. Your investment and return
values fluctuate so that your shares, when redeemed, may be worth more or less
than the original cost. Returns do not reflect taxes payable on distributions
and redemptions. Also see "Past Performance" in the Fund's current prospectus.
VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN AXP NEW DIMENSIONS FUND
$50,000
$40,000 (solid line) AXP New Dimensions Fund
$30,000 (dotted line) S&P 500 Index
$20,000 (dashed line) Lipper Large-Cap Growth Funds Index
$10,000
'92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '01 '02
(solid line) AXP New Dimensions Fund Class A $25,797
(dotted line) S&P 500 Index(1) $26,139
(dashed line) Lipper Large-Cap Growth Funds Index(2) $21,154
(1) Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of common
stocks, is frequently used as a general measure of market performance. The index
reflects reinvestment of all distributions and changes in market prices, but
excludes brokerage commissions or other fees. However, the S&P 500 companies may
be generally larger than those in which the Fund invests.
(2) The Lipper Large-Cap Growth Funds Index, published by Lipper Inc., includes
the 30 largest funds that are generally similar to the Fund, although some funds
in the index may have somewhat different investment policies or objectives.
Average Annual Total Returns
Class A with Sales Charge as of July 31, 2002
1 year -25.68%
5 years +0.15%
10 years +9.94%
Since inception N/A
Results for other share classes can be found on page 7.
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9 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
Investments in Securities
Growth Trends Portfolio
July 31, 2002
(Percentages represent value of investments compared to net assets)
Common stocks (97.3%)
Issuer Shares Value(a)
Aerospace & defense (0.7%)
Lockheed Martin 800,000 $51,288,000
United Technologies 1,000,000(f) 69,500,000
Total 120,788,000
Airlines (1.5%)
Southwest Airlines 18,000,000 248,580,000
Automotive & related (0.3%)
General Motors 1,000,000 46,550,000
Banks and savings & loans (5.0%)
Bank of America 7,000,000 465,500,000
Washington Mutual 2,000,000 74,820,000
Wells Fargo 6,000,000 305,160,000
Total 845,480,000
Beverages & tobacco (4.0%)
Anheuser-Busch 2,400,000 124,104,000
PepsiCo 2,600,000 111,644,000
Philip Morris 9,600,000 442,080,000
Total 677,828,000
Chemicals (1.7%)
Air Products & Chemicals 2,500,000 110,625,000
du Pont (EI) de Nemours 2,200,000 92,202,000
Waste Management 3,200,000 75,744,000
Total 278,571,000
Communications equipment & services (1.1%)
Motorola 5,000,000 58,000,000
Nokia ADR Cl A 2,000,000(c) 24,800,000
Verizon Communications 3,000,000 99,000,000
Total 181,800,000
Computer software & services (4.4%)
Automatic Data Processing 2,500,000 93,225,000
Brocade Communications
Systems 1,000,000(b) 18,750,000
Electronic Arts 500,000(b) 30,090,000
Microsoft 11,500,000(b) 551,425,000
SunGard Data Systems 1,700,000(b) 39,865,000
Total 733,355,000
Computers & office equipment (5.3%)
Cisco Systems 15,000,000(b) 197,850,000
Dell Computer 5,500,000(b) 137,115,000
Fiserv 1,300,000(b) 44,733,000
Intl Business Machines 3,000,000 211,200,000
State Street 7,100,000 301,750,000
Total 892,648,000
Electronics (5.4%)
Applied Materials 10,000,000(b) 148,700,000
Intel 11,000,000 206,690,000
Maxim Integrated Products 5,000,000(b) 175,900,000
Samsung Electronics 220,000(c) 61,569,410
Texas Instruments 13,600,000 314,840,000
Total 907,699,410
Energy (5.5%)
ChevronTexaco 5,000,000 375,000,000
Exxon Mobil 12,000,000 441,120,000
Murphy Oil 500,000 41,575,000
Phillips Petroleum 1,500,000 77,625,000
Total 935,320,000
Energy equipment & services (1.5%)
Schlumberger 4,200,000 180,264,000
Transocean 1,500,000 38,250,000
Weatherford Intl 1,000,000(b) 40,560,000
Total 259,074,000
Financial services (9.5%)
Citigroup 18,000,000 603,720,000
Fannie Mae 4,000,000 299,560,000
MBNA 11,000,000 213,290,000
Morgan Stanley 5,000,000 201,750,000
Paychex 420,600 11,065,986
SLM 3,000,000 273,000,000
Total 1,602,385,986
Food (0.2%)
General Mills 700,000 29,015,000
See accompanying notes to investments in securities.
