-----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, HyfYzEkNwiOoaVWTnBymcYS+B04w3I4pTjZu+4/yiHo8EQiutuFOkyWU/LQAwOjN BPPk69OStQyYC6KODGjPPg== 0000820027-02-000448.txt : 20020625 0000820027-02-000448.hdr.sgml : 20020625 20020625162914 ACCESSION NUMBER: 0000820027-02-000448 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020430 FILED AS OF DATE: 20020625 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AXP GLOBAL SERIES INC CENTRAL INDEX KEY: 0000842918 IRS NUMBER: 411850486 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: 02686639 BUSINESS ADDRESS: STREET 1: IDS TOWER 10 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 BUSINESS PHONE: 6126712772 FORMER COMPANY: FORMER CONFORMED NAME: IDS GLOBAL SERIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: IDS GLOBAL BOND FUND INC DATE OF NAME CHANGE: 19901011 N-30D 1 s6396d.txt AXP GLOBAL TECHNOLOGY FUND AXP(R) Global Technology Fund 2002 SEMIANNUAL REPORT (icon of) ruler American Express(R) Funds AXP Global Technology Fund seeks to provide shareholders with long-term capital growth. Investing in the Information Age In recent years, the most exciting and fastest-growing segment of the global economy has been technology, particularly the transmission of information. AXP Global Technology Fund concentrates its investments in stocks of companies on the cutting edge of information technology to create a portfolio that takes advantage of the potential offered by this segment of the market. CONTENTS From the Chairman 3 Portfolio Manager Q & A 3 Fund Facts 6 The 10 Largest Holdings 7 Financial Statements (Fund) 8 Notes to Financial Statements (Fund) 11 Financial Statements (Portfolio) 17 Notes to Financial Statements (Portfolio) 19 Investments in Securities 23 - -------------------------------------------------------------------------------- 2 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT (picture of) Arne H. Carlson Arne H. Carlson Chairman of the board From the Chairman Although we see reason for optimism as the U.S. economy slowly improves, various factors continue to create uncertainty in the financial markets. Warnings about terrorist activities, doubts about the reliability of companies' financial information and growing unrest around the world have contributed to a volatile environment in 2002. While this short-term volatility is unsettling, we encourage you to keep a long-term perspective when it comes to your investments. At times like these, it is important for you to assess your own financial needs, set short- and long-term goals and develop a plan to obtain these goals. Your personal financial advisor can be an important asset in helping you meet your goals. American Express Financial Corporation has set its own goals to assist you in meeting yours. It has taken steps toward improving the competitive ranking and investment performance of the American Express Funds and expanding the range of investment options. The members of the Board, the majority of whom are independent from American Express Financial Corporation, oversee these efforts and believe the steps that have been taken show promise for meeting the goals. This Fund will join the other American Express Funds in holding shareholder meetings in November. We believe it is important for your voice as a Fund shareholder to be heard. When you receive your proxy statement, please take the time to consider the proposals and vote. The Board's recommendation on each proposal will be outlined in the proxy statement. On behalf of the Board, Arne H. Carlson (picture of) Louis Giglio Louis Giglio Portfolio manager Portfolio Manager Q & A Q: How did AXP Global Technology Fund perform for the six-month period ended April 30, 2002? A: In a very volatile environment that saw technology-oriented stocks move up and down in dramatic fashion, AXP Global Technology Fund returned -6.88% for the six-month period (Class A shares not including sales charges). By comparison, the Pacific Stock Exchange Technology Index and the Standard & Poor's 500 Index returned 1.11% and 2.29%, respectively, for the same period. Another comparative index, the Lipper Science and Technology Funds Index, returned -5.81%. - -------------------------------------------------------------------------------- 3 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT Q: What factors affected the Fund's performance during the period? A: Overall volatility in the stock market, especially among technology issues, was the most significant influence on the Fund's performance. At the beginning of the period under review, investors were increasingly encouraged about the direction of the U.S. economy. Coming off a mild recession and the aftershocks of the September 11, 2001 terrorist attacks, equity markets closed 2001 on a strong note, led in particular by a surge in technology stocks. However, most of those gains were lost in the opening weeks of 2002 as investors again retreated from more aggressive sectors of the market. In March, technology stocks again bounced back, but were rocked in April as investor sentiment turned extremely pessimistic. Stocks of software and biotechnology companies were hardest hit due to weaker-than-expected earnings reports from several bellwether firms. It was clear as the six-month period came to a close that technology issues were yet to break out of the bear market that began in early 2000. This volatility, coupled with investors' reluctance to stick with the more aggressive sectors of the stock markets, had the most significant impact on performance this period. Q: What changes did you make to