-----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, Varec3SCHibZ4rAD2OTKBiY46oOCWfKWvpfkIXnhqL4nGxa8ePuQ7J6+u3VzFxNT VvHoeJwjtIiKyrC8kWhiNQ== 0000820027-01-500608.txt : 20020413 0000820027-01-500608.hdr.sgml : 20020413 ACCESSION NUMBER: 0000820027-01-500608 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011031 FILED AS OF DATE: 20011221 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AXP GLOBAL SERIES INC CENTRAL INDEX KEY: 0000842918 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MN FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05696 FILM NUMBER: 1821184 BUSINESS ADDRESS: STREET 1: IDS TOWER 10 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 BUSINESS PHONE: 6126712772 FORMER COMPANY: FORMER CONFORMED NAME: IDS GLOBAL BOND FUND INC DATE OF NAME CHANGE: 19901011 FORMER COMPANY: FORMER CONFORMED NAME: IDS GLOBAL SERIES INC DATE OF NAME CHANGE: 19920703 N-30D 1 s6352.txt AXP GLOBAL SERIES, INC. - GLOBAL BALANCED FUND ANNUAL AXP(R) Global Balanced Fund 2001 ANNUAL REPORT (PROSPECTUS ENCLOSED) American Express(R) Funds (icon of) compass AXP Global Balanced Fund seeks to provide shareholders with a balance of growth of capital and current income. (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.) An International Blend AXP Global Balanced Fund offers a logical first step for investors who want to have some exposure to foreign markets, but also want to avoid the greater volatility of a portfolio consisting of only foreign stocks. Table of Contents 2001 ANNUAL REPORT The purpose of this annual report is to tell investors how the Fund performed. From the Chairman 3 From the Portfolio Managers 3 Fund Facts 5 The 10 Largest Holdings 6 Making the Most of the Fund 7 The Fund's Long-term Performance 8 Board Members and Officers 10 Independent Auditors' Report 12 Financial Statements 13 Notes to Financial Statements 16 Investments in Securities 24 Federal Income Tax Information 29 - ------------------------------------------------------------------------------- 2 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT (picture of) Arne H. Carlson Arne H. Carlson Chairman of the board From the Chairman For most of us investors, the past several months proved to be an extremely trying time. More recently, the events of this past September and the prospect of what may follow have added to our collective concern. While nothing can change what has happened, we can control how we respond. In broad terms, I would strongly advise that you keep a focus on your long-term financial goals and not let specific events dictate your investment decisions. Ultimately, it is where you finish, not where you are at the moment, that matters most. Your financial advisor plays an essential role in this process, so please let him or her help you by reviewing your situation and plotting the proper investment course. As I have indicated in the past, the role our Board plays in your financial future is to monitor and confirm that each American Express mutual fund meets its investment objective and that its management style stays on target. We want each fund to be able to deliver to you, the shareholder, the type of performance you expect and the best results that can be obtained. Toward that end, American Express has made significant changes in its investment management capability, and will continue to make changes as it strives to provide a consistent standard of excellence. On behalf of the Board, Arne H. Carlson (picture of) Elizabeth Tran Elizabeth Tran Portfolio manager From the Portfolio Managers AXP Global Balanced Fund experienced a loss during the past fiscal year, as a slowdown in global economic growth and weakening corporate profits depressed stocks in the major markets of the U.S. and Europe. For the 12 months -- November 2000 through October 2001 -- the Fund's Class A shares lost 20.63% (excluding the sales charge). This compares with a loss of 13.58% for the Lipper Global Flexible Funds Index, a group of mutual funds used to compare the performance of funds such as this. Stocks had already begun to slide when the period began, as indications of a slowdown in economic and corporate profit growth in the U.S. also cast a cloud over the outlook for the major European markets. As it turned out, that gloomy scenario played out as many observers feared and plagued stocks on both sides of the Atlantic for most of the fiscal year. - ------------------------------------------------------------------------------- 3 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT (picture of) Mark Fawcett Mark Fawcett Portfolio manager (picture of) Michael Ng Michael Ng Portfolio manager While virtually all sectors came under pressure, technology-related growth stocks clearly suffered the most, as declines of 50% to 90% were common. Although the Fund avoided the worst of technology's blow-ups, its performance was nonetheless sharply penalized by its tech holdings. The fundamental problem stemmed from our misjudgment of the global economy, which we expected to pick up in the second half of 2000, allowing growth stocks, especially tech issues, to move higher in anticipation of that possibility. When the economic outlook failed to improve by early summer -- in fact, it worsened -- the stocks slid further. As that occurred, we substantially cut back on tech, but most of the damage had already been done. Concurrently, we shifted the portfolio to a more defensive position, adding to pharmaceutical and consumer staple stocks, and maintaining an above-average exposure to financial services and holding a higher level of cash reserves. That strategy proved worthwhile, but it couldn't pull the portfolio out of the hole it was mired in. Things were considerably better on the bond side. Spurred by the weakening economies, non-threatening inflation data and central banks' willingness to cut short-term interest rates, bond prices rose for much of the period. Thanks to steep and steady interest-rate cuts by the Federal Reserve, U.S. government bonds enjoyed particularly good gains. Overall, we emphasized bond investments in the U.S. over Europe. Looking more closely at the portfolio, the largest component was U.S. stocks, followed by U.S. bonds, foreign stocks and foreign bonds. On a geographical basis, about half of the investments were in the U.S., with the bulk of the rest in Europe, mainly Germany, the United Kingdom, France and Italy. We kept only a small exposure to Japan, where the investment climate remained largely uninviting. As for the new fiscal year, we think the events of September 11 will delay the global economic recovery, making it more difficult for stocks to mount a sustained advance. Bonds, on the other hand, should continue to benefit from the likelihood of sluggish economies and an ongoing slowdown in the rate of inflation worldwide. Therefore, late in the period we reduced stocks and increased bonds to achieve roughly a 50/50 allocation. Elizabeth Tran Mark Fawcett Michael Ng - ------------------------------------------------------------------------------- 4 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Fund Facts Class A -- 12-month performance (All figures per share) Net asset value (NAV) Oct. 31, 2001 $4.53 Oct. 31, 2000 $6.27 Decrease $1.74 Distributions -- Nov. 1, 2000 - Oct. 31, 2001 From income $0.25 From long-term capital gains $0.29 Total distributions $0.54 Total return* -20.63% Class B -- 12-month performance (All figures per share) Net asset value (NAV) Oct. 31, 2001 $4.47 Oct. 31, 2000 $6.21 Decrease $1.74 Distributions -- Nov. 1, 2000 - Oct. 31, 2001 From income $0.22 From long-term capital gains $0.29 Total distributions $0.51 Total return* -21.21% Class C -- 12-month performance (All figures per share) Net asset value (NAV) Oct. 31, 2001 $4.46 Oct. 31, 2000 $6.21 Decrease $1.75 Distributions -- Nov. 1, 2000 - Oct. 31, 2001 From income $0.24 From long-term capital gains $0.29 Total distributions $0.53 Total return* -21.17% Class Y -- 12-month performance (All figures per share) Net asset value (NAV) Oct. 31, 2001 $4.56 Oct. 31, 2000 $6.30 Decrease $1.74 Distributions -- Nov. 1, 2000 - Oct. 31, 2001 From income $0.25 From long-term capital gains $0.29 Total distributions $0.54 Total return* -20.40% * The total return is a hypothetical investment in the Fund with all distributions reinvested. Returns do not include sales load. The prospectus discusses the effect of sales charges, if any, on the various classes. - ------------------------------------------------------------------------------- 5 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT The 10 Largest Holdings Percent Value (of net assets) (as of Oct 31, 2001) Oesterreich Kontrollbank (Austria) 1.80% 2010 2.3% $3,183,401 Buoni Poliennali Del Tes (Italy) 4.25% 2009 2.2 3,006,328 Microsoft (United States) 2.2 2,967,511 Pfizer (United States) 1.8 2,495,983 Intl Business Machines (United States) 1.8 2,474,803 Abbott Laboratories (United States) 1.5 2,103,306 American Home Products (United States) 1.5 2,082,459 Citigroup (United States) 1.4 1,928,363 General Electric (United States) 1.4 1,868,197 Tyco Intl (Bermuda) 1.3 1,818,180 Excludes U.S. Treasury and government agency holdings. Note: Certain foreign investment risks include: changes in currency exchange rates, adverse political or economic order, and lack of similar regulatory requirements followed by U.S. companies. For further detail about these holdings, please refer to the section entitled "Investments in Securities." (picture of) pie chart The 10 holdings listed here make up 17.4% of net assets - ------------------------------------------------------------------------------- 6 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT 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 falls 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 $ 5 $8 $6 $4 $4 $7 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. - ------------------------------------------------------------------------------- 7 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT The Fund's Long-term Performance Value of your $10,000 in AXP Global Balanced Fund (line chart) $30,000 $10,672 AXP Global Balanced $20,000 MSCI All Country Fund Class A World Free Index Lipper Global Flexible Funds Index $9,425 12/1/96 10/97 10/98 10/99 10/00 10/01 Average Annual Total Returns (as of Oct. 31, 2001) Since 1 year inception AXP Global Balanced Fund Class A -25.20% +1.32%* Class B -24.09% +1.60%* Class C -21.89% -19.70%** Class Y -20.40% +2.77%* * Inception date was Nov. 13, 1996. ** Inception date was June 26, 2000. Assumes: Holding period from 12/1/96 to 10/31/01. Returns do not reflect taxes payable on distributions. Reinvestment of all income and capital gain distributions for the Fund has a value of $2,263. 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 MSCI All Country World Free Index and the Lipper Global Flexible Funds Index. In comparing AXP Global Balanced 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 5.75%, 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 maximum applicable sales charge. This was a period of widely fluctuating security prices. Past performance is no guarantee of future results. - ------------------------------------------------------------------------------- 8 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Morgan Stanley Capital International (MSCI) All Country World Free Index, an unmanaged index, is compiled from a composite of securities markets of 47 countries, including Canada, the United States, and 26 emerging market countries. The index reflects reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. The Lipper Global Flexible Funds Index, an unmanaged index published by Lipper Inc., includes the 30 largest funds that are generally similar to the Fund, although some funds in the index may have somewhat different investment policies or objectives. - ------------------------------------------------------------------------------- 9 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Board Members and Officers Shareholders elect a board that oversees the Fund's operations. The board appoints officers who are responsible for day-to-day business decisions based on policies set by the board. The following is a list of the Fund's board members. Each member oversees 15 Master Trust portfolios and 72 American Express mutual funds. Board members serve until the next regular shareholders' meeting or until he or she reaches the mandatory retirement age established by the board.
Independent Board Members Name, Position Principal Other address, held with occupations directorships age Registrant during past five and length years of service - ---------------------------- -------------- ------------------- ------------------- H. Brewster Atwater, Jr. Board member Retired chair and 4900 IDS Tower since 1996 chief executive Minneapolis, MN 55402 officer, General Born in 1931 Mills, Inc. (consumer foods) - ---------------------------- -------------- ------------------- ------------------- Arne H. Carlson Chair of the Chair, Board 901 S. Marquette Ave. Board since Services Minneapolis, MN 1999 Corporation 55402 (provides Born in 1934 administrative services to boards), former Governor of Minnesota - ---------------------------- -------------- ------------------- ------------------- Lynne V. Cheney Board member Distinguished The Reader's American Enterprise since 1994 Fellow, AEI Digest Institute for Public Association Inc. Policy Research (AEI) 1150 17th St., N.W. Washington, D.C. 20036 Born in 1941 - ---------------------------- -------------- ------------------- ------------------- Livio D. DeSimone Board member Retired chair of Cargill, 30 Seventh Street East since 2001 the board and Incorporated Suite 3050 chief executive (commodity St. Paul, MN 55101-4901 officer, merchants and Born in 1936 Minnesota Mining processors), and Manufacturing Target (3M) Corporation (department stores), General Mills, Inc. (consumer foods), Vulcan Materials Company (construction materials/chemicals) and Milliken & Company (textiles and chemicals) - ---------------------------- -------------- ------------------- ------------------- Ira D. Hall Board member Treasurer, Texaco Texaco, Inc. since 2001 Inc. since 1998. 