N-CSRS 1 dimensions-ncsrs.txt AXP DIMENSIONS SERIES, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-1629 ------------ AXP DIMENSIONS SERIES, INC. -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 50606 AXP Financial Center, Minneapolis, Minnesota 55474 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Leslie L. Ogg - 901 S. Marquette Avenue, Suite 2810, Minneapolis, MN 55402-3268 -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (612) 330-9283 ----------------- Date of fiscal year end: 7/31 -------------- Date of reporting period: 1/31 -------------- AXP(R) New Dimensions Fund(R) Semiannual Report for the Period Ended Jan. 31, 2005 AXP New Dimensions Fund seeks to provide shareholders with long-term growth of capital. (logo) (logo) American AMERICAN Express(R) EXPRESS Funds (R) Table of Contents Fund Snapshot 3 Performance Summary 4 Questions & Answers with Portfolio Management 5 Investments in Securities 11 Financial Statements (Portfolio) 15 Notes to Financial Statements (Portfolio) 18 Financial Statements (Fund) 22 Notes to Financial Statements (Fund) 26 Fund Expenses Example 36 Proxy Voting 38 CORPORATE REORGANIZATION On Feb. 1, 2005, American Express Company, the parent company of the Fund's investment manager, American Express Financial Corporation (AEFC), announced plans to pursue a spin-off of 100% of the common stock of AEFC to shareholders of American Express Company. The transaction, expected to be completed in the third quarter of 2005, is subject to certain regulatory and other approvals, as well as final approval by the board of directors of American Express Company. Upon completion of the transaction AEFC will be a publicly traded company separate from American Express Company. The current agreements between the Fund and AEFC and its affiliates will remain in place. No changes in operations or personnel, including the portfolio manager of the Fund, are anticipated. (logo) Dalbar American Express(R) Funds' reports to shareholders have been awarded the Communications Seal from Dalbar Inc., an independent financial services research firm. The Seal recognizes communications demonstrating a level of excellence in the industry. -------------------------------------------------------------------------------- 2 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Fund Snapshot AT JAN. 31, 2005 PORTFOLIO MANAGERS Portfolio managers Since Years in industry Gordon Fines 1/91 37 Michael Nance 2/05 12 Trisha Schuster, CFA 2/05 12 FUND OBJECTIVE For investors seeking long-term growth of capital. Inception dates by class A: 8/1/68 B: 3/20/95 C: 6/26/00 I: 3/4/04 Y: 3/20/95 Ticker symbols by class A: INNDX B: INDBX C: ANDCX I: ANDIX Y: IDNYX Total net assets $13.931 billion Number of holdings 104 STYLE MATRIX STYLE VALUE BLEND GROWTH X LARGE MEDIUM SIZE SMALL Shading within the style matrix indicates areas in which the Fund generally invests. SECTOR COMPOSITION Percentage of portfolio assets (pie chart) Technology 20.0% Consumer discretionary 16.1% Health care 16.1% Industrials 12.7% Financials 11.4% Energy 9.1% Short-term securities* 4.7% Consumer staples 3.6% Telecommunications 3.1% Utilities 2.5% Materials 0.7% * 0.4% of portfolio assets is due to security lending activity. 4.3% of portfolio assets is the Portfolio's cash equivalent position. TOP TEN HOLDINGS Percentage of portfolio assets Microsoft (Computer software & services) 4.1% General Electric (Multi-industry) 3.9 Citigroup (Finance companies) 3.5 UnitedHealth Group (Health care services) 3.5 Dell (Computer hardware) 3.0 Exxon Mobil (Energy) 3.0 American Intl Group (Insurance) 2.9 Johnson & Johnson (Health care products) 2.6 Dominion Resources (Utilites -- electric) 2.5 Target (Retail -- general) 2.3 For further detail about these holdings, please refer to the section entitled "Investments in Securities." 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. Stocks of medium-sized companies may be subject to more abrupt or erratic price movements than stocks of larger companies. Some of these companies also may have fewer financial resources. Fund holdings are subject to change. -------------------------------------------------------------------------------- 3 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Performance Summary (bar chart) PERFORMANCE COMPARISON For the six-month period ended Jan. 31, 2005 +5.07% +8.16% +7.92% +5.07% = AXP New Dimensions Fund Class A (excluding sales charge) +8.16% = S&P 500 Index(1) (unmanaged) +7.92% = Lipper Large-Cap Growth Funds Index(2) The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by calling (800) 862-7919 or visiting www.americanexpress.com/funds. (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 includes the 30 largest large-cap growth funds tracked by Lipper Inc. The index's returns include net reinvested dividends. 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 other classes may vary from that shown because of differences in expenses. The indices do not reflect the effects of sales charges, expenses (excluding Lipper) and taxes. -------------------------------------------------------------------------------- 4 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Questions & Answers WITH PORTFOLIO MANAGEMENT Below, Portfolio Manager Gordon Fines discusses AXP New Dimensions Fund's results and positioning for the first half of fiscal year 2005. On Feb. 11, 2005, Michael Nance and Trisha Schuster joined the Fund's portfolio management team as associate portfolio managers. Q: How did the Fund perform for the six months ended Jan. 31, 2005? A: While the period from July 2004 through January 2005 provided positive returns for many areas of the U.S. stock market, stocks with very large market capitalizations (mega-cap stocks) underperformed amid multiple stock-specific events and short-term market trends. AXP New Dimensions Fund's Class A shares (excluding sales charge) rose 5.07% for the six months ended Jan. 31, 2005 as the Standard & Poor's 500 Index (S&P 500 Index) advanced 8.16% for the period.
AVERAGE ANNUAL TOTAL RETURNS Class A Class B Class C Class I Class Y (Inception dates) (8/1/68) (3/20/95) (6/26/00) (3/4/04) (3/20/95) NAV(1) POP(2) NAV(1) CDSC(3) NAV(1) CDSC(4) NAV(5) NAV(6) at Jan. 31, 2005 6 months * +5.07% -0.97% +4.67% +0.67% +4.62% +3.62% +5.28% +5.18% 1 year -0.53% -6.25% -1.30% -5.22% -1.34% -1.34% N/A -0.36% 3 years -0.24% -2.19% -1.00% -1.99% -1.02% -1.02% N/A -0.06% 5 years -4.93% -6.05% -5.66% -5.82% N/A N/A N/A -4.77% 10 years +10.24% +9.59% N/A N/A N/A N/A N/A N/A Since inception +11.30% +11.12% +8.86% +8.86% -7.18% -7.18% -1.68%* +9.86% at Dec. 31, 2004 6 months * +3.10% -2.83% +2.68% -2.32% +2.68% +1.68% +3.33% +3.17% 1 year +3.09% -2.84% +2.27% -1.73% +2.28% +2.28% N/A +3.25% 3 years +0.19% -1.77% -0.58% -1.58% -0.60% -0.60% N/A +0.36% 5 years -4.97% -6.09% -5.70% -5.87% N/A N/A N/A -4.81% 10 years +10.64% +9.99% N/A N/A N/A N/A N/A N/A Since inception +11.42% +11.24% +9.30% +9.30% -6.66% -6.66% +1.38%* +10.29% * Not annualized.