the Fund's portfolio? A: Throughout the period, we continued to broaden the Fund's technology focus. Along with holdings in many of the most visible technology sectors such as computer-related industries, we added a number of stocks from companies in biotechnology and medical devices as well. Early in the six-month period, this helped to dampen some of the Fund's volatility and likewise, helped performance keep pace with that of comparative indices during these turbulent times. In another effort to cope with the volatile nature of the technology sector, we increased the number of holdings in the Fund, and put a greater emphasis on large-cap companies. Larger stocks tend to be less volatile than mid-cap and small-cap companies, although the latter two segments continue to play a role in the Fund's portfolio. Q: What is your outlook for the coming months? A: The environment has been extremely challenging for the technology sector for more than two years, but we now believe there is reason for optimism in this sector. This is based on our expectation that the U.S. economy will continue to show renewed strength in the months ahead. We anticipate that many companies will boost technology spending in the third and fourth quarters of 2002, which should create a better business environment for the sector as a whole. If profits of technology companies improve, the Fund should experience improved performance. - -------------------------------------------------------------------------------- 4 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT Q: How are you positioning the Fund in light of your outlook? A: We have the Fund virtually fully invested, as we believe it is important to be positioned in advance of any upward move in the markets in order to fully benefit from it. While it seems fair to expect continued volatility in the technology sector, our more broadly diversified approach and increasing emphasis on large-cap stocks should help stabilize the Fund's performance compared to what was the case previously. We are also optimistic about prospects for some of our core large-cap holdings such as Cisco Systems, IBM, Microsoft and Intel. These stocks have suffered through a significant sell-off during the recent bear market, and seem to offer attractive upside potential going forward. After the struggles of the past two years, we are optimistic that the Fund is well positioned to benefit from an improved environment for technology stocks. Louis Giglio Note to shareholders: Effective Feb. 7, 2002, the name of the Fund changed from AXP Innovations Fund to AXP Global Technology Fund. - -------------------------------------------------------------------------------- 5 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT Fund Facts Class A -- 6-month performance (All figures per share) Net asset value (NAV) April 30, 2002 $1.49 Oct. 31, 2001 $1.60 Decrease $0.11 Distributions -- Nov. 1, 2001 - April 30, 2002 From income $ -- From long-term capital gains $ -- Total distributions $ -- Total return* -6.88% Class B -- 6-month performance (All figures per share) Net asset value (NAV) April 30, 2002 $1.33 Oct. 31, 2001 $1.44 Decrease $0.11 Distributions -- Nov. 1, 2001 - April 30, 2002 From income $ -- From long-term capital gains $ -- Total distributions $ -- Total return* -7.64% Class C -- 6-month performance (All figures per share) Net asset value (NAV) April 30, 2002 $1.33 Oct. 31, 2001 $1.44 Decrease $0.11 Distributions -- Nov. 1, 2001 - April 30, 2002 From income $ -- From long-term capital gains $ -- Total distributions $ -- Total return* -7.64% Class Y -- 6-month performance (All figures per share) Net asset value (NAV) April 30, 2002 $1.48 Oct. 31, 2001 $1.60 Decrease $0.12 Distributions -- Nov. 1, 2001 - April 30, 2002 From income $ -- From long-term capital gains $ -- Total distributions $ -- Total return* -7.50% * 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. - -------------------------------------------------------------------------------- 6 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT The 10 Largest Holdings Percent Value (of net assets) (as of April 30, 2002) Intl Business Machines 4.2% $8,325,744 St. Jude Medical 3.4 6,881,467 Applied Materials 3.0 5,909,760 Amgen 2.7 5,425,488 KLA-Tencor 2.6 5,218,845 Electronic Data Systems 2.6 5,181,830 DST Systems 2.6 5,169,332 Electronic Arts 2.6 5,144,436 Maxim Integrated Products 2.5 5,054,700 First Data 2.5 4,936,329 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 28.7% of net assets - -------------------------------------------------------------------------------- 7 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT
Financial Statements Statement of assets and liabilities AXP Global Technology Fund April 30, 2002 (Unaudited) Assets Investment in Portfolio (Note 1) $ 199,953,248 Capital shares receivable 37,617 ------ Total assets 199,990,865 ----------- Liabilities Capital shares payable 6,362 Accrued distribution fee 2,748 Accrued transfer agency fee 3,188 Accrued administrative services fee 327 Other accrued expenses 117,949 ------- Total liabilities 130,574 ------- Net assets applicable to outstanding capital stock $ 199,860,291 ============== Represented by Capital stock -- $.01 par value (Note 1) $ 1,397,820 Additional paid-in capital 638,586,868 Net operating loss (2,098,449) Accumulated net realized gain (loss) (Note 5) (418,445,597) Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (19,580,351) ----------- Total -- representing net assets applicable to outstanding capital stock $ 199,860,291 ============== Net assets applicable to outstanding shares: Class A $ 131,884,948 Class B $ 63,739,211 Class C $ 4,166,740 Class Y $ 69,392 Net asset value per share of outstanding capital stock: Class A shares 88,749,725 $ 1.49 Class B shares 47,857,398 $ 1.33 Class C shares 3,128,104 $ 1.33 Class Y shares 46,797 $ 1.48 ------ --------------