2000 Westchester Avenue Prior to that, White Plains, NY 10650 director, Born in 1944 International Operations IBM Corp. - ---------------------------- -------------- ------------------- ------------------- Heinz F. Hutter Board Retired president P.O. Box 2187 member and chief Minneapolis, MN since 1994 operating 55402 officer, Cargill, Born in 1929 Incorporated (commodity merchants and processors) - ---------------------------- -------------- ------------------- ------------------- Anne P. Jones Board member Attorney and Motorola, Inc. 5716 Bent Branch Rd. since 1985 consultant (electronics) Bethesda, MD 20816 Born in 1935 - ---------------------------- -------------- ------------------- ------------------- William R. Pearce Board RII Weyerhaeuser 2050 One Financial Plaza member World Timberfund, Minneapolis, MN 55402 since 1980 L.P. (develops Born in 1927 timber resources) - management committee; former chair, American Express Funds - ---------------------------- -------------- ------------------- -------------------
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Independent Board Members (continued) Name, Position Principal Other address, held with occupations directorships age Registrant during past five and length years of service - ---------------------------- -------------- ------------------- ------------------- Alan K. Simpson Board member Former three-term Biogen, Inc. 1201 Sunshine Ave. since 1997 United States (bio-pharmaceuticals) Cody, WY 82414 Senator for Born in 1931 Wyoming - ---------------------------- -------------- ------------------- ------------------- C. Angus Wurtele Board Retired chair of Bemis Corporation 4900 IDS Tower member the board and (packaging) Minneapolis, MN 55402 since 1994 chief executive Born in 1934 officer, The Valspar Corporation - ---------------------------- -------------- ------------------- ------------------- Board Members Affiliated with American Express Financial Corporation (AEFC) Name, Position Principal Other directorships address, held with occupations age Registrant during past five and length years of service - ---------------------------- -------------- ------------------- -------------------- David R. Hubers Board Retired chief Chronimed Inc. 50643 AXP Financial Center member executive officer (specialty Minneapolis, MN 55474 since 1993 and director of pharmaceutical Born in 1943 AEFC distribution), RTW Inc. (manages workers compensation programs), Lawson Software, Inc. (technology based business applications) - ---------------------------- -------------- ------------------- -------------------- John R. Thomas Board Senior vice 50652 AXP Financial Center member president - Minneapolis, MN 55474 since 1987, information and Born in 1937 president technology of since 1997 AEFC - ---------------------------- -------------- ------------------- -------------------- The board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the board. In addition to Mr. Thomas, who is president, the Fund's other officers are: Other Officers Name, Position Principal Other directorships address, held with occupations age Registrant during past five and length years of service - ---------------------------- -------------- ------------------- -------------------- John M. Knight Treasurer Vice president - 50005 AXP Financial Center since 1999 investment Minneapolis, MN 55474 accounting of Born in 1952 AEFC - ---------------------------- -------------- ------------------- -------------------- Leslie L. Ogg Vice President of 901 S. Marquette Ave. president, Board Services Minneapolis, MN 55402 general Corporation Born in 1938 counsel and secretary since 1978 - ---------------------------- -------------- ------------------- --------------------
The SAI has additional information about the Fund's directors and is available, without charge, upon request by calling (800) 862-7919. - -------------------------------------------------------------------------------- 11 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Independent Auditors' Report THE BOARD AND SHAREHOLDERS AXP GLOBAL SERIES, INC. We have audited the accompanying statement of assets and liabilities, including the schedule of investments in securities, of AXP Global Balanced Fund (a series of the AXP Global Series, Inc.) as of October 31, 2001, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period ended October 31, 2001 and the financial highlights for each of the years in the four-year period ended October 31, 2001 and for the period from November 13, 1996, (commencement of operations), to October 31, 1997. These financial statements and the financial highlights are the responsibility of fund management. Our responsibility is to express an opinion on these financial statements and the financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2001, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of AXP Global Balanced Fund as of October 31, 2001, and the results of its operations, changes in its net assets and the financial highlights for each of the periods stated in the first paragraph above, in conformity with accounting principles generally accepted in the United States of America. KPMG LLP Minneapolis, Minnesota December 7, 2001 - ------------------------------------------------------------------------------- 12 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Financial Statements
Statement of assets and liabilities AXP Global Balanced Fund Oct. 31, 2001 Assets Investments in securities, at value (Note 1) (identified cost $138,057,624) $133,054,853 Cash in bank on demand deposit 382 Capital shares receivable 13,509 Dividends and accrued interest receivable 1,534,109 Receivable for investment securities sold 2,887,646 --------- Total assets 137,490,499 ----------- Liabilities Payable for investment securities purchased 1,334,228 Accrued investment management services fee 2,974 Accrued distribution fee 2,038 Accrued service fee 7 Accrued transfer agency fee 551 Accrued administrative services fee 226 Other accrued expenses 74,987 ------ Total liabilities 1,415,011 --------- Net assets applicable to outstanding capital stock $136,075,488 ============ Represented by Capital stock -- $.01 par value (Note 1) $ 301,750 Additional paid-in capital 176,220,565 Undistributed net investment income 398,560 Accumulated net realized gain (loss) (Note 7) (35,837,872) Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (5,007,515) ---------- Total -- representing net assets applicable to outstanding capital stock $136,075,488 ============ Net assets applicable to outstanding shares: Class A $ 79,838,957 Class B $ 53,274,664 Class C $ 543,238 Class Y $ 2,418,629 Net asset value per share of outstanding capital stock: Class A shares 17,607,843 $ 4.53 Class B shares 11,914,736 $ 4.47 Class C shares 121,720 $ 4.46 Class Y shares 530,708 $ 4.56 ------- ------------