(1) Excluding sales charge. (2) Returns at public offering price (POP) reflect a sales charge of 5.75%. (3) Returns at maximum contingent deferred sales charge (CDSC). CDSC applies as follows: first year 5%; second and third year 4%; fourth year 3%; fifth year 2%; sixth year 1%; no sales charge thereafter. (4) 1% CDSC applies to redemptions made within the first year of purchase. (5) Sales charge is not applicable to these shares. Shares available to eligible investors only, currently limited to AXP Portfolio Builder Series funds, six affiliated funds-of-funds. (6) Sales charge is not applicable to these shares. Shares available to institutional investors only. -------------------------------------------------------------------------------- 5 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Questions & Answers (begin callout quote)> Our stock selection, specifically in the financials, consumer staples and industrial sectors, hurt performance. (end callout quote) The Lipper Large-Cap Growth Funds Index (Lipper Index), representing the Fund's peer group, advanced 7.92% over the same six months. Q: What factors affected results? A: It was one of the more disappointing and difficult fiscal periods we have faced since the early 1990s. In our view, the main reasons for our underperformance were: o Our higher-than-S&P 500 Index position in mega-cap stocks. The Fund held large positions in mega-cap stocks such as Citigroup, American International Group, Pfizer and Wal-Mart, which trailed the overall U.S. equity market for the year and the quarter. The Fund had a higher median market capitalization and higher weighting in the largest stocks compared to its peer group. Some companies such as Pfizer faced product safety concerns and increased competition while others faced earnings shortfalls or regulatory concerns. o We didn't have enough mid-cap stocks. Mid-cap stocks, which are an element of the Fund's S&P 500 Index benchmark, continued to outperform large-cap stocks for most of calendar year 2004. This trend began to reverse itself toward the end of the year, but the Fund's fiscal period results were negatively affected by the market cap of its holdings. o Energy stocks dimmed in the fourth calendar quarter. Energy stock performance helped our results for most of the year. However, as the price of oil peaked at nearly $55 per barrel in the fourth quarter, energy stocks underperformed, and we had a higher-than-S&P 500 Index weighting in this sector. We remain positive on the energy sector for the year ahead. -------------------------------------------------------------------------------- 6 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Questions & Answers (begin callout quote)> Our outlook calls for moderate economic growth and steadily rising interest rates this year. In our view, this should bode well for a rotation into high quality, low leverage companies that we favor. (end callout quote) o Outperformance of value stocks over growth stocks. Value stocks significantly outpaced growth stocks in calendar year 2004, as they have for several years. We do not believe this style trend can be sustained indefinitely. Since the Fund has a distinct and consistent growth focus, it was another factor that hurt our short-term results relative to the S&P 500 Index, which has both growth and value stocks. o Our stock selection efforts were not as effective as we would have liked. Our stock selection, specifically in the financials, consumer staples and industrial sectors, hurt performance. One stock that worked well for much of the period, eBay, weakened near the end of the period amid earnings concerns. For much of the fiscal period, two of the Fund's top 10 holdings at the start of the fiscal year -- Pfizer and American International Group -- did not meet our expectations. Both firms' stock prices suffered amid product and regulatory concerns. The last few years have been an exceptionally challenging period for large-cap growth investors. The current value outperformance cycle, which began in 2000, has been longer and deeper than any we've seen over the last 20 years. To illustrate the huge difference in performance between large-cap growth and large-cap value stocks in recent years, the chart on page 8 compares the returns of the Russell 1000 Growth Index and the Russell 1000 Value Index. We firmly believe this imbalance in the equity market will correct itself at some point. In this environment, we believe it makes sense for investors to maintain their exposure to growth stocks in order to benefit when the market again begins to favor growth stocks. -------------------------------------------------------------------------------- 7 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Questions & Answers The Fund's primary benchmark, the S&P 500 Index, contains both growth and value stocks. Effective Feb. 11, 2005, we have added the Russell 1000 Growth Index as a secondary unmanaged benchmark. We will illustrate the Fund's performance against this Russell Index in the Fund's 2005 annual report, which will be mailed to you in late September 2005. COMPARISON OF RETURNS At Jan. 31, 2005 Growth Stocks, Value Stocks and the S&P 500 Index 1 yr 3 yr 5 yr 10 yr Russell 1000 Growth Index +0.70% -0.71% -9.04% +8.99% Russell 1000 Value Index +12.45% +8.20% +5.59% +13.28% S&P 500 Index +6.22% +3.24% -1.77% +11.51% Past performance does not guarantee future results. The Russell 1000(R) Growth Index is an unmanaged market capitalization weighted index of those Russell 1000 Index companies with higher forecasted growth values The Russell 1000(R) Value Index is an unmanaged market capitalization weighted index of those Russell 1000 Index companies with lower price-to-book ratios and lower forecasted growth values. Neither Index figures reflect any deduction for fees or expenses Q: Did you have any success stories during the period? A: We are pleased to report that some of our holdings finished the period among the top performing stocks in the S&P 500 Index. We invested in some fast-growing companies whose stock performance helped us. These included Starbucks, Apple Computer, Dell Computer and Biogen Idec, to name a few. We sought solid, growing businesses with products that had a strong customer following and an expanding market share. In calendar year 2004, in terms of sector allocation, the Fund had a lower-than-S&P 500 Index weighting in health care and consumer discretionary stocks and this generally helped us. Large pharmaceutical companies and many consumer discretionary stocks did not do well during the fiscal period. -------------------------------------------------------------------------------- 8 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Questions & Answers Q: What portfolio changes did you make and how is the Fund currently positioned? A: Given their attractive growth characteristics, we have been adding some media stocks, including Time Warner and Comcast. We continue to like some of the Internet-related companies led by, of course, eBay but also Amazon. We also have a small holding in Google. Our largest holdings continue to be large-caps such as Microsoft and General Electric. We look for above average growth regardless of whether it is mega-cap or large. Currently, we are looking for earnings growth above 12%. Overall, we emphasize companies that we think are well managed, healthy growing companies in terms of balance sheet and income characteristics. We try to find companies that show not only earnings growth but also revenue growth. Also, in our view, dividend yield and dividend growth are very important themes in this market cycle. Q: Why was the Fund's management expanded to a team structure? A: The addition of two associate portfolio managers provides the Fund with additional resources. The Fund's objective to provide shareholders with long-term growth of capital remains unchanged. Michael Nance brings a consistent and disciplined process of selecting