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 8 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT
Statement of operations AXP Global Technology Fund Six months ended April 30, 2002 (Unaudited) Investment income Income: Dividends $ 132,916 Interest 118,263 Less foreign taxes withheld (3,021) ------ Total income 248,158 ------- Expenses (Note 2): Expenses allocated from Portfolio 884,694 Distribution fee Class A 192,220 Class B 366,928 Class C 22,794 Transfer agency fee 622,108 Incremental transfer agency fee Class A 46,269 Class B 38,054 Class C 1,837 Service fee -- Class Y 36 Administrative services fees and expenses 68,947 Compensation of board members 4,700 Printing and postage 63,015 Registration fees 30,037 Audit fees 2,625 Other 2,886 ----- Total expenses 2,347,150 Earnings credits on cash balances (Note 2) (543) ---- Total net expenses 2,346,607 --------- Investment income (loss) -- net (2,098,449) ---------- Realized and unrealized gain (loss) -- net Net realized gain (loss) on: Security transactions (14,326,246) Options contracts written 358,005 ------- Net realized gain (loss) on investments (13,968,241) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 109,169 ------- Net gain (loss) on investments and foreign currencies (13,859,072) ----------- Net increase (decrease) in net assets resulting from operations $(15,957,521) ============
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 9 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT
Statements of changes in net assets AXP Global Technology Fund April 30, 2002 Oct. 31, 2001 Six months ended Year ended (Unaudited) Operations Investment income (loss) -- net $ (2,098,449) $ (4,080,511) Net realized gain (loss) on investments (13,968,241) (392,303,736) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 109,169 (31,205,076) ------- ----------- Net increase (decrease) in net assets resulting from operations (15,957,521) (427,589,323) ----------- ------------ Capital share transactions (Note 3) Proceeds from sales Class A shares (Note 2) 27,729,331 209,393,984 Class B shares 10,536,579 80,620,251 Class C shares 1,086,322 5,921,904 Class Y shares 60,654 215,882 Payments for redemptions Class A shares (31,913,537) (90,799,810) Class B shares (Note 2) (8,720,959) (20,364,403) Class C shares (Note 2) (609,145) (660,768) Class Y shares (41,104) (143,621) ------- -------- Increase (decrease) in net assets from capital share transactions (1,871,859) 184,183,419 ---------- ----------- Total increase (decrease) in net assets (17,829,380) (243,405,904) Net assets at beginning of period 217,689,671 461,095,575 ----------- ----------- Net assets at end of period $199,860,291 $ 217,689,671 ============ =============
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 10 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT Notes to Financial Statements AXP Global Technology Fund (formerly known as AXP Innovations Fund) (Unaudited as to April 30, 2002) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AXP Global Technology Fund (a series of AXP Global Series, Inc.) is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. 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. 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. Investment in World Technologies Portfolio The Fund invests all of its assets in World Technologies Portfolio (the Portfolio), a series of World Trust (the Trust), an open-end investment company that has the same objectives as the Fund. World Technologies Portfolio invests in technology common stocks. The Fund records daily its share of the Portfolio's income, expenses and realized and unrealized gains and losses. The financial statements of the Portfolio are included elsewhere in this report and should be read in conjunction with the Fund's financial statements. The Fund records its investment in the Portfolio at the value that is equal to the Fund's proportionate ownership interest in the Portfolio's net assets. The percentage of the Portfolio owned by the Fund as of April 30, 2002 was 99.99%. Valuation of securities held by the Portfolio is discussed in Note 1 of the Portfolio's "Notes to financial statements" (included elsewhere in this report). Use of estimates Preparing financial statements that conform to accounting principles generally accepted in the United States of America requires management to make estimates (e.g., on assets, liabilities and contingent assets and liabilities) that could differ from actual results. Federal taxes The Fund's policy is to comply with all sections of the Internal Revenue Code that apply to regulated investment companies and to distribute substantially all of its taxable income to the shareholders. No provision for income or excise taxes is thus required. - -------------------------------------------------------------------------------- 11 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of deferred losses on certain futures contracts, the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes, and losses deferred due to "wash sale" transactions. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the Fund. Dividends to shareholders An annual dividend from net investment income, declared and paid at the end of the calendar year, when available, is reinvested in additional shares of the Fund at net asset value or payable in cash. Capital gains, when available, are distributed along with the income dividend. 