UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-2591
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AXP MONEY MARKET 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: 1/31
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AXP(R)
Cash
Management
Fund
Semiannual Report
for the Period Ended
Jan. 31, 2004
AXP Cash Management Fund seeks to provide shareholders with maximum current
income consistent with liquidity and stability of principal.
(logo) (logo)
American AMERICAN
Express(R) EXPRESS
Funds (R)
Table of Contents
Fund Snapshot 3
Questions & Answers
with Portfolio Management 4
Investments in Securities 7
Financial Statements 11
Notes to Financial Statements 14
Proxy Voting 19
(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 CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Fund Snapshot
AS OF JAN. 31, 2004
PORTFOLIO MANAGER
Portfolio manager Jerri I. Cohen, CFA*
Since 12/02
Years in industry 23
* The Fund is managed by a team of portfolio managers led by Jerri I. Cohen.
FUND OBJECTIVE
For investors seeking maximum current income consistent with liquidity and
conservation of capital.
Inception dates
A: 10/6/75 B: 3/20/95 C: 6/26/00 Y: 3/20/95
Ticker symbols
A: IDSXX B: ACBXX C: -- Y: IDYXX
Total net assets $4.460 billion
Number of holdings 166
Average maturity in days 57
STYLE MATRIX
Shading within the style matrix indicates areas in which the Fund generally
invests.
DURATION
SHORT INT LONG
X HIGH
MEDIUM QUALITY
LOW
SECTOR COMPOSITION
Percentage of portfolio assets
(pie graph)
Commercial paper 63.1%
Certificates of deposit 26.2%
U.S. government agencies 7.0%
Bank notes 3.7%
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund.
Fund holdings are subject to change.
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3 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Questions & Answers
WITH PORTFOLIO MANAGEMENT
Below, portfolio manager Jerri Cohen discusses AXP Cash Management Fund's
results and positioning for the first half of fiscal year 2004.
Q: How did AXP Cash Management Fund perform for the six months ended Jan. 31,
2004?
A: AXP Cash Management Fund's Class A shares returned 0.18% for the period.
The Fund's seven-day yield was 0.36% on Jan. 31, 2004.* The Fund serves as
a conservative investment choice for individuals who want to avoid riskier
markets.
Q: What factors significantly affected the Fund's performance?
A: The continuation of historically low interest rates was the predominate
factor affecting the Fund's results. During the period, in an effort to
stimulate the economy and prevent deflation, the Federal Reserve Board (the
Fed) maintained an accommodative monetary policy.
In August 2003, the Fed stated that it believed its accommodative policy
could be maintained for a "considerable period." As a result, the
short-term yield curve has been relatively flat and most investors believe
there will be no official increase in interest rates until well into 2004.
On January 28th, the Federal Open Market Committee substituted "patient"
for "considerable period." This change not only served to remind people
that short rates will rise eventually, but that the Fed will be thinking in
terms of progress in the recovery as opposed to some predetermined time
frame.
The Fed's accommodative monetary policy, along with stimulative fiscal
policy in the form of tax cuts, has been successful in reinvigorating the
U.S. economy. During 2003, the annual pace of growth in U.S. Gross Domestic
Product (GDP) rose a robust 8.2% in the third calendar quarter and a solid
4.1% in the fourth calendar quarter. Business spending and corporate
profits are showing signs of improvement. New jobs are being created after
a long period of labor market contraction. All of these economic events
affect the yield curve and performance of the Fund.
Q: What changes did you make to the Fund during the period?
A: As always, we attempt to maximize the Fund's yield without taking
unnecessary risks. With interest rates likely to stay low for a
considerable period of time, we tried to selectively extend the maturity
when
* Past performance does not guarantee future results. The Fund is neither
insured nor guaranteed by the FDIC (Federal Deposit Insurance Corporation)
or any other government agency. Yields will fluctuate. Although the Fund
seeks to preserve the value of your investment at $1 per share, it is
possible to lose money by investing in the Fund. The seven-day current
yield more closely reflects the current earnings of the Fund than the total
return.