growth stocks that provide improved returns, earnings accelerations and improved returns on capital. Trisha Schuster provides many years of experience in the health care sector, which is one of the largest sectors in both the S&P 500 Index and Russell 1000 Growth Index. Mike and Trisha bring 24 years of combined investment experience to their expanded role, experience we believe will add value for shareholders. Mike and Trisha have been part of a team supporting this Fund. Both bring ideas that we believe can help enhance results. CHANGES TO TOP TEN HOLDINGS Jan. 31, 2005 compared to July 31, 2004 Company Change in weighting Microsoft (Computer software & services) Increased General Electric (Multi-industry) No change Citigroup (Finance companies) Increased UnitedHealth Group (Health care services) New to Top Ten Dell (Computer hardware) Increased Exxon Mobil (Energy) Decreased American Intl Group (Insurance) Decreased Johnson & Johnson (Health care products) New to Top Ten Dominion Resources (Utilities -- electric) New to Top Ten Target (Retail -- general) New to Top Ten No longer among Top Ten Holdings but still in the portfolio at Jan. 31, 2005 were Amgen, Intel, Pfizer and Wal-Mart Stores. For more information on the Top Ten Holdings, see this report's Fund Snapshot page or americanexpress.com/funds. -------------------------------------------------------------------------------- 9 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Questions & Answers Q: Has the Fund's investment strategy changed? A: No. AXP New Dimensions Fund continues to be managed based on four core principles: o Teamwork -- Portfolio managers and a group of dedicated analysts constantly exchange individual stock ideas and sector perspectives. o Multifaceted stock selection -- We thoroughly study company fundamentals, evaluate company potential to benefit from secular growth themes and monitor stock valuations. o Commitment to Research -- In addition to researching company public filings, the selection process also incorporates hundreds of company visits, industry contacts and external research from third- party analysts. o Rigorous Risk Management -- The team actively manages and monitors the portfolio's risk profile. Q: How do you intend to manage the Fund in the coming months? A: We remain upbeat about the prospects for the Fund in 2005. Our outlook calls for moderate economic growth and steadily rising interest rates this year. In our view, this should bode well for a rotation into high-quality low-leverage companies that we favor. Relative valuations also suggest that a rotation toward larger cap companies is probably overdue. Our experience has taught us that during periods of rising interest rates and slowing economic growth, when corporate earnings are nearing a peak, higher quality companies generally perform better than lower quality companies. In fact, a shift in market emphasis toward quality growth companies with sound balance sheets --the kind of companies that dominate the Fund's portfolio -- will provide an excellent opportunity for the Fund to regain ground. We express our gratitude for shareholders' patience, and we are optimistic that investors who have expressed long-term confidence in our strategy will be rewarded in 2005. -------------------------------------------------------------------------------- 10 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Investments in Securities Growth Trends Portfolio Jan. 31, 2005 (Unaudited) (Percentages represent value of investments compared to net assets) Common stocks (95.3%) Issuer Shares Value(a) Aerospace & defense (3.1%) Lockheed Martin 2,500,000 $144,525,000 Northrop Grumman 2,500,000 129,700,000 United Technologies 1,500,000 151,020,000 Total 425,245,000 Banks and savings & loans (1.6%) Bank of America 4,700,000 217,939,000 Beverages & tobacco (1.7%) PepsiCo 4,500,000 241,650,000 Broker dealers (0.6%) Charles Schwab 7,305,500 82,113,820 Cable (1.1%) Comcast Special Cl A 5,000,000(b) 158,050,000 Cellular telecommunications (0.6%) Vodafone Group ADR 3,000,000(c) 77,940,000 Chemicals (0.7%) EI du Pont de Nemours & Co 2,000,000 95,120,000 Computer hardware (7.6%) Apple Computer 3,000,000(b) 230,700,000 Cisco Systems 10,000,000(b) 180,400,000 Dell 10,000,000(b) 417,600,000 EMC 18,000,000(b) 235,800,000 Total 1,064,500,000 Computer software & services (9.2%) Google Cl A 200,000(b,d) 39,126,000 Intl Business Machines 2,500,000 233,550,000 Juniper Networks 8,000,000(b) 201,040,000 Microsoft 22,000,000 578,160,000 SAP ADR 3,400,000(c) 131,648,000 Symantec 4,000,000(b) 93,400,000 Total 1,276,924,000 Electronics (3.2%) Applied Materials 4,000,000(b) 63,600,000 Intel 4,000,000 89,800,000 Samsung Electronics 400,000(c) 193,024,771 Texas Instruments 2,000,000 46,420,000 Xerox 3,000,000(b) 47,640,000 Total 440,484,771 Energy (6.5%) Apache 3,000,000 163,260,000 ChevronTexaco 2,900,000 157,760,000 ConocoPhillips 1,800,000 167,022,000 Exxon Mobil 8,000,000 412,800,000 Total 900,842,000 Energy equipment & services (2.6%) Halliburton 3,500,000 143,955,000 Schlumberger 2,000,000 136,080,000 Transocean 2,000,000(b) 88,000,000 Total 368,035,000 Environmental services (--%) Waste Management 66,700 1,934,300 Finance companies (3.5%) Citigroup 10,000,000 490,500,000 Financial services (2.3%) Goldman Sachs Group 1,000,000 107,850,000 MBNA 3,800,000 101,004,000 SLM 2,200,000(d) 110,418,000 Total 319,272,000 See accompanying notes to investments in securities. -------------------------------------------------------------------------------- 11 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Common stocks (continued) Issuer Shares Value(a) Health care products (12.6%) Abbott Laboratories 2,500,000 $112,550,000 Amgen 3,500,000(b) 217,840,000 Biogen Idec 3,000,000(b) 194,880,000 Boston Scientific 4,500,000(b) 148,770,000 Eli Lilly & Co 1,000,000 54,240,000 Forest Laboratories 71,900(b) 2,986,007 Gilead Sciences 3,000,000(b) 99,300,000 Johnson & Johnson 5,500,000 (d) 355,850,000 Medtronic 2,000,000 104,980,000 Novartis ADR 1,500,000(c) 71,820,000 Pfizer 8,000,000 193,280,000 St. Jude Medical 3,000,000(b) 117,840,000 Zimmer Holdings 1,080,800(b) 85,221,080 Total 1,759,557,087 Health care services (3.5%) UnitedHealth Group 5,500,000 488,950,000 Home building (0.3%) Pulte Homes 600,000 39,648,000 Household products (1.9%) Procter & Gamble 5,000,000 266,150,000 Industrial transportation (1.2%) United Parcel Service Cl B 2,200,000 164,296,000 Insurance (3.4%) AFLAC 1,000,000 39,510,000 American Intl Group 6,000,000 397,740,000 UnumProvident 2,000,000 34,340,000 Total 471,590,000 Leisure time & entertainment (1.2%) Carnival 3,000,000 (d) 172,800,000 Lodging & gaming (0.4%) Intl Game Technology 2,000,000 62,600,000 Machinery (1.5%) Deere & Co 3,000,000 208,290,000 Media (4.7%) Amazon.com 800,000(b) 34,576,000 eBay 2,500,000(b) 203,750,000 Time Warner 15,000,000(b) 270,000,000 Yahoo! 