2. EXPENSES AND SALES CHARGES In addition to the expenses allocated from the Portfolio, the Fund accrues its own expenses as follows: The Fund has an agreement with American Express Financial Corporation (AEFC) to provide administrative services. Under an Administrative Services Agreement, the Fund pays AEFC a fee for administration and accounting services at a percentage of the Fund's average daily net assets in reducing percentages from 0.06% 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. 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. - -------------------------------------------------------------------------------- 12 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT Sales charges received by the Distributor for distributing Fund shares were $403,552 for Class A, $54,713 for Class B and $965 for Class C for the six months ended April 30, 2002. During the six months ended April 30, 2002, the Fund's transfer agency fees were reduced by $543 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 April 30, 2002 Class A Class B Class C Class Y Sold 15,793,775 6,718,717 696,563 35,595 Issued for reinvested distributions -- -- -- -- Redeemed (18,318,881) (5,665,243) (392,624) (24,503) ----------- ---------- -------- ------- Net increase (decrease) (2,525,106) 1,053,474 303,939 11,092 ---------- --------- ------- ------ Year ended Oct. 31, 2001 Class A Class B Class C Class Y Sold 67,577,147 27,705,885 2,451,303 100,791 Issued for reinvested distributions -- -- -- -- Redeemed (36,991,839) (9,957,212) (319,219) (81,895) ----------- ---------- -------- ------- Net increase (decrease) 30,585,308 17,748,673 2,132,084 18,896 ---------- ---------- --------- ------
4. BANK BORROWINGS The Fund has a revolving credit agreement with U.S. Bank, N.A., whereby the Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. The Fund must have asset coverage for borrowings not to exceed the aggregate of 333% of advances equal to or less than five business days plus 367% of advances over five business days. The agreement, which enables the Fund to participate with other American Express mutual funds, permits borrowings up to $200 million, collectively. Interest is charged to each Fund based on its borrowings at a rate equal to the Federal Funds Rate plus 0.30% or the Eurodollar Rate (Reserve Adjusted) plus 0.20%. Borrowings are payable up to 90 days after such loan is executed. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.05% per annum. The Fund had no borrowings outstanding during the six months ended April 30, 2002. 5. CAPITAL LOSS CARRY-OVER For federal income tax purposes the Fund has a capital loss carry-over of $403,598,797 as of Oct. 31, 2001, that will expire in 2008 and 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. - -------------------------------------------------------------------------------- 13 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT
6. 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, 2002(k) 2001 2000 1999 1998 Net asset value, beginning of period $1.60 $ 5.26 $ 11.27 $ 5.41 $5.27 Income from investment operations: Net investment income (loss) (.01) (.02) (.01) (.08) (.07) Net gains (losses) (both realized and unrealized) (.10) (3.64) 7.05 5.94 .21 Total from investment operations (.11) (3.66) 7.04 5.86 .14 Less distributions: Distributions from realized gains -- -- (1.29) -- -- Tax return of capital(h) -- -- (11.76) -- -- Total distributions -- -- (13.05) -- -- Net asset value, end of period $1.49 $ 1.60 $ 5.26 $11.27 $5.41 Ratios/supplemental data: Net assets, end of period (in thousands) $131,885 $146,139 $319,164 $7,435 $3,572 Ratio of expenses to average daily net assets(c) 1.76%(i) 1.63% 1.24%(d) 1.11%(d) 1.33%(d) Ratio of net investment income (loss) to average daily net assets (1.54%)(i) (.99%) (.38%) (1.01%) (1.29%) Portfolio turnover rate (excluding short-term securities) 111% 233% 116% 113% 200% Total return(j) (6.88%) (69.58%) 66.58% 108.32% 2.68% Class B Per share income and capital changes(a) Fiscal period ended Oct. 31, 2002(k) 2001 2000 1999 1998 Net asset value, beginning of period $1.44 $ 4.77 $ 11.02 $ 5.33 $5.23 Income from investment operations: Net investment income (loss) (.02) (.04) (.04) (.14) (.11) Net gains (losses) (both realized and unrealized) (.09) (3.29) 6.84 5.83 .21 Total from investment operations (.11) (3.33) 6.80 5.69 .10 Less distributions: Distributions from realized gains -- -- (1.29) -- -- Tax return of captial(h) -- -- (11.76) -- -- Total distributions -- -- (13.05) -- -- Net asset value, end of period $1.33 $ 1.44 $ 4.77 $11.02 $5.33 Ratios/supplemental data: Net assets, end of period (in thousands) $63,739 $67,425 $138,545 $220 $107 Ratio of expenses to average daily net assets(c) 2.55%(i) 2.42% 2.01%(e) 1.86%(e) 2.08%(e) Ratio of net investment income (loss) to average daily net assets (2.35%)(i) (1.78%) (1.16%) (1.76%) (2.04%) Portfolio turnover rate (excluding short-term securities) 111% 233% 116% 113% 200% Total return(j) (7.64%) (69.81%) 65.25% 106.72% 1.91%
See accompanying notes to financial highlights. - -------------------------------------------------------------------------------- 14 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT