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4 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Questions & Answers
(begin callout quote)> As always, we attempt to maximize the Fund's yield
without taking unnecessary risks.(end callout quote)
the yield curve provided attractive opportunities. In October and November,
when the yield curve steepened slightly, we extended the average maturity
to lock in some higher rates. Now that the yield curve has flattened, we
are back to a neutral duration. We also increased our allocation to
variable rate securities, as we believe these securities offer good value
in a flat or rising rate environment. All of the Fund's investments
AVERAGE ANNUAL TOTAL RETURNS
Class A Class B Class C Class Y
(Inception dates) (10/6/75) (3/20/95) (6/26/00) (3/20/95)
NAV(1) NAV(2) After CDSC(3) NAV(2) After CDSC(4) NAV(1)
as of Jan. 31, 2004
6 months* +0.18% +0.03% -3.97% +0.03% -0.97% +0.24%
1 year +0.41% +0.06% -3.94% +0.06% +0.06% +0.53%
5 years +3.17% +2.49% +2.31% N/A N/A +3.21%
10 years +4.03% N/A N/A N/A N/A N/A
Since inception N/A +3.36% +3.36% +1.84% +1.84% +4.11%
as of Dec. 31, 2003
6 months* +0.17% +0.03% -4.97% +0.03% -0.97% +0.24%
1 year +0.44% +0.06% -3.94% +0.06% +0.06% +0.56%
5 years +3.24% +2.55% +2.37% N/A N/A +3.28%
10 years +4.04% N/A N/A N/A N/A N/A
Since inception N/A +3.39% +3.39% +1.88% +1.88% +4.14%
The performance information shown represents the past performance and is not a
guarantee of future results. The value of your investment and returns will
fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the
performance information shown. You may obtain performance information current to
the most recent month-end by calling (888) 723-8476 or visiting
www.americanexpress.com/funds. You should consider the investment objectives,
risks, and charges and expenses of the Fund carefully before investing.
* Not annualized.
(1) Sales charge is not applicable to these shares. Class Y shares available to
institutional investors only.
(2) Excluding sales charge.
(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.
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5 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Questions & Answers
continue to be in high quality securities with minimal credit risk. With
these adjustments, we believe the Fund is strategically positioned to
navigate the current low interest rate environment.
Q: How do you plan to manage the Fund in the coming months?
A: Signs of an economic recovery are evident. The key questions are: Is the
recovery sustainable, and how long will the Fed maintain low short-term
interest rates? We believe the recovery will continue. At the same time, we
believe that inflation will remain subdued. Given low levels of inflation
and excess capacity in the economy, the Fed will not be in a rush to raise
interest rates.
We will continue to closely monitor economic data and Fed policy, striving
to strategically adjust our portfolio positioning accordingly.
Short-term yield curve has been relatively flat since July 2003
(bar chart)
U.S. Treasury Yields
Yield
2.0% [Y]
1.5% [X] [Y] [X] 1.01%
1.0% 0.91% 0.94% 0.99%
0.5%
0.0%
3 months 6 months
Maturity
[X] Jan. 31, 2004
[Y] July 31, 2003
Source: Bloomberg.
This illustration is not intended to represent the yield of any American Express
Fund.
