Prospectus Supplement* Dec. 27, 1999

AXP Blue Chip  Advantage Fund S-6025 M (3/99)
AXP Bond Fund S-6495 N (10/99)
AXP California  Tax-Exempt  Fund S-6328 N (8/99)
AXP Discovery  Fund S-6457 N (9/99)
AXP Diversified  Equity Income Fund S-6475 N (11/99)
AXP Emerging  Markets Fund S-6354 D (12/98)
AXP Equity  Select  Fund S-6426 N (1/99)
AXP Equity  Value Fund S-6382 G (5/99)
AXP Extra  Income Fund  S-6370 N (7/99)
AXP Federal  Income Fund S-6042 P (7/99)
AXP Global  Balanced  Fund S-6352 C (12/98)
AXP Global Bond Fund S-6309 M (12/98)
AXP Global  Growth Fund S-6334 M (12/98)
AXP Growth Fund S-6455 P (9/99)
AXP High Yield  Tax-Exempt Fund S-6430 N (1/99)
AXP Insured  Tax-Exempt Fund  S-6327 N (8/99)
AXP Intermediate  Tax-Exempt  Fund  S-6355 D (1/99)
AXP International Fund S-6140 M (12/98)
AXP Managed Allocation Fund S-6141 P (11/99)
AXP Massachusetts  Tax-Exempt Fund S-6328 N (8/99)
AXP Michigan  Tax-Exempt Fund S-6328 N (8/99)
AXP Minnesota  Tax-Exempt Fund S-6328 N (8/99)
AXP Mutual S-6326 P (11/99)
AXP New Dimensions  Fund S-6440 N (9/99)
AXP New York  Tax-Exempt Fund S-6328 N (8/99)
AXP Ohio  Tax-Exempt  Fund S-6328 N (8/99)
AXP Precious  Metals Fund  S-6142  N (5/99)
AXP Progressive  Fund  S-6449 N  (11/99)
AXP Research Opportunities  Fund S-6356 E (9/99)
AXP Selective Fund S-6376 P (7/99)
AXP Small Cap Advantage  Fund S-6427 A (4/99)
AXP Small Company Index Fund S-6357 E (3/99)
AXP Stock Fund S-6351 P (11/99)
AXP Strategy Aggressive Fund S-6381 G (5/99)
AXP Tax-Exempt Bond Fund S-6310 N (1/99)
AXP Utilities Income Fund S-6341 N (8/99)

The following  information has been revised under the section titled "Waivers of
the sales charge for Class A shares":

o    Purchases  made within 90 days of a sale of shares (up to the amount sold):

     -    of American  Express  mutual  funds in a qualified  plan  subject to a
          deferred sales charge

     -    in a qualified  plan or account where  American  Express Trust Company
          has a recordkeeping,  trustee,  investment  management,  or investment
          servicing relationship.

The following  information  has been revised under the section  titled  "Selling
Shares":

You can  change  your mind  after  requesting  a sale and use all or part of the
proceeds to purchase new shares in the same account from which you sold.  If you
reinvest  in Class A,  you will  purchase  the new  shares  at NAV  rather  than
offering  price on the date of a new  purchase.  If you reinvest in Class B, any
CDSC you paid on the amount you are reinvesting also will be reinvested. To take
advantage  of this option,  send a request  within 90 days of the date your sale
request was  received  and include your  account  number.This  privilege  may be
limited or withdrawn at any time and may have tax consequences.

The  following   information   has  been  revised   under  the  section   titled
"Exchanging/Selling Shares":

You may make up to three exchanges (1 1/2 round trips) within any 30-day period.
These limits do not apply to scheduled  exchange  programs and certain  employee
benefit plans. Exceptions may be allowed with the pre-approval of the Fund.


S-6553 A(12/99)
*Valid until next prospectus update