See accompanying notes to financial statements. - ------------------------------------------------------------------------------- 13 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT
Statement of operations AXP Global Balanced Fund Year ended Oct. 31, 2001 Investment income Income: Dividends $ 909,960 Interest 3,365,213 Less foreign taxes withheld (62,912) ------- Total income 4,212,261 --------- Expenses (Note 2): Investment management services fee 1,247,975 Distribution fee Class A 232,798 Class B 653,511 Class C 3,837 Transfer agency fee 318,820 Incremental transfer agency fee Class A 20,436 Class B 22,487 Class C 159 Service fee -- Class Y 1,788 Administrative services fees and expenses 98,158 Compensation of board members 9,985 Custodian fees 80,005 Printing and postage 49,860 Registration fees 68,470 Audit fees 18,250 Other 4,442 ----- Total expenses 2,830,981 Earnings credits on cash balances (Note 2) (14,472) ------- Total net expenses 2,816,509 --------- Investment income (loss) -- net 1,395,752 --------- Realized and unrealized gain (loss) -- net Net realized gain (loss) on: Security transactions (Note 3) (35,683,073) Foreign currency transactions 46,613 ------ Net realized gain (loss) on investments (35,636,460) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (3,463,775) ---------- Net gain (loss) on investments and foreign currencies (39,100,235) ----------- Net increase (decrease) in net assets resulting from operations $(37,704,483) ============
See accompanying notes to financial statements. - ------------------------------------------------------------------------------- 14 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT
Statements of changes in net assets AXP Global Balanced Fund Year ended Oct. 31, 2001 2000 Operations and distributions Investment income (loss) -- net $ 1,395,752 $ 1,845,012 Net realized gain (loss) on investments (35,636,460) 12,652,945 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (3,463,775) (11,441,182) ---------- ----------- Net increase (decrease) in net assets resulting from operations (37,704,483) 3,056,775 ----------- --------- Distributions to shareholders from: Net investment income Class A (427,085) (460,788) Class B -- (188,858) Class C (677) -- Class Y (9,408) (7) Net realized gain Class A (8,653,890) (7,922,899) Class B (6,251,273) (5,406,811) Class C (14,106) -- Class Y (109,148) (108) -------- ---- Total distributions (15,465,587) (13,979,471) ----------- ----------- Capital share transactions (Note 4) Proceeds from sales Class A shares (Note 2) 27,366,581 46,893,342 Class B shares 10,878,062 23,477,082 Class C shares 597,777 131,377 Class Y shares 2,186,077 1,774,227 Reinvestment of distributions at net asset value Class A shares 8,857,999 7,831,573 Class B shares 6,145,933 5,514,191 Class C shares 14,783 -- Class Y shares 118,556 115 Payments for redemptions Class A shares (35,573,917) (38,753,765) Class B shares (Note 2) (18,871,266) (14,908,490) Class C shares (Note 2) (87,625) -- Class Y shares (470,336) (606,853) -------- -------- Net increase (decrease) in net assets from capital share transactions 1,162,624 31,352,799 --------- ---------- Total increase (decrease) in net assets (52,007,446) 20,430,103 Net assets at beginning of year 188,082,934 167,652,831 ----------- ----------- Net assets at end of year $136,075,488 $188,082,934 ============ ============ Undistributed net investment income $ 398,560 $ 25,616 ------------ ------------
See accompanying notes to financial statements. - ------------------------------------------------------------------------------- 15 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Notes to Financial Statements AXP Global Balanced Fund 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Fund is a series of AXP Global Series, Inc. and is registered under the Investment Company Act of 1940 (as amended) as a diversified open-end management investment company. The Fund invests primarily in equity and debt securities of issuers throughout the world. AXP Global Series, Inc. has 10 billion authorized shares of capital stock that can be allocated among the separate series as designated by the board. Class C shares of the Fund were offered to the public on June 26, 2000. Prior to this date, American Express Financial Corporation (AEFC) purchased 300 shares of capital stock at $6.67 per share, which represented the initial capital in Class C. The Fund offers Class A, Class B, Class C and Class Y shares. o Class A shares are sold with a front-end sales charge. o Class B shares may be subject to a contingent deferred sales charge (CDSC) and automatically convert to Class A shares during the ninth calendar year of ownership. o Class C shares may be subject to a CDSC. o Class Y shares have no sales charge and are offered only to qualifying institutional investors. All classes of shares have identical voting, dividend and liquidation rights. The distribution fee, incremental transfer agency fee and service fee (class specific expenses) differ among classes. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses on investments are allocated to each class of shares based upon its relative net assets. The Fund's significant accounting policies are summarized below: Use of estimates Preparing financial statements that conform to accounting principles generally accepted in the United States of America requires management to make estimates (e.g., on assets, liabilities and contingent assets and liabilities) that could differ from actual results. Valuation of securities 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. Foreign securities are valued based on quotations from the principal market in which such securities are normally traded. If trading or events occurring in other markets after the close of the principal market in which foreign securities are traded, and before the close of business of the Fund, are expected to materially affect the value of those securities, then they are valued at their fair value taking this trading or these events into account. Securities for which market quotations are not readily available are valued at fair value according to methods selected in good faith by the board. Short-term securities maturing in more than 60 days from the valuation date are valued at the market price or approximate market value based on current interest rates; those maturing in 60 days or less are valued at amortized cost. - ------------------------------------------------------------------------------- 16 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Option transactions To produce incremental earnings, protect gains, and facilitate buying and selling of securities for investments, the Fund 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 Fund 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 Fund gives up the opportunity for profit if the market price of the security increases. The risk in writing a put