10 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
Common stocks (continued)
Issuer Shares Value(a)
Health care (7.4%)
Amgen 2,500,000(b) $114,100,000
Forest Laboratories 1,100,000(b) 85,217,000
Johnson & Johnson 8,200,000 434,600,000
Medtronic 7,000,000 282,800,000
Pfizer 10,000,000 323,500,000
Quest Diagnostics 200,000(b) 12,078,000
Total 1,252,295,000
Health care services (6.3%)
Cardinal Health 5,000,000 288,000,000
HCA 8,000,000 376,000,000
UnitedHealth Group 4,600,000 403,236,000
Total 1,067,236,000
Household products (2.0%)
Gillette 1,700,000 55,896,000
Procter & Gamble 3,200,000 284,768,000
Total 340,664,000
Indexes (1.1%)
Nasdaq-100 Index Tracking 8,000,000(b) 191,040,000
Industrial equipment & services (2.7%)
Caterpillar 5,000,000 223,500,000
Deere & Co 750,000 31,515,000
Illinois Tool Works 3,000,000 197,970,000
Total 452,985,000
Insurance (3.4%)
American Intl Group 4,000,000 255,680,000
Marsh & McLennan 6,800,000 325,720,000
Total 581,400,000
Leisure time & entertainment (3.6%)
AOL Time Warner 2,000,000(b) 23,000,000
Intl Game Technology 1,000,000(b) 58,250,000
Mattel 3,000,000 56,430,000
Viacom Cl B 12,000,000(b) 467,040,000
Total 604,720,000
Media (2.6%)
eBay 2,000,000(b) 114,180,000
Gannett 2,000,000 143,820,000
Grupo Televisa ADR 760,000(b,c) 22,990,000
USA Interactive 4,800,000(b) 105,835,200
USA Networks 2,200,000(b,e) 48,507,800
Total 435,333,000
Metals (1.1%)
Alcoa 4,500,000 121,725,000
Nucor 1,200,000 66,996,000
Total 188,721,000
Multi-industry conglomerates (6.6%)
3M 4,000,000 503,320,000
Accenture Cl A 1,000,000(b,c) 16,500,000
Cendant 5,500,000(b) 76,010,000
General Electric 14,000,000 450,800,000
Robert Half Intl 3,000,000(b) 59,850,000
Total 1,106,480,000
Paper & packaging (0.5%)
Intl Paper 2,000,000 79,640,000
Restaurants & lodging (1.0%)
Marriott Intl Cl A 5,000,000 167,500,000
Retail (9.5%)
Bed Bath & Beyond 1,200,000(b) 37,200,000
Best Buy 2,400,000(b) 78,960,000
Costco Wholesale 7,000,000(b) 244,090,000
Home Depot 5,000,000 154,400,000
Kohl's 500,000(b) 33,000,000
Target 10,500,000 350,175,000
Wal-Mart Stores 12,500,000 614,750,000
Walgreen 2,400,000 84,792,000
Total 1,597,367,000
Transportation (1.1%)
Union Pacific 2,500,000 146,675,000
United Parcel Service Cl B 700,000 45,738,000
Total 192,413,000
Utilities-- electric (2.3%)
Dominion Resources 6,500,000 386,360,000
Total common stocks
(Cost: $16,162,405,499) $16,403,248,396
Preferred stock (0.6%)
Issuer Shares Value(a)
TXU
8.75% Cv 2,300,000 $107,249,000
Total preferred stock
(Cost: $120,371,746) $107,249,000
See accompanying notes to investments in securities.
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11 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
Option purchased (--%)
Issuer Contracts Exercise Expiration Value(a)
price date
Call
S&P 500 Index 3200 $950 Aug. 2002 $2,432,000
Total option purchased
(Cost: $10,729,600) $2,432,000
<TABLE>
<CAPTION>
Short-term securities (2.2%)(f)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agency (0.2%)
Federal Home Loan Bank Disc Nts
<S> <C> <C> <C>
10-02-02 1.71% $25,000,000 $24,926,500
10-09-02 1.74 2,400,000 2,392,226
10-11-02 1.73 9,500,000 9,468,337
Total 36,787,063
Commercial paper (2.0%)
CAFCO
08-20-02 1.81 1,500,000(d) 1,498,442
09-06-02 1.80 4,200,000(d) 4,191,752
Charta
08-01-02 1.81 30,000,000(d) 29,998,021
CXC
08-22-02 1.81 25,000,000(d) 24,954,666
Edison Asset Securitization
08-16-02 1.88 25,000,000(d) 24,978,655
09-19-02 1.81 30,000,000(d) 29,888,114
10-16-02 1.81 25,000,000(d) 24,901,077
Fleet Funding
08-08-02 1.92 10,000,000(d) 9,991,956
09-03-02 1.81 2,000,000(d) 1,996,448
09-16-02 1.80 30,000,000(d) 29,927,152
GE Capital Intl Funding
08-13-02 1.92 9,100,000(d) 9,093,691
Goldman Sachs Group
08-05-02 1.93 22,300,000 22,294,022
Intl Lease Finance
08-02-02 1.79 12,300,000 12,298,645
Nordea North America
10-21-02 1.82 15,000,000 14,936,792
Park Avenue Receivables
08-07-02 1.79 5,000,000(d) 4,998,260
Preferred Receivables
08-29-02 1.81 25,000,000(d) 24,945,621
Receivables Capital
08-05-02 1.80 3,500,000(d) 3,499,062
08-12-02 1.80 25,000,000(d) 24,984,000
Sheffield Receivables
08-01-02 1.84 29,400,000(d) 29,398,497
Total 328,774,873
Total short-term securities
(Cost: $365,663,563) $365,561,936
Total investments in securities
(Cost: $16,659,170,408)(g) $16,878,491,332
</TABLE>
See accompanying notes to investments in securities.
