-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UYz5x4uAiKvM9gC5EZhWSr6sU8LdtYusy9c1te7pbM5v01t5hJDemXKXaojw2b0T R+A0zMHzg0g85Uwpjw42dA== 0000820027-99-000886.txt : 19991210 0000820027-99-000886.hdr.sgml : 19991210 ACCESSION NUMBER: 0000820027-99-000886 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AXP STOCK FUND INC CENTRAL INDEX KEY: 0000052423 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 410839317 STATE OF INCORPORATION: MN FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-00498 FILM NUMBER: 99771512 BUSINESS ADDRESS: STREET 1: 80 SOUTH 8TH ST STREET 2: T33/52 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 BUSINESS PHONE: 6126712727 FORMER COMPANY: FORMER CONFORMED NAME: IDS STOCK FUND INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: INVESTORS STOCK FUND INC DATE OF NAME CHANGE: 19831221 N-30D 1 AXP STOCK FUND AXP(SM) Stock Fund 1999 ANNUAL REPORT (PROSPECTUS ENCLOSED) (icon of) magnifying glass AXP Stock Fund seeks to provide shareholders with current income and 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.) Distributed by American Express Financial Advisors Inc. AMERICAN EXPRESS Financial Advisors Big Names, Big Business These are the names you know. They are the movers and shakers of today's business world. Whether representing established U.S. firms or companies that have made theirmark over-seas, the securities found in AXP Stock Fund make up a veritable who's who in the financial market. These stocks offer a dual benefit of ongoing growth potential along with a steady stream of dividend income. And as we move toward a more global economy, these blue chip, multi-national companies are well-positioned to prosper in the 21st century. AXP STOCK FUND (This annual report is not part of the prospectus.) Table of Contents 1999 ANNUAL REPORT The purpose of this annual report is to tell investors how the Fund performed. From the Chairman 4 From the Portfolio Manager 4 Fund Facts 6 The 10 Largest Holdings 7 Making the Most of the Fund 8 The Fund's Long-term Performance 9 Independent Auditors' Report (Fund) 10 Financial Statements (Fund) 11 Notes to Financial Statements (Fund) 14 Independent Auditors' Report (Portfolio) 19 Financial Statements (Portfolio) 20 Notes to Financial Statements (Portfolio)23 Investments in Securities 28 Federal Income Tax Information 38 1999 PROSPECTUS The prospectus, which is bound into the middle of this annual report, describes the Fund in detail. The Fund 3p Goal 3p Investment Strategy 3p Risks 5p Past Performance 6p Fees and Expenses 8p Management 9p Buying and Selling Shares 9p Valuing Fund Shares 9p Investment Options 10p Purchasing Shares 11p Sales Charges 14p Exchanging/Selling Shares 18p Distributions and Taxes 23p Personalized Shareholder Information 25p Master/Feeder Structure 26p About the Company 27p Quick Telephone Reference 29p Financial Highlights 30p (This annual report is not part of the prospectus.) ANNUAL REPORT - 1999 (picture of) Arne H. Carlson Arne H. Carlson Chairman of the board From the Chairman American Express(R) Funds held shareholder meetings in June 1999. Shareholders approved all of the proposals advanced by management. Among the proposals were: o The selection of Board members and the selection of KPMG LLP as independent auditors. o Change in the Fund name from "IDS" to "AXP." o A new shareholder service and distribution plan. o Changes with respect to fundamental investment policies. No other business was presented at the meeting, which was concluded by a report to shareholders from the Investment Department of American Express Financial Corporation. Thanks to all of you for your effort in reviewing the proxy material and voting your proxies. Arne H. Carlson (picture of) Michael Kennedy Michael Kennedy Portfolio manager From the Portfolio Manager The past 12 months was a volatile but overall positive period for U.S. stocks, allowing AXP Stock Fund's Class A shares to generate a gain of 17.71% for the October 1998 through September 1999 fiscal year. (A portion of the return came in the form of a capital gain, which was paid to shareholders in December 1998 and reduced the Fund's net asset value by the same amount at that time.) At the outset of the period, the stock market was still licking its wounds suffered in a steep decline that began in the late summer of 1998. But with the remarkable resilience that has been its hallmark in recent years, the market gathered itself and began to move forward. Supported by three reductions in short-term interest rates by the Federal Reserve Board during the fall, stocks quickly turned a tentative advance into a roaring rally that, despite a slump in February, ultimately took the market and the Fund to an all-time high in mid-summer. By that time, long-term interest rates had risen from the beginning of 1999, and so had concern about a possible run-up in inflation. That was enough to send stocks into retreat over the final three months of the period and, in the process, erode some of the Fund's gain earned during the first nine months. `LARGE-CAPS' LEAD Consistent with the trend of recent years, the market's advances were most often driven by large-capitalization stocks. Because of