UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
AMENDMENT TO CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-1629
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AXP DIMENSIONS SERIES, INC.
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(Exact name of registrant as specified in charter)
50606 AXP Financial Center, Minneapolis, Minnesota 55474
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(Address of principal executive offices) (Zip code)
Leslie L. Ogg - 901 S. Marquette Avenue, Suite 2810, Minneapolis, MN 55402-3268
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(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 330-9283
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Date of fiscal year end: 7/31
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Date of reporting period: 7/31
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AXP(R)
Growth
Dimensions
Fund
Annual Report
for the Period Ended
July 31, 2003
AXP Growth Dimensions Fund seeks to provide shareholders with long-term capital
growth.
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(logo) (logo)
American AMERICAN
Express(R) EXPRESS
Funds (R)
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Table of Contents
Fund Snapshot 3
Questions & Answers
with Portfolio Management 4
The Fund's Long-term Performance 8
Investments in Securities 9
Financial Statements 12
Notes to Financial Statements 15
Independent Auditors' Report 26
Board Members and Officers 27
(logo) Dalbar
American Express(R) Funds' reports to shareholders have been awarded the
Communications Seal from Dalbar Inc., an independent financial services research
firm. The Seal recognizes communications demonstrating a level of excellence in
the industry.
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2 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Fund Snapshot
AS OF JULY 31, 2003
PORTFOLIO MANAGER
Portfolio manager Gordon Fines
Since 6/00
Years in industry 36
FUND OBJECTIVE
For investors seeking long-term capital growth.
Inception dates
A: 6/26/00 B: 6/26/00 C: 6/26/00 Y: 6/26/00
Ticker symbols
A: AXDAX B: ABGDX C: AXGDX Y: --
Total net assets $202.6 million
Number of holdings 85
STYLE MATRIX
Shading within the style matrix indicates areas in which the Fund generally
invests.
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
SECTOR COMPOSITION
Percentage of portfolio assets
(pie chart)
Consumer discretionary 24.2%
Technology 17.0%
Health care 16.4%
Financials 14.6%
Industrials 11.9%
Energy 7.2%
Consumer staples 4.3%
Utilities 2.8%
Short-term securities 0.6%
Materials 0.5%
Telecommunications 0.5%
TOP TEN HOLDINGS
Percentage of portfolio assets
Bank of America (Banks and savings & loans) 4.1%
Microsoft (Computer software & services) 3.9
Wal-Mart Stores (Retail -- general) 3.6
Amgen (Health care products) 3.5
Citigroup (Finance companies) 3.3
Viacom Cl B (Leisure time & entertainment) 3.3
3M (Multi-industry) 3.0
Anthem (Health care services) 2.6
ConocoPhillips (Energy) 2.6
Medtronic (Health care products) 2.6
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
Stock prices of established companies that pay dividends may be less volatile
than the stock market as a whole. Stocks of medium-sized companies may be
subject to more abrupt or erratic price movements than stocks of larger
companies.
Fund holdings are subject to change.
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3 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Questions & Answers
WITH PORTFOLIO MANAGEMENT
Q: How did AXP Growth Dimensions Fund perform for fiscal year 2003?
A: AXP Growth Dimensions Fund's Class A shares, excluding sales charge, gained
7.88% for the 12 months ended July 31, 2003. The Fund underperformed the
8.97% return of the Lipper Large-Cap Growth Funds Index, representing the
Fund's peer group. The S&P 500 Index increased 10.64% over the same time
frame.
Q: What factors most significantly affected Fund performance during the annual
period?
A: The portfolio's conservative stance, including an emphasis on consumer
cyclical companies and other sectors, helped performance during most of
the annual period. However, when the equity market rose sharply in the
autumn and again in the second calendar quarter, the Fund's relatively
conservative stocks did not rally as much as more aggressive, less
well-capitalized companies. The Fund was also underweighted in the
strong performing information technology sector relative to the S&P 500
Index. Thus, while producing positive returns, the Fund underperformed
its peer group and its benchmark index for the fiscal year.
Among the Fund's specific stock disappointments were Microsoft and Viacom.
Microsoft was a top performer during the first half of the fiscal year, but
experienced a slowdown in growth during the second half along with much of
the personal computer industry. Entertainment company Viacom lost ground
primarily due to a slowdown in advertising spending. However, we continued
to hold both of these companies in the Fund's portfolio, as each is clearly
a leader in its respective industry, and we are optimistic about their
prospects going forward. Northrop Grumman in the defense industry was
PERFORMANCE COMPARISON
For the period ended July 31, 2003
12% (bar 2)
+10.64%
10% (bar 3)
+8.97%
8% (bar 1)
+7.88%
6%
4%
2%
0%
(bar 1) AXP Growth Dimensions Fund Class A (excluding sales charge)
(bar 2) S&P 500 Index (unmanaged)
(bar 3) Lipper Large-Cap Growth Funds Index
(see "The Fund's Long-term Performance" for Index descriptions)
Past performance is no guarantee of future results. The 5.75% sales charge
applicable to Class A shares of the Fund is not reflected in the bar chart; if
reflected, returns would be lower than those shown. The performance of Class B,
Class C and Class Y may vary from that shown above because of differences in
expenses.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes.
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4 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Questions & Answers
(begin callout qoute)> The Fund has a low turnover rate compared to many of
its peers, as we are focused on finding growth-oriented companies to buy and
hold for the long term. (end callout qoute)
another disappointment, as the high level of government spending
anticipated by many was not fully realized. We reduced the Fund's holding
in this stock.
We did have some success, however. Fund performance was boosted by
effective stock selection. For example, WalMart, Citigroup and Bank of
America were strong performers for the year overall. Johnson & Johnson and
3M held up well during the first half; Amgen and Target were among the
Fund's best performers during the second half. JetBlue Airways; pasta maker
American Italian Pasta; auto insurance company Progressive, Brinker
International (parent of Chili's restaurants), and some smaller healthcare
firms like GenProbe offered compelling growth stories and benefited the
Fund's yearly results.
AVERAGE ANNUAL TOTAL RETURNS
as of July 31, 2003
Class A Class B Class C Class Y
(Inception dates) (6/26/00) (6/26/00) (6/26/00) (6/26/00)
NAV(1) POP(2) NAV(1) After CDSC(3) NAV(1) After CDSC(4) NAV(5) POP(5)
1 year +7.88% +1.67% +7.00% +3.00% +7.00% +7.00% +8.37% +8.37%
Since inception -23.00% -24.46% -23.58% -24.33% -23.58% -23.58% -22.89% -22.89%
(1) Excluding sales charge.
(2) Returns at public offering price (POP) reflect a sales charge of 5.75%.
(3) Returns at maximum contingent deferred sales charge (CDSC). CDSC applies as
follows: first year 5%; second and third year 4%; fourth year 3%; fifth
year 2%; sixth year 1%; no sales charge thereafter.
(4) 1% CDSC applies to redemptions made within the first year of purchase.
(5) Sales charge is not applicable to these shares. Shares available to
institutional investors only.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that your shares, when redeemed, may be worth
more or less than the original cost. The performance shown for each class of
shares will vary due to differences in sales charges and fees. Short term
performance may be higher or lower than the figures shown. Visit
americanexpress.com/funds for current information.
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5 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Questions & Answers
The equity market was exceptionally volatile during fiscal year 2003. In
the summer of 2002, stock markets reached four-year lows, depressing stocks
of every style and capitalization, including large-cap and mid-cap growth
stocks. October and November marked a vigorous market rally, led by the
most beaten-up sectors of the past three years, including
telecommunications and technology. After starting the new year on a
positive note, the equity market then began a sustained decline, as fears
surrounding the likely war with Iraq heightened and economic activity
subsequently slowed. By the beginning of March, a "war relief" rally took
place, as investors grew optimistic that the war would not last very long.
The second calendar quarter marked the largest single quarterly gain for
the S&P 500 Index in nearly five years. A significant number of corporate
earnings announcements met or exceeded expectations, and earnings estimates
were revised up going forward. Furthermore, the low interest rate
environment and declining yields on bond investments drew more attention to
equities, as investors sought higher returns. The case for owning equities
was additionally strengthened by a $350 billion U.S. tax cut, an
accommodative Federal Reserve Board and a declining dollar that benefited
U.S. companies distributing products and services overseas. Finally, while
the transition to democracy in Iraq is by no means at an end, the
conclusion of active military operations provided the equity markets with a
degree of geopolitical stability not seen for some time. July was a
relatively neutral month for the marketplace, with the S&P 500 Index rising
a modest 1.76%.
Q: What changes did you make to the portfolio, and how is it currently
positioned?
A: AXP Growth Dimensions Fund has a low turnover rate compared to many of
its peers, as we are focused on finding growth-oriented companies to
buy and hold for the long term. Indeed, for most of the fiscal year,
the bulk of the Fund's assets remained relatively constant. Still, we
did make some opportunistic changes. Besides adding some healthy
mid-cap stocks with high growth potential to the Fund, we increased our
positions in the energy sector in anticipation of improving stock
prices. We reduced the Fund's technology weighting, as we believed that
this sector had yet to overcome the twin hurdles of low demand and
overcapacity. The technology stocks that the Fund continued to hold
were software-related rather than service-driven. Within the healthcare
sector, we shifted away from hospitals and distribution companies
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6 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Questions & Answers
toward a focus on biotechnology and medical device companies. For example,
we eliminated the Fund's position in HCA, the nation's largest hospital
chain, and bought Amgen, a leading biotechnology company in the fight
against cancer. We also added Genzyme, Boston Scientific, St. Jude Medical
and Alcon to the portfolio. Genzyme is a biotechnology company focused on
rare genetic disorders, renal disease and osteoarthritis. The latter three
are each medical device manufacturers.
In June, we repositioned the Fund a bit, shifting the portfolio's stance to
take advantage of the less risk-averse market environment. We reduced the
Fund's weighting in the more defensive consumer staples sector, by cutting
back on such positions as Procter & Gamble. We then redeployed those assets
into industrial-related and business services companies that we believe may
benefit from the eventual upturn in the economy. One such addition to the
portfolio was Caterpillar, the manufacturer of construction, agricultural,
mining and forestry machinery.
Q: How do you intend to manage the Fund in the coming months?
A: We are optimistic about the direction of the equity market going forward. A
great deal of fiscal and monetary stimulus is currently in the pipeline,
including tax cuts and dividend and capital gains tax reform. Such stimulus
should help boost economic growth in the months ahead. What is missing so
far is job growth, which is key to improving consumer confidence and
consumer spending. Also, capital spending remains flat.
Our focus will remain on seeking long-term growth of capital. We will
continue to broadly diversify the Fund's holdings, looking for
opportunities that display good fundamentals and a better-than-average
potential for growth. We are particularly looking at opportunities in the
casual dining segment of the restaurant industry, as we believe current
supply/demand dynamics put this area in an early cycle of momentum.
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7 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
The Fund's Long-term Performance
This chart illustrates the total value of an assumed $10,000 investment in AXP
Growth Dimensions Fund Class A shares (from 7/1/00 to 7/31/03) as compared to
the performance of two widely cited performance indices, the Standard & Poor's
500 Index (S&P 500 Index) and the Lipper Large-Cap Growth Funds Index. In
comparing the Fund's Class A shares to these indices, 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
indices. Returns for the Fund include the reinvestment of any distribution paid
during each period.
Past performance is no guarantee of future results. Your investment and return
values fluctuate so that your shares, when redeemed, may be worth more or less
than the original cost. Returns do not reflect taxes payable on distributions
and redemptions. Also see "Past Performance" in the Fund's current prospectus.
(line chart)
VALUE OF A HYPOTHETICAL $10,000 INVESTMENT
IN AXP GROWTH DIMENSIONS FUND
AXP Growth Dimensions Fund Class A $ 9,425 $9,329 $5,268 $3,889 $4,195
S&P 500 Index(1) $10,000 $9,844 $8,433 $6,440 $7,125
Lipper Large-Cap Growth Funds Index(2) $10,000 $9,797 $6,427 $4,629 $5,044
7/01/00 7/00 7/01 7/02 7/03
(1) S&P 500 Index, an unmanaged index of common stocks, is frequently used as a
general measure of market performance. The index reflects reinvestment of
all distributions and changes in market prices, but excludes brokerage
commissions or other fees. However, the S&P 500 companies may be generally
larger than those in which the Fund invests.