12 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
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 July 31, 2002,
the value of foreign securities represented 0.7% 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) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at July 31, 2002, is as follows:
Security Acquisition Cost
date
USA Networks 05-02-02 $62,700,000
(f) At July 31, 2002, securities valued at $6,950,000 were held to cover open
call options written as follows (see Note 5 to the financial statements):
Issuer Contracts Exercise price Expiration date Value(a)
United Technologies 1,000 $75 Aug. 2002 $40,000
At July 31, 2002, cash or short-term securities were designated to cover
open put options written as follows (see Note 5 to the financial
statements):
Issuer Contracts Exercise price Expiration date Value(a)
United Technologies 1,000 $60 Aug. 2002 $25,000
(g) At July 31, 2002, the cost of securities for federal income tax purposes
was $16,659,170,408 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
Unrealized appreciation $ 1,953,523,275
Unrealized depreciation (1,734,202,351)
--------------
Net unrealized appreciation $ 219,320,924
---------------
--------------------------------------------------------------------------------
13 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
Financial Statements
Statement of assets and liabilities
Growth Trends Portfolio
July 31, 2002
Assets
Investments in securities, at value (Note 1)*
<S> <C>
(identified cost $16,659,170,408) $16,878,491,332
Foreign currency holdings (identified cost $28,088,520) (Note 1) 27,853,018
Dividends and accrued interest receivable 10,984,760
Receivable for investment securities sold 13,510,751
----------
Total assets 16,930,839,861
--------------
Liabilities
Disbursements in excess of cash on demand deposit 1,205,799
Payable for investment securities purchased 46,072,548
Payable upon return of securities loaned (Note 4) 25,000,000
Accrued investment management services fee 236,283
Other accrued expenses 137,478
Options contracts written, at value (premiums received $343,989) (Note 5) 65,000
------
Total liabilities 72,717,108
----------
Net assets $16,858,122,753
===============
* Including securities on loan, at value (Note 4) $ 23,880,000
---------------
</TABLE>
See accompanying notes to financial statements.
--------------------------------------------------------------------------------
14 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
Statement of operations
Growth Trends Portfolio
Year ended July 31, 2002
Investment income
Income:
<S> <C>
Dividends $ 244,873,954
Interest 18,421,944
Less foreign taxes withheld (238,623)
--------
Total income 263,057,275
-----------
Expenses (Note 2):
Investment management services fee 127,492,321
Compensation of board members 89,206
Custodian fees 1,158,122
Audit fees 34,500
Other 287,977
-------
Total expenses 129,062,126
Earnings credits on cash balances (Note 2) (3,699)
------
Total net expenses 129,058,427
-----------
Investment income (loss) -- net 133,998,848
-----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) (86,615,657)
Foreign currency transactions (527,727)
Options contracts written (Note 5) 8,417,627
---------
Net realized gain (loss) on investments (78,725,757)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (4,792,265,331)
--------------
Net gain (loss) on investments and foreign currencies (4,870,991,088)
--------------
Net increase (decrease) in net assets resulting from operations $(4,736,992,240)
===============
</TABLE>
See accompanying notes to financial statements.
--------------------------------------------------------------------------------
15 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
Growth Trends Portfolio
Year ended July 31, 2002 2001
Operations
<S> <C> <C>
Investment income (loss) -- net $ 133,998,848 $ 140,932,561
Net realized gain (loss) on investments (78,725,757) (396,793,889)
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets
and liabilities in foreign currencies (4,792,265,331) (6,106,460,902)
-------------- --------------
Net increase (decrease) in net assets resulting from operations (4,736,992,240) (6,362,322,230)
-------------- --------------
Proceeds from contributions 1,102,314,218 1,408,932,058
Fair value of withdrawals (3,241,842,538) (1,673,744,904)
-------------- --------------
Net contributions (withdrawals) from partners (2,139,528,320) (264,812,846)
-------------- ------------
Total increase (decrease) in net assets (6,876,520,560) (6,627,135,076)
Net assets at beginning of year 23,734,643,313 30,361,778,389
-------------- --------------
Net assets at end of year $16,858,122,753 $23,734,643,313
=============== ===============
</TABLE>
See accompanying notes to financial statements.
--------------------------------------------------------------------------------
16 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
Notes to Financial Statements
Growth Trends Portfolio
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, liabilities and contingent 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.
--------------------------------------------------------------------------------
17 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
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. As of July 31, 2002 foreign currency was comprised of Taiwan
dollars.
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.
Illiquid securities
As of July 31, 2002, investments in securities included issues that are illiquid
which the Portfolio currently limits to 10% of net assets, at market value, at
the time of purchase. The aggregate value of such securities as of July 31, 2002
was $48,507,800 representing 0.29% of net assets. These securities are valued at
fair value according to methods selected in good faith by the board. According
to board guidelines, certain unregistered securities are determined to be liquid
and are not included within the 10% limitation specified above.