option is that the Fund 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 Fund pays a premium whether or not the option is exercised. The Fund 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 Fund 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 Fund may buy and sell financial futures contracts traded on any U.S. or foreign exchange. The Fund 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 Fund 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 Fund 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 Fund recognizes a realized gain or loss when the contract is closed or expires. Foreign currency translations and foreign currency contracts Securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars. Foreign currency amounts related to the purchase or sale of securities and income and expenses are translated at the exchange rate on the transaction date. The effect of changes in foreign exchange rates on realized and unrealized security gains or losses is reflected as a component of such gains or losses. In the statement of operations, net realized gains or losses from foreign currency transactions, if any, may arise from sales of foreign currency, closed forward contracts, exchange gains or losses realized between the trade date and settlement date on securities transactions, and other translation gains or losses on dividends, interest income and foreign withholding taxes. The Fund 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 Fund and the resulting unrealized appreciation and/or depreciation are determined using foreign currency exchange rates from an independent pricing service. The Fund is subject to the credit risk that the other party will not complete its contract obligations. - ------------------------------------------------------------------------------- 17 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT 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. On the statement of assets and liabilities, as a result of permanent book-to-tax differences, undistributed net investment income has been decreased by $585,638 and accumulated net realized loss has been decreased by $444,084 resulting in a net reclassification adjustment to increase paid-in capital by $141,554. Dividends to shareholders Dividends from net investment income, declared and paid each calendar quarter, when available are reinvested in additional shares of the Fund at net asset value or payable in cash. Capital gains, when available, are distributed along with the last income dividend of the calendar year. Other Security transactions are accounted for on the date securities are purchased or sold. Dividend income is recognized on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities. Interest income, including level-yield amortization of premium and discount, is accrued daily. 2. EXPENSES AND SALES CHARGES The Fund has agreements with AEFC to manage its portfolio and provide administrative services. Under an Investment Management Services Agreement, AEFC determines which securities will be purchased, held or sold. The management fee is a percentage of the Fund's average daily net assets in reducing percentages from 0.79% to 0.67% annually. The fee may be adjusted upward or downward by a performance incentive adjustment based on a comparison of the performance of Class A shares of the Fund to the Lipper Global Flexible Funds Index. The maximum adjustment is 0.12% of the Fund's average daily net assets after deducting 1% from the performance difference. If the performance difference is less than 1%, the adjustment will be zero. The adjustment decreased the fee by $21,095 for the year ended Oct. 31, 2001. Under an Administrative Services Agreement, the Fund pays AEFC a fee for administration and accounting services at a percentage of the Fund's average daily net assets in reducing percentages from 0.06% to 0.035% annually. A minor portion of additional administrative service expenses paid by the Fund are consultants' fees and fund office expenses. Under this agreement, the Fund also pays taxes, audit and certain legal fees, registration fees for shares, compensation of board members, corporate filing fees and any other expenses properly payable by the Fund and approved by the board. - ------------------------------------------------------------------------------- 18 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Under a separate Transfer Agency Agreement, American Express Client Service Corporation (AECSC) maintains shareholder accounts and records. The incremental transfer agency fee is the amount charged to the specific classes for the additional expense above the fee for Class Y. The Fund pays AECSC an annual fee per shareholder account for this service as follows: o Class A $19.00 o Class B $20.00 o Class C $19.50 o Class Y $17.00 The Fund has agreements with American Express Financial Advisors Inc. (the Distributor) for distribution and shareholder services. Under a Plan and Agreement of Distribution, the Fund pays a distribution fee at an annual rate up to 0.25% of the Fund's average daily net assets attributable to Class A shares and up to 1.00% for Class B and Class C shares. Under a Shareholder Service Agreement, the Fund pays the Distributor a fee for service provided to shareholders by financial advisors and other servicing agents. The fee is calculated at a rate of 0.10% of the Fund's average daily net assets attributable to Class Y shares. Sales charges received by the Distributor for distributing Fund shares were $203,386 for Class A, $56,827 for Class B and $115 for Class C for the year ended Oct. 31, 2001. The Fund also pays custodian fees to American Express Trust Company, an affiliate of AEFC. During the year ended Oct. 31, 2001, the Fund's custodian and transfer agency fees were reduced by $14,472 as a result of earnings credits from overnight cash balances. 3. SECURITIES TRANSACTIONS Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated $264,970,596 and $277,191,313, respectively, for the year ended Oct. 31, 2001. Realized gains and losses are determined on an identified cost basis. 4. CAPITAL SHARE TRANSACTIONS Transactions in shares of capital stock for the periods indicated are as follows:
Year ended Oct. 31, 2001 Class A Class B Class C Class Y Sold 5,320,243 2,135,016 117,568 424,281 Issued for reinvested distributions 1,624,564 1,136,032 2,740 21,718 Redeemed (6,853,395)(3,769,909) (19,211) (92,728) ---------- ---------- ------- ------- Net increase (decrease) 91,412 (498,861) 101,097 353,271 ------ -------- ------- ------- Year ended Oct. 31, 2000 Class A Class B Class C* Class Y Sold 7,069,430 3,551,107 20,623 267,763 Issued for reinvested distributions 1,178,972 832,844 -- 17 Redeemed (5,846,341)(2,266,065) -- (90,554) ---------- ---------- ------ ------- Net increase (decrease) 2,402,061 2,117,886 20,623 177,226 --------- --------- ------ -------