(2) The Lipper Large-Cap Growth Funds Index, 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.
Average Annual Total Returns
Class A with Sales Charge as of July 31, 2003
1 year +1.67%
Since inception (6/26/00) -24.46%
Results for other share classes can be found on page 5.
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8 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Investments in Securities
AXP Growth Dimensions Fund
July 31, 2003
(Percentages represent value of investments compared to net assets)
Common stocks (98.4%)
Issuer Shares Value(a)
Aerospace & defense (0.3%)
Northrop Grumman 5,600 $516,544
Airlines (2.1%)
JetBlue Airways 31,900(b) 1,453,364
Ryanair Holdings ADR 12,000(b,c) 514,680
Southwest Airlines 140,000 2,297,400
Total 4,265,444
Banks and savings & loans (6.3%)
Bank of America 100,000 8,257,000
Wells Fargo 90,000 4,547,700
Total 12,804,700
Beverages & tobacco (3.6%)
Altria Group 100,000 4,001,000
PepsiCo 70,000 3,224,900
Total 7,225,900
Broker dealers (0.5%)
Lehman Brothers Holdings 17,400 1,100,898
Cellular telecommunications (0.5%)
Vodafone Group ADR 50,600(c) 960,388
Chemicals (0.5%)
Engelhard 42,000 1,103,760
Computer hardware (2.5%)
Dell 120,000(b) 4,041,600
Hewlett-Packard 46,100 975,937
Total 5,017,537
Computer software & services (9.5%)
Autodesk 65,000 972,400
Electronic Arts 6,500(b) 546,000
Intl Business Machines 36,200 2,941,250
Microsoft 300,000 7,920,000
Oracle 120,000(b) 1,440,000
Paychex 25,000 813,250
Symantec 45,000(b) 2,104,650
Synopsys 8,000(b) 500,080
VERITAS Software 66,000(b) 2,032,800
Total 19,270,430
Electronics (4.8%)
Applied Materials 100,000(b) 1,950,000
Intel 150,000 3,742,500
Maxim Integrated Products 30,000 1,172,400
Teradyne 60,000(b) 987,000
Texas Instruments 100,000 1,887,000
Total 9,738,900
Energy (5.3%)
Burlington Resources 10,000 461,700
ConocoPhillips 100,000 5,234,000
Devon Energy 62,100 2,941,677
EnCana 60,000(c) 2,072,400
Total 10,709,777
Energy equipment & services (1.8%)
Nabors Inds 13,400(b,c) 479,720
Schlumberger 50,000 2,253,500
Weatherford Intl 25,000(b) 906,750
Total 3,639,970
Finance companies (3.3%)
Citigroup 150,000 6,720,000
Financial services (0.6%)
SLM 30,000 1,243,800
Food (0.7%)
American Italian Pasta Cl A 34,300(b) 1,375,087
Health care products (13.7%)
Alcon 25,000(c) 1,274,250
Amgen 100,000(b) 6,958,000
Barr Laboratories 8,000(b) 540,400
Boston Scientific 32,300(b) 2,042,329
Gen-Probe 22,000(b) 1,210,000
Genzyme-General Division 24,000(b) 1,210,560
Johnson & Johnson 60,000 3,107,400
Medtronic 100,000 5,150,000
Pfizer 150,000 5,004,000
St. Jude Medical 21,400(b) 1,148,110
Total 27,645,049
See accompanying notes to investments in securities.
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9 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Common stocks (continued)
Issuer Shares Value(a)
Health care services (2.6%)
Anthem 70,000(b) $5,285,700
Industrial transportation (0.5%)
GATX 45,000 986,400
Insurance (3.7%)
American Intl Group 17,300 1,110,660
Axis Capital Holdings 80,000(b,c) 2,094,400
Marsh & McLennan 20,000 992,400
Progressive 50,000 3,297,000
Total 7,494,460
Leisure time & entertainment (4.8%)
Carnival 61,000 2,092,910
Harley-Davidson 25,000 1,172,000
Viacom Cl B 150,000(b) 6,528,000
Total 9,792,910
Lodging & gaming (1.0%)
Intl Game Technology 80,800 2,056,360
Machinery (2.0%)
Caterpillar 60,000 4,048,200
Media (7.5%)
Amazon.com 60,000(b) 2,503,200
Cendant 125,000(b) 2,243,750
Citadel Broadcasting 12,500(b) 237,500
eBay 20,000(b) 2,144,000
Gannett 14,000 1,075,620
InterActiveCorp 108,700(b) 4,399,089
Liberty Media Cl A 45,000(b) 499,050
Scripps (EW) Cl A 12,200 1,012,112
Univision Communications Cl A 35,100(b) 1,095,120
Total 15,209,441
Multi-industry (6.9%)
3M 43,100 6,042,620
Danaher 15,500 1,119,100
General Electric 160,000 4,550,400
Harman Intl Inds 14,500 1,212,200
Tyco Intl 60,000(c) 1,116,000
Total 14,040,320
Restaurants (2.6%)
Brinker Intl 57,700(b) 2,019,500
McDonald's 54,700 1,258,647
Outback Steakhouse 26,000 971,100
Starbucks 40,000(b) 1,093,200
Total 5,342,447
Retail -- general (8.0%)
Best Buy 45,000(b) 1,964,250
Home Depot 50,000 1,560,000
Target 130,000 4,981,600
Wal-Mart Stores 130,000 7,268,300
Williams-Sonoma 12,700(b) 358,775
Total 16,132,925
Utilities -- electric (2.8%)
Dominion Resources 60,000 3,606,000
Public Service Enterprise Group 50,000 2,037,500
Total 5,643,500
Total common stocks
(Cost: $194,691,832) $199,370,847
Short-term securities (0.6%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies
Federal Natl Mtge Assn Disc Nts
08-15-03 0.98% $800,000 $799,673
08-27-03 0.90 500,000 499,672
Total short-term securities
(Cost: $1,299,370) $1,299,345
Total investments in securities
(Cost: $195,991,202)(d) $200,670,192
See accompanying notes to investments in securities.
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10 -- AXP GROWTH DIMENSIONS FUND -- 2003 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.
(c) Foreign security values are stated in U.S. dollars. As of July 31, 2003,
the value of foreign securities represented 4.2% of net assets.
(d) At July 31, 2003, the cost of securities for federal income tax purposes
was $199,018,842 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
Unrealized appreciation $ 15,868,129
Unrealized depreciation (14,216,779)
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Net unrealized appreciation $ 1,651,350
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11 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Financial Statements
Statement of assets and liabilities
AXP Growth Dimensions Fund
July 31, 2003
Assets
Investments in securities, at value (Note 1)
(identified cost $195,991,202) $ 200,670,192
Cash in bank on demand deposit 40,300
Capital shares receivable 2,538
Dividends and accrued interest receivable 141,110
Receivable for investment securities sold 2,569,278
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Total assets 203,423,418
-----------
Liabilities
Capital shares payable 15,907
Payable for investment securities purchased 695,100
Accrued investment management services fee 2,847
Accrued distribution fee 2,745
Accrued transfer agency fee 1,703
Accrued administrative services fee 177
Other accrued expenses 55,064
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Total liabilities 773,543
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Net assets applicable to outstanding capital stock $ 202,649,875
=============
Represented by
Capital stock -- $.01 par value (Note 1) $ 931,568
Additional paid-in capital 449,249,821
Accumulated net realized gain (loss) (Note 6) (252,210,504)
Unrealized appreciation (depreciation) on investments 4,678,990
---------
Total -- representing net assets applicable to outstanding capital stock $ 202,649,875
=============
Net assets applicable to outstanding shares: Class A $ 135,984,753
Class B $ 62,297,656
Class C $ 4,340,427
Class Y $ 27,039
Net asset value per share of outstanding capital stock: Class A shares 62,022,743 $ 2.19
Class B shares 29,094,696 $ 2.14
Class C shares 2,027,041 $ 2.14
Class Y shares 12,296 $ 2.20
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See accompanying notes to financial statements.
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12 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Statement of operations
AXP Growth Dimensions Fund
Year ended July 31, 2003
Investment income
Income:
Dividends $ 2,473,571
Interest 158,293
Fee income from securities lending (Note 3) 3,808
Less foreign taxes withheld (10,739)
-------
Total income 2,624,933
---------
Expenses (Note 2):
Investment management services fee 1,061,017
Distribution fee
Class A 328,802
Class B 623,677
Class C 40,386
Transfer agency fee 653,697
Incremental transfer agency fee
Class A 46,616
Class B 40,560
Class C 3,240
Service fee -- Class Y 30
Administrative services fees and expenses 67,761
Compensation of board members 8,383
Custodian fees 20,700
Printing and postage 100,532
Registration fees 24,406
Audit fees 18,000
Other 12,455
------
Total expenses 3,050,262
Expenses waived/reimbursed by AEFC (Note 2) (269,194)
--------
2,781,068
Earnings credits on cash balances (Note 2) (3,754)
------
Total net expenses 2,777,314
---------
Investment income (loss) -- net (152,381)
--------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) (32,419,276)
Options contracts written (Note 5) 11,000
------
Net realized gain (loss) on investments (32,408,276)
Net change in unrealized appreciation (depreciation) on investments 46,531,710
----------
Net gain (loss) on investments 14,123,434
----------
Net increase (decrease) in net assets resulting from operations $ 13,971,053
============
See accompanying notes to financial statements.
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13 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Statements of changes in net assets
AXP Growth Dimensions Fund
Year ended July 31, 2003 2002
Operations
Investment income (loss) -- net $ (152,381) $ (1,333,138)
Net realized gain (loss) on investments (32,408,276) (115,630,156)
Net change in unrealized appreciation (depreciation) on investments 46,531,710 30,045,770
---------- ----------
Net increase (decrease) in net assets resulting from operations 13,971,053 (86,917,524)
---------- -----------
Capital share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 31,462,802 60,095,890
Class B shares 11,102,284 29,255,612
Class C shares 946,436 1,991,039
Class Y shares 52,827 --
Payments for redemptions
Class A shares (47,121,296) (93,339,189)
Class B shares (Note 2) (20,999,702) (41,489,853)
Class C shares (Note 2) (1,213,685) (1,923,169)
Class Y shares (53,609) (7,084)
------- ------
Increase (decrease) in net assets from capital share transactions (25,823,943) (45,416,754)
----------- -----------
Total increase (decrease) in net assets (11,852,890) (132,334,278)
Net assets at beginning of year 214,502,765 346,837,043
----------- -----------
Net assets at end of year $202,649,875 $ 214,502,765
============ =============
See accompanying notes to financial statements.
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14 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Notes to Financial Statements
AXP Growth Dimensions Fund
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a series of AXP Dimensions Series, Inc. (formerly AXP New
Dimensions Fund, Inc.) and is registered under the Investment Company Act of
1940 (as amended) as a diversified, open-end management investment company.
AXP Dimensions Series, Inc. has 10 billion authorized shares of capital stock
that can be allocated among the separate series as designated by the board.
The Fund invests primarily in equity securities showing potential for
significant growth.
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.
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.
- --------------------------------------------------------------------------------
15 -- AXP GROWTH DIMENSIONS FUND -- 2003 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.
- --------------------------------------------------------------------------------
16 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
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 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.
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 increased by $152,381
resulting in a net reclassification adjustment to decrease paid-in capital by
$152,381.
The tax character of distributions paid for the years indicated is as follows:
Year ended July 31, 2003 2002
Class A
Distributions paid from:
Ordinary income $-- $--
Long-term capital gain -- --
Class B
Distributions paid from:
Ordinary income -- --
Long-term capital gain -- --
Class C
Distributions paid from:
Ordinary income -- --
Long-term capital gain -- --
Class Y
Distributions paid from:
Ordinary income -- --
Long-term capital gain -- --
As of July 31, 2003, the components of distributable earnings on a tax basis are
as follows:
Undistributed ordinary income $ --
Accumulated long-term gain (loss) $(249,177,951)
Unrealized appreciation (depreciation) $ 1,646,437
- --------------------------------------------------------------------------------
17 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
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.