--------------------------------------------------------------------------------
18 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
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 Funds 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 $20,242,854 for the year ended July 31, 2002.
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 year ended July 31, 2002, the Portfolio's custodian fees were reduced
by $3,699 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 $5,484,438,329 and $6,764,788,949, respectively, for the
year ended July 31, 2002. For the same period, the portfolio turnover rate was
27%. Realized gains and losses are determined on an identified cost basis.
Brokerage commissions paid to brokers affiliated with AEFC were $1,289,960 for
the year ended July 31, 2002.
--------------------------------------------------------------------------------
19 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
4. LENDING OF PORTFOLIO SECURITIES
As of July 31, 2002, securities valued at $23,880,000 were on loan to brokers.
For collateral, the Portfolio received $25,000,000 in cash. Income from
securities lending amounted to $154,118 for the year ended July 31, 2002. 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 premiums associated with options contracts written are as follows:
Year ended July 31, 2002
Puts Calls
Contracts Premiums Contracts Premiums
Balance July 31, 2001 -- $ -- 5,000 $ 777,500
Opened 16,800 2,412,707 62,500 8,492,564
Closed (6,800) (850,576) (23,500) (3,209,922)
Expired (9,000) (1,375,137) (43,000) (5,903,147)
------ ---------- ------- ----------
Balance July 31, 2002 1,000 $ 186,994 1,000 $ 156,995
----- ----------- ----- -----------
--------------------------------------------------------------------------------
20 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
Independent Auditors' Report
THE BOARD OF TRUSTEES AND UNITHOLDERS
GROWTH TRUST
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of Growth Trends Portfolio (a series
of Growth Trust) as of July 31, 2002, the related statement of operations for
the year then ended and the statements of changes in net assets for each of the
years in the two-year period ended July 31, 2002. These financial statements are
the responsibility of portfolio management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 2002, by correspondence with the custodian and brokers or by other
appropriate auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Growth Trends Portfolio as of
July 31, 2002, and the results of its operations and the changes in its net
assets for each of the periods stated in the first paragraph above, in
conformity with accounting principles generally accepted in the United States of
America.
KPMG LLP
Minneapolis, Minnesota
September 6, 2002
--------------------------------------------------------------------------------
21 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
Financial Statements
Statement of assets and liabilities
AXP New Dimensions Fund
July 31, 2002
Assets
<S> <C>
Investment in Portfolio (Note 1) $16,858,062,470
Capital shares receivable 859,498
-------
Total assets 16,858,921,968
--------------
Liabilities
Capital shares payable 245,716
Accrued distribution fee 169,714
Accrued service fee 8,747
Accrued transfer agency fee 65,629
Accrued administrative services fee 14,750
Other accrued expenses 465,920
-------
Total liabilities 970,476
-------
Net assets applicable to outstanding capital stock $16,857,951,492
===============
Represented by
Capital stock -- $.01 par value (Note 1) $ 8,494,944
Additional paid-in capital 17,374,453,280
Accumulated net realized gain (loss) (Note 5) (744,359,627)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 219,362,895
-----------
Total -- representing net assets applicable to outstanding capital stock $16,857,951,492
===============
Net assets applicable to outstanding shares:
Class A $ 9,863,130,072
Class B $ 3,728,472,005
Class C $ 44,015,284
Class Y $ 3,222,334,131
Net asset value per share
of outstanding capital stock: Class A shares 492,114,004 $ 20.04
Class B shares 195,044,945 $ 19.12
Class C shares 2,304,834 $ 19.10
Class Y shares 160,030,567 $ 20.14
----------- ---------------
</TABLE>
See accompanying notes to financial statements.
--------------------------------------------------------------------------------
22 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
Statement of operations
AXP New Dimensions Fund
Year ended July 31, 2002
Investment income
Income:
<S> <C>
Dividends $ 244,873,140
Interest 18,417,086
Less foreign taxes withheld (238,622)
--------
Total income 263,051,604
-----------
Expenses (Note 2):
Expenses allocated from Portfolio 129,057,999
Distribution fee
Class A 30,613,503
Class B 46,621,925
Class C 389,809
Transfer agency fee 29,132,095
Incremental transfer agency fee
Class A 1,712,038
Class B 1,470,624
Class C 21,153
Service fee -- Class Y 4,078,144
Administrative services fees and expenses 6,562,461
Compensation of board members 148,705
Printing and postage 2,094,931
Registration fees 381,737
Audit fees 11,500
Other 74,003
------
Total expenses 252,370,627
Earnings credits on cash balances (Note 2) (407,483)
--------
Total net expenses 251,963,144
-----------
Investment income (loss) -- net 11,088,460
----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (86,606,677)
Foreign currency transactions (527,725)
Options contracts written 8,417,604
---------
Net realized gain (loss) on investments (78,716,798)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (4,792,258,031)
--------------
Net gain (loss) on investments and foreign currencies (4,870,974,829)
--------------
Net increase (decrease) in net assets resulting from operations $(4,859,886,369)
===============
</TABLE>
See accompanying notes to financial statements.