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6 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Investments in Securities
AXP Cash Management Fund
Jan. 31, 2004 (Unaudited)
(Percentages represent value of investments compared to net assets)
U.S. government agencies (7.0%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Federal Home Loan Mtge Corp Nt
11-15-04 1.40% $34,000,000 $34,021,187
Federal Natl Mtge Assn Nts
07-20-04 1.06 50,400,000 50,400,000
07-26-04 1.03 42,000,000 42,000,000
07-27-04 1.18 42,000,000 42,000,000
08-13-04 1.20 42,000,000 42,000,000
08-30-04 1.30 33,500,000 33,500,000
11-02-04 1.35 33,500,000 33,500,000
11-15-04 1.43 33,500,000 33,500,000
Total U.S. government agencies
(Cost: $310,921,187) $310,921,187
Bank notes (3.7%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
La Salle Bank
02-05-04 1.10% $27,200,000 $27,200,000
02-20-04 1.10 37,600,000 37,600,000
03-02-04 1.11 26,000,000 26,000,000
06-22-04 1.07 30,400,000 30,400,000
Natl City Bank of Indiana
01-10-05 1.07 43,000,000(c) 42,995,932
Total bank notes
(Cost: $164,195,932) $164,195,932
Certificates of deposit (26.2%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Abbey Natl North America
03-03-04 1.04% $55,000,000(c) $54,999,273
Bank One
04-16-04 1.03 60,000,000(c) 59,998,755
Bayerische Landesbank Girozentrale NY Yankee
03-08-04 1.16 10,000,000 10,000,663
04-16-04 1.29 59,500,000 59,498,143
BNP Paribas NY Yankee
06-07-04 1.04 42,000,000(c) 41,996,277
11-16-04 1.45 42,000,000 42,000,000
11-19-04 1.50 42,000,000 41,994,956
Canadian Imperial Bank NY Yankee
03-05-04 1.30 55,000,000 55,000,000
05-28-04 1.06 33,500,000(c) 33,498,910
06-18-04 1.00 34,000,000 34,000,000
Credit Agricole Indosuez NY Yankee
02-13-04 1.10 5,000,000 5,000,011
02-18-04 1.03 10,000,000 9,999,587
03-04-04 1.03 22,000,000 22,000,000
03-04-04 1.10 5,000,000 4,999,994
03-05-04 1.12 5,000,000 5,000,078
03-10-04 1.03 18,400,000 18,400,000
04-14-04 1.28 8,000,000 8,002,728
Credit Suisse First Boston NY Yankee
07-06-04 1.10 40,000,000(c) 40,000,000
Danske Bank NY Yankee
07-15-04 1.11 16,000,000 16,000,000
Deutsche Bank NY Yankee
11-02-04 1.25 28,500,000 28,500,000
Lloyds TSB Bank NY Yankee
04-01-04 1.09 30,000,000 30,000,000
See accompanying notes to investments in securities.
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7 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Certificates of deposit (continued)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Natexis Banques Populaires NY Yankee
02-02-04 1.10% $30,000,000 $30,000,000
02-17-04 1.10 35,000,000 35,000,000
02-25-04 1.12 34,000,000 34,000,000
04-14-04 1.13 33,500,000 33,500,000
Royal Bank of Scotland NY Yankee
04-19-04 1.34 59,500,000 59,498,070
Societe Generale NY Yankee
02-26-04 1.05 60,000,000(c) 59,999,571
03-03-04 1.05 55,000,000(c) 54,999,519
Standard Chartered Bank NY Yankee
04-06-04 1.08 40,000,000 40,000,000
Svenska Handelsbanken NY Yankee
04-13-04 1.07 49,500,000 49,500,000
Toronto Dominion NY Yankee
03-16-04 1.09 25,000,000 25,000,000