Other
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date and interest income,
including amortization of premium and discount using the effective interest
method, is accrued daily.
2. EXPENSES AND SALES CHARGES
The Fund has agreements with American Express Financial Corporation (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 0.60% to 0.48% annually
based on the combined net assets of the Fund and AXP New Dimensions Fund. 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 Large-Cap Growth Funds Index. Prior to Dec. 1, 2002, the maximum
adjustment was 0.12% of the Fund's average daily net assets after deducting 1%
from the performance difference. If the performance difference was less than 1%,
the adjustment was zero. On Nov. 13, 2002, shareholders approved modification of
the performance incentive adjustment calculation by adjusting the performance
difference intervals, while retaining the previous maximum adjustment and
reducing the amount of the performance difference for which no adjustment is
made to 0.50%. The effect of the modifications began Dec. 1, 2002. The
adjustment increased the fee by $39,400 for the year ended July 31, 2003.
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 0.05% to 0.02% annually based on
the combined net assets of the Fund and AXP New Dimensions Fund. 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 GROWTH DIMENSIONS FUND -- 2003 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 $19.50
o Class B $20.50
o Class C $20.00
o Class Y $17.50
In addition, there is an annual closed-account fee of $5 per inactive account,
charged on a pro rata basis from the date the account becomes inactive until the
date the account is purged from the transfer agent system generally within one
year.
Under terms of a prior agreement that ended April 30, 2003, the Fund paid a
transfer agency fee at an annual rate per shareholder account of $19 for Class
A, $20 for Class B, $19.50 for Class C and $17 for Class Y.
In addition, there is an annual closed-account fee of $5 per inactive account,
charged on a pro rata basis from the date the account becomes inactive until the
account is purged from the transfer agent system generally within one year.
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 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
$402,887 for Class A, $112,853 for Class B and $716 for Class C for the year
ended July 31, 2003.
For the year ended July 31, 2003, AEFC and American Express Financial Advisors
Inc. waived certain fees and expenses to 1.15% for Class A, 1.91% for Class B,
1.91% for Class C and 0.95% for Class Y of the Fund's average daily net assets.
Beginning Aug. 1, 2003, AEFC and American Express Financial Advisors Inc. have
agreed to waive certain fees and expenses until July 31, 2004. Under this
agreement, total expenses will not exceed 1.35% for Class A, 2.11% for Class B,
2.11% for Class C and 1.19% for Class Y of the Fund's average daily net assets.
During the year ended July 31, 2003, the Fund's custodian and transfer agency
fees were reduced by $3,754 as a result of earnings credits from overnight cash
balances. The Fund also pays custodian fees to American Express Trust Company,
an affiliate of AEFC.
- --------------------------------------------------------------------------------
19 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $97,315,228 and $103,152,994, respectively, for the year
ended July 31, 2003. Realized gains and losses are determined on an identified
cost basis.
Brokerage clearing fees paid to brokers affiliated with AEFC were $54,276 for
the year ended July 31, 2003.
Income from securities lending amounted to $3,808 for the year ended July 31,
2003. The risks to the Fund of securities lending are that the borrower may not
provide additional collateral when required or return the securities when due.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the years indicated are as follows:
Year ended July 31, 2003
Class A Class B Class C Class Y
Sold 15,693,438 5,672,236 483,044 25,567
Issued for reinvested distributions -- -- -- --
Redeemed (23,726,742) (10,728,324) (625,035) (25,567)
----------- ----------- -------- -------
Net increase (decrease) (8,033,304) (5,056,088) (141,991) --
----------- ----------- -------- -------
Year ended July 31, 2002
Class A Class B Class C Class Y
Sold 24,351,907 11,984,110 819,992 --
Issued for reinvested distributions -- -- -- --
Redeemed (38,649,187) (17,638,451) (809,472) (2,813)
----------- ----------- -------- ------
Net increase (decrease) (14,297,280) (5,654,341) 10,520 (2,813)
----------- ---------- ------ ------
5. OPTIONS CONTRACTS WRITTEN
Contracts and premiums associated with options contracts written are as follows:
Year ended July 31, 2003
Calls
Contracts Premiums
Balance July 31, 2002 -- $ --
Opened 110 11,000
Closed -- --
Exercised -- --
Expired (110) (11,000)
---- -------
Balance July 31, 2003 -- $ --
---- --------
- --------------------------------------------------------------------------------
20 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
6. CAPITAL LOSS CARRY-OVER
For federal income tax purposes, the Fund has a capital loss carry-over of
$249,177,951 as of July 31, 2003, that will expire in 2008 through 2012 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.
7. BANK BORROWINGS
The Fund has a revolving credit agreement with a syndicate of banks headed by
Deutsche Bank, whereby the Fund is permitted to have bank borrowings for
temporary or emergency purposes to fund shareholder redemptions. The agreement
went into effect Sept. 24, 2002. The Fund must maintain asset coverage for
borrowings of at least 300%. The agreement, which enables the Fund to
participate with other American Express mutual funds, permits borrowings up to
$500 million, collectively. Interest is charged to each Fund based on its
borrowings at a rate equal to either the LIBOR plus 0.50%, the IBOR plus 0.50%
or the higher of the Federal Funds Rate plus 0.25% and the Prime Lending Rate.
Borrowings are payable within 60 days after such loan is executed. The Fund also
pays a commitment fee equal to its pro rata share of the amount of the credit
facility at a rate of 0.09% per annum. Prior to this agreement, the Fund had a
revolving credit agreement that permitted borrowings up to $200 million with
U.S. Bank, N.A. The Fund had no borrowings outstanding during the year ended
July 31, 2003.
- --------------------------------------------------------------------------------
21 -- AXP GROWTH DIMENSIONS FUND -- 2003 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 July 31, 2003 2002 2001 2000(b)
Net asset value, beginning of period $2.03 $2.75 $ 4.87 $4.92
Income from investment operations:
Net investment income (loss) -- (.01) (.01) --
Net gains (losses) (both realized and unrealized) .16 (.71) (2.11) (.05)
Total from investment operations .16 (.72) (2.12) (.05)
Net asset value, end of period $2.19 $2.03 $ 2.75 $4.87
Ratios/supplemental data
Net assets, end of period (in millions) $136 $142 $232 $22
Ratio of expenses to average daily net assets(c) 1.15%(d) 1.10% 1.12%(d) 1.10%(d),(h)
Ratio of net investment income (loss) to average daily net assets .18% (.20%) (.16%) .37%(h)
Portfolio turnover rate (excluding short-term securities) 52% 69% 67% 2%
Total return(i) 7.88% (26.18%) (43.53%) (1.02%)(j)
See accompanying notes to financial highlights.
- --------------------------------------------------------------------------------
22 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Class B
Per share income and capital changes(a)
Fiscal period ended July 31, 2003 2002 2001 2000(b)
Net asset value, beginning of period $2.00 $2.73 $ 4.87 $4.92
Income from investment operations:
Net investment income (loss) (.01) (.03) (.02) --
Net gains (losses) (both realized and unrealized) .15 (.70) (2.12) (.05)
Total from investment operations .14 (.73) (2.14) (.05)
Net asset value, end of period $2.14 $2.00 $ 2.73 $4.87
Ratios/supplemental data
Net assets, end of period (in millions) $62 $68 $109 $11
Ratio of expenses to average daily net assets(c) 1.91%(e) 1.88% 1.89%(e) 1.91%(e),(h)
Ratio of net investment income (loss) to average daily net assets (.58%) (.97%) (.92%) (.48%)(h)
Portfolio turnover rate (excluding short-term securities) 52% 69% 67% 2%
Total return(i) 7.00% (26.74%) (43.94%) (1.02%)(j)
See accompanying notes to financial highlights.
- --------------------------------------------------------------------------------
23 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Class C
Per share income and capital changes(a)
Fiscal period ended July 31, 2003 2002 2001 2000(b)
Net asset value, beginning of period $2.00 $2.73 $ 4.87 $4.92
Income from investment operations:
Net investment income (loss) (.01) (.03) (.02) --
Net gains (losses) (both realized and unrealized) .15 (.70) (2.12) (.05)
Total from investment operations .14 (.73) (2.14) (.05)
Net asset value, end of period $2.14 $2.00 $ 2.73 $4.87
Ratios/supplemental data
Net assets, end of period (in millions) $4 $4 $6 $1
Ratio of expenses to average daily net assets(c) 1.91%(f) 1.88% 1.89%(f) 1.91%(f),(h)
Ratio of net investment income (loss) to average daily net assets (.59%) (.97%) (.94%) (.48%)(h)
Portfolio turnover rate (excluding short-term securities) 52% 69% 67% 2%
Total return(i) 7.00% (26.74%) (43.94%) (1.02%)(j)
See accompanying notes to financial highlights.
- --------------------------------------------------------------------------------
24 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Class Y
Per share income and capital changes(a)
Fiscal period ended July 31, 2003 2002 2001 2000(b)
Net asset value, beginning of period $2.03 $2.76 $ 4.88 $4.92
Income from investment operations:
Net investment income (loss) .01 -- -- --
Net gains (losses) (both realized and unrealized) .16 (.73) (2.12) (.04)
Total from investment operations .17 (.73) (2.12) (.04)
Net asset value, end of period $2.20 $2.03 $ 2.76 $4.88
Ratios/supplemental data
Net assets, end of period (in millions) $-- $-- $-- $--
Ratio of expenses to average daily net assets(c) .95%(g) .94% .95%(g) .81%(g),(h)
Ratio of net investment income (loss) to average daily net assets .34% .01% (.03%) .58%(h)
Portfolio turnover rate (excluding short-term securities) 52% 69% 67% 2%
Total return(i) 8.37% (26.45%) (43.44%) (.81%)(j)
Notes to financial highlights
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from June 26, 2000 (when shares became publicly available)
to July 31, 2000.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
(d) AEFC waived/reimbursed the Fund for certain expenses. Had AEFC not done so,
the annual ratios of expenses for Class A would have been 1.28%, 1.16% and
2.32% for the periods ended July 31, 2003, 2001 and 2000, respectively.
(e) AEFC waived/reimbursed the Fund for certain expenses. Had AEFC not done so,
the annual ratios of expenses for Class B would have been 2.04%, 1.92% and
3.40% for the periods ended July 31, 2003, 2001 and 2000, respectively.
(f) AEFC waived/reimbursed the Fund for certain expenses. Had AEFC not done so,
the annual ratios of expenses for Class C would have been 2.04%, 1.92% and
3.40% for the periods ended July 31, 2003, 2001 and 2000, respectively.
(g) AEFC waived/reimbursed the Fund for certain expenses. Had AEFC not done so,
the annual ratios of expenses for Class Y would have been 1.12%, 1.00% and
2.12% for the periods ended July 31, 2003, 2001 and 2000, respectively.
(h) Adjusted to an annual basis.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
- --------------------------------------------------------------------------------
25 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Independent Auditors' Report
THE BOARD AND SHAREHOLDERS
AXP DIMENSIONS SERIES, INC.
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of AXP Growth Dimensions Fund (a
series of AXP Dimensions Series, Inc.) as of July 31, 2003, 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 July 31, 2003 and
the financial highlights for each of the years in the three-year period ended
July 31, 2003 and for the period from June 26, 2000 (when shares became publicly
available) to July 31, 2000. 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 July 31, 2003, by correspondence with the custodian and
brokers or by other appropriate auditing procedures. 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 and financial highlights referred to
above present fairly, in all material respects, the financial position of AXP
Growth Dimensions Fund as of July 31, 2003, 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
September 12, 2003
- --------------------------------------------------------------------------------
26 -- AXP GROWTH DIMENSIONS FUND -- 2003 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 83 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, address, age Position held Principal occupation during past Other directorships
with Fund and five years
length of service
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Arne H. Carlson Board member Chair, Board Services Corporation
901 S. Marquette Ave. since 1999 (provides administrative services
Minneapolis, MN 55402 to boards). Former Governor of
Age 68 Minnesota
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Philip J. Carroll, Jr. Board member Retired Chairman and CEO, Fluor Scottish Power PLC, Vulcan
901 S. Marquette Ave. since 2002 Corporation (engineering and Materials Company, Inc.
Minneapolis, MN 55402 construction) since 1998 (construction
Age 65 materials/chemicals)
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Livio D. DeSimone Board member Retired Chair of the Board and Cargill, Incorporated
30 Seventh Street East since 2001 Chief Executive Officer, Minnesota (commodity merchants and
Suite 3050 Mining and Manufacturing (3M) processors), General Mills,
St. Paul, MN 55101-4901 Inc. (consumer foods), Vulcan
Age 69 Materials Company (construction
materials/ chemicals), Milliken
& Company (textiles and
chemicals), and Nexia
Biotechnologies, Inc.