* Inception date was June 26, 2000. - ------------------------------------------------------------------------------- 19 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT 5. BANK BORROWINGS The Fund has a revolving credit agreement with U.S. Bank, N.A., whereby the Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. The Fund must have asset coverage for borrowings not to exceed the aggregate of 333% of advances equal to or less than five business days plus 367% of advances over five business days. The agreement, which enables the Fund to participate with other American Express mutual funds, permits borrowings up to $200 million, collectively. Interest is charged to each Fund based on its borrowings at a rate equal to the Federal Funds Rate plus 0.30% or the Eurodollar Rate (Reserve Adjusted) plus 0.20%. Borrowings are payable up to 90 days after such loan is executed. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.05% per annum. The Fund had no borrowings outstanding during the year ended Oct. 31, 2001. 6. NEW ACCOUNTING PRONOUNCEMENT In November, 2000, the AICPA issued a revised Audit and Accounting Guide, Audits of Investment Companies, which is effective for fiscal years beginning after Dec. 15, 2000. Adopting the revised Guide is not expected to have a significant impact on the Fund's financial position, results of operations or changes in its net assets. 7. CAPITAL LOSS CARRY-OVER For federal income tax purposes, the Fund has a capital loss carry-over of $34,289,758 as of Oct. 31, 2001, that will expire in 2009 if not offset by capital gains. It is unlikely the board will authorize a distribution of any net realized capital gains until the available capital loss carry-over has been offset or expires. - ------------------------------------------------------------------------------- 20 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT 8. 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 Oct. 31, 2001 2000 1999 1998 1997(b) Net asset value, beginning of period $ 6.27 $6.61 $5.79 $5.33 $5.00 ------ ----- ----- ----- ----- Income from investment operations: Net investment income (loss) .07 .08 .09 .10 .09 Net gains (losses) (both realized and unrealized) (1.27) .12 .82 .48 .31 ----- --- --- --- --- Total from investment operations (1.20) .20 .91 .58 .40 ----- --- --- --- --- Less distributions: Dividends from net investment income (.03) (.03) (.07) (.11) (.07) Distributions from realized gains (.51) (.51) (.02) (.01) -- ---- ---- ---- ---- ---- Total distributions (.54) (.54) (.09) (.12) (.07) ---- ---- ---- ---- ---- Net asset value, end of period $ 4.53 $6.27 $6.61 $5.79 $5.33 ------ ----- ----- ----- ----- Ratios/supplemental data Net assets, end of period (in millions) $80 $110 $100 $63 $31 --- ---- ---- --- --- Ratio of expenses to average daily net assets(d) 1.45% 1.31% 1.40% 1.49%(e) 1.45%(e),(h) ---- ---- ---- ---- ---- Ratio of net investment income (loss) to average daily net assets 1.18% 1.26% 1.43% 1.86% 2.18%(h) ---- ---- ---- ---- ---- Portfolio turnover rate (excluding short-term securities) 173% 110% 99% 74% 44% --- --- -- -- -- Total return(i) (20.63%) 2.62% 15.53% 11.01% 8.10% ------ ---- ----- ----- ---- Class B Per share income and capital changes(a) Fiscal period ended Oct. 31, 2001 2000 1999 1998 1997(b) Net asset value, beginning of period $ 6.21 $6.58 $5.77 $5.31 $5.00 ------ ----- ----- ----- ----- Income from investment operations: Net investment income (loss) .01 .04 .03 .06 .06 Net gains (losses) (both realized and unrealized) (1.24) .12 .83 .48 .30 ----- --- --- --- --- Total from investment operations (1.23) .16 .86 .54 .36 ----- --- --- --- --- Less distributions: Dividends from net investment income -- (.02) (.03) (.07) (.05) Distributions from realized gains (.51) (.51) (.02) (.01) -- ---- ---- ---- ---- ---- Total distributions (.51) (.53) (.05) (.08) (.05) ---- ---- ---- ---- ---- Net asset value, end of period $ 4.47 $6.21 $6.58 $5.77 $5.31 ------ ----- ----- ----- ----- Ratios/supplemental data Net assets, end of period (in millions) $53 $77 $68 $44 $19 --- --- --- --- --- Ratio of expenses to average daily net assets(d) 2.21% 2.07% 2.16% 2.25%(f) 2.22%(f),(h) ---- ---- ---- ---- ---- Ratio of net investment income (loss) to average daily net assets .42% .51% .66% 1.10% 1.41%(h) --- --- --- ---- ---- Portfolio turnover rate (excluding short-term securities) 173% 110% 99% 74% 44% --- --- -- -- -- Total return(i) (21.21%) 1.95% 14.89% 10.18% 7.31% ------ ---- ----- ----- ----
See accompanying notes to financial highlights. - ------------------------------------------------------------------------------- 21 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Class C Per share income and capital changes(a) Fiscal period ended Oct. 31, 2001 2000(c) Net asset value, beginning of period $ 6.21 $6.58 ------ ----- Income from investment operations: Net investment income (loss) .02 .01 Net gains (losses) (both realized and unrealized) (1.24) (.38) ----- ---- Total from investment operations (1.22) (.37) ----- ---- Less distributions: Dividends from net investment income (.02) -- Distributions from realized gains (.51) -- ---- ----- Total distributions (.53) -- ---- ----- Net asset value, end of period $ 4.46 $6.21 ------ ----- Ratios/supplemental data Net assets, end of period (in millions) $1 $-- -- --- Ratio of expenses to average daily net assets(d) 2.21% 2.07%(h) ---- ---- Ratio of net investment income (loss) to average daily net assets .41% .47%(h) --- --- Portfolio turnover rate (excluding short-term securities) 173% 110% --- --- Total return(i) (21.17%) (5.62%) ------ -----
Class Y Per share income and capital changes(a) Fiscal period ended Oct. 31, 2001 2000 1999 1998 1997(b) Net asset value, beginning of period $ 6.30 $6.62 $5.79 $5.33 $5.00 ------ ----- ----- ----- ----- Income from investment operations: Net investment income (loss) .08 .10 .09 .12 .10 Net gains (losses) (both realized and unrealized) (1.28) .13 .84 .47 .31 ----- --- --- --- --- Total from investment operations (1.20) .23 .93 .59 .41 ----- --- --- --- --- Less distributions: Dividends from net investment income (.03) (.04) (.08) (.12) (.08) Distributions from realized gains (.51) (.51) (.02) (.01) -- ---- ---- ---- ---- ---- Total distributions (.54) (.55) (.10) (.13) (.08) ---- ---- ---- ---- ---- Net asset value, end of period $ 4.56 $6.30 $6.62 $5.79 $5.33 ------ ----- ----- ----- ----- Ratios/supplemental data Net assets, end of period (in millions) $2 $1 $-- $-- $-- -- -- --- --- --- Ratio of expenses to average daily net assets(d) 1.31% 1.20% 1.15% 1.42%(g) 1.30%(g),(h) ---- ---- ---- ---- ---- Ratio of net investment income (loss) to average daily net assets 1.35% 1.51% 1.65% 2.02% 2.46%(h) ---- ---- ---- ---- ---- Portfolio turnover rate (excluding short-term securities) 173% 110% 99% 74% 44% --- --- -- -- -- Total return(i) (20.40%) 2.99% 15.76% 11.17% 8.24% ------ ---- ----- ----- ----