--------------------------------------------------------------------------------
23 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
AXP New Dimensions Fund
Year ended July 31, 2002 2001
Operations and distributions
<S> <C> <C>
Investment income (loss) -- net $ 11,088,460 $ (3,797,962)
Net realized gain (loss) on investments (78,716,798) (396,765,677)
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets
and liabilities in foreign currencies (4,792,258,031) (6,106,468,726)
-------------- --------------
Net increase (decrease) in net assets
resulting from operations (4,859,886,369) (6,507,032,365)
-------------- --------------
Distributions to shareholders from:
Net investment income
Class A (6,092,513) (4,684,288)
Class B (2,401,369) --
Class C (18,358) (5,049)
Class Y (2,048,495) (3,219,986)
Excess distribution of net investment income
Class A -- (8,000,002)
Class C -- (8,099)
Class Y -- (5,165,393)
Net realized gain
Class A -- (1,695,350,636)
Class B -- (639,365,263)
Class C -- (1,669,548)
Class Y -- (608,065,587)
Tax return of capital
Class A (2,538,856) --
Class B (1,003,750) --
Class C (7,646) --
Class Y (854,555) --
-------- -------
Total distributions (14,965,542) (2,965,533,851)
----------- --------------
Capital share transactions (Note 3)
Proceeds from sales
Class A shares (Notes 2) 2,430,324,703 2,799,675,984
Class B shares 675,994,508 1,084,304,631
Class C shares 31,832,064 35,033,595
Class Y shares 1,040,580,252 1,444,980,459
Reinvestment of distributions at net asset value
Class A shares 8,375,379 1,663,355,392
Class B shares 3,370,269 634,330,120
Class C shares 25,864 1,680,968
Class Y shares 2,894,340 616,450,966
Payments for redemptions
Class A shares (3,608,500,396) (2,919,560,087)
Class B shares (Note 2) (997,820,871) (738,588,995)
Class C shares (Note 2) (7,489,197) (3,045,672)
Class Y shares (1,580,185,126) (1,772,093,982)
-------------- --------------
Increase (decrease) in net assets
from capital share transactions (2,000,598,211) 2,846,523,379
-------------- -------------
Total increase (decrease) in net assets (6,875,450,122) (6,626,042,837)
Net assets at beginning of year 23,733,401,614 30,359,444,451
-------------- --------------
Net assets at end of year $16,857,951,492 $23,733,401,614
=============== ===============
</TABLE>
--------------------------------------------------------------------------------
24 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
See accompanying notes to financial statements.
Notes to Financial Statements
AXP New Dimensions Fund
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.
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 July 31, 2002, 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, liabilities and contingent assets and liabilities) that could
differ from actual results.
--------------------------------------------------------------------------------
25 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
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.
On the statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been decreased by $527,725
and accumulated net realized loss has been decreased by $527,725.
The tax character of distributions paid for the years indicated is as follows:
Year ended July 31, 2002 2001
Class A
Distributions paid from:
Ordinary income $6,092,513 $ 12,684,290
Long-term capital gain -- 1,695,350,636
Tax return of capital 2,538,856 --
Class B
Distributions paid from:
Ordinary income 2,401,369 --
Long-term capital gain -- 639,365,263
Tax return of capital 1,003,750 --
Class C
Distributions paid from:
Ordinary income 18,358 13,148
Long-term capital gain -- 1,669,548
Tax return of capital 7,646 --
Class Y
Distributions paid from:
Ordinary income 2,048,495 8,385,379
Long-term capital gain -- 608,065,587
Tax return of capital 854,555 --
As of July 31, 2002, the components of distributable earnings
on a tax basis are as follows:
Undistributed ordinary income $ --
Accumulated gain (loss) $(730,857,694)
Unrealized appreciation (depreciation) $ 205,860,962
--------------------------------------------------------------------------------
26 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
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 American Express Financial Corporation (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 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 $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
$23,219,973 for Class A, $5,084,683 for Class B and $17,144 for Class C for the
year ended July 31, 2002.
During the year ended July 31, 2002, the Fund's transfer agency fees were
reduced by $407,483 as a result of earnings credits from overnight cash
balances.
--------------------------------------------------------------------------------
27 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the years indicated are as follows:
<TABLE>
<CAPTION>
Year ended July 31, 2002
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Sold 103,405,732 30,104,630 1,423,135 44,288,672
Issued for reinvested distributions 343,417 144,220 1,107 118,222
Redeemed (156,522,877) (46,677,982) (347,238) (67,710,202)
------------ ----------- -------- -----------
Net increase (decrease) (52,773,728) (16,429,132) 1,077,004 (23,303,308)
----------- ----------- --------- -----------
</TABLE>
<TABLE>
<CAPTION>
Year ended July 31, 2001
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Sold 93,773,746 37,048,347 1,209,696 47,427,537
Issued for reinvested distributions 59,624,370 23,558,366 62,467 22,063,387
Redeemed (98,821,564) (26,640,422) (112,649) (60,345,820)
----------- ----------- -------- -----------
Net increase (decrease) 54,576,552 33,966,291 1,159,514 9,145,104
---------- ---------- --------- ---------
</TABLE>
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 year ended July 31,
2002.