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Heinz F. Hutter* Board member Retired President and Chief
901 S. Marquette Ave. since 1994 Operating Officer, Cargill,
Minneapolis, MN 55402 Incorporated (commodity merchants
Age 74 and processors)
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 68
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Stephen R. Lewis, Jr.** Board member Retired President and Professor of Valmont Industries, Inc.
901 S. Marquette Ave. since 2002 Economics, Carleton College (manufactures irrigation
Minneapolis, MN 55402 systems)
Age 64
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Alan G. Quasha Board member President, Quadrant Management, Compagnie Financiere Richemont
901 S. Marquette Ave. since 2002 Inc. (management of private AG (luxury goods), Harken
Minneapolis, MN 55402 equities) Energy Corporation (oil and gas
Age 53 exploration) and SIRIT Inc.
(radio frequency identification
technology)
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
* Interested person of AXP Partners International Aggressive Growth Fund and
AXP Partners Aggressive Growth Fund by reason of being a security holder of
J P Morgan Chase & Co., which has a 45% interest in American Century
Companies, Inc., the parent company of the subadviser of two of the AXP
Partners Funds, American Century Investment Management, Inc.
** Interested person of AXP Partners International Aggressive Growth Fund by
reason of being a security holder of FleetBoston Financial Corporation,
parent company of Liberty Wanger Asset Management, L.P., one of the fund's
subadvisers.
- --------------------------------------------------------------------------------
27 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
Independent Board Members (continued)
Name, address, age Position held Principal occupation during past Other directorships
with Fund and five years
length of service
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Alan K. Simpson Board member Former three-term United States Biogen, Inc.
1201 Sunshine Ave. since 1997 Senator for Wyoming (biopharmaceuticals)
Cody, WY 82414
Age 71
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Alison Taunton-Rigby Board member President, Forester Biotech since
901 S. Marquette Ave. since 2002 2000. Former President and CEO,
Minneapolis, MN 55402 Aquila Biopharmaceuticals, Inc.
Age 59
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Board Members Affiliated with AEFC***
Name, address, age Position held Principal occupation during past Other directorships
with Fund and five years
length of service
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Barbara H. Fraser Board member Executive Vice President - AEFA
1546 AXP Financial Center since 2002 Products and Corporate Marketing of
Minneapolis, MN 55474 AEFC since 2002. President -
Age 53 Travelers Check Group, American
Express Company, 2001-2002.
Management Consultant, Reuters,
2000-2001. Managing Director -
International Investments, Citibank
Global, 1999-2000. Chairman and
CEO, Citicorp Investment Services
and Citigroup Insurance Group,
U.S., 1998-1999
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Stephen W. Roszell Board member Senior Vice President -
50238 AXP Financial Center since 2002, Vice Institutional Group of AEFC
Minneapolis, MN 55474 President since
Age 54 2002
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
William F. Truscott Board member Senior Vice President - Chief
53600 AXP Financial Center since 2001, Vice Investment Officer of AEFC since
Minneapolis, MN 55474 President since 2001. Former Chief Investment
Age 42 2002 Officer and Managing Director,
Zurich Scudder Investments
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
*** Interested person by reason of being an officer, director and/or employee of
AEFC.
- --------------------------------------------------------------------------------
28 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
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. Roszell, who is vice president, and
Mr. Truscott, who is vice president, the Fund's other officers are:
Other Officers
Name, address, age Position held Principal occupation during past Other directorships
with Fund and five years
length of service
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Jeffrey P. Fox Treasurer since Vice President - Investment
50005 AXP Financial Center 2002 Accounting, AEFC, since 2002; Vice
Minneapolis, MN 55474 President - Finance, American
Age 48 Express Company, 2000-2002; Vice
President - Corporate Controller,
AEFC, 1996-2000
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Paula R. Meyer President since Senior Vice President and General
596 AXP Financial Center 2002 Manager - Mutual Funds, AEFC, since
Minneapolis, MN 55474 2002; Vice President and Managing
Age 49 Director - American Express Funds,
AEFC, 2000-2002; Vice President,
AEFC, 1998-2000
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Leslie L. Ogg Vice President, President of Board Services
901 S. Marquette Ave. General Counsel, Corporation
Minneapolis, MN 55402 and Secretary
Age 64 since 1978
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
The SAI has additional information about the Fund's directors and is available,
without charge, upon request by calling (800) 862-7919.
- --------------------------------------------------------------------------------
29 -- AXP GROWTH DIMENSIONS FUND -- 2003 ANNUAL REPORT
The policies and procedures that the Fund uses to determine how to vote proxies
relating to portfolio securities can be found in the Fund's Statement of
Additional Information (SAI) which is available (i) without charge, upon
request, by calling toll-free (800) 862-7919; (ii) on the American Express
Company Web site at americanexpress.com/funds; and (iii) on the Securities and
Exchange Commission Web site at http://www.sec.gov.
- --------------------------------------------------------------------------------
(logo)
AMERICAN
EXPRESS
(R)
- --------------------------------------------------------------------------------
American Express Funds
70100 AXP Financial Center
Minneapolis, MN 55474
This report must be accompanied or preceded by the Fund's current prospectus.
Distributed by American Express Financial Advisors Inc. Member NASD. American
Express Company is separate from American Express Financial Advisors Inc. and
is not a broker-dealer.
AXP(R)
New
Dimensions(R)
Fund
Annual Report
for the Period Ended
July 31, 2003
AXP New Dimensions Fund seeks to provide shareholders with long-term growth of
capital.
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(logo) (logo)
American AMERICAN
Express(R) EXPRESS
Funds (R)
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Table of Contents
Fund Snapshot 3
Questions & Answers
with Portfolio Management 4
The Fund's Long-term Performance 8
Investments in Securities 9
Financial Statements (Portfolio) 12
Notes to Financial Statements (Portfolio) 15
Independent Auditors' Report (Portfolio) 19
Financial Statements (Fund) 20
Notes to Financial Statements (Fund) 23
Independent Auditors' Report (Fund) 31
Federal Income Tax Information 32
Board Members and Officers 33
(logo) Dalbar
American Express(R) Funds' reports to shareholders have been awarded the
Communications Seal from Dalbar Inc., an independent financial services research
firm. The Seal recognizes communications demonstrating a level of excellence in
the industry.
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2 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Fund Snapshot
AS OF JULY 31, 2003
PORTFOLIO MANAGER
Portfolio manager Gordon Fines
Since 1/91
Years in industry 36
FUND OBJECTIVE
For investors seeking long-term growth of capital.
Inception dates
A: 8/1/68 B: 3/20/95 C: 6/26/00 Y: 3/20/95
Ticker symbols
A: INNDX B: INDBX C: ANDCX Y: IDNYX
Total net assets $16.846 billion
Number of holdings 108
STYLE MATRIX
Shading within the style matrix indicates areas in which the Fund generally
invests.
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
SECTOR COMPOSITION
Percentage of portfolio assets
(pie chart)
Consumer discretionary 20.1%
Technology 17.0%
Financials 15.8%
Health care 13.8%
Industrials 12.1%
Energy 6.9%
Consumer staples 4.9%
Short-term securities 3.3%
Utilities 2.1%
Telecommunications 1.0%
Other 1.5%
TOP TEN HOLDINGS
Percentage of portfolio assets
Bank of America (Banks and savings & loans) 4.0%
Wal-Mart Stores (Retail -- general) 4.0
Microsoft (Computer software & services) 3.7
Amgen (Health care products) 3.5
Viacom Cl B (Leisure time & entertainment) 3.4
Citigroup (Finance companies) 3.3
3M (Multi-industry) 2.9
UnitedHealth Group (Health care services) 2.8
Pfizer (Health care products) 2.5
Target (Retail -- general) 2.4
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
Stock prices of established companies that pay dividends may be less volatile
than the stock market as a whole. There are special risk considerations
associated with international investing related to market, currency, economic,
political and other factors.
Fund holdings are subject to change.
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3 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Questions & Answers
WITH PORTFOLIO MANAGEMENT
Q: How did AXP New Dimensions Fund perform for fiscal year 2003?
A: AXP New Dimensions Fund's Class A shares (excluding sales charge) gained
9.47% for the 12 months ended July 31, 2003, outperforming the 8.97% return
of Lipper Large-Cap Growth Funds Index, representing the Fund's peer group.
The S&P 500 Index increased 10.64% over the same period.
Q: What factors most significantly affected Fund performance during the annual
period?
A: Effective stock selection helped the Fund outpace its peer group for the
2003 fiscal year. For example, WalMart, Citigroup and Bank of America were
strong performers for the year overall. Johnson & Johnson and 3M held up
well during the first half; Amgen and Target were among the Fund's best
performers during the second half. The portfolio's conservative stance,
including an emphasis on consumer cyclical companies, also helped
performance during most of the annual period. However, when the equity
market rose sharply in the autumn and again in the second calendar quarter,
the Fund's relatively conservative stocks did not rally as much as more
aggressive, smaller companies. The Fund was also underweighted in the
strongly performing information technology sector relative to the S&P 500
Index. Thus, the Fund underperformed its benchmark index.
The equity market was exceptionally volatile during fiscal year 2003.
During the summer, stock markets reached four-year lows, depressing stocks
of every style and capitalization, including large-cap growth stocks.
October and November marked a vigorous market rally, led by the most
beaten-up sectors of the past three years, including
PERFORMANCE COMPARISON
For the period ended July 31, 2003
12% (bar 2)
(bar 1) +10.64%
10% +9.47% (bar 3)
+8.97%
8%
6%
4%
2%
0%
(bar 1) AXP New Dimensions Fund Class A (excluding sales charge)
(bar 2) S&P 500 Index (unmanaged)
(bar 3) Lipper Large-Cap Growth Funds Index
(see "The Fund's Long-term Performance" for Index descriptions)
Past performance is no guarantee of future results. The 5.75% sales charge
applicable to Class A shares of the Fund is not reflected in the bar chart; if
reflected, returns would be lower than those shown. The performance of Class B,
Class C and Class Y may vary from that shown above because of differences in
expenses.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes.
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4 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Questions & Answers
(being callout quote)> We will continue to look for dividend-paying stocks of
companies that can maintain earnings growth through varying market cycles.(end
callout quote)
telecommunications and technology. After starting the new year on a
positive note, the equity market then began a sustained decline, as fears
surrounding the likely war with Iraq heightened and economic activity
subsequently slowed. By the beginning of March, the market rallied as
investors grew optimistic about a military victory.
The second calendar quarter marked the largest single quarterly gain for
the S&P 500 Index in nearly five years. A significant number of corporate
earnings announcements met or exceeded expectations, and earnings estimates
were revised upward. Furthermore, the low interest rate environment and
declining yields on bond investments drew more attention to equities, as
investors sought higher returns. The case for
AVERAGE ANNUAL TOTAL RETURNS
as of July 31, 2003
Class A Class B Class C Class Y
(Inception dates) (8/1/68) (3/20/95) (6/26/00) (3/20/95)
NAV(1) POP(2) NAV(1) After CDSC(3) NAV(1) After CDSC(4) NAV(5) POP(5)
1 year +9.47% +3.18% +8.63% +4.63% +8.59% +8.59% +9.64% +9.64%
5 years +0.14% -1.04% -0.62% -0.78% N/A N/A +0.29% +0.29%
10 years +9.89% +9.24% N/A N/A N/A N/A N/A N/A
Since inception N/A N/A +9.58% +9.58% -12.56% -12.56% +10.58% +10.58%
(1) Excluding sales charge.