Class C Per share income and capital changes(a) Fiscal period ended Oct. 31, 2002(k) 2001 2000(b) Net asset value, beginning of period $1.44 $ 4.77 $5.05 Income from investment operations: Net investment income (loss) (.02) (.04) (.01) Net gains (losses) (both realized and unrealized) (.09) (3.29) (.27) Total from investment operations (.11) (3.33) (.28) Net asset value, end of period $1.33 $ 1.44 $4.77 Ratios/supplemental data: Net assets, end of period (in thousands) $4,167 $4,069 $3,298 Ratio of expenses to average daily net assets(c) 2.53%(i) 2.42% 2.01%(f),(i) Ratio of net investment income (loss) to average daily net assets (2.36%)(i) (1.84%) (1.17%)(i) Portfolio turnover rate (excluding short-term securities) 111% 233% 116% Total return(j) (7.64%) (69.81%) (5.54%)
Class Y Per share income and capital changes(a) Fiscal period ended Oct. 31, 2002(k) 2001 2000 1999 1998 Net asset value, beginning of period $1.60 $ 5.25 $ 11.27 $ 5.41 $5.27 Income from investment operations: Net investment income (loss) (.01) (.02) -- (.08) (.07) Net gains (losses) (both realized and unrealized) (.11) (3.63) 7.03 5.94 .21 Total from investment operations (.12) (3.65) 7.03 5.86 .14 Less distributions: Distributions from realized gains -- -- (1.29) -- -- Tax return of capital(h) -- -- (11.76) -- -- Total distributions -- -- (13.05) -- -- Net asset value, end of period $1.48 $ 1.60 $ 5.25 $11.27 $5.41 Ratios/supplemental data: Net assets, end of period (in thousands) $69 $57 $88 $225 $108 Ratio of expenses to average daily net assets(c) 1.55%(i) 1.49% .94%(g) 1.11%(g) 1.33%(g) Ratio of net investment income (loss) to average daily net assets (1.44%)(i) (.89%) (.80%) (1.01%) (1.29%) Portfolio turnover rate (excluding short-term securities) 111% 233% 116% 113% 200% Total return(j) (7.50%) (69.52%) 66.27% 108.32% 2.68%
See accompanying notes to financial highlights. - -------------------------------------------------------------------------------- 15 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT Notes to financial highlights (a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Inception date was June 26, 2000. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (d) AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the annual ratios of expenses for Class A would have been 1.45%, 1.22% and 1.63% for the periods ended 2000, 1999 and 1998, respectively. (e) AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the annual ratios of expenses for Class B would have been 2.26%, 1.97% and 2.38% for the periods ended 2000, 1999 and 1998, respectively. (f) AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the annual ratio of expenses for Class C would have been 2.26% for the period ended 2000. (g) AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the annual ratios of expenses for Class Y would have been 1.19%, 1.12% and 1.63% for the periods ended 2000, 1999 and 1998, respectively. (h) A distribution payable to a single corporate shareholder. (i) Adjusted to an annual basis. (j) Total return does not reflect payment of a sales charge. (k) Six months ended April 30, 2002 (Unaudited). Prior to April 19, 2000, the Fund had not engaged in a broad public offering of its shares, or been subject to redemption requests. It had sold shares only to a single investor. One factor impacting the Fund's 2000 and 1999 performance was the high concentration in technology investments, particularly in securities of internet and communication companies. These investments performed well and had a greater effect on the Fund's performance than similar investments made by other funds because of high concentration, the lack of cash flows and the smaller size of the Fund. There is no assurance that the Fund's future investments will result in the same level of performance. - -------------------------------------------------------------------------------- 16 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT
Financial Statements Statement of assets and liabilities World Technologies Portfolio April 30, 2002 (Unaudited) Assets Investments in securities, at value (Note 1)* (identified cost $229,168,610) $209,585,792 Cash in bank on demand deposit 12,303 Dividends and accrued interest receivable 13,634 Receivable for investment securities sold 2,463,122 --------- Total assets 212,074,851 ----------- Liabilities Payable for investment securities purchased 9,322,439 Payable upon return of securities loaned (Note 4) 2,750,000 Accrued investment management services fee 3,925 Other accrued expenses 20,731 ------ Total liabilities 12,097,095 ---------- Net assets $199,977,756 ============ *Including securities on loan, at value (Note 4) $ 2,525,000 ------------
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 17 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT
Statement of operations World Technologies Portfolio Six months ended April 30, 2002 (Unaudited) Investment income Income: Dividends $ 132,993 Interest 118,277 Less foreign taxes withheld (3,022) ------ Total income 248,248 ------- Expenses (Note 2): Investment management services fee 835,257 Compensation of board members 5,192 Custodian fees 25,694 Audit fees 8,000 Other 12,084 ------ Total expenses 886,227 Earnings credits on cash balances (Note 2) (1,427) ------ Total net expenses 884,800 ------- Investment income (loss) -- net (636,552) -------- Realized and unrealized gain (loss) -- net Net realized gain (loss) on: Security transactions (Note 3) (14,327,925) Options contracts written (Note 5) 358,005 ------- Net realized gain (loss) on investments (13,969,920) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 109,137 ------- Net gain (loss) on investments and foreign currencies (13,860,783) ----------- Net increase (decrease) in net assets resulting from operations $(14,497,335) ============