the Fund's emphasis on large-cap issues, that trend worked to the Fund's advantage. More specifically, the Fund's largest areas of investment were technology, financial services, retailing, utilities, consumer products and health care. Looking at individual stocks, several of the Fund's largest holdings were also among its best performers. They included General Electric, IBM, Wal-Mart, Microsoft and Intel. As for changes to the portfolio, I added to the technology exposure about mid-period and reduced the level of cash reserves (from about 14% in the fall of 1998 to about 5% at period-end). Also, in light of the interest-rate rise, I reduced holdings among rate-sensitive stocks such as banks and credit card companies, as well as retailing and housing-related businesses. In addition, I decreased the exposure to pharmaceuticals, given the possibility of reform in healthcare. Those moves allowed me to shift more assets into commodities and companies with a strong international presence, which I felt would benefit from a recovering world economy. Looking toward the current fiscal year, while I expect the global economic recovery to continue, I think the volatility in the U.S. stock market may actually increase. Therefore, I plan to maintain a portfolio that is well diversified and structured on the conservative side. Michael Kennedy (This annual report is not part of the prospectus.) ANNUAL REPORT - 1999 Fund Facts Class A -- 12-month performance (All figures per share) Net asset value (NAV) Sept. 30, 1999 $26.14 Sept. 30, 1998 $24.18 Increase $ 1.96 Distributions -- Oct. 1, 1998 - Sept. 30, 1999 From income $ 0.28 From capital gains $ 2.00 Total distributions $ 2.28 Total return* +17.71%** Class B -- 12-month performance (All figures per share) Net asset value (NAV) Sept. 30, 1999 $25.97 Sept. 30, 1998 $24.05 Increase $ 1.92 Distributions -- Oct. 1, 1998 - Sept. 30, 1999 From income $ 0.10 From capital gains $ 2.00 Total distributions $ 2.10 Total return* +16.81%** Class Y -- 12-month performance (All figures per share) Net asset value (NAV) Sept. 30, 1999 $26.14 Sept. 30, 1998 $24.18 Increase $ 1.96 Distributions -- Oct. 1, 1998 - Sept. 30, 1999 From income $ 0.31 From capital gains $ 2.00 Total distributions $ 2.31 Total return* +17.81%** *The prospectus discusses the effect of sales charges, if any, on the various classes. **The total return is a hypothetical investment in the Fund with all distributions reinvested. AXP STOCK FUND (This annual report is not part of the prospectus.) The 10 Largest Holdings Percent Value (of net assets) (as of Sept. 30, 1999) Microsoft 4.01% $181,124,999 General Electric 3.93 177,843,750 Intl Business Machines 2.69 121,375,000 American Intl Group 2.17 98,293,711 Wal-Mart Stores 1.89 85,612,500 Cisco Systems 1.82 82,275,000 Texas Instruments 1.82 82,250,000 Illinois Tool Works 1.65 74,562,500 Intel 1.64 74,312,500 Solectron 1.58 71,557,494 For further detail about these holdings, please refer to the section entitled "Investments in Securities." (icon of) pie chart The 10 holdings listed here make up 23.20% of net assets (This annual report is not part of the prospectus.) ANNUAL REPORT - 1999 Making the Most of the Fund BUILD YOUR ASSETS SYSTEMATICALLY One of the best ways to invest in the Fund is by dollar-cost averaging -- a time-tested strategy that can make market fluctuations work for you. To dollar-cost average, simply invest a fixed amount of money regularly. You'll automatically buy more shares when the Fund's share price is low, fewer shares when it is high. The chart below shows how dollar-cost averaging works. In these three hypothetical scenarios, you will see six months of share price fluctuations. This strategy does not ensure a profit or avoid a loss if the market declines. But, if you can continue to invest regularly through changing market conditions even when the price of your shares fall or the market declines, it can be an effective way to accumulate shares to meet your long-term goals. How dollar-cost averaging works Jan Feb Mar Apr May Jun $15 $16 $18 $20 $10 $10 $12 $14 $ 5 Accumulated shares* Average market Your average price per share cost per share 42.25 $15 $14.20 - ------------------------------------------------------------------------------- Jan Feb Mar Apr May Jun $15 $10 $10 $10 $ 5 $8 $5 $5 $8 Accumulated shares* Average market Your average price per share cost per share 85.0 $7.66 $7.05 - ------------------------------------------------------------------------------- Jan Feb Mar Apr May Jun $15 $10 $10 $8 $6 $7 $ 5 $4 $4 Accumulated shares* Average market Your average price per share cost per share 103.5 $6.50 $5.80 - ------------------------------------------------------------------------------- $100 invested per month. Total invested: $600. *Shares purchased is determined by dividing the amount invested per month by the current share price. THREE WAYS TO BENEFIT FROM A MUTUAL FUND: o your shares increase in value when the Fund's investments do well o you receive capital gains when the gains on investments sold by the Fund exceed losses o you receive income when the Fund's stock dividends, interest and short-term gains exceed its expenses. All three make up your