(2) Returns at public offering price (POP) reflect a sales charge of 5.75%.
(3) Returns at maximum contingent deferred sales charge (CDSC). CDSC applies as
follows: first year 5%; second and third year 4%; fourth year 3%; fifth
year 2%; sixth year 1%; no sales charge thereafter.
(4) 1% CDSC applies to redemptions made within the first year of purchase.
(5) Sales charge is not applicable to these shares. Shares available to
institutional investors only.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that your shares, when redeemed, may be worth
more or less than the original cost. The performance shown for each class of
shares will vary due to differences in sales charges and fees. Short term
performance may be higher or lower than the figures shown. Visit
americanexpress.com/funds for current information.
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5 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Questions & Answers
owning equities was additionally strengthened by a $350 billion U.S. tax
cut, an accommodative Federal Reserve Board, and a declining dollar that
benefited U.S. companies distributing products and services overseas.
Finally, while the transition to democracy in Iraq is by no means at an
end, the conclusion of active military operations provided the equity
markets with a degree of geopolitical stability not seen for some time.
July was a relatively neutral month for the marketplace, with the S&P 500
Index rising a modest 1.76%.
Among the Fund's specific stock disappointments were Microsoft and Viacom.
Microsoft was a top performer during the first half of the fiscal year, but
experienced a slowdown in growth during the second half along with much of
the personal computer industry. Entertainment company Viacom lost ground
primarily due to a slowdown in advertising spending. However, we continued
to hold both of these companies in the Fund's portfolio, as each is clearly
a leader in its respective industry, and we are optimistic about their
prospects going forward. Lockheed Martin in the defense industry was
another disappointment, as the high level of government spending
anticipated by many was not fully realized. We reduced the Fund's holding
in this stock.
Q: What changes did you make to the portfolio and how is it currently
positioned?
A: The Fund has historically had a low turnover rate compared to many of its
large-cap growth peers, and we upheld this tradition in fiscal year 2003.
Indeed, for most of the fiscal year, the bulk of the Fund's assets
remained relatively constant. However, we slightly increased our
positions in the energy sector in anticipation of improving stock prices.
Within the healthcare sector, we shifted away from hospitals and
distribution companies toward a focus on biotechnology and medical device
companies. For example, we eliminated the Fund's position in HCA, the
nation's largest hospital chain, and bought Amgen, a leading
biotechnology company in the fight against cancer. We also added Genzyme
and Stryker to the portfolio.
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6 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Questions & Answers
Genzyme is a biotechnology company focused on rare genetic disorders, renal
disease and osteoarthritis. Stryker is a surgical and medical device
manufacturer.
In June, we repositioned the Fund a bit, shifting the portfolio's stance to
take advantage of the less risk-averse market environment. We moderately
increased the Fund's weighting in the technology sector, with a focus on
software-related companies. We also reduced the Fund's weighting in the
more defensive consumer staples sector, by cutting back on such positions
as Procter & Gamble and eliminating Budweiser. We then redeployed those
assets into industrial-related and business services companies that we
believe may benefit from the eventual upturn in the economy. One such
addition to the portfolio was Caterpillar, the manufacturer of
construction, agricultural, mining and forestry machinery.
Q: How do you intend to manage the Fund in the coming months?
A: We are optimistic about the equity market going forward. A great deal of
fiscal and monetary stimulus is currently in the pipeline, including low
interest rates, tax cuts and dividend and capital gains tax reform. Such
stimulus should help boost economic growth in the months ahead. What is
missing so far is job growth, which is key to improving consumer confidence
and consumer spending. Also, capital spending remains flat, as businesses
remain reluctant to hire or invest aggressively.
Our focus will remain on seeking long-term growth of capital. We will
continue to broadly diversify the Fund's holdings, looking for large-cap
opportunities that display good fundamentals and a better-than-average
potential for growth. We will also continue to look for dividend-paying
stocks of companies that can maintain earnings growth through varying
market cycles.
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7 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
The Fund's Long-term Performance
This chart illustrates the total value of an assumed $10,000 investment in AXP
New Dimensions Fund Class A shares (from 8/1/93 to 7/31/03) as compared to the
performance of two widely cited performance indices, the Standard & Poor's 500
Index (S&P 500 Index) and the Lipper Large-Cap Growth Funds Index. In comparing
the Fund's Class A shares to these indices, 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 indices. Returns
for the Fund include the reinvestment of any distribution paid during each
period.
Past performance is no guarantee of future results. Your investment and return
values fluctuate so that your shares, when redeemed, may be worth more or less
than the original cost. Returns do not reflect taxes payable on distributions
and redemptions. Also see "Past Performance" in the Fund's current
prospectus.
(line chart)
VALUE OF A HYPOTHETICAL $10,000 INVESTMENT
IN AXP NEW DIMENSIONS FUND
AXP New Dimensions
Fund Class A $ 9,425 $ 9,857 $12,349 $14,390 $20,694 $24,044 $28,862 $35,546 $28,046 $22,117 $24,211
S&P 500 Index(1) $10,000 $10,516 $13,262 $15,460 $23,521 $28,056 $33,723 $36,748 $31,482 $24,043 $26,601
Lipper Large-Cap
Growth Funds Index(2) $10,000 $10,486 $13,507 $15,045 $22,277 $26,768 $32,906 $40,165 $26,348 $18,976 $20,678
'93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03
(1) S&P 500 Index, an unmanaged index of common stocks, is frequently used as a
general measure of market performance. The index reflects reinvestment of
all distributions and changes in market prices, but excludes brokerage
commissions or other fees. However, the S&P 500 companies may be generally
larger than those in which the Fund invests.
(2) The Lipper Large-Cap Growth Funds Index, 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.
Average Annual Total Returns
Class A with Sales Charge as of July 31, 2003
1 year +3.18%
5 years -1.04%
10 years +9.24%
Results for other share classes can be found on page 5.
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8 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Investments in Securities
Growth Trends Portfolio
July 31, 2003
(Percentages represent value of investments compared to net assets)
Common stocks (97.0%)
Issuer Shares Value(a)
Aerospace & defense (0.5%)
Lockheed Martin 100,000 $5,234,000
United Technologies 1,000,000 75,230,000
Total 80,464,000
Airlines (1.3%)
Southwest Airlines 13,300,000 218,253,000
Banks and savings & loans (5.8%)
Bank of America 8,200,000 677,074,000
Wells Fargo 6,000,000 303,180,000
Total 980,254,000
Beverages & tobacco (3.9%)
Altria Group 9,000,000 360,090,000
Anheuser-Busch 2,000,000 103,640,000
PepsiCo 4,100,000 188,887,000
Total 652,617,000
Broker dealers (0.6%)
Morgan Stanley 2,200,000 104,368,000
Cellular telecommunications (0.5%)
Vodafone Group ADR 4,500,000(c) 85,410,000
Chemicals (0.6%)
Air Products & Chemicals 2,000,000 92,960,000
Computer hardware (3.7%)
Cisco Systems 12,000,000(b) 234,240,000
Dell 9,200,000(b) 309,856,000
Hewlett-Packard 3,820,000 80,869,400
Total 624,965,400
Computer software & services (8.8%)
Electronic Arts 200,000(b) 16,800,000
Intl Business Machines 2,990,000 242,937,500
Microsoft 24,000,000 633,600,000
Oracle 8,000,000(b) 96,000,000
Paychex 2,000,000 65,060,000
State Street 4,000,000 183,600,000
Symantec 1,800,000(b) 84,186,000
VERITAS Software 5,000,000(b) 154,000,000
Total 1,476,183,500
Electronics (4.5%)
Analog Devices 1,200,000(b) 45,540,000
Applied Materials 7,500,000(b) 146,250,000
Intel 11,000,000 274,450,000
Maxim Integrated Products 2,600,000 101,608,000
Texas Instruments 10,000,000 188,700,000
Total 756,548,000
Energy (5.6%)
Burlington Resources 1,000,000 46,170,000
ChevronTexaco 5,500,000 396,605,000
ConocoPhillips 4,000,000 209,360,000
Exxon Mobil 8,000,000 284,640,000
Total 936,775,000
Energy equipment & services (1.4%)
Schlumberger 4,300,000 193,801,000
Weatherford Intl 1,000,000(b) 36,270,000
Total 230,071,000
Finance companies (3.3%)
Citigroup 12,500,000 560,000,000
Financial services (3.1%)
Fannie Mae 1,000,000 64,040,000
MBNA 4,000,000 89,160,000
SLM 9,000,000 373,140,000
Total 526,340,000
Health care products (11.2%)
Amgen 8,500,000(b) 591,430,000
Forest Laboratories 1,800,000(b) 86,184,000
Genzyme-General Division 1,000,000(b) 50,440,000
Johnson & Johnson 5,000,000 258,950,000
Medtronic 7,000,000 360,500,000
Pfizer 12,500,000 417,000,000
Stryker 700,000 53,564,000
Teva Pharmaceutical Inds ADR 800,000(c) 45,872,000
Total 1,863,940,000
Health care services (2.8%)
UnitedHealth Group 9,000,000 468,810,000
See accompanying notes to investments in securities.
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9 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Common stocks (continued)
Issuer Shares Value(a)
Household products (1.0%)
Procter & Gamble 2,000,000 $175,740,000
Indexes (1.5%)
Nasdaq-100 Index Tracking 8,000,000(b) 254,240,000
Industrial transportation (1.2%)
Union Pacific 2,500,000 152,350,000
United Parcel Service Cl B 700,000 44,156,000
Total 196,506,000
Insurance (3.0%)
American Intl Group 4,000,000 256,800,000
Marsh & McLennan 5,000,000 248,100,000
Total 504,900,000
Leisure time & entertainment (3.4%)
Viacom Cl B 13,100,000(b) 570,112,000
Lodging & gaming (2.2%)
Intl Game Technology 6,800,000 173,060,000
Marriott Intl Cl A 5,000,000 205,500,000
Total 378,560,000
Machinery (3.5%)
Caterpillar 5,664,800 382,204,056
Illinois Tool Works 3,000,000 208,950,000
Total 591,154,056
Media (5.1%)
Cendant 9,000,000(b) 161,550,000
eBay 1,800,000(b) 192,960,000
Gannett 2,000,000 153,660,000
InterActiveCorp 8,700,000(b) 351,759,000
Total 859,929,000
Metals (0.6%)
Nucor 2,000,000 98,640,000
Multi-industry (5.7%)
3M 3,500,000 490,700,000
General Electric 14,000,000 398,160,000
Tyco Intl 4,000,000(c) 74,400,000
Total 963,260,000
Paper & packaging (0.3%)
Intl Paper 1,500,000 58,680,000
Restaurants (0.8%)
McDonald's 6,000,000 138,060,000
Retail -- general (8.6%)
Best Buy 2,400,000(b) 104,760,000
Costco Wholesale 3,000,000(b) 111,150,000
Home Depot 4,000,000 124,800,000
Target 10,700,000 410,024,000
Wal-Mart Stores 12,000,000 670,920,000
Williams-Sonoma 1,000,000(b) 28,250,000
Total 1,449,904,000
Utilities -- electric (2.1%)
Dominion Resources 6,000,000 360,600,000
Utilities -- telephone (0.5%)
Verizon Communications 2,500,000 87,150,000
Total common stocks
(Cost: $14,308,655,782) $16,345,393,956
Short-term securities (3.4%)
Issuer Coupon Principal Value(a)
rate amount
U.S. government agencies (0.7%)
Federal Home Loan Bank Disc Nt
09-26-03 1.02% $50,000,000 $49,916,601
Federal Natl Mtge Assn Disc Nts
08-06-03 1.16 48,100,000 48,091,693
08-20-03 0.96 25,000,000 24,988,248
Total 122,996,542
Commercial paper (2.6%)
AEGON Funding
10-15-03 1.03 17,400,000(d) 17,361,797
Amsterdam Funding
08-08-03 1.05 12,500,000(d) 12,497,084
Barton Capital
08-14-03 1.03 6,600,000(d) 6,597,356
CAFCO LLC
08-25-03 1.03 18,600,000(d) 18,586,695
09-09-03 1.04 25,000,000(d) 24,971,112
Charta LLC
09-18-03 1.07 10,700,000(d) 10,684,417
Ciesco LLC
09-03-03 1.04 10,500,000 10,489,687
Corporate Receivables
08-01-03 0.94 11,600,000(d) 11,599,697
Credit Agricole Indosuez Yankee
08-05-03 1.02 20,700,000 20,697,068
CXC
08-07-03 0.98 22,800,000(d) 22,795,655
See accompanying notes to investments in securities.