Statements of changes in net assets World Technologies Portfolio April 30, 2002 Oct. 31, 2001 Six months ended Year ended (Unaudited) Operations Investment income (loss) -- net $ (636,552) $ (356,584) Net realized gain (loss) on investments (13,969,920) (392,358,181) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 109,137 (31,209,649) ------- ----------- Net increase (decrease) in net assets resulting from operations (14,497,335) (423,924,414) ----------- ------------ Proceeds from contributions 12,057,657 208,160,212 Fair value of withdrawals (15,439,120) (27,593,768) ----------- ----------- Net contributions (withdrawals) from partners (3,381,463) 180,566,444 ---------- ----------- Total increase (decrease) in net assets (17,878,798) (243,357,970) Net assets at beginning of period 217,856,554 461,214,524 ----------- ----------- Net assets at end of period $199,977,756 $ 217,856,554 ============ =============
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 18 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT Notes to Financial Statements World Technologies Portfolio (Unaudited as to April 30, 2002) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES World Technologies Portfolio (the Portfolio) is a series of World Trust (the Trust) and is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. The Portfolio invests in equity securities of companies within the information technology industry. The Declaration of Trust permits the Trustees to issue non-transferable interests in the Portfolio. The Portfolio's significant accounting policies are summarized below: Use of estimates Preparing financial statements that conform to accounting principles generally accepted in the United States of America requires management to make estimates (e.g., on assets, liabilities and contingent assets and liabilities) that could differ from actual results. Valuation of securities All securities are valued at the close of each business day. Securities traded on national securities exchanges or included in national market systems are valued at the last quoted sales price. Debt securities are generally traded in the over-the-counter market and are valued at a price that reflects fair value as quoted by dealers in these securities or by an independent pricing service. Foreign securities are valued based on quotations from the principal market in which 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 Portfolio, 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. 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 - -------------------------------------------------------------------------------- 19 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT written call option, the purchase cost for a written put option or the cost of a security for a purchased put or call option is adjusted by the amount of premium received or paid. Futures transactions To gain exposure to or protect itself from market changes, the Portfolio may buy and sell financial futures contracts traded on any U.S. or foreign exchange. The Portfolio also may buy and write put and call options on these futures contracts. Risks of entering into futures contracts and related options include the possibility of an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. Upon entering into a futures contract, the Portfolio is required to deposit either cash or securities in an amount (initial margin) equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Portfolio each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Portfolio recognizes a realized gain or loss when the contract is closed or expires. Foreign currency translations and foreign currency contracts Securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars. Foreign currency amounts related to the purchase or sale of securities and income and expenses are translated at the exchange rate on the transaction date. The effect of changes in foreign exchange rates on realized and unrealized security gains or losses is reflected as a component of such gains or losses. In the statement of operations, net realized gains or losses from foreign currency transactions, if any, may arise from sales of foreign currency, closed forward contracts, exchange gains or losses realized between the trade date and settlement date on securities transactions, and other translation gains or losses on dividends, interest income and foreign withholding taxes. The Portfolio may enter into forward foreign currency exchange contracts for operational purposes and to protect against adverse exchange rate fluctuation. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Portfolio and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates from an independent pricing service. The Portfolio is subject to the credit risk that the other party will not complete its contract obligations. Illiquid securities As of April 30, 2002, investments in securities included issues that were illiquid which the Portfolio currently limits to 10% of net assets, at market value, at the time of purchase. The aggregate value of such securities as of April 30, 2002 was $4,829,194 representing 2.41% of net assets. These securities are valued at fair value according to methods selected in good faith by the board. According to board guidelines, certain unregistered securities are determined to be liquid and are not included within the 10% limitation specified above. Securities purchased on a forward-commitment basis Delivery and payment for securities that have been purchased by the Portfolio on a forward-commitment basis, including when-issued securities and future