total return. You potentially can increase your investment if, like most investors, you reinvest your dividends and capital gain distributions to buy additional shares of the Fund or another fund. AXP STOCK FUND (This annual report is not part of the prospectus.) The Fund's Long-term Performance $40,000 X S&P 500 Index X 34,138 AXP Stock Fund $30,000 X Lipper Growth & Income Fund Index $20,000 $10,000 $9,500 10/01/89 9/90 9/91 9/92 9/93 9/94 9/95 9/96 9/97 9/98 9/99 Average annual total return (as of Sept. 30, 1999) 1 year 5 years 10 years Since inception* Class A +11.82% +15.19% +13.06% --% Class B +12.81% --% --% +16.54% Class Y +17.81% --% --% +17.83% *Inception date was March 20, 1995. Assumes: Holding period from 10/1/89 to 9/30/99. Returns do not reflect taxes payable on distributions. Reinvestment of all income and capital gain distributions for the Fund, with a value of $3,989. Also see "Past Performance" in the Fund's current prospectus. On the graph above you can see how the Fund's total return compared to two widely cited unmanaged performance indexes, the Standard & Poor's 500 Index (S&P 500 Index) and the Lipper Growth & Income Fund Index. In comparing AXP Stock Fund (Class A) to the two indexes, you should take into account the fact that the Fund's performance reflects the maximum sales charge of 5%, while such charges are not reflected in the performance of the indexes. Your investment and return values fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Average annual total return figures reflect the impact of the applicable sales charge up to a maximum of 5%. This was a period of widely fluctuating security prices. Past performance is no guarantee of future results. S&P 500 Index, an unmanaged list 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. Lipper Growth and Income Fund Index, an unmanaged index published by Lipper Analytical Services, Inc., includes 30 funds that are generally similar to the Fund, although some funds in the index may have somewhat different investment policies or objectives. (This annual report is not part of the prospectus.) ANNUAL REPORT - 1999 The financial statements contained in Post-Effective Amendment #99 to Registration statement No. 2-11358 filed on or about November 24, 1999, are incorporated herein by reference. Federal Income Tax Information (Unaudited) The Fund is required by the Internal Revenue Code of 1986 to tell its shareholders about the tax treatment of the dividends it pays during its fiscal year. Some of the dividends listed below are reported to you on Form 1099-DIV, Dividends and Distributions. Shareholders should consult a tax advisor on how to report distributions for state and local tax purposes. AXP Stock Fund, Inc. Fiscal year ended Sept. 30, 1999 Class A Income distributions taxable as dividend income, 100% qualifying for deduction by corporations. Payable date Per share Dec. 22, 1998 $0.13065 March 25, 1999 0.04573 June 24, 1999 0.07087 Sept. 23, 1999 0.03753 Total $0.28478 Capital gain distribution taxable for long-term capital gain. Payable date Per share Dec. 22, 1998 $1.99824 Total distributions $2.28302 The distribution of $2.12889 per share, payable Dec. 22, 1998, consisted of $0.09211 derived from net investment income, $0.03854 from net short-term capital gains (a total of $0.13065 taxable as dividend income) and $1.99824 from net long-term capital gains. AXP STOCK FUND (This annual report is not part of the prospectus.) Class B Income distributions taxable as dividend income, 100% qualifying for deduction by corporations. Payable date Per share Dec. 22, 1998 $0.08515 June 24, 1999 0.01564 Total $0.10079 Capital gain distribution taxable for long-term capital gain. Payable date Per share Dec. 22, 1998 $1.99824 Total distributions $2.09903 The distribution of $2.08339 per share, payable Dec. 22, 1998, consisted of $0.04661 derived from net investment income, $0.03854 from net short-term capital gains (a total of $0.08515 taxable as dividend income) and $1.99824 from net long-term capital gains. Class Y Income distributions taxable as dividend income, 100% qualifying for deduction by corporations. Payable date Per share Dec. 22, 1998 $0.13505 March 25, 1999 0.05111 June 24, 1999 0.07636 Sept. 23, 1999 0.04784 Total $0.31036 Capital gain distribution taxable for long-term capital gain. Payable date Per share Dec. 22, 1998 $1.99824 Total distributions $2.30860 The distribution of $2.13329 per share, payable Dec. 22, 1998, consisted of $0.09651 derived from net investment income, $0.03854 from net short-term capital gains (a total of $0.13505 taxable as dividend income) and $1.99824 from net long-term capital gains. (This annual report is not part of the prospectus.) ANNUAL REPORT - 1999 S-6351 P (11/99) AXP Stock Fund IDS Tower 10 Minneapolis, MN 55440-0010 AMERICAN EXPRESS Financial Advisors (logo) STATEMENT OF DIFFERENCES Difference Description 1) The layout is different 1) Some of the layout in the throughout the annual report. annual report to shareholders is in two columns. 2) There are pictures, icons 3) Each picture, icon and and graphs throughout the graph is described in annual report. parentheses. -----END PRIVACY-ENHANCED MESSAGE-----