5. CAPITAL LOSS CARRY-OVER
For federal income tax purposes, the Fund has a capital loss carry-over of
$730,857,694 as of July 31, 2002, that will expire in 2010 if not offset by
capital gains. It is unlikely the board will authorize a distribution of any net
realized capital gains until the available capital loss carry-over has been
offset or expires.
--------------------------------------------------------------------------------
28 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
6. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating
the Fund's results.
<TABLE>
<CAPTION>
Class A
Per share income and capital changes(a)
Fiscal period ended July 31, 2002 2001 2000 1999 1998
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $25.43 $36.26 $31.21 $27.59 $25.69
------ ------ ------ ------ ------
Income from investment operations:
Net investment income (loss) .05 .02 .02 .06 .13
Net gains (losses) (both realized and unrealized) (5.42) (7.37) 7.14 5.31 3.67
----- ----- ---- ---- ----
Total from investment operations (5.37) (7.35) 7.16 5.37 3.80
----- ----- ---- ---- ----
Less distributions:
Dividends from net investment income (.02) (.01) (.05) (.06) (.17)
Excess distributions from net investment income -- (.01) -- -- --
Distributions from realized gains -- (3.46) (2.06) (1.69) (1.73)
----- ----- ----- ----- -----
Total distributions (.02) (3.48) (2.11) (1.75) (1.90)
---- ----- ----- ----- -----
Net asset value, end of period $20.04 $25.43 $36.26 $31.21 $27.59
------ ------ ------ ------ ------
Ratios/supplemental data
Net assets, end of period (in millions) $9,863 $13,857 $17,777 $13,568 $10,559
Ratio of expenses to average daily net assets(c) 1.06% 1.00% .90% .86% .82%
Ratio of net investment income (loss)
to average daily net assets .19% .12% .19% .24% .55%
Portfolio turnover rate (excluding short-term securities) 27% 29% 34% 34% 38%
Total return(e) (21.14%) (21.10%) 23.16% 20.04% 16.19%
</TABLE>
See accompanying notes to financial highlights.
--------------------------------------------------------------------------------
29 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
Class B
Per share income and capital changes(a)
Fiscal period ended July 31, 2002 2001 2000 1999 1998
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $24.44 $35.22 $30.54 $27.19 $25.38
------ ------ ------ ------ ------
Income from investment operations:
Net investment income (loss) (.14) (.13) (.24) (.10) --
Net gains (losses) (both realized and unrealized) (5.16) (7.19) 6.98 5.14 3.57
----- ----- ---- ---- ----
Total from investment operations (5.30) (7.32) 6.74 5.04 3.57
----- ----- ---- ---- ----
Less distributions:
Dividends from net investment income (.02) -- -- -- (.03)
Distributions from realized gains -- (3.46) (2.06) (1.69) (1.73)
----- ----- ----- ----- -----
Total distributions (.02) (3.46) (2.06) (1.69) (1.76)
---- ----- ----- ----- -----
Net asset value, end of period $19.12 $24.44 $35.22 $30.54 $27.19
------ ------ ------ ------ ------
Ratios/supplemental data
Net assets, end of period (in millions) $3,728 $5,169 $6,252 $4,070 $2,515
Ratio of expenses to average daily net assets(c) 1.83% 1.76% 1.66% 1.63% 1.58%
Ratio of net investment income (loss)
to average daily net assets (.57%) (.65%) (.57%) (.53%) (.23%)
Portfolio turnover rate (excluding short-term securities) 27% 29% 34% 34% 38%
Total return(e) (21.71%) (21.69%) 22.20% 19.13% 15.31%
</TABLE>
See accompanying notes to financial highlights.
--------------------------------------------------------------------------------
30 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
Class C
Per share income and capital changes(a)
Fiscal period ended July 31, 2002 2001 2000(b)
<S> <C> <C> <C>
Net asset value, beginning of period $24.42 $35.23 $35.52
------ ------ ------
Income from investment operations:
Net investment income (loss) (.14) (.13) (.01)
Net gains (losses) (both realized and unrealized) (5.16) (7.19) (.28)
----- ----- ----
Total from investment operations (5.30) (7.32) (.29)
----- ----- ----
Less distributions:
Dividends from net investment income (.02) (.02) --
Excess distributions from net investment income -- (.01) --
Distributions from realized gains -- (3.46) --
Total distributions (.02) (3.49) --
---- ----- -----
Net asset value, end of period $19.10 $24.42 $35.23
------ ------ ------
Ratios/supplemental data
Net assets, end of period (in millions) $44 $30 $2
Ratio of expenses to average daily net assets(c) 1.85% 1.76% 1.66%(d)
Ratio of net investment income (loss)
to average daily net assets (.60%) (.75%) (.74%)(d)
Portfolio turnover rate (excluding short-term securities) 27% 29% 34%
Total return(e) (21.73%) (21.70%) (.82%)
</TABLE>
See accompanying notes to financial highlights.