capital commitments for limited partnership interests, can take place one month or more after the transaction date - -------------------------------------------------------------------------------- 20 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT During this period, when-issued securities are subject to market fluctuations, and they may affect the Portfolio's net assets the same as owned securities. The Portfolio designates cash or liquid securities at least equal to the amount of its forward-commitments. As of April 30, 2002, the Portfolio has entered into outstanding future capital commitments for limited partnership interests of $1,250,000. Federal taxes For federal income tax purposes the Portfolio qualifies as a partnership and each investor in the Portfolio is treated as the owner of its proportionate share of the net assets, income, expenses and realized and unrealized gains and losses of the Portfolio. As a "pass-through" entity, the Portfolio therefore does not pay any income dividends or capital gain distributions. Other Security transactions are accounted for on the date securities are purchased or sold. Dividend income is recognized on the ex-dividend date and interest income, including level-yield amortization of premium and discount, is accrued daily. 2. FEES AND EXPENSES The Trust, on behalf of the Portfolio, has an Investment Management Services Agreement with AEFC to manage its portfolio. Under this agreement, AEFC determines which securities will be purchased, held or sold. The management fee is a percentage of the Portfolio's average daily net assets in reducing percentages from 0.72% to 0.595% annually. Under the agreement, the Trust also pays taxes, brokerage commissions and nonadvisory expenses, which include custodian fees, audit and certain legal fees, fidelity bond premiums, registration fees for units, office expenses, consultants' fees, compensation of trustees, corporate filing fees, expenses incurred in connection with lending securities of the Portfolio and any other expenses properly payable by the Trust or Portfolio and approved by the board. During the six months ended April 30, 2002, the Portfolio's custodian fees were reduced by $1,427 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 $245,414,893 and $246,576,864, respectively, for the six months ended April 30, 2002. For the same period, the portfolio turnover rate was 111%. Realized gains and losses are determined on an identified cost basis. Brokerage commissions paid to brokers affiliated with AEFC were $52,395 for the six months ended April 30, 2002. 4. LENDING OF PORTFOLIO SECURITIES As of April 30, 2002, securities valued at $2,525,000 were on loan to brokers. For collateral, the Portfolio received $2,750,000 in cash. Income from securities lending amounted to $17,052 for the six months ended April 30, 2002. The risks to the Portfolio of securities lending are that the borrower may not provide additional collateral when required or return the securities when due. - -------------------------------------------------------------------------------- 21 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT 5. OPTIONS CONTRACTS WRITTEN Contracts and premiums associated with options contracts written are as follows: Six months ended April 30, 2002 Puts Calls Contracts Premiums Contracts Premiums Balance Oct. 31, 2001 250 $ 50,498 1,665 $ 463,558 Opened -- -- 1,300 328,303 Closed (250) (50,498) (1,790) (403,668) Exercised -- -- (875) (308,479) Expired -- -- (300) (79,714) ----- ----- ---- ------- Balance April 30, 2002 -- $ -- -- $ -- ----- -------- ----- --------- See "Summary of significant accounting policies." - -------------------------------------------------------------------------------- 22 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT Investments in Securities World Technologies Portfolio April 30, 2002 (Unaudited) (Percentages represent value of investments compared to net assets) Common stocks (94.4%) Issuer Shares Value(a) Aerospace & defense (3.8%) Lockheed Martin 60,900 $3,830,610 Northrop Grumman 13,600 1,640,976 Raytheon 50,700 2,144,610 Total 7,616,196 Airlines (0.5%) ExpressJet Holdings 68,150(b) 977,953 Banks and savings & loans (0.8%) Alliance Data Systems 65,000(b) 1,602,250 Chemicals (0.4%) Millipore 20,000 799,000 Communications equipment & services (10.1%) ATI Technologies 132,100(b,c) 1,347,420 Broadcom Cl A 34,500(b) 1,190,250 Finisar 249,500(b) 1,594,305 Microtune 166,500(b) 1,856,475 Nokia ADR Cl A 51,000(c) 829,260 Powerwave Technologies 145,800(b) 1,740,852 QUALCOMM 102,500(b) 3,091,400 RF Micro Devices 74,700(b) 1,299,780 Semtech 80,000(b) 2,558,400 Silicon Laboratories 34,300(b) 1,013,908 Teradyne 114,400(b) 3,769,480 Total 20,291,530 Computer software & services (19.1%) Adaptec 91,500(b) 1,345,050 Adobe Systems 75,070 2,999,797 Anteon Intl 11,500(b) 261,625 Autodesk 125,000 2,298,750 Automatic Data Processing 51,500 2,618,260 BMC Software 75,500(b) 1,091,730 Brocade Communications Systems 38,000(b) 972,420 Cadence Design Systems 51,000(b) 1,044,480 Check Point Software Technologies 39,900(b,c) 724,185 Electronic Arts 87,120(b) 5,144,436 Intuit 31,000(b) 1,214,580 Lawson Software 144,000(b) 1,225,440 Lexmark Intl Cl A 20,500(b) 1,225,490 Microsoft 77,800(b) 4,065,828 Network Associates 106,100(b) 1,883,275 Oracle 188,600(b) 1,893,544 PeopleSoft 70,400(b) 1,631,168 SunGard Data Systems 105,600(b) 3,142,656 VERITAS Software 83,000(b) 2,352,220 Yahoo! 