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10 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Short-term securities (continued)
Issuer Coupon Principal Value(a)
rate amount
Commercial paper (cont.)
Danske
08-13-03 1.05% $28,000,000 $27,989,385
Delaware Funding
08-14-03 1.03 3,089,000(d) 3,087,763
Dexia Bank (Delaware) LLC
08-22-03 1.05 17,400,000 17,388,835
Edison Asset Securitization
10-09-03 1.03 17,644,000(d) 17,608,320
Fairway Finance
08-15-03 1.04 15,679,000(d) 15,672,206
08-22-03 1.04 14,400,000(d) 14,390,848
Falcon Asset Securitization
08-29-03 1.07 17,358,000(d) 17,343,038
Galaxy Funding
08-05-03 1.06 18,000,000(d) 17,997,350
Greyhawk Funding
09-04-03 1.03 12,500,000(d) 12,487,482
Northern Rock
08-04-03 1.23 7,000,000(d) 6,999,043
Old Line Funding
09-05-03 1.04 5,400,000(d) 5,394,384
Park Avenue Receivables
08-12-03 1.02 24,100,000(d) 24,091,805
08-15-03 1.03 8,200,000(d) 8,196,481
Preferred Receivables Funding
08-11-03 1.03 18,800,000(d) 18,794,083
08-26-03 1.05 6,300,000(d) 6,295,223
Receivables Capital
08-06-03 0.95 16,100,000(d) 16,097,451
Sigma Finance
08-18-03 1.05 15,800,000(d) 15,791,705
10-29-03 1.05 15,000,000(d) 14,961,000
Societe Generale North America LLC
09-02-03 1.05 26,200,000 26,174,783
Total 443,041,753
Total short-term securities
(Cost: $566,055,119) $566,038,295
Total investments in securities
(Cost: $14,874,710,901)(e) $16,911,432,251
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 July 31, 2003,
the value of foreign securities represented 1.2% of net assets.
(d) Commercial paper sold within terms of a private placement memorandum,
exempt from registration under Section 4(2) of the Securities Act of 1933,
as amended, and may be sold only to dealers in that program or other
"accredited investors." This security has been determined to be liquid
under guidelines established by the board.
(e) At July 31, 2003, the cost of securities for federal income tax purposes
was $14,881,184,324 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
Unrealized appreciation $2,855,581,196
Unrealized depreciation (825,333,269)
------------
Net unrealized appreciation $2,030,247,927
--------------
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11 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Financial Statements
Statement of assets and liabilities
Growth Trends Portfolio
July 31, 2003
Assets
Investments in securities, at value (Note 1)*
(identified cost $14,874,710,901) $16,911,432,251
Foreign currency holdings (identified cost $6,948) (Note 1) 7,022
Dividends and accrued interest receivable 14,025,070
Receivable for investment securities sold 112,342,417
U.S. government securities held as collateral (Note 4) 134,622,034
-----------
Total assets 17,172,428,794
--------------
Liabilities
Disbursements in excess of cash on demand deposit 1,246,612
Payable for investment securities purchased 28,388,201
Payable upon return of securities loaned (Note 4) 295,943,334
Accrued investment management services fee 236,910
Other accrued expenses 223,412
-------
Total liabilities 326,038,469
-----------
Net assets $16,846,390,325
===============
* Including securities on loan, at value (Note 4) $ 291,164,377
---------------
See accompanying notes to financial statements.
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12 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Statement of operations
Growth Trends Portfolio
Year ended July 31, 2003
Investment income
Income:
Dividends $ 232,038,970
Interest 5,913,103
Fee income from securities lending (Note 4) 274,512
Less foreign taxes withheld (148,570)
--------
Total income 238,078,015
-----------
Expenses (Note 2):
Investment management services fee 90,852,746
Compensation of board members 69,316
Custodian fees 869,029
Audit fees 36,000
Other 284,043
-------
Total expenses 92,111,134
----------
Investment income (loss) -- net 145,966,881
-----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) (478,774,954)
Foreign currency transactions (1,464,357)
Options contracts written (Note 5) 1,213,909
---------
Net realized gain (loss) on investments (479,025,402)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 1,817,357,987
-------------
Net gain (loss) on investments and foreign currencies 1,338,332,585
-------------
Net increase (decrease) in net assets resulting from operations $1,484,299,466
==============
See accompanying notes to financial statements.
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13 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Statements of changes in net assets
Growth Trends Portfolio
Year ended July 31, 2003 2002
Operations
Investment income (loss) -- net $ 145,966,881 $ 133,998,848
Net realized gain (loss) on investments (479,025,402) (78,725,757)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 1,817,357,987 (4,792,265,331)
------------- --------------
Net increase (decrease) in net assets resulting from operations 1,484,299,466 (4,736,992,240)
------------- --------------
Proceeds from contributions 151,515,494 1,102,314,218
Fair value of withdrawals (1,647,547,388) (3,241,842,538)
-------------- --------------
Net contributions (withdrawals) from partners (1,496,031,894) (2,139,528,320)
-------------- --------------
Total increase (decrease) in net assets (11,732,428) (6,876,520,560)
Net assets at beginning of year 16,858,122,753 23,734,643,313
-------------- --------------
Net assets at end of year $16,846,390,325 $16,858,122,753
=============== ===============
See accompanying notes to financial statements.
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14 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Notes to Financial Statements
Growth Trends Portfolio
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Growth Trends Portfolio (the Portfolio) is a series of Growth Trust (the Trust)
and is registered under the Investment Company Act of 1940 (as amended) as a
diversified, open-end management investment company. Growth Trends Portfolio
invests primarily in common stocks of companies showing potential for
significant growth and operating in areas where economic or technological
changes are occurring. The Declaration of Trust permits the Trustees to issue
non-transferable interests in the Portfolio.
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.
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.
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15 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Portfolio
will realize a gain or loss when the option transaction expires or closes. When
an option is exercised, the proceeds on sales for a written call option, the
purchase cost for a written put option or the cost of a security for a purchased
put or call option is adjusted by the amount of premium received or paid.
Futures transactions
To gain exposure to or protect itself from market changes, the Portfolio may buy
and sell financial futures contracts traded on any U.S. or foreign exchange. The
Portfolio also may buy and write put and call options on these futures
contracts. Risks of entering into futures contracts and related options include
the possibility of an illiquid market and that a change in the value of the
contract or option may not correlate with changes in the value of the underlying
securities.
Upon entering into a futures contract, the Portfolio is required to deposit
either cash or securities in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Portfolio each day. The variation margin payments are
equal to the daily changes in the contract value and are recorded as unrealized
gains and losses. The Portfolio recognizes a realized gain or loss when the
contract is closed or expires.
Foreign currency translations and foreign currency contracts
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the statement of operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes. As of July 31, 2003, foreign currency holdings were entirely
comprised of Taiwan Dollars.
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.
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.
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16 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Other
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date and interest income,
including amortization of premium and discount using the effective interest
method, is accrued daily.
2. FEES AND EXPENSES
The Trust, on behalf of the Portfolio, has an Investment Management Services
Agreement with American Express Financial Corporation (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 0.6% to 0.48% 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 AXP New Dimensions
Fund to the Lipper Large-Cap Growth Funds Index. Prior to Dec. 1, 2002, the
maximum adjustment was 0.12% of the Portfolio's average daily net assets after
deducting 1% from the performance difference. If the performance difference was
less than 1%, the adjustment was zero. On Nov. 13, 2002, shareholders approved
modification of the performance incentive adjustment calculation by adjusting
the performance difference intervals, while retaining the previous maximum
adjustment and reducing the amount of the performance difference for which no
adjustment is made to 0.50%. The effect of the modifications began Dec. 1, 2002.
The adjustment increased the fee by $8,699,236 for the year ended July 31, 2003.
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.
The Portfolio 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 $3,148,724,089 and 4,655,242,662, respectively, for the
year ended July 31, 2003. For the same period, the portfolio turnover rate was
20%. Realized gains and losses are determined on an identified cost basis.
Brokerage clearing fees paid to brokers affiliated with AEFC were $324,088 for
the year ended July 31, 2003.
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17 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
4. LENDING OF PORTFOLIO SECURITIES
As of July 31, 2003, securities valued at $291,164,377 were on loan to brokers.
For collateral, the Portfolio received $161,321,300 in cash and U.S. government
securities valued at $134,622,034. Income from securities lending amounted to
$274,512 for the year ended July 31, 2003. The risks to the Portfolio of
securities lending are that the borrower may not provide additional collateral
when required or return the securities when due.
5. OPTIONS CONTRACTS WRITTEN
Contracts and premiums associated with options contracts written are as follows:
Year ended July 31, 2003
Puts Calls
Contracts Premiums Contracts Premiums
Balance July 31, 2002 1,000 $ 186,994 1,000 $ 156,995
Opened -- -- 10,000 1,000,000
Closed (1,000) (186,994) -- --
Expired -- -- (11,000) (1,156,995)
----- --------- ------- -----------
Balance July 31, 2003 -- $ -- -- $ --
----- --------- ----- -----------
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18 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Independent Auditors' Report
THE BOARD OF TRUSTEES AND UNITHOLDERS
GROWTH TRUST
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of Growth Trends Portfolio (a series
of Growth Trust) as of July 31, 2003, the related statement of operations for
the year then ended and the statements of changes in net assets for each of the
years in the two-year period ended July 31, 2003. These financial statements are
the responsibility of portfolio management. Our responsibility is to express an
opinion on these financial statements 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 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 July
31, 2003, by correspondence with the custodian and brokers or by other
appropriate auditing procedures. 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 Growth Trends Portfolio as of
July 31, 2003, and the results of its operations and the changes in its net
assets 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
September 12, 2003
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19 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Financial Statements
Statement of assets and liabilities
AXP New Dimensions Fund
July 31, 2003
Assets
Investment in Portfolio (Note 1) $16,846,324,007
Capital shares receivable 1,554,161
---------
Total assets 16,847,878,168
--------------
Liabilities
Capital shares payable 1,155,716
Accrued distribution fee 163,239
Accrued service fee 9,467
Accrued transfer agency fee 63,692
Accrued administrative services fee 14,782
Other accrued expenses 509,194
-------
Total liabilities 1,916,090
---------
Net assets applicable to outstanding capital stock $16,845,962,078
===============
Represented by
Capital stock -- $.01 par value (Note 1) $ 7,770,956
Additional paid-in capital 16,004,223,715
Undistributed net investment income 19,172,686
Accumulated net realized gain (loss) (Note 5) (1,221,918,813)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 2,036,713,534
-------------
Total -- representing net assets applicable to outstanding capital stock $16,845,962,078
===============
Net assets applicable to outstanding shares: Class A $ 9,858,532,685
Class B $ 3,456,870,379
Class C $ 58,640,193
Class Y $ 3,471,918,821
Net asset value per share of outstanding capital stock: Class A shares 450,109,769 $ 21.90
Class B shares 166,469,977 $ 20.77
Class C shares 2,827,315 $ 20.74
Class Y shares 157,688,507 $ 22.02
----------- ---------------
See accompanying notes to financial statements.