--------------------------------------------------------------------------------
31 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
Class Y
Per share income and capital changes(a)
Fiscal period ended July 31, 2002 2001 2000 1999 1998
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $25.51 $36.33 $31.24 $27.62 $25.72
------ ------ ------ ------ ------
Income from investment operations:
Net investment income (loss) .09 .07 .05 .09 .15
Net gains (losses) (both realized and unrealized) (5.44) (7.38) 7.19 5.30 3.68
----- ----- ---- ---- ----
Total from investment operations (5.35) (7.31) 7.24 5.39 3.83
----- ----- ---- ---- ----
Less distributions:
Dividends from net investment income (.02) (.02) (.09) (.08) (.20)
Excess distributions from net investment income -- (.03) -- -- --
Distributions from realized gains -- (3.46) (2.06) (1.69) (1.73)
----- ----- ----- ----- -----
Total distributions (.02) (3.51) (2.15) (1.77) (1.93)
---- ----- ----- ----- -----
Net asset value, end of period $20.14 $25.51 $36.33 $31.24 $27.62
------ ------ ------ ------ ------
Ratios/supplemental data
Net assets, end of period (in millions) $3,222 $4,677 $6,328 $5,513 $4,575
Ratio of expenses to average daily net assets(c) .90% .84% .74% .77% .75%
Ratio of net investment income (loss)
to average daily net assets .36% .28% .35% .33% .62%
Portfolio turnover rate (excluding short-term securities) 27% 29% 34% 34% 38%
Total return(e) (21.00%) (20.97%) 23.35% 20.12% 16.28%
</TABLE>
Notes to financial highlights
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Inception date was June 26, 2000.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
(d) Adjusted to an annual basis.
(e) Total return does not reflect payment of a sales charge.
--------------------------------------------------------------------------------
32 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
Independent Auditors' Report
THE BOARD AND SHAREHOLDERS
AXP NEW DIMENSIONS FUND, INC.
We have audited the accompanying statement of assets and liabilities of AXP New
Dimensions Fund (a series of AXP New Dimensions Fund, Inc.) as of July 31, 2002,
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the years in the two-year period ended July
31, 2002, and the financial highlights for each of the years in the five-year
period ended July 31, 2002. These financial statements and the financial
highlights are the responsibility of fund management. Our responsibility is to
express an opinion on these financial statements and the financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AXP New Dimensions Fund as of
July 31, 2002, and the results of its operations, changes in its net assets and
the financial highlights for each of the periods stated in the first paragraph
above, in conformity with accounting principles generally accepted in the United
States of America.
KPMG LLP
Minneapolis, Minnesota
September 6, 2002
--------------------------------------------------------------------------------
33 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
Board Members and Officers
Shareholders elect a board that oversees the Fund's operations. The board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the board.
The following is a list of the Fund's board members. Each member oversees 15
Master Trust portfolios and 78 American Express mutual funds. Board members
serve until the next regular shareholders' meeting or until he or she reaches
the mandatory retirement age established by the board.
<TABLE>
<CAPTION>
Independent Board Members
---------------------------- ------------------------ ------------------- ------------------
Name, Position held with Principal Other
address, Registrant and length occupations directorships
age of service during past five
years
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
<S> <C> <C> <C>
H. Brewster Atwater, Jr. Board member Retired chair and
4900 IDS Tower since 1996 chief executive
Minneapolis, MN 55402 officer, General
Born in 1931 Mills, Inc.
(consumer foods)
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
Arne H. Carlson Chair of the Board Chair, Board
901 S. Marquette Ave. since 1999 Services
Minneapolis, MN 55402 Corporation
Born in 1934 (provides
administrative
services to
boards), former
Governor of
Minnesota
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
Lynne V. Cheney Board member since 1994 Distinguished The Reader's
American Enterprise Fellow, AEI Digest
Institute Association Inc.
for Public Policy Research
(AEI)
1150 17th St., N.W.
Washington, D.C. 20036
Born in 1941
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
Livio D. DeSimone Board member Retired chair of Cargill,
30 Seventh Street East since 2001 the board and Incorporated
Suite 3050 chief executive (commodity
St. Paul, MN 55101-4901 officer, merchants and
Born in 1936 Minnesota Mining processors),
and Manufacturing Target
(3M) Corporation
(department
stores), General
Mills, Inc.
(consumer
foods), Vulcan
Materials
Company
(construction
materials/chemicals),
Milliken &
Company
(textiles and
chemicals) and
Nexia
Biotechnologies,
Inc.
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
Ira D. Hall Board member Private investor; Imagistics
Texaco, Inc. since 2001 formerly with International,
2000 Westchester Avenue Texaco Inc., Inc. (office
White Plains, NY 10650 treasurer, equipment),
Born in 1944 1999-2001 and Reynolds &
general manager, Reynolds Company
alliance (information
management services), TECO
operations, Energy, Inc.
1998-1999. Prior (energy holding
to that, company), The
director, Williams
International Companies, Inc.
Operations IBM (energy
Corp. distribution
company)
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
Heinz F. Hutter Board member Retired president
P.O. Box 2187 since 1994 and chief
Minneapolis, MN 55402 operating
Born in 1929 officer, Cargill,
Incorporated
(commodity
merchants and
processors)
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
Anne P. Jones Board member Attorney and Motorola, Inc.