See accompanying notes to financial highlights. - ------------------------------------------------------------------------------- 22 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Notes to financial highlights (a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Nov. 13, 1996 (commencement of operations) to Oct. 31, 1997. (c) Inception date was June 26, 2000. (d) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (e) AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the annual ratios of expenses for Class A would have been 1.53% and 2.29% for the periods ended 1998 and 1997, respectively. (f) AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the annual ratios of expenses for Class B would have been 2.29% and 2.96% for the periods ended 1998 and 1997, respectively. (g) AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the annual ratios of expenses for Class Y would have been 1.46% and 2.14% for the periods ended 1998 and 1997, respectively. (h) Adjusted to an annual basis. (i) Total return does not reflect payment of a sales charge. - ------------------------------------------------------------------------------- 23 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Investments in Securities AXP Global Balanced Fund Oct. 31, 2001 (Percentages represent value of investments compared to net assets) Common stocks (45.9%)(c) Issuer Shares Value(a) Australia (--%) Financial services Westfield Holdings 2,666 $22,833 Bermuda (1.3%) Multi-industry conglomerates Tyco Intl 37,000 1,818,180 Finland (0.4%) Communications equipment & services Nokia 25,927 542,477 France (1.1%) Energy (0.3%) Total Fina ELF 3,235 454,547 Indexes (0.8%) StreetTRACKS MSCI Pan Euro ETF 11,603(b) 1,051,352 Germany (1.6%) Banks and savings & loans (0.4%) Deutsche Bank 10,414 578,082 Computers & office equipment (0.3%) SAP 3,476 360,046 Insurance (0.9%) Allianz 3,705 873,184 Muenchener Rueckversicherungs-Gesellschaft 1,262 333,048 Total 1,206,232 Hong Kong (0.6%) Financial services Cheung Kong Holdings 89,000 753,077 Italy (0.3%) Insurance Assicurazioni Generali 12,550 344,200 Japan (3.4%) Automotive & related (0.5%) Honda Motor 10,100 362,232 Toyota Motor 19,000 461,011 Total 823,243 Banks and savings & loans (0.2%) Orix 3,200 279,989 Chemicals (0.2%) Sumitomo Chemical 73,000 278,510 Computers & office equipment (0.4%) Canon 18,000 523,508 Electronics (0.3%) Hitachi 29,000 197,827 Nintendo 1,300 200,515 Total 398,342 Financial services (0.1%) Nomura Holdings 14,000 184,143 Health care services (0.2%) Yamanouchi Pharmaceutical 8,000 237,245 Household products (0.3%) Kao ADR 15,000 355,378 Media (0.3%) Sony 10,500 397,165 Miscellaneous (0.3%) Mitsubishi Estate 40,000 391,160 Multi-industry conglomerates (0.4%) Mitsubishi 34,000 260,545 Secom 6,000 312,242 Total 572,787 Utilities -- telephone (0.2%) NTT DoCoMo 16 216,985 Mexico (0.5%) Retail Wal-Mart de Mexico 280,209 666,905 Netherlands (0.5%) Insurance ING Groep 26,310 656,418 Singapore (0.3%) Banks and savings & loans United Overseas Bank 65,000 363,427 See accompanying notes to investments in securities. - ------------------------------------------------------------------------------- 24 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Common stocks (continued) Issuer Shares Value(a) South Korea (0.5%) Electronics Samsung Electronics 4,930 $660,506 Spain (1.3%) Banks and savings & loans (0.2%) Banco Santander Central Hispano 43,654 336,179 Utilities -- telephone (1.1%) Telefonica 123,007 1,477,970 Switzerland (2.3%) Banks and savings & loans (0.7%) UBS 20,530 954,898 Food (1.0%) Nestle 6,544 1,358,574 Health care (0.6%) Novartis 20,545 769,384 United Kingdom (5.0%) Banks and savings & loans (1.4%) Barclays 7,783 234,300 HSBC Holdings 114,439 1,254,039 Lloyds TSB Group 39,958 403,290 Total 1,891,629 Communications equipment & services (1.3%) GlaxoSmithKline 63,324 1,703,704 Energy (0.3%) BP 55,779 450,213 Media (0.4%) British Sky Broadcasting Group 22,400(b) 250,838 WPP Group 36,980 334,780 Total 585,618 Utilities -- telephone (1.6%) British Telecommunications 137,928 698,049 Vodafone Group 617,875 1,428,735 Total 2,126,784 United States (26.8%) Banks and savings & loans (0.6%) U.S. Bancorp 47,400 842,772 Beverages & tobacco (0.8%) Coca-Cola 23,700 1,134,756 Computer software & services (2.6%) Microsoft 51,032(b) 2,967,511 Oracle 47,100(b) 638,676 Total 3,606,187 Computers & office equipment (3.9%) AOL Time Warner 33,400(b) 1,042,414 Cisco Systems 29,959(b) 506,906 Dell Computer 55,312(b) 1,326,382 Intl Business Machines 22,900 2,474,803 Total 5,350,505 Electronics (2.2%) Intel 62,900 1,536,017 Micron Technology 17,500(b) 398,300 Texas Instruments 39,000 1,091,610 Total 3,025,927 Energy (0.2%) ChevronTexaco 3,800 336,490 Financial services (2.8%) Citigroup 42,363 1,928,363 Fannie Mae 17,760 1,437,850 Goldman Sachs Group 5,900 461,144 Total 3,827,357 Food (1.2%) Kraft Foods Cl A 48,900 1,650,375 Health care (7.9%) Abbott Laboratories 39,700 2,103,306 American Home Products 37,300 2,082,459 Amgen 8,000(b) 454,560 Medtronic 24,600 991,380 Merck & Co 18,000 1,148,580 Pfizer 59,570 2,495,983 Pharmacia 37,600 1,523,552 Total 10,799,820 Insurance (0.6%) American Intl Group 9,560 751,416 Media (0.4%) Interpublic Group of Companies 23,100 518,595 Multi-industry conglomerates (1.4%) General Electric 51,310 1,868,197 Retail (1.7%) Home Depot 26,600 1,016,918 Wal-Mart Stores 24,800 1,274,720 Total 2,291,638 Utilities -- telephone (0.5%) Sprint (PCS Group) 28,400(b) 633,320 Total common stocks (Cost: $67,421,352) $62,429,045 See accompanying notes to investments in securities. - ------------------------------------------------------------------------------- 25 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Bonds (47.9%)(c) Issuer Coupon Principal Value(a) rate amount Australia (0.3%) New South Wales Treasury (Australian Dollar) 03-01-08 8.00% 200,000 $116,014 Queensland Treasury (Australian Dollar) Local Govt Guaranty 05-14-03 8.00 565,000 301,555 Total 417,569 Austria (2.3%) Oesterreich Kontrollbank (Japanese Yen) 03-22-10 1.80 364,000,000 3,183,401 Brazil (0.6%) Federal Republic of Brazil (U.S. Dollar) 04-15-14 8.00 554,135 375,775 08-17-40 11.00 700,000 456,182 Total 831,957 Canada (1.4%) Govt of Canada (Canadian Dollar) 02-01-06 7.00 1,250,000 886,976 06-01-08 6.00 800,000 545,599 Province of British Columbia (Canadian Dollar) 12-01-06 5.25 500,000 325,113 Rogers Communication (Canadian Dollar) Sr Nts 07-15-07 8.75 300,000 184,816 Total 1,942,504 China (--%) Greater Beijing First Expressways (U.S. Dollar) Sr Nts 06-15-07 9.50 170,000(b) 61,200 Denmark (0.6%) Govt of Denmark (Danish Krone) 05-15-03 8.00 600,000 77,141 08-15-05 5.00 6,000,000 749,300 Total 826,441 France (2.2%) Govt of France (European Monetary Unit) 10-25-09 4.00 1,500,000 1,315,879 04-25-10 5.50 1,800,000 1,741,020 Total 3,056,899 Germany (8.6%) Allgemeine Hypo Bank (European Monetary Unit) 09-02-09 5.00 850,000 781,789 Bundesschatzanweisungen (European Monetary Unit) 12-14-01 4.00 2,000,000 1,801,876 03-15-02 4.50 1,550,000 1,400,805 Federal Republic of Germany (European Monetary Unit) 11-11-04 7.50 700,000 703,791 01-05-06 6.00 600,000 587,730 01-04-08 5.25 1,285,000 1,226,340 07-04-08 4.75 725,000 