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20 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Statement of operations
AXP New Dimensions Fund
Year ended July 31, 2003
Investment income
Income:
Dividends $ 232,038,094
Interest 5,912,075
Fee income from securities lending 274,511
Less foreign taxes withheld (148,569)
--------
Total income 238,076,111
-----------
Expenses (Note 2):
Expenses allocated from Portfolio 92,110,787
Distribution fee
Class A 23,058,929
Class B 34,895,375
Class C 487,807
Transfer agency fee 27,953,542
Incremental transfer agency fee
Class A 1,611,457
Class B 1,396,563
Class C 29,979
Service fee -- Class Y 3,142,520
Administrative services fees and expenses 5,277,428
Compensation of board members 139,482
Printing and postage 2,845,629
Registration fees 2,342
Audit fees 12,000
Other 188,961
-------
Total expenses 193,152,801
Earnings credits on cash balances (Note 2) (212,253)
--------
Total net expenses 192,940,548
-----------
Investment income (loss) -- net 45,135,563
----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (478,773,091)
Foreign currency transactions (1,464,352)
Options contracts written 1,213,905
---------
Net realized gain (loss) on investments (479,023,538)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 1,817,350,639
-------------
Net gain (loss) on investments and foreign currencies 1,338,327,101
-------------
Net increase (decrease) in net assets resulting from operations $1,383,462,664
==============
See accompanying notes to financial statements.
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21 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Statements of changes in net assets
AXP New Dimensions Fund
Year ended July 31, 2003 2002
Operations and distributions
Investment income (loss) -- net $ 45,135,563 $ 11,088,460
Net realized gain (loss) on investments (479,023,538) (78,716,798)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 1,817,350,639 (4,792,258,031)
------------- --------------
Net increase (decrease) in net assets resulting from operations 1,383,462,664 (4,859,886,369)
------------- --------------
Distributions to shareholders from:
Net investment income
Class A (15,823,968) (6,092,513)
Class B -- (2,401,369)
Class C -- (18,358)
Class Y (8,674,557) (2,048,495)
Tax return of capital
Class A -- (2,538,856)
Class B -- (1,003,750)
Class C -- (7,646)
Class Y -- (854,555)
----------- -----------
Total distributions (24,498,525) (14,965,542)
----------- -----------
Capital share transactions (Note 3)
Proceeds from sales
Class A shares (Note 2) 952,976,869 2,430,324,703
Class B shares 406,346,628 675,994,508
Class C shares 20,596,860 31,832,064
Class Y shares 850,965,146 1,040,580,252
Reinvestment of distributions at net asset value
Class A shares 15,366,526 8,375,379
Class B shares -- 3,370,269
Class C shares -- 25,864
Class Y shares 8,566,223 2,894,340
Payments for redemptions
Class A shares (1,761,464,006) (3,608,500,396)
Class B shares (Note 2) (955,150,455) (997,820,871)
Class C shares (Note 2) (10,578,609) (7,489,197)
Class Y shares (898,578,735) (1,580,185,126)
------------ --------------
Increase (decrease) in net assets from capital share transactions (1,370,953,553) (2,000,598,211)
-------------- --------------
Total increase (decrease) in net assets (11,989,414) (6,875,450,122)
Net assets at beginning of year 16,857,951,492 23,733,401,614
-------------- --------------
Net assets at end of year $16,845,962,078 $16,857,951,492
=============== ===============
Undistributed net investment income $ 19,172,686 $ --
--------------- ---------------
See accompanying notes to financial statements.
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22 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Notes to Financial Statements
AXP New Dimensions Fund
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a series of AXP Dimensions Series, Inc. (formerly AXP New
Dimensions Fund, Inc.) and is registered under the Investment Company Act of
1940 (as amended) as a diversified, open-end management investment company.
AXP Dimensions Series, Inc. has 10 billion authorized shares of capital stock
that can be allocated among the separate series as designated by the board.
The Fund offers Class A, Class B, Class C and Class Y shares.
o Class A shares are sold with a front-end sales charge.
o Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth calendar year
of ownership.
o Class C shares may be subject to a CDSC.
o Class Y shares have no sales charge and are offered only to qualifying
institutional investors.
All classes of shares have identical voting, dividend and liquidation rights.
The level of 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 Growth Trends Portfolio
The Fund invests all of its assets in the Growth Trends Portfolio (the
Portfolio), a series of Growth Trust (the Trust), an open-end investment company
that has the same objectives as the Fund. The Portfolio invests primarily in
common stocks of companies showing potential for significant growth and
operating in areas where economic or technological changes are occurring.
The Fund records daily its share of the Portfolio's income, expenses and
realized and unrealized gains and losses. The financial statements of the
Portfolio are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements.
The Fund records its investment in the Portfolio at the value that is equal to
the Fund's proportionate ownership interest in the Portfolio's net assets. The
percentage of the Portfolio owned by the Fund as of July 31, 2003, 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.
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23 -- AXP NEW DIMENSIONS FUND -- 2003 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 the 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
$1,464,352 and accumulated net realized loss has been decreased by $1,464,352.
The tax character of distributions paid for the years indicated is as follows:
Year ended July 31, 2003 2002
Class A
Distributions paid from:
Ordinary income $15,823,968 $6,092,513
Tax return of capital -- 2,538,856
Class B
Distributions paid from:
Ordinary income -- 2,401,369
Tax return of capital -- 1,003,750
Class C
Distributions paid from:
Ordinary income -- 18,358
Tax return of capital -- 7,646
Class Y
Distributions paid from:
Ordinary income 8,674,557 2,048,495
Tax return of capital -- 854,555
As of July 31, 2003, the components of distributable earnings on a tax basis are
as follows:
Undistributed ordinary income $ 19,172,686
Accumulated long-term gain (loss) $(1,193,208,675)
Unrealized appreciation (depreciation) $ 2,008,003,396
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.
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24 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
2. EXPENSES AND SALES CHARGES
In addition to the expenses allocated from the Portfolio, the Fund accrues its
own expenses as follows:
The Fund has an agreement with AEFC to provide administrative services. Under an
Administrative Services Agreement, the Fund pays AEFC a fee for administration
and accounting services at a percentage of the Fund's average daily net assets
in reducing percentages from 0.05% to 0.02% 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 $19.50
o Class B $20.50
o Class C $20.00
o Class Y $17.50
In addition, there is an annual closed-account fee of $5 per inactive account,
charged on a pro rata basis from the date the account becomes inactive until the
date the account is purged from the transfer agent system generally within one
year.
Under terms of a prior agreement that ended April 30, 2003, the Fund paid a
transfer agency fee at an annual rate per shareholder account of $19 for Class
A, $20 for Class B, $19.50 for Class C and $17 for Class Y.
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 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
$16,451,736 for Class A, $3,936,838 for Class B and $17,441 for Class C for the
year ended July 31, 2003.
During the year ended July 31, 2003, the Fund's transfer agency fees were
reduced by $212,253 as a result of earnings credits from overnight cash
balances.
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25 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the years indicated are as follows:
Year ended July 31, 2003
Class A Class B Class C Class Y
Sold 46,758,227 21,445,445 1,090,406 42,498,051
Issued for reinvested distributions 792,467 -- -- 441,558
Redeemed (89,554,929) (50,020,413) (567,925) (45,281,669)
----------- ----------- -------- -----------
Net increase (decrease) (42,004,235) (28,574,968) 522,481 (2,342,060)
----------- ----------- ------- ----------
Year ended July 31, 2002
Class A Class B Class C Class Y
Sold 103,405,732 30,104,630 1,423,135 44,288,672
Issued for reinvested distributions 343,417 144,220 1,107 118,222
Redeemed (156,522,877) (46,677,982) (347,238) (67,710,202)
------------ ----------- -------- -----------
Net increase (decrease) (52,773,728) (16,429,132) 1,077,004 (23,303,308)
----------- ----------- --------- -----------
4. BANK BORROWINGS
The Fund has a revolving credit agreement with a syndicate of banks headed by
Deutsche Bank, whereby the Fund is permitted to have bank borrowings for
temporary or emergency purposes to fund shareholder redemptions. The agreement
went into effect Sept. 24, 2002. The Fund must maintain asset coverage for
borrowings of at least 300%. The agreement, which enables the Fund to
participate with other American Express mutual funds, permits borrowings up to
$500 million, collectively. Interest is charged to each Fund based on its
borrowings at a rate equal to either the LIBOR plus 0.50%, the IBOR plus 0.50%
or the higher of the Federal Funds Rate plus 0.25% and the Prime Lending Rate.
Borrowings are payable within 60 days after such loan is executed. The Fund also
pays a commitment fee equal to its pro rata share of the amount of the credit
facility at a rate of 0.09% per annum. Prior to this agreement, the Fund had a
revolving credit agreement that permitted borrowings up to $200 million with
U.S. Bank, N.A. The Fund had no borrowings outstanding during the year ended
July 31, 2003.
5. CAPITAL LOSS CARRY-OVER
For federal income tax purposes, the Fund has a capital loss carry-over of
$1,193,208,675 as of July 31, 2003, that will expire in 2010 through 2012 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.
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26 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL 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 July 31, 2003 2002 2001 2000 1999
Net asset value, beginning of period $20.04 $25.43 $36.26 $31.21 $27.59
Income from investment operations:
Net investment income (loss) .07 .05 .02 .02 .06
Net gains (losses) (both realized and unrealized) 1.82 (5.42) (7.37) 7.14 5.31
Total from investment operations 1.89 (5.37) (7.35) 7.16 5.37
Less distributions:
Dividends from net investment income (.03) (.02) (.01) (.05) (.06)
Excess distributions from net investment income -- -- (.01) -- --
Distributions from realized gains -- -- (3.46) (2.06) (1.69)
Total distributions (.03) (.02) (3.48) (2.11) (1.75)
Net asset value, end of period $21.90 $20.04 $25.43 $36.26 $31.21
Ratios/supplemental data
Net assets, end of period (in millions) $9,859 $9,863 $13,857 $17,777 $13,568
Ratio of expenses to average daily net assets(c) 1.08% 1.06% 1.00% .90% .86%
Ratio of net investment income (loss) to average daily net assets .42% .19% .12% .19% .24%
Portfolio turnover rate (excluding short-term securities) 20% 27% 29% 34% 34%
Total return(e) 9.47% (21.14%) (21.10%) 23.16% 20.04%
See accompanying notes to financial highlights.
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27 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Class B
Per share income and capital changes(a)
Fiscal period ended July 31, 2003 2002 2001 2000 1999
Net asset value, beginning of period $19.12 $24.44 $35.22 $30.54 $27.19
Income from investment operations:
Net investment income (loss) (.04) (.14) (.13) (.24) (.10)
Net gains (losses) (both realized and unrealized) 1.69 (5.16) (7.19) 6.98 5.14
Total from investment operations 1.65 (5.30) (7.32) 6.74 5.04
Less distributions:
Dividends from net investment income -- (.02) -- -- --
Distributions from realized gains -- -- (3.46) (2.06) (1.69)
Total distributions -- (.02) (3.46) (2.06) (1.69)
Net asset value, end of period $20.77 $19.12 $24.44 $35.22 $30.54
Ratios/supplemental data
Net assets, end of period (in millions) $3,457 $3,728 $5,169 $6,252 $4,070
Ratio of expenses to average daily net assets(c) 1.85% 1.83% 1.76% 1.66% 1.63%
Ratio of net investment income (loss) to average daily net assets (.35%) (.57%) (.65%) (.57%) (.53%)
Portfolio turnover rate (excluding short-term securities) 20% 27% 29% 34% 34%
Total return(e) 8.63% (21.71%) (21.69%) 22.20% 19.13%
See accompanying notes to financial highlights.
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28 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Class C
Per share income and capital changes(a)
Fiscal period ended July 31, 2003 2002 2001 2000(b)
Net asset value, beginning of period $19.10 $24.42 $35.23 $35.52
Income from investment operations:
Net investment income (loss) (0.04) (.14) (.13) (.01)
Net gains (losses) (both realized and unrealized) 1.68 (5.16) (7.19) (.28)
Total from investment operations 1.64 (5.30) (7.32) (.29)
Less distributions:
Dividends from net investment income -- (.02) (.02) --
Excess distributions from net investment income -- -- (.01) --
Distributions from realized gains -- -- (3.46) --
Total distributions -- (.02) (3.49) --
Net asset value, end of period $20.74 $19.10 $24.42 $35.23
Ratios/supplemental data
Net assets, end of period (in millions) $59 $44 $30 $2
Ratio of expenses to average daily net assets(c) 1.87% 1.85% 1.76% 1.66%(d)
Ratio of net investment income (loss) to average daily net assets (.38%) (.60%) (.75%) (.74%)(d)
Portfolio turnover rate (excluding short-term securities) 20% 27% 29% 34%
Total return(e) 8.59% (21.73%) (21.70%) (.82%)(f)
See accompanying notes to financial highlights.