5716 Bent Branch Rd. since 1985 consultant (electronics)
Bethesda, MD 20816
Born in 1935
---------------------------- ------------------------ ------------------- ------------------
</TABLE>
--------------------------------------------------------------------------------
34 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
Independent Board Members (continued)
---------------------------- ------------------------ ------------------- ------------------
Name, Position held with Principal Other
address, Registrant and length occupations directorships
age of service during past five
years
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
<S> <C> <C> <C>
Stephen R. Lewis, Jr. Board member Retired president
901 S. Marquette Ave. since 2002 and professor of
Minneapolis, MN 55402 economics,
Born in 1939 Carleton College
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
William R. Pearce Board member RII Weyerhaeuser
2050 One Financial Plaza since 1980 World Timberfund,
Minneapolis, MN 55402 L.P. (develops
Born in 1927 timber resources)
- management
committee; former
chair, American
Express Funds
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
Alan G. Quasha Board member President, Compagnie
720 Fifth Avenue since 2002 Quadrant Financiere
New York, NY 10019 Management, Inc. Richemont AG
Born in 1949 (management of (luxury goods)
private equities)
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
Alan K. Simpson Board member Former three-term Biogen, Inc.
1201 Sunshine Ave. since 1997 United States (bio-pharmaceuticals)
Cody, WY 82414 Senator for
Born in 1931 Wyoming
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
C. Angus Wurtele Board member Retired chair of Bemis
4900 IDS Tower since 1994 the board and Corporation
Minneapolis, MN 55402 chief executive (packaging)
Born in 1934 officer,
The Valspar
Corporation
---------------------------- ------------------------ ------------------- ------------------
</TABLE>
<TABLE>
<CAPTION>
Board Members Affiliated with American Express Financial Corporation (AEFC)
---------------------------- ------------------------ ------------------- ------------------
Name, Position held with Principal Other
address, Registrant and length occupations directorships
age of service during past five
years
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
<S> <C> <C> <C>
David R. Hubers Board member Retired chief Chronimed Inc.
50643 AXP Financial Center since 1993 executive officer (specialty
Minneapolis, MN 55474 and director of pharmaceutical
Born in 1943 AEFC distribution),
RTW Inc.
(manages workers
compensation
programs),
Lawson Software,
Inc. (technology
based business
applications)
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
John R. Thomas Board member Senior vice
50652 AXP Financial Center since 1987, president -
Minneapolis, MN 55474 president information and
Born in 1937 since 1997 technology of AEFC
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
William F. Truscott Board member Senior vice
53600 AXP Financial Center since 2001, president - chief
Minneapolis, MN 55474 vice president investment
Born in 1960 since 2002 officer of AEFC;
former chief
investment
officer and
managing
director, Zurich
Scudder
Investments
---------------------------- ------------------------ ------------------- ------------------
</TABLE>
--------------------------------------------------------------------------------
35 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
The board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the board. In addition to Mr. Thomas, who is president, and Mr.
Truscott, who is vice president, the Fund's other officers are:
<TABLE>
<CAPTION>
Other Officers
---------------------------- ------------------------ ------------------- ------------------
Name, address, age Position held with Principal Other
Registrant and length occupations directorships
of service during past five
years
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
<S> <C> <C> <C>
Jeffrey P. Fox Treasurer Vice president -
50005 AXP Financial Center since 2002 investment
Minneapolis, MN 55474 accounting, AEFC,
Born in 1955 since 2002; vice
president -
finance,
American Express
Company, 2000-2002;
vice president -
corporate
controller,
AEFC, 1996-2000
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
Leslie L. Ogg Vice president, President of
901 S. Marquette Ave. general counsel Board Services
Minneapolis, MN 55402 and secretary Corporation
Born in 1938 since 1978
---------------------------- ------------------------ ------------------- ------------------
---------------------------- ------------------------ ------------------- ------------------
Stephen W. Roszell Vice president Senior vice
50239 AXP Financial Center since 2002 president -
Minneapolis, MN 55474 institutional
Born in 1949 group of AEFC
---------------------------- ------------------------ ------------------- ------------------
</TABLE>
The SAI has additional information about the Fund's directors and is available,
without charge, upon request by calling (800) 862-7919.
--------------------------------------------------------------------------------
36 -- AXP NEW DIMENSIONS FUND -- 2002 ANNUAL REPORT
<PAGE>
American Express(R) Funds
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 International Equity Index Fund
AXP Large Cap Equity Fund
AXP Managed Allocation Fund
AXP Mid Cap Index Fund
AXP Nasdaq 100 Index(R) 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
AXP Total Stock Market Index 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 Select Value 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 Select Value 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.
For more complete information about our funds, including fees and expenses,
please call (800) 862-7919 for prospectuses. Read them carefully before you
invest.
(9/02)
<PAGE>
AXP New Dimensions Fund
70100 AXP Financial Center
Minneapolis, MN 55474
americanexpress.com
American
Express(R)
Funds
AMERICAN
EXPRESS(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-6440 V (9/02)
</TEXT>
</DOCUMENT>