Westdeutsche Landesbank NY Yankee
02-19-04 1.36 39,700,000 39,700,000
04-07-04 1.25 15,000,000 15,002,794
07-29-04 1.13 30,000,000 30,000,000
08-02-04 1.15 21,500,000 21,500,000
09-23-04 1.05 21,000,000(c) 20,997,272
Total certificates of deposit
(Cost: $1,169,586,601) $1,169,586,601
Commercial paper (63.3%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Asset-backed (39.9%)
Alpine Securitization
02-19-04 1.10% $34,100,000(b) $34,080,203
03-25-04 1.04 20,700,000(b) 20,667,708
Amsterdam Funding
02-03-04 1.05 5,700,000(b) 5,699,501
02-09-04 1.09 31,700,000(b) 31,691,362
02-13-04 1.03 11,500,000(b) 11,495,723
03-19-04 1.03 19,800,000(b) 19,772,808
03-24-04 1.03 42,400,000(b) 42,335,705
Barton Capital
04-21-04 1.04 43,477,000(b) 43,375,264
CAFCO LLC
02-04-04 1.10 17,700,000(b) 17,697,837
02-12-04 1.04 4,800,000(b) 4,798,336
02-23-04 1.03 26,300,000(b) 26,282,693
03-17-04 1.05 35,000,000(b) 34,953,042
CC USA
04-26-04 1.05 54,100,000(b) 53,964,300
CHARTA LLC
03-17-04 1.04 20,000,000(b) 19,973,422
03-19-04 1.04 10,000,000(b) 9,986,133
03-24-04 1.04 30,000,000(b) 29,954,066
CIESCO LLC
02-20-04 1.08 23,600,000(b) 23,585,840
CRC Funding LLC
03-01-04 1.03 15,400,000(b) 15,386,782
03-02-04 1.03 11,700,000(b) 11,689,623
03-08-04 1.03 43,500,000(b) 43,453,949
03-30-04 1.04 5,500,000(b) 5,490,626
CXC LLP
02-27-04 1.05 14,900,000(b) 14,888,266
Dorada Finance
04-26-04 1.06 22,700,000(b) 22,642,519
Edison Asset Securitization
02-09-04 1.10 35,000,000(b) 34,990,375
02-10-04 1.10 15,000,000(b) 14,995,417
02-12-04 1.10 8,000,000(b) 7,997,067
02-13-04 1.09 15,700,000(b) 15,693,820
03-01-04 1.10 16,000,000(b) 15,985,333
Fairway Finance
03-15-04 1.11 34,542,000(b) 34,495,138
03-24-04 1.09 14,470,000(b) 14,446,780
Falcon Asset Securitization
03-15-04 1.09 24,500,000(b) 24,467,361
FCAR Owner Trust I
04-02-04 1.04 23,800,000 23,757,372
04-05-04 1.06 32,400,000 32,337,990
04-07-04 1.04 15,600,000 15,569,805
05-04-04 1.05 15,900,000 15,856,408
Galaxy Funding
03-09-04 1.12 58,300,000(b) 58,231,075
03-18-04 1.12 34,700,000(b) 34,649,261
03-25-04 1.09 10,800,000(b) 10,782,342
04-21-04 1.11 7,000,000(b) 6,982,518
Grampian Funding LLC
02-18-04 1.11 36,900,000(b) 36,879,521
02-24-04 1.11 25,000,000(b) 24,981,500
03-17-04 1.10 24,000,000(b) 23,966,267
05-25-04 1.06 25,000,000(b) 24,915,347
See accompanying notes to investments in securities.
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8 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Commercial paper (continued)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Asset-backed (cont.)
Greyhawk Funding LLC
02-04-04 1.09% $5,900,000(b) $5,899,285
02-04-04 1.11 15,000,000(b) 14,998,150
02-05-04 1.10 17,000,000(b) 16,997,403
02-06-04 1.10 15,000,000(b) 14,997,250
02-11-04 1.12 23,600,000(b) 23,591,924
02-12-04 1.09 30,000,000(b) 29,989,100
Kitty Hawk Funding
02-17-04 1.10 10,000,000(b) 9,994,806
Old Line Funding
02-09-04 1.09 32,518,000(b) 32,509,139
Preferred Receivables Funding
02-04-04 1.10 7,500,000(b) 7,499,083
02-09-04 1.05 25,000,000(b) 24,993,438