4,200,000(b) 147,882,000 Total 656,208,000 Multi-industry (7.0%) 3M 3,000,000 253,080,000 General Electric 15,000,000 541,950,000 Tyco Intl 4,800,000(c) 173,472,000 Total 968,502,000 Restaurants (2.0%) McDonald's 4,500,000 145,755,000 Starbucks 2,500,000(b) 135,000,000 Total 280,755,000 Retail -- general (6.2%) Best Buy 700,000 37,653,000 Home Depot 3,400,000 140,284,000 Staples 1,800,000(d) 58,932,000 Target 6,200,000 314,774,000 Wal-Mart Stores 6,000,000 314,400,000 Total 866,043,000 Telecom equipment & services (2.6%) Motorola 4,000,000 62,960,000 QUALCOMM 8,000,000 297,920,000 Total 360,880,000 Utilities -- electric (2.5%) Dominion Resources 5,000,000 346,900,000 Total common stocks (Cost: $11,686,579,462) $13,273,718,978 See accompanying notes to investments in securities. -------------------------------------------------------------------------------- 12 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Short-term securities (4.7%)(e) Issuer Effective Amount Value(a) yield payable at maturity U.S. government agencies (0.7%) Federal Home Loan Bank Disc Nt 02-18-05 2.33% $25,000,000 $24,970,875 Federal Natl Mtge Assn Disc Nts 02-01-05 2.27 4,400,000 4,399,723 02-09-05 2.25 50,000,000 49,971,874 02-16-05 2.32 17,800,000 17,781,646 Total 97,124,118 Commercial paper (4.0%) Amsterdam Funding 02-11-05 2.33 24,750,000 24,732,379 BNP Paribas 02-01-05 2.49 4,650,000 4,649,678 Barton Capital LLC 02-08-05 2.31 10,400,000 10,394,661 Beta Finance 02-08-05 2.33 25,000,000 24,987,055 04-29-05 2.55 5,500,000 5,465,973 CHARTA LLC 04-25-05 2.54 15,000,000 14,911,467 CRC Funding LLC 02-17-05 2.35 3,000,000 2,996,671 Credit Suisse First Boston NY 02-03-05 2.30 30,000,000 29,994,251 Danske 02-14-05 2.36 10,000,000 9,990,822 Delaware Funding LLC 02-07-05 2.30 20,000,000 19,991,056 02-15-05 2.34 50,000,000 49,951,250 03-01-05 2.51 25,000,000 24,949,653 General Electric Capital 02-01-05 2.48 7,700,000 7,699,470 Jupiter Securitization 02-22-05 2.45 30,000,000 29,955,084 Kitty Hawk Funding 02-23-05 2.50 25,000,000 24,960,069 Morgan Stanley 02-04-05 2.48 12,000,000 11,996,693 02-14-05 2.53 50,000,000 49,950,806 Old Line Funding LLC 03-03-05 2.51 39,831,000 39,745,252 Park Avenue Receivables 02-10-05 2.33 40,000,000 39,974,110 02-25-05 2.49 30,000,000 29,948,126 Ranger Funding LLC 02-24-05 2.48 30,000,000 29,950,400 Sheffield Receivables 02-01-05 2.50 6,350,000 6,349,559 Variable Funding Capital 02-11-05 2.33 18,600,000 18,586,757 03-04-05 2.52 50,000,000 49,888,444 Total 562,019,686 Total short-term securities (Cost: $659,182,049) $659,143,804 Total investments in securities (Cost: $12,345,761,511)(f) $13,932,862,782 See accompanying notes to investments in securities. -------------------------------------------------------------------------------- 13 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT 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. At Jan. 31, 2005, the value of foreign securities represented 4.6% of net assets. (d) At Jan. 31, 2005, security was partially or fully on loan. See Note 4 to the financial statements. (e) Cash collateral received from security lending activity is invested in short-term securities and represents 0.4% of net assets. See Note 5 to the financial statements. 4.3% of net assets is the Portfolio's cash equivalent position. (f) At Jan. 31, 2005, the cost of securities for federal income tax purposes was approximately $12,345,762,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $2,026,191,000 Unrealized depreciation (439,090,000) ------------ Net unrealized appreciation $1,587,101,000 -------------- How to find information about the Fund's portfolio holdings (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii) The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at www.americanexpress.com/funds. -------------------------------------------------------------------------------- 14 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Financial Statements
Statement of assets and liabilities Growth Trends Porfolio Jan. 31, 2005 (Unaudited) Assets Investments in securities, at value (Note 1)* (identified cost $12,345,761,511) $13,932,862,782 Foreign currency holdings (identified cost $5,521) (Note 1) 6,049 Dividends and accrued interest receivable 7,118,492 Receivable for investment securities sold 151,095,223 ----------- Total assets 14,091,082,546 -------------- Liabilities Disbursements in excess of cash on demand deposit 4,093,349 Payable for investment securities purchased 92,416,540 Payable upon return of securities loaned (Note 4) 58,600,770 Accrued investment management services fee 591,411 Other accrued expenses 434,286 ------- Total liabilities 156,136,356 ----------- Net assets $13,934,946,190 =============== * Including securities on loan, at value (Note 4) $ 58,061,539 ---------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 15 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT
Statement of operations Growth Trends Porfolio Six months ended Jan. 31, 2005 (Unaudited) Investment income Income: Dividends $149,979,553 Interest 6,071,541 Fee income from securities lending (Note 4) 104,054 Less foreign taxes withheld (246,353) -------- Total income 155,908,795 ----------- Expenses (Note 2): Investment management services fee 34,802,763 Compensation of board members 29,069 Custodian fees 571,405 Audit fees 18,000 Other 274,995 ------- Total expenses 35,696,232 Earnings credits on cash balances (Note 2) (719) ---- Total net expenses 35,695,513 ---------- Investment income (loss) -- net 120,213,282 ----------- Realized and unrealized gain (loss) -- net Net realized gain (loss) on: Security transactions (Note 3) 396,634,385 Foreign currency transactions (169,253) Futures contracts (1,726,848) ---------- Net realized gain (loss) on investments 394,738,284 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 267,652,761 ----------- Net gain (loss) on investments and foreign currencies 662,391,045 ----------- Net increase (decrease) in net assets resulting from operations $782,604,327 ============
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 16 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT
Statements of changes in net assets Growth Trends Porfolio Jan. 31, 2005 July 31, 2004 Six months ended Year ended (Unaudited) Operations Investment income (loss) -- net $ 120,213,282 $ 153,163,075 Net realized gain (loss) on investments 394,738,284 1,326,193,728 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 267,652,761 (740,840,157) ----------- ------------ Net increase (decrease) in net assets resulting from operations 782,604,327 738,516,646 ----------- ----------- Proceeds from contributions 56,873,827 588,788,643 Fair value of withdrawals (2,224,936,120) (3,075,163,840) In-kind contributions in connection with fund mergers (Note 1) -- 221,872,382 -------------- -------------- Net contributions (withdrawals) from partners (2,168,062,293) (2,264,502,815) -------------- -------------- Total increase (decrease) in net assets (1,385,457,966) (1,525,986,169) Net assets at beginning of period 15,320,404,156 16,846,390,325 -------------- -------------- Net assets at end of period $13,934,946,190 $15,320,404,156 =============== ===============
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 17 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Notes to Financial Statements Growth Trends Portfolio (Unaudited as to Jan. 31, 2005) 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 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. On June 25, 2004, AXP New Dimensions Fund acquired the assets and assumed the identified liabilities of AXP Focused Growth Fund and AXP Growth Dimensions Fund. Upon receipt of these assets and liabilities, AXP New Dimensions Fund made an in-kind contribution of $221,872,382 to Growth Trends 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. Pursuant to procedures adopted by the Board of Trustees of the portfolios, American Express Financial Corporation (AEFC) utilizes Fair Value Pricing (FVP). FVP determinations are made in good faith in accordance with these procedures. If a development or event is so significant that there is a reasonably high degree of certainty that the effect of the development or event has actually caused the closing price to no longer reflect the actual value, the closing prices, as determined at the close of the applicable foreign market, may be adjusted to reflect the fair value of the affected foreign securities as of the close of the New York Stock Exchange. Significant events include material movements in the U.S. securities markets prior to the opening of foreign markets on the following trading day. FVP results in an estimated price that reasonably reflects the current market conditions in order to value the portfolio holdings such that shareholder transactions receive a fair net asset value (NAV). 