- --------------------------------------------------------------------------------
29 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Class Y
Per share income and capital changes(a)
Fiscal period ended July 31, 2003 2002 2001 2000 1999
Net asset value, beginning of period $20.14 $25.51 $36.33 $31.24 $27.62
Income from investment operations:
Net investment income (loss) .11 .09 .07 .05 .09
Net gains (losses) (both realized and unrealized) 1.83 (5.44) (7.38) 7.19 5.30
Total from investment operations 1.94 (5.35) (7.31) 7.24 5.39
Less distributions:
Dividends from net investment income (.06) (.02) (.02) (.09) (.08)
Excess distributions from net investment income -- -- (.03) -- --
Distributions from realized gains -- -- (3.46) (2.06) (1.69)
Total distributions (.06) (.02) (3.51) (2.15) (1.77)
Net asset value, end of period $22.02 $20.14 $25.51 $36.33 $31.24
Ratios/supplemental data
Net assets, end of period (in millions) $3,472 $3,222 $4,677 $6,328 $5,513
Ratio of expenses to average daily net assets(c) .91% .90% .84% .74% .77%
Ratio of net investment income (loss) to average daily net assets .59% .36% .28% .35% .33%
Portfolio turnover rate (excluding short-term securities) 20% 27% 29% 34% 34%
Total return(e) 9.64% (21.00%) (20.97%) 23.35% 20.12%
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) Adjusted to an annual basis.
(e) Total return does not reflect payment of a sales charge.
(f) Not annualized.
- --------------------------------------------------------------------------------
30 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Independent Auditors' Report
THE BOARD AND SHAREHOLDERS
AXP DIMENSIONS SERIES, INC.
We have audited the accompanying statement of assets and liabilities of AXP New
Dimensions Fund (a series of AXP Dimensions Series, Inc.) as of July 31, 2003,
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 July
31, 2003, and the financial highlights for each of the years in the five-year
period ended July 31, 2003. 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. 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 and financial highlights referred to
above present fairly, in all material respects, the financial position of AXP
New Dimensions Fund as of July 31, 2003, 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
September 12, 2003
- --------------------------------------------------------------------------------
31 -- AXP NEW DIMENSIONS FUND -- 2003 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 New Dimensions Fund
Fiscal year ended July 31, 2003
Class A
Income distributions -- taxable as dividend income:
Qualified Dividend Income for individuals (effective for distributions
made after Jan. 1, 2003) 0.00%
Dividends Received Deduction for corporations 100%
Payable date Per share
Dec. 19, 2002 $0.03382
Class Y
Income distributions -- taxable as dividend income:
Qualified Dividend Income for individuals (effective for distributions
made after Jan. 1, 2003) 0.00%
Dividends Received Deduction for corporations 100%
Payable date Per share
Dec. 19, 2002 $0.05517
- --------------------------------------------------------------------------------
32 -- AXP NEW DIMENSIONS FUND -- 2003 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 83 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, address, age Position held Principal occupation during past Other directorships
with Fund and five years
length of service
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Arne H. Carlson Board member Chair, Board Services Corporation
901 S. Marquette Ave. since 1999 (provides administrative services
Minneapolis, MN 55402 to boards). Former Governor of
Age 68 Minnesota
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Philip J. Carroll, Jr. Board member Retired Chairman and CEO, Fluor Scottish Power PLC, Vulcan
901 S. Marquette Ave. since 2002 Corporation (engineering and Materials Company, Inc.
Minneapolis, MN 55402 construction) since 1998 (construction
Age 65 materials/chemicals)
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Livio D. DeSimone Board member Retired Chair of the Board and Cargill, Incorporated
30 Seventh Street East since 2001 Chief Executive Officer, Minnesota (commodity merchants and
Suite 3050 Mining and Manufacturing (3M) processors), General Mills,
St. Paul, MN 55101-4901 Inc. (consumer foods), Vulcan
Age 69 Materials Company (construction
materials/ chemicals), Milliken
& Company (textiles and
chemicals), and Nexia
Biotechnologies, Inc.
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Heinz F. Hutter* Board member Retired President and Chief
901 S. Marquette Ave. since 1994 Operating Officer, Cargill,
Minneapolis, MN 55402 Incorporated (commodity merchants
Age 74 and processors)
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 68
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Stephen R. Lewis, Jr.** Board member Retired President and Professor of Valmont Industries, Inc.
901 S. Marquette Ave. since 2002 Economics, Carleton College (manufactures irrigation
Minneapolis, MN 55402 systems)
Age 64
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
Alan G. Quasha Board member President, Quadrant Management, Compagnie Financiere Richemont
901 S. Marquette Ave. since 2002 Inc. (management of private AG (luxury goods), Harken
Minneapolis, MN 55402 equities) Energy Corporation (oil and gas
Age 53 exploration) and SIRIT Inc.
(radio frequency identification
technology)
- ---------------------------------- ------------------ ------------------------------------- ---------------------------------
* Interested person of AXP Partners International Aggressive Growth Fund and
AXP Partners Aggressive Growth Fund by reason of being a security holder of
J P Morgan Chase & Co., which has a 45% interest in American Century
Companies, Inc., the parent company of the subadviser of two of the AXP
Partners Funds, American Century Investment Management, Inc.
** Interested person of AXP Partners International Aggressive Growth Fund by
reason of being a security holder of FleetBoston Financial Corporation,
parent company of Liberty Wanger Asset Management, L.P., one of the fund's
subadvisers.
- --------------------------------------------------------------------------------
33 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
Independent Board Members (continued)
Name, address, age Position held Principal occupation during past Other directorships
with Fund and five years
length of service
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Alan K. Simpson Board member Former three-term United States Biogen, Inc.
1201 Sunshine Ave. since 1997 Senator for Wyoming (biopharmaceuticals)
Cody, WY 82414
Age 71
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Alison Taunton-Rigby Board member President, Forester Biotech since
901 S. Marquette Ave. since 2002 2000. Former President and CEO,
Minneapolis, MN 55402 Aquila Biopharmaceuticals, Inc.
Age 59
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Board Members Affiliated with AEFC***
Name, address, age Position held Principal occupation during past Other directorships
with Fund and five years
length of service
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Barbara H. Fraser Board member Executive Vice President - AEFA
1546 AXP Financial Center since 2002 Products and Corporate Marketing of
Minneapolis, MN 55474 AEFC since 2002. President -
Age 53 Travelers Check Group, American
Express Company, 2001-2002.
Management Consultant, Reuters,
2000-2001. Managing Director -
International Investments, Citibank
Global, 1999-2000. Chairman and
CEO, Citicorp Investment Services
and Citigroup Insurance Group,
U.S., 1998-1999
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Stephen W. Roszell Board member Senior Vice President -
50238 AXP Financial Center since 2002, Vice Institutional Group of AEFC
Minneapolis, MN 55474 President since
Age 54 2002
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
William F. Truscott Board member Senior Vice President - Chief
53600 AXP Financial Center since 2001, Vice Investment Officer of AEFC since
Minneapolis, MN 55474 President since 2001. Former Chief Investment
Age 42 2002 Officer and Managing Director,
Zurich Scudder Investments
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
*** Interested person by reason of being an officer, director and/or employee of
AEFC.
- --------------------------------------------------------------------------------
34 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
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. Roszell, who is vice president, and
Mr. Truscott, who is vice president, the Fund's other officers are:
Other Officers
Name, address, age Position held Principal occupation during past Other directorships
with Fund and five years
length of service
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Jeffrey P. Fox Treasurer since Vice President - Investment
50005 AXP Financial Center 2002 Accounting, AEFC, since 2002; Vice
Minneapolis, MN 55474 President - Finance, American
Age 48 Express Company, 2000-2002; Vice
President - Corporate Controller,
AEFC, 1996-2000
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Paula R. Meyer President since Senior Vice President and General
596 AXP Financial Center 2002 Manager - Mutual Funds, AEFC, since
Minneapolis, MN 55474 2002; Vice President and Managing
Age 49 Director - American Express Funds,
AEFC, 2000-2002; Vice President,
AEFC, 1998-2000
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
Leslie L. Ogg Vice President, President of Board Services
901 S. Marquette Ave. General Counsel, Corporation
Minneapolis, MN 55402 and Secretary
Age 64 since 1978
- --------------------------------- ------------------- ------------------------------------- ---------------------------------
The SAI has additional information about the Fund's directors and is available,
without charge, upon request by calling (800) 862-7919.
- --------------------------------------------------------------------------------
35 -- AXP NEW DIMENSIONS FUND -- 2003 ANNUAL REPORT
The policies and procedures that the Fund uses to determine how to vote proxies
relating to portfolio securities can be found in the Fund's Statement of
Additional Information (SAI) which is available (i) without charge, upon
request, by calling toll-free (800) 862-7919; (ii) on the American Express
Company Web site at americanexpress.com/funds; and (iii) on the Securities and
Exchange Commission Web site at http://www.sec.gov.
- --------------------------------------------------------------------------------
(logo)
AMERICAN
EXPRESS(R)
- --------------------------------------------------------------------------------
American Express Funds
70100 AXP Financial Center
Minneapolis, MN 55474
This report must be accompanied or preceded by the Fund's current prospectus.
Distributed by American Express Financial Advisors Inc. Member NASD. American
Express Company is separate from American Express Financial Advisors Inc. and
is not a broker-dealer.
Item 2. (a) The Registrant has adopted a code of ethics that applies to the
Registrant's principal executive officer and principal financial
officer. A copy of the code of ethics is filed as an exhibit to this
form N-CSR.
(b) During the period covered by this report, there were not any
amendments to the provisions of the code of ethics adopted in 2(a)
above.
(c) During the period covered by this report, there were not any
implicit or explicit waivers to the provisions of the code of ethics
adopted in 2(a).
Item 3. The Registrant's board of directors has determined that independent
directors Livio D. DeSimone, Anne P. Jones, and Alan G. Quasha, each
qualify as audit committee financial experts.
Item 4. Principal Accountant Fees and Services. Not applicable.
Item 5. Audit Committee of Listed Registrants. Not applicable.
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. Not applicable.
Item 8. [Reserved]
Item 9. Controls and Procedures.
(a) The registrant's Principal Executive Officer and Principal
Financial Officer have evaluated the registrant's disclosure
controls and procedures within 90 days of this filing and have
concluded that the registrant's disclosure controls and
procedures by the registrant in this Form N-CSR was recorded,
processed, summarized, and reported timely.
(b) At the date of filing this Form N-CSR, the registrant's
Principal Executive Officer and Principal Financial Officer are
aware of no significant changes in the registrant's internal
controls or in other factors that could significantly affect
these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Item 10. Exhibits.
(a)(1) Code of ethics as applies to the Registrant's principal
executive officer and principal financial officer, as required to be
disclosed under Item 2 of Form N-CSR, is attached as Ex. 99.CODE ETH.
(a)(2) Separate certification for the Registrant's principal
executive officer and principal financial officer, as required by
Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a)
under the Investment Company Act of 1940, are attached as
EX.99.CERT.
(b) A certification by the Registrant's principal executive officer
and principal financial officer, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(b) under the Investment
Company Act of 1940, is attached as EX.99.906 CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) AXP Dimensions Series, Inc.
By /s/ Paula R. Meyer
------------------
Paula R. Meyer
President and Principal Executive Officer
Date January 14, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ Paula R. Meyer
------------------
Paula R. Meyer
President and Principal Executive Officer
Date January 14, 2004
By /s/ Jeffrey P. Fox
------------------
Jeffrey P. Fox
Treasurer and Principal Financial Officer
Date January 14, 2004