73,000(b) 1,077,480 Total 38,212,414 Computers & office equipment (24.9%) Apple Computer 48,500(b) 1,177,095 Cisco Systems 118,500(b) 1,736,025 Compaq Computer 156,500 1,588,475 Dell Computer 78,350(b) 2,063,739 DST Systems 104,600(b) 5,169,332 Electronic Data Systems 95,500 5,181,830 Emulex 96,500(b) 2,797,535 First Data 62,100 4,936,329 Intl Business Machines 99,400 8,325,744 Manugistics Group 127,700(b) 2,012,552 NCR 52,000(b) 2,020,720 Network Appliance 103,000(b) 1,797,350 NVIDIA 36,000(b) 1,253,160 SAP ADR 41,200(c) 1,343,120 Siebel Systems 84,500(b) 2,044,055 State Street 25,100 1,282,861 Symantec 59,000(b) 2,089,190 Synopsys 65,600(b) 2,959,216 Total 49,778,328 Electronics (21.1%) Altera 50,800(b) 1,044,448 Applied Materials 243,000(b) 5,909,760 Integrated Circuit Systems 113,200(b) 2,252,680 Intel 71,300 2,039,893 KLA-Tencor 88,500(b) 5,218,845 Lam Research 123,500(b) 3,169,010 LTX 60,000(b) 1,272,600 Maxim Integrated Products 101,500(b) 5,054,700 Micron Technology 78,900(b) 1,869,930 Novellus Systems 84,000(b) 3,981,600 Texas Instruments 116,500 3,603,345 United Microelectronics ADR 266,000(b,c) 2,686,600 Xilinx 111,200(b) 4,198,912 Total 42,302,323 See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 23 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT Common stocks (continued) Issuer Shares Value(a) Health care (11.6%) Amgen 102,600(b) $5,425,488 Biogen 38,300(b) 1,664,901 Biomet 74,500 2,103,135 Chiron 26,000(b) 1,052,220 Genentech 38,180(b) 1,355,390 Genzyme-General Division 46,000(b) 1,883,240 IDEC Pharmaceuticals 22,570(b) 1,240,222 Medtronic 38,500 1,720,565 St. Jude Medical 82,700(b) 6,881,467 Total 23,326,628 Leisure time & entertainment (0.3%) Viacom Cl B 11,200(b) 527,520 Media (1.1%) eBay 40,700(b) 2,161,170 Retail (0.6%) Best Buy 16,100(b) 1,197,035 Total common stocks (Cost: $200,446,611) $188,792,347 Preferred stocks & other (2.3%)(b) Issuer Shares Value(a) Adaytum Software Series E 103,719(f) $406,578 Warrants 2,006(f,g) -- Agiliti Cv Series C 550,000(f) 467,500 Avasta Series B 300,820(f) 403,099 Avasta E-Services Warrants 150,411(f,g) -- Bluestream Ventures LP 2,500,000(e,f) 2,196,481 Covia Technologies Series E 232,502(f,g) -- Equinix Cv 26,525(d) 15,119 Evoice Cv Series D 981,091(f) 550,000 Gorp.com Series B 97,087(f,g) -- Marketsoft Cv 225,410(f) 112,705 Paxonet Communications 106,383(f) 150,000 Portera Series G 425,374(f) 221,194 Retail Exchange.com 314,286(f,g) -- Warrants 111,789(f,g) -- Vcommerce Cv Series C 64,378(f) 77,897 Total preferred stocks & other (Cost: $11,781,633) $4,600,573 Options purchased (--%) Issuer Contracts Exercise Expiration Value(a) price date Calls Microsoft 1,000 $60.00 May 2002 $17,500 Tyco Intl 1,500 47.50 July 2002 3,750 Total options purchased (Cost: $769,500) $21,250 Short-term securities (8.1%) Issuer Annualized Amount Value(a) yield on date payable at of purchase maturity U.S. government agencies (7.5%) Federal Home Loan Bank Disc Nt 05-15-02 1.77% $2,400,000 $2,398,317 Federal Home Loan Mtge Corp Disc Nts 05-07-02 1.78 800,000 799,723 05-17-02 1.68 1,500,000 1,498,810 06-04-02 1.73 2,500,000 2,495,796 Federal Natl Mtge Assn Disc Nts 05-22-02 1.78 1,300,000 1,298,678 06-03-02 1.77 500,000 499,159 06-05-02 1.81 1,300,000 1,297,824 06-19-02 1.74 2,300,000 2,294,927 08-08-02 1.85 2,400,000 2,388,451 Total 14,971,685 Commercial paper (0.6%) UBS Finance (Delaware) 05-01-02 1.90 1,200,000 1,199,937 Total short-term securities (Cost: $16,170,866) $16,171,622 Total investments in securities (Cost: $229,168,610)(h) $209,585,792 See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 24 AXP GLOBAL TECHNOLOGY FUND -- 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. As of April 30, 2002, the value of foreign securities represented 3.5% of net assets. (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) The share amount for Limited Liability Companies (LLC) or Limited Partnerships (LP) represents capital contributions. At April 30, 2002, the amount of capital committed to the LLC or LP for future investment was $1,250,000. (f) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). Information concerning such security holdings at April 30, 2002, is as follows: Security Acquisition Cost dates Adaytum Software Series E 09-15-00 thru 05-10-01 $ 650,318 Warrants 05-10-01 -- Agiliti Cv Series C 11-14-00 1,650,000 Avasta Series B 11-09-00 1,649,847 Avasta E-Services Warrants 11-08-00 -- Bluestream Ventures LP 06-28-00 thru 06-28-01 2,500,000 Covia Technologies Series E 08-16-00 582,650 Evoice Cv Series D 11-27-00 1,100,000 Gorp.com Series B 02-21-00 499,998 Marketsoft Cv 12-11-00 1,100,001 Paxonet Communications 04-04-01 thru 04-23-01 300,000 Portera Series G 11-10-00 1,425,003 Retail Exchange.com 11-29-00 1,100,001 Warrants 11-29-00 1 Vcommerce Cv Series C 07-21-00 300,001 (g) Negligible market value. (h) At April 30, 2002, the cost of securities for federal income tax purposes was approximately $229,169,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $ 9,139,000 Unrealized depreciation (28,722,000) ----------- Net unrealized depreciation $(19,583,000) ------------ - -------------------------------------------------------------------------------- 25 AXP GLOBAL TECHNOLOGY FUND -- SEMIANNUAL REPORT AXP Global Technology Fund 70100 AXP Financial Center Minneapolis, MN 55474 americanexpress.com Ticker Symbol Class A: AXIAX Class B: INVBX Class C: AXICX Class Y: N/A This report must be accompanied or preceded by the Fund's current prospectus. Distributed by American Express Financial Advisors Inc. Member NASD. American Express Company is separate from American Express Financial Advisors Inc. and is not a broker-dealer. S-6396 D (6/02) -----END PRIVACY-ENHANCED MESSAGE-----