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. -------------------------------------------------------------------------------- 18 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT 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. At Jan. 31, 2005, foreign currency holdings were entirely comprised of Taiwan Dollars. -------------------------------------------------------------------------------- 19 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT 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. Guarantees and indemnifications Under the Portfolio's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Portfolio. In addition, certain of the Portfolio's contracts with its service providers contain general indemnification clauses. The Portfolio's maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Portfolio cannot be determined and the Portfolio has no historical basis for predicting the likelihood of any such claims. 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 amortization of premium, market discount and original issue discount using the effective interest method, 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 that declines from 0.6% to 0.48% annually as the Portfolio's assets increase. 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. In certain circumstances, the board may approve a change in the index. The maximum adjustment is 0.12% per year. If the performance difference is less than 0.50%, the adjustment will be zero. The adjustment decreased the fee by $4,051,820 for the six months ended Jan. 31, 2005. 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. -------------------------------------------------------------------------------- 20 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Under a Deferred Compensation Plan (the Plan), non-interested trustees may defer receipt of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the underlying Fund or other American Express mutual funds. The Portfolio's liability for these amounts is adjusted for market value changes and remains in the Portfolio until distributed in accordance with the Plan. During the six months ended Jan. 31, 2005, the Portfolio's custodian fees were reduced by $719 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 $4,567,608,312 and $6,632,507,511, respectively, for the six months ended Jan. 31, 2005. Realized gains and losses are determined on an identified cost basis. Brokerage clearing fees paid to brokers affiliated with AEFC were $108,435 for the six months ended Jan. 31, 2005. 4. LENDING OF PORTFOLIO SECURITIES At Jan. 31, 2005, securities valued at $58,061,539 were on loan to brokers. For collateral, the Portfolio received $58,600,770 in cash. Cash collateral received is invested in short-term securities, which are included in the short-term section of the "Investments in securities." Income from securities lending amounted to $104,054 for the six months ended Jan. 31, 2005. 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. FINANCIAL HIGHLIGHTS The table below shows certain important financial information for evaluating the Portfolio's results.
Ratios/supplemental data Fiscal period ended July 31, 2005(e) 2004 2003 2002 2001 Ratio of expenses to average daily net assets(a) .48%(b) .45% .58% .61% .59% Ratio of net investment income (loss) to average daily net assets 1.60%(b) .91% .92% .64% .52% Portfolio turnover rate (excluding short-term securities) 32% 49% 20% 27% 29% Total return(c) 5.30%(d) 4.05% 10.01% (20.76%) (20.77%)
(a) Expense ratio is based on total expenses of the Portfolio before reduction of earnings credits on cash balances. The ratio does not include feeder fund expenses. (b) Adjusted to an annual basis. (c) Total return is based on a calculated Portfolio NAV and does not reflect payment of a sales charge. (d) Not annualized. (e) Six months ended Jan. 31, 2005 (Unaudited). -------------------------------------------------------------------------------- 21 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Financial Statements
Statement of assests and liabilities AXP New Dimensions Fund Jan. 31, 2005 Assets Investment in Portfolio (Note 1) $13,934,873,513 Capital shares receivable 1,573,809 --------- Total assets 13,936,447,322 -------------- Liabilities Capital shares payable 4,159,804 Accrued distribution fee 385,309 Accrued service fee 22,978 Accrued transfer agency fee 186,462 Accrued administrative services fee 38,259 Other accrued expenses 623,134 ------- Total liabilities 5,415,946 --------- Net assets applicable to outstanding capital stock $13,931,031,376 =============== Represented by Capital stock -- $.01 par value (Note 1) $ 6,013,206 Additional paid-in capital 12,039,707,545 Excess of distributions over net investment income (5,641,266) Accumulated net realized gain (loss) (Note 5) 303,830,610 Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 1,587,121,281 ------------- Total -- representing net assets applicable to outstanding capital stock $13,931,031,376 =============== Net assets applicable to outstanding shares: Class A $ 8,432,978,506 Class B $ 2,559,551,128 Class C $ 57,824,102 Class I $ 59,489,881 Class Y $ 2,821,187,759 Net asset value per share of outstanding capital stock: Class A shares 360,580,067 $ 23.39 Class B shares 115,522,878 $ 22.16 Class C shares 2,612,972 $ 22.13 Class I shares 2,533,686 $ 23.48 Class Y shares 120,070,968 $ 23.50 ----------- ---------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 22 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT
Statement of operations AXP New Dimensions Fund Six months ended Jan. 31, 2005 (Unaudited) Investment income Income: Dividends $149,978,831 Interest 6,074,775 Fee income from securities lending 104,053 Less foreign taxes withheld (246,352) -------- Total income 155,911,307 ----------- Expenses (Note 2): Expenses allocated from Portfolio 35,695,345 Distribution fee Class A 11,368,457 Class B 13,879,321 Class C 309,850 Transfer agency fee 12,070,512 Incremental transfer agency fee Class A 740,608 Class B 552,698 Class C 14,449 Service fee -- Class Y 1,506,797 Administrative services fees and expenses 2,569,654 Compensation of board members 15,952 Printing and postage 1,627,659 Registration fees 31,118 Audit fees 6,000 Other 87,869 ------ Total expenses 80,476,289 Earnings credits on cash balances (Note 2) (157,139) -------- Total net expenses 80,319,150 ---------- Investment income (loss) -- net 75,592,157 ---------- Realized and unrealized gain (loss) -- net Net realized gain (loss) on: Security transactions 396,633,129 Foreign currency transactions (169,252) Futures contracts (1,726,848) ---------- Net realized gain (loss) on investments 394,737,029 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 267,650,927 ----------- Net gain (loss) on investments and foreign currencies 662,387,956 ----------- Net increase (decrease) in net assets resulting from operations $737,980,113 ============
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 23 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT
Statements of changes in net assets AXP New Dimensions Fund Jan. 31, 2005 July 31, 2004 Six months ended Year ended (Unaudited) Operations and distributions Investment income (loss) -- net $ 75,592,157 $ 53,646,007 Net realized gain (loss) on investments 394,737,029 1,326,188,766 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 267,650,927 (740,837,241) ----------- ------------ Net increase (decrease) in net assets resulting from operations 737,980,113 638,997,532 ----------- ----------- Distributions to shareholders from: Net investment income Class A (59,842,681) (46,364,316) Class I (402,755) (24,173) Class Y (25,264,241) (22,183,807) Net realized gain Class A (66,369,513) -- Class B (21,459,288) -- Class C (480,445) -- Class I (279,703) -- Class Y (22,415,431) -- ------------ ----------- Total distributions (196,514,057) (68,572,296) ------------ -----------
-------------------------------------------------------------------------------- 24 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT
Statements of changes in net assets (continued) AXP New Dimensions Fund Jan. 31, 2005 July 31, 2004 Six months ended Year ended (Unaudited) Capital share transactions (Note 3) Proceeds from sales Class A shares (Note 2) $ 179,214,050 $ 957,437,754 Class B shares 76,158,426 289,864,944 Class C shares 4,122,016 15,172,920 Class I shares 40,269,455 18,590,210 Class Y shares 150,823,692 649,466,427 Fund merger (Note 6) Class A shares -- 145,036,482 Class B shares -- 71,825,421 Class C shares -- 4,985,482 Class Y shares -- 24,997 Reinvestment of distributions at net asset value Class A shares 122,901,165 45,072,267 Class B shares 21,267,536 -- Class C shares 472,648 -- Class I shares 682,371 24,152 Class Y shares 46,516,684 21,742,867 Payments for redemptions Class A shares (1,515,369,973) (2,032,028,533) Class B shares (Note 2) (492,858,042) (1,071,801,488) Class C shares (Note 2) (12,444,726) (17,016,745) Class I shares (121,799) (10,876) Class Y shares (549,980,254) (1,196,861,524) ------------ -------------- Increase (decrease) in net assets from capital share transactions (1,928,346,751) (2,098,475,243) -------------- -------------- Total increase (decrease) in net assets (1,386,880,695) (1,528,050,007) Net assets at beginning of period 15,317,912,071 16,845,962,078 -------------- -------------- Net assets at end of period $13,931,031,376 $15,317,912,071 =============== =============== Undistributed (excess of distributions over) net investment income $ (5,641,266) $ 4,276,254 --------------- ---------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 25 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Notes to Financial Statements AXP New Dimensions Fund (Unaudited as to Jan. 31, 2005) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Fund is a series of AXP Dimensions Series, Inc. and is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. AXP Dimensions Series, Inc. has 10 billion authorized shares of capital stock that can be allocated among the separate series as designated by the board. The Fund offers Class A, Class B, Class C and Class Y shares. o Class A shares 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. The Fund offers an additional class of shares, Class I, exclusively to certain institutional investors. Class I shares have no sales charge and are made available through a separate prospectus supplement provided to investors eligible to purchase the shares. At Jan. 31, 2005, AEFC and the AXP Portfolio Builder Series funds owned 100% of Class I shares, which represents 0.43% of the Fund's net assets. All classes of shares have identical voting, dividend and liquidation rights. The distribution fee, transfer agency fees 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 at Jan. 31, 2005 was 99.99%. All securities held by the Portfolio 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 -------------------------------------------------------------------------------- 26 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT an independent pricing service. Pursuant to procedures adopted by the Board of Trustees of the portfolios, AEFC utilizes Fair Value Pricing (FVP). FVP determinations are made in good faith in accordance with these procedures. If a development or event is so significant that there is a reasonably high degree of certainty that the effect of the development or event has actually caused the closing price to no longer reflect the actual value, the closing prices, as determined at the close of the applicable foreign market, may be adjusted to reflect the fair value of the affected foreign securities as of the close of the New York Stock Exchange. Significant events include material movements in the U.S. securities markets prior to the opening of foreign markets on the following trading day. FVP results in an estimated price that reasonably reflects the current market conditions in order to value the portfolio holdings such that shareholder transactions receive a fair NAV. 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. 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. Guarantees and indemnifications Under the Fund's organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, certain of the Fund's contracts with its service providers contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined and the Fund has no historical basis for predicting the likelihood of any such claims. Federal taxes The Fund's policy is to comply with all sections of the Internal Revenue Code that apply to regulated investment companies and to distribute substantially all of its taxable income to shareholders. No provision for income or excise taxes is thus required. Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes 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. -------------------------------------------------------------------------------- 27 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT 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 that declines from 0.05% to 0.02% annually as the Fund's assets increase. 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 Deferred Compensation Plan (the Plan), non-interested board members may defer receipt of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the Fund or other American Express mutual funds. The Fund's liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Plan. 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 $19.50 o Class B $20.50 o Class C $20.00 o Class Y $17.50 The incremental transfer agency fee is the amount charged to the specific classes for the additional expense above the fee for Class Y. Class I pays a transfer agency fee at an annual rate per shareholder account of $1. This amount is included in the transfer agency fee on the statement of operations. In addition, AECSC is entitled to charge an annual closed account fee of $5 per inactive account, charged on a pro rata basis from the date the account becomes inactive until the date the account is purged from the transfer agent system generally within one year. However, the closed account fee is currently not effective. The Fund has agreements with American Express Financial Advisors Inc. (the Distributor) for distribution and shareholder services. Under a Plan and Agreement of Distribution pursuant to Rule 12b-1, the Fund pays a 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. -------------------------------------------------------------------------------- 28 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Sales charges received by the Distributor for distributing Fund shares were $4,820,787 for Class A, $1,988,359 for Class B and $5,708 for Class C for the six months ended Jan. 31, 2005. During the six months ended Jan. 31, 2005, the Fund's transfer agency fees were reduced by $157,139 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, 2005 Class A Class B Class C Class I Class Y Sold 7,704,852 3,468,562 187,844 1,712,246 6,466,417 Issued for reinvested distributions 5,161,745 941,876 20,960 28,563 1,945,491 Redeemed (64,999,046) (22,390,133) (567,105) (5,203) (23,529,134) ----------- ----------- -------- ------ ----------- Net increase (decrease) (52,132,449) (17,979,695) (358,301) 1,735,606 (15,117,226) ----------- ----------- -------- --------- ----------- Year ended July 31, 2004 Class A Class B Class C Class I* Class Y Sold 41,994,227 13,241,759 694,168 797,528 27,893,281 Fund merger 6,143,014 3,220,859 223,688 -- 1,053 Issued for reinvested distributions 1,922,552 -- -- 1,014 922,930 Redeemed (87,457,046) (49,430,022) (773,898) (462) (51,317,577) ----------- ----------- -------- ---- ----------- Net increase (decrease) (37,397,253) (32,967,404) 143,958 798,080 (22,500,313) ----------- ----------- ------- ------- -----------