672,667 07-04-10 5.25 250,000 239,087 06-20-16 6.00 434,598 441,466 07-04-27 6.50 1,475,000 1,592,700 01-04-30 6.25 1,200,000 1,273,781 Treuhandanstalt (European Monetary Unit) 01-29-03 7.13 1,022,584 962,946 Total 11,684,978 Italy (5.4%) Buoni Poliennali Del Tes (European Monetary Unit) 01-01-04 8.50 800,000 796,505 07-01-05 4.75 1,830,000 1,710,569 11-01-09 4.25 3,400,000 3,006,328 11-01-10 5.50 650,000 622,397 11-01-29 5.25 1,400,000 1,257,169 Total 7,392,968 Mexico (0.3%) Bancomext Trust (U.S. Dollar) 05-30-06 11.25 150,000(d) 174,375 United Mexican States (British Pound) Medium-term Nts Series E 05-30-02 8.75 125,000 181,636 Total 356,011 Norway (1.0%) Govt of Norway (Norwegian Krone) 11-30-04 5.75 7,200,000 809,150 05-15-09 5.50 5,000,000 551,335 Total 1,360,485 See accompanying notes to investments in securities. - ------------------------------------------------------------------------------- 26 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Bonds (continued) Issuer Coupon Principal Value(a) rate amount Singapore (0.6%) PSA (U.S. Dollar) 08-01-05 7.13% $700,000(d) $764,496 Spain (0.8%) Govt of Spain (European Monetary Unit) 05-30-04 8.00 700,000 700,687 04-30-06 8.80 322,744 349,099 Total 1,049,786 United Kingdom (2.9%) United Kingdom Treasury (British Pound) 06-07-02 7.00 415,000 614,398 06-10-03 8.00 940,000 1,449,019 12-07-03 6.50 350,000 532,826 12-07-05 8.50 800,000 1,336,211 Total 3,932,454 United States (20.9%) Citicorp (European Monetary Unit) 09-19-09 6.25 1,000,000 493,142 Clear Channel Communications (U.S. Dollar) 11-01-06 6.00 650,000 654,231 DTE Burns Harbor LLC (U.S. Dollar) Sr Nts 01-30-03 6.57 34,390(d) 29,232 Federal Natl Mtge Assn (U.S. Dollar) 05-14-04 5.63 1,000,000 1,064,251 08-15-04 6.50 1,375,000 1,495,722 02-15-05 7.13 2,000,000 2,229,570 02-15-08 5.75 900,000 968,549 01-15-10 7.25 1,500,000 1,750,806 05-15-11 6.00 4,900,000 5,298,370 07-01-13 6.00 564,555 583,721 05-01-14 6.50 766,119 797,850 03-01-27 7.50 102,083 107,803 Ford Motor Credit (Japanese Yen) 02-07-05 1.20 61,000,000 482,498 (U.S. Dollar) 10-25-11 7.25 500,000 502,950 Intl Paper (European Monetary Unit) 08-11-06 5.38 560,000 505,636 Phillips Petroleum (U.S. Dollar) 03-15-28 7.13 200,000 197,118 U.S. Treasury (U.S. Dollar) 02-28-03 5.50 350,000 365,257 11-15-05 5.75 850,000 924,902 11-15-08 4.75 200,000 208,874 08-15-10 5.75 1,900,000 2,109,304 02-15-16 9.25 2,000,000 2,909,380 11-15-16 7.50 3,000,000 3,828,750 WorldCom (U.S. Dollar) 05-15-11 7.50 750,000 773,003 Total 28,280,919 Total bonds (Cost: $65,151,419) $65,142,068 Short-term securities (4.0%) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity U.S. government agencies Federal Home Loan Bank Disc Nts 12-19-01 2.16% $4,200,000 $4,186,680 12-19-01 2.29 300,000 299,049 Federal Natl Mtge Assn Disc Nts 11-29-01 3.38 500,000 498,923 11-30-01 2.19 500,000 499,088 Total short-term securities (Cost: $5,484,853) $5,483,740 Total investments in securities (Cost: $138,057,624)(e) $133,054,853 See accompanying notes to investments in securities. - ------------------------------------------------------------------------------- 27 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Notes to investments in securities (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Non-income producing. For long-term debt securities, item identified is in default as to payment of interest and/or principal. (c) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in the currency indicated. (d) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the board. (e) At Oct. 31, 2001, the cost of securities for federal income tax purposes was $139,604,623 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $ 4,086,292 Unrealized depreciation (10,636,062) ----------- Net unrealized depreciation $ (6,549,770) ============ - ------------------------------------------------------------------------------- 28 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT 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. 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 Global Balanced Fund Fiscal year ended Oct. 31, 2001 Class A Income distribution taxable as dividend income, 45.71% qualifying for deduction by corporations. Payable date Per share Dec. 20, 2000 $0.22826 Mar. 27, 2001 0.00681 June 27, 2001 0.00851 Total $0.24358 Capital gain distributions taxable for long-term capital gain. Payable date Per share Dec. 20, 2000 $0.29260 Total distributions $0.53618 The distribution of $0.52086 per share, payable Dec. 20, 2000, consisted of $0.00891 derived from net investment income, $0.21935 from net short-term capital gains (a total of $0.22826 taxable as dividend income) and $0.29260 from net long-term capital gains. Class B Income distribution taxable as dividend income, 45.71% qualifying for deduction by corporations. Payable date Per share Dec. 20, 2000 $.21935 Capital gain distributions taxable for long-term capital gain. Payable date Per share Dec. 20, 2000 $0.29260 Total distributions $0.51195 The distribution of $0.51195 per share, payable Dec. 20, 2000, consisted of $0.21935 from net short-term capital gains (taxable as dividend income) and $0.29260 from net long-term capital gains. - ------------------------------------------------------------------------------- 29 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT Class C Income distribution taxable as dividend income, 45.71% qualifying for deduction by corporations. Payable date Per share Dec. 20, 2000 $0.23009 Mar. 27, 2001 0.00260 June 27, 2001 0.00193 Total $0.23462 Capital gain distributions taxable for long-term capital gain. Payable date Per share Dec. 20, 2000 $0.29260 Total distributions $0.52722 The distribution of $0.52269 per share, payable Dec. 20, 2000, consisted of $0.01074 derived from net investment income, $0.21935 from net short-term capital gains (a total of $0.23009 taxable as dividend income) and $0.29260 from net long-term capital gains. Class Y Income distribution taxable as dividend income, 45.71% qualifying for deduction by corporations. Payable date Per share Dec. 20, 2000 $0.23386 Mar. 27, 2001 0.00854 June 27, 2001 0.00867 Total $0.25107 Capital gain distributions taxable for long-term capital gain. Payable date Per share Dec. 20, 2000 $0.29260 Total distributions $0.54367 The distribution of $0.52646 per share, payable Dec. 20, 2000, consisted of $0.01451 derived from net investment income, $0.21935 from net short-term capital gains (a total of $0.23386 taxable as dividend income) and $0.29260 from net long-term capital gains. - ------------------------------------------------------------------------------- 30 AXP GLOBAL BALANCED FUND -- ANNUAL REPORT AXP Global Balanced Fund PRSRT STD AUTO 70100 AXP Financial Center U.S. POSTAGE Minneapolis, MN 55474 PAID AMERICAN americanexpress.com EXPRESS Ticker Symbol Class A: IDGAX Class B: IGBBX Class C: N/A Class Y: AGBYX 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. (logo) AMERICAN EXPRESS S-6352 H (12/01) -----END PRIVACY-ENHANCED MESSAGE-----