* Inception date was March 4, 2004. 4. BANK BORROWINGS The Fund has a revolving credit agreement with a syndicate of banks headed by The Bank of New York, whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The agreement went into effect Sept. 21, 2004. The Fund must maintain asset coverage for borrowings of at least 300%. The agreement, which enables the Fund to participate with other American Express mutual funds, permits borrowings up to $500 million, collectively. Interest is charged to each Fund based on its borrowings at a rate equal to either the higher of the Federal Funds Effective Rate plus 0.50% or the Prime Lending Rate. Borrowings are payable within 60 days after such loan is executed. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.09% per annum. Prior to this agreement, the Fund had a revolving credit agreement that permitted borrowings up to $500 million with Deutsche Bank. The Fund had no borrowings outstanding during the six months ended Jan. 31, 2005. -------------------------------------------------------------------------------- 29 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT 5. CAPITAL LOSS CARRY-OVER For federal income tax purposes, the Fund had a capital loss carry-over of $67,590,843 that if not offset by future capital gains realized after July 31, 2004 will expire as follows: 2007 2008 2009 2010 2011 $651,698 $7,174,242 $47,082,209 $8,294,019 $4,388,675 AXP New Dimensions Fund acquired $80,136,732 of capital loss carry-overs in connection with the AXP Growth Dimensions Fund and AXP Focused Growth Fund merger (Note 6). In addition to the acquired capital loss carry-overs, the Fund also acquired unrealized capital gains as a result of the mergers. The yearly utilization of the acquired capital losses as well as the utilization of the acquired unrealized losses is limited by the Internal Revenue Code. 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. 6. FUND MERGER At the close of business on June 25, 2004, AXP New Dimensions Fund acquired the assets and assumed the identified liabilities of AXP Focused Growth Fund and AXP Growth Dimensions Fund. Upon receipt of the investments and related assets and liabilities from AXP Focused Growth Fund and AXP Growth Dimensions Fund, AXP New Dimensions Fund made an in-kind contribution of $211,872,382 to Growth Trends Portfolio. This reorganization was completed after shareholders approved the plan on June 9, 2004. The aggregate net assets of AXP New Dimensions Fund immediately before the acquisition was $16,149,643,433 and the combined net assets immediately after the acquisition was $16,371,515,815. The merger was accomplished by a tax-free exchange of the following: Shares Value AXP Focused Growth Fund 23,415,522 $ 42,348,160 AXP Growth Dimensions Fund 74,295,087 179,524,222 In exchange for the AXP Focused Growth Fund and AXP Growth Dimensions Fund shares and net assets, AXP New Dimensions Fund issued the following number of shares: Shares Class A 6,143,014 Class B 3,220,859 Class C 223,688 Class Y 1,053 AXP Focused Growth Fund's and AXP Growth Dimensions Fund's net assets after adjustments for any permanent book-to-tax differences at the merger date were as follows, which include the following amounts of capital stock, unrealized appreciation, accumulated net realized loss and temporary book-to-tax differences.
Accumulated Temporary Total net Capital Unrealized net book-to-tax assets stock appreciation realized loss differences AXP Focused Growth Fund $ 42,348,160 $ 47,925,406 $ 5,187,878 $(10,453,291) $(311,833) AXP Growth Dimensions Fund 179,524,222 234,495,050 18,406,183 (72,853,762) (523,249)
-------------------------------------------------------------------------------- 30 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT 7. FINANCIAL HIGHLIGHTS The tables below show certain important financial information for evaluating the Fund's results.
Class A Per share income and capital changes(a) Fiscal period ended July 31, 2005(f) 2004 2003 2002 2001 Net asset value, beginning of period $22.58 $21.90 $20.04 $25.43 $36.26 ------ ------ ------ ------ ------ Income from investment operations: Net investment income (loss) .14 .08 .07 .05 .02 Net gains (losses) (both realized and unrealized) 1.01 .71 1.82 (5.42) (7.37) ------ ------ ------ ------ ------ Total from investment operations 1.15 .79 1.89 (5.37) (7.35) ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income (.16) (.11) (.03) (.02) (.01) Excess distributions from net investment income -- -- -- -- (.01) Distributions from realized gains (.18) -- -- -- (3.46) ------ ------ ------ ------ ------ Total distributions (.34) (.11) (.03) (.02) (3.48) ------ ------ ------ ------ ------ Net asset value, end of period $23.39 $22.58 $21.90 $20.04 $25.43 ------ ------ ------ ------ ------ Ratios/supplemental data Net assets, end of period (in millions) $8,433 $9,319 $9,859 $9,863 $13,857 Ratio of expenses to average daily net assets(b) .96%(c) .91% 1.08% 1.06% 1.00% Ratio of net investment income (loss) to average daily net assets 1.12%(c) .45% .42% .19% .12% Portfolio turnover rate (excluding short-term securities) 32% 49% 20% 27% 29% Total return(d) 5.07%(e) 3.59% 9.47% (21.14%) (21.10%)
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (c) Adjusted to an annual basis. (d) Total return does not reflect payment of a sales charge. (e) Not annualized. (f) Six months ended Jan. 31, 2005 (Unaudited). -------------------------------------------------------------------------------- 31 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT
Class B Per share income and capital changes(a) Fiscal period ended July 31, 2005(f) 2004 2003 2002 2001 Net asset value, beginning of period $21.34 $20.77 $19.12 $24.44 $35.22 ------ ------ ------ ------ ------ Income from investment operations: Net investment income (loss) .01 (.10) (.04) (.14) (.13) Net gains (losses) (both realized and unrealized) .99 .67 1.69 (5.16) (7.19) ------ ------ ------ ------ ------ Total from investment operations 1.00 .57 1.65 (5.30) (7.32) ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income -- -- -- (.02) -- Distributions from realized gains (.18) -- -- -- (3.46) ------ ------ ------ ------ ------ Total distributions (.18) -- -- (.02) (3.46) ------ ------ ------ ------ ------ Net asset value, end of period $22.16 $21.34 $20.77 $19.12 $24.44 ------ ------ ------ ------ ------ Ratios/supplemental data Net assets, end of period (in millions) $2,560 $2,849 $3,457 $3,728 $5,169 Ratio of expenses to average daily net assets(b) 1.73%(c) 1.68% 1.85% 1.83% 1.76% Ratio of net investment income (loss) to average daily net assets .35%(c) (.32%) (.35%) (.57%) (.65%) Portfolio turnover rate (excluding short-term securities) 32% 49% 20% 27% 29% Total return(d) .67%(e) 2.74% 8.63% (21.71%) (21.69%)
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (c) Adjusted to an annual basis. (d) Total return does not reflect payment of a sales charge. (e) Not annualized. (f) Six months ended Jan. 31, 2005 (Unaudited). -------------------------------------------------------------------------------- 32 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT
Class C Per share income and capital changes(a) Fiscal period ended July 31, 2005(f) 2004 2003 2002 2001 Net asset value, beginning of period $21.32 $20.74 $19.10 $24.42 $35.23 ------ ------ ------ ------ ------ Income from investment operations: Net investment income (loss) .01 (.09) (.04) (.14) (.13) Net gains (losses) (both realized and unrealized) .98 .67 1.68 (5.16) (7.19) ------ ------ ------ ------ ------ Total from investment operations .99 .58 1.64 (5.30) (7.32) ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income -- -- -- (.02) (.02) Excess distributions from net investment income -- -- -- -- (.01) Distributions from realized gains (.18) -- -- -- (3.46) ------ ------ ------ ------ ------ Total distributions (.18) -- -- (.02) (3.49) ------ ------ ------ ------ ------ Net asset value, end of period $22.13 $21.32 $20.74 $19.10 $24.42 ------ ------ ------ ------ ------ Ratios/supplemental data Net assets, end of period (in millions) $58 $63 $59 $44 $30 Ratio of expenses to average daily net assets(b) 1.74%(c) 1.69% 1.87% 1.85% 1.76% Ratio of net investment income (loss) to average daily net assets .34%(c) (.33%) (.38%) (.60%) (.75%) Portfolio turnover rate (excluding short-term securities) 32% 49% 20% 27% 29% Total return(d) 4.62%(e) 2.80% 8.59% (21.73%) (21.70%)
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (c) Adjusted to an annual basis. (d) Total return does not reflect payment of a sales charge. (e) Not annualized. (f) Six months ended Jan. 31, 2005 (Unaudited). -------------------------------------------------------------------------------- 33 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT
Class I Per share income and capital changes(a) Fiscal period ended July 31, 2005(g) 2004(b) Net asset value, beginning of period $22.71 $24.37 ------ ------ Income from investment operations: Net investment income (loss) .24 .06 Net gains (losses) (both realized and unrealized) .97 (1.67) ------ ------ Total from investment operations 1.21 (1.61) ------ ------ Less distributions: Dividends from net investment income (.26) (.05) Distributions from realized gains (.18) -- ------ ------ Total distributions (.44) -- ------ ------ Net asset value, end of period $23.48 $22.71 ------ ------ Ratios/supplemental data Net assets, end of period (in millions) $59 $18 Ratio of expenses to average daily net assets(c) .55%(d) .50%(d) Ratio of net investment income (loss) to average daily net assets .1.43%(d) .87%(d) Portfolio turnover rate (excluding short-term securities) 32% 49% Total return(e) 5.28%(f) (6.61%)(f)
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Inception date was March 4, 2004. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (d) Adjusted to an annual basis. (e) Total return does not reflect payment of a sales charge. (f) Not annualized. (g) Six months ended Jan. 31, 2005 (Unaudited). -------------------------------------------------------------------------------- 34 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT
Class Y Per share income and capital changes(a) Fiscal period ended July 31, 2005(f) 2004 2003 2002 2001 Net asset value, beginning of period $22.70 $22.02 $20.14 $25.51 $36.33 ------ ------ ------ ------ ------ Income from investment operations: Net investment income (loss) .18 .11 .11 .09 .07 Net gains (losses) (both realized and unrealized) 1.00 .72 1.83 (5.44) (7.38) ------ ------ ------ ------ ------ Total from investment operations 1.18 .83 1.94 (5.35) (7.31) ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income (.20) (.15) (.06) (.02) (.02) Excess distributions from net investment income -- -- -- -- (.03) Distributions from realized gains (.18) -- -- -- (3.46) ------ ------ ------ ------ ------ Total distributions (.38) (.15) (.06) (.02) (3.51) ------ ------ ------ ------ ------ Net asset value, end of period $23.50 $22.70 $22.02 $20.14 $25.51 ------ ------ ------ ------ ------ Ratios/supplemental data Net assets, end of period (in millions) $2,821 $3,068 $3,472 $3,222 $4,677 Ratio of expenses to average daily net assets(b) .79%(c) .75% .91% .90% .84% Ratio of net investment income (loss) to average daily net assets 1.28%(c) .61% .59% .36% .28% Portfolio turnover rate (excluding short-term securities) 32% 49% 20% 27% 29% Total return(d) 5.18%(e) 3.75% 9.64% (21.00%) (20.97%)
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (c) Adjusted to an annual basis. (d) Total return does not reflect payment of a sales charge. (e) Not annualized. (f) Six months ended Jan. 31, 2005 (Unaudited). -------------------------------------------------------------------------------- 35 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Fund Expenses Example (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the six months ended Jan. 31, 2005. Actual Expenses The first line of the table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading titled "Expenses paid during the period" to estimate the expenses you paid on your account during this period. Hypothetical Example for Comparison Purposes The second line of the table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. -------------------------------------------------------------------------------- 36 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT
Beginning Ending Expenses account value account value paid during Annualized Aug. 1, 2004 Jan. 31, 2005 the period(a) expense ratio Class A Actual(b) $1,000 $1,050.70 $4.99 0.96% Hypothetical (5% return before expenses) $1,000 $1,020.48 $4.92 0.96% Class B Actual(b) $1,000 $1,046.70 $8.97 1.73% Hypothetical (5% return before expenses) $1,000 $1,016.57 $8.84 1.73% Class C Actual(b) $1,000 $1,046.20 $9.02 1.74% Hypothetical (5% return before expenses) $1,000 $1,016.52 $8.89 1.74% Class I Actual(b) $1,000 $1,052.80 $2.86 0.55% Hypothetical (5% return before expenses) $1,000 $1,022.55 $2.82 0.55% Class Y Actual(b) $1,000 $1,051.80 $4.11 0.79% Hypothetical (5% return before expenses) $1,000 $1,021.34 $4.05 0.79%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 185/365 (to reflect the one-half year period). (b) Based on the actual return for the six months ended Jan. 31, 2005: +5.07% for Class A, +4.67% for Class B, +4.62% for Class C, +5.28% for Class I and +5.18% for Class Y. -------------------------------------------------------------------------------- 37 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT Proxy Voting The policy of the Board is to vote all proxies of the companies in which the Fund holds investments. The procedures are stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling (800) 862-7919; by looking at the website americanexpress.com/funds; or by searching the website of the Securities and Exchange Commission http://www.sec.gov. You may view the Fund's voting record for all portfolio companies whose shareholders meetings were completed the previous quarter on americanexpress.com/funds or obtain a copy by calling the Fund's administrator, Board Services Corporation, collect at (612) 330-9283. In addition, information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available at http://www.sec.gov. -------------------------------------------------------------------------------- 38 --- AXP NEW DIMENSIONS FUND --- 2005 SEMIANNUAL REPORT (logo) AMERICAN EXPRESS (R) American Express Funds 70100 AXP Financial Center Minneapolis, MN 55474 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. Item 2. Code of Ethics. Not applicable for semi-annual reports. Item 3. Audit Committee Financial Expert. Not applicable for semi-annual reports. Item 4. Principal Accountant Fees and Services. Not applicable for semi-annual reports. Item 5. Audit Committee of Listed Registrants. Not applicable. Item 6. The complete schedule of investments is included in Item 1 of this Form N-CSR. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable. Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable. Item 10. Submission of matters to a vote of security holders. Not applicable. Item 11. Controls and Procedures. (a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's Principal Financial Officer and Principal Executive Officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no changes in the registrant's internal controls over financial reporting that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12. Exhibits. (a)(1) Not applicable for semi-annual reports. (a)(2) Separate certification for the Registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached as EX.99.CERT. (a)(3) Not applicable. (b) A certification by the Registrant's principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(b) under the Investment Company Act of 1940, is attached as EX.99.906 CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) AXP Dimensions Series, Inc. By /s/ Paula R. Meyer ------------------ Paula R. Meyer President and Principal Executive Officer Date March 30, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ Paula R. Meyer ------------------ Paula R. Meyer President and Principal Executive Officer Date March 30, 2005 By /s/ Jeffrey P. Fox ------------------ Jeffrey P. Fox Treasurer and Principal Financial Officer Date March 30, 2005