Receivables Capital
02-02-04 1.08 21,028,000(b) 21,026,738
02-06-04 1.10 17,000,000(b) 16,996,883
02-23-04 1.03 47,000,000(b) 46,969,070
Scaldis Capital LLC
02-10-04 1.10 12,200,000(b) 12,196,272
02-12-04 1.10 31,061,000(b) 31,049,611
02-17-04 1.10 25,000,000(b) 24,987,014
04-15-04 1.16 25,300,000(b) 25,238,858
Sheffield Receivables
02-04-04 1.04 40,500,000(b) 40,495,320
Sigma Finance
05-06-04 1.06 42,000,000(b,c) 41,999,449
05-10-04 1.06 42,000,000(b,c) 41,998,311
06-09-04 1.06 43,000,000(b,c) 42,996,986
SPARC LLC
02-18-04 1.05 20,000,000(b) 19,989,500
02-24-04 1.05 20,900,000(b) 20,885,370
03-01-04 1.05 10,000,000(b) 9,991,250
03-04-04 1.06 24,600,000(b) 24,576,097
03-11-04 1.06 16,800,000(b) 16,780,213
03-12-04 1.06 6,500,000(b) 6,492,153
03-17-04 1.06 17,000,000(b) 16,976,974
White Pine Finance LLC
07-12-04 1.07 42,500,000(b,c) 42,496,160
08-25-04 1.06 30,000,000(b,c) 29,995,690
12-15-04 1.06 15,000,000(b,c) 14,997,357
Windmill Funding
04-02-04 1.04 35,500,000(b) 35,436,416
Total 1,781,887,675
Banks and savings & loans (17.9%)
ANZ (Delaware)
04-12-04 1.05 10,000,000 9,979,000
Bank of America
04-20-04 1.04 31,000,000 30,928,356
Bank of Ireland
03-04-04 1.09 8,976,000(b) 8,967,031
BBVA Bancomer
02-02-04 1.05 22,000,000(b) 21,998,717
07-01-04 1.30 10,000,000(b) 9,945,533
07-19-04 1.30 10,000,000(b) 9,939,083
Citicorp
03-19-04 1.04 22,000,000 21,969,493
03-23-04 1.04 20,000,000 19,969,956
Credit Suisse First Boston NY
02-27-04 1.03 20,000,000 19,984,550
Danske
02-10-04 1.10 6,400,000 6,398,044
02-17-04 1.05 6,200,000 6,196,926
04-01-04 1.10 30,500,000 30,443,151
HBOS Treasury Services
02-02-04 1.10 36,400,000 36,397,776
02-03-04 1.10 33,200,000 33,196,971
02-24-04 1.10 27,500,000 27,479,833
02-25-04 1.13 20,000,000 19,984,306
Landesbank Baden-Wurttemberg NY
02-23-04 1.05 5,000,000 4,996,646
Norddeutsche Landesbank NY Girozentrale
03-11-04 1.11 35,000,000 34,957,028
03-18-04 1.08 5,500,000 5,492,245
04-20-04 1.17 30,700,000 30,620,180
Nordea North America
02-27-04 1.03 32,000,000 31,975,280
03-18-04 1.08 15,800,000 15,777,722
03-23-04 1.07 32,100,000 32,050,388
04-08-04 1.05 26,100,000 26,048,235
Northern Rock
03-29-04 1.14 17,000,000(b) 16,968,777
04-22-04 1.10 19,000,000(b) 18,952,394
12-09-04 1.18 59,300,000(b,c) 59,299,999
Scotiabanc
02-10-04 1.11 52,000,000(b) 51,983,967
Spintab
02-10-04 1.10 20,000,000 19,993,889
03-16-04 1.09 24,800,000 24,766,210
See accompanying notes to investments in securities.
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9 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Commercial paper (continued)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Banks and savings & loans (cont.)
Svenska Handelsbanken
02-06-04 1.10% $20,300,000 $20,296,278
02-17-04 1.10 26,000,000 25,986,494
Swedbank
02-05-04 1.10 8,000,000 7,998,778
02-12-04 1.12 25,000,000 24,990,667
03-15-04 1.09 32,000,000 31,957,369
Total 798,891,272
Broker dealers (2.3%)
Bear Stearns
03-10-04 1.03 18,200,000 18,179,692
Goldman Sachs Group
01-18-05 1.08 42,500,000(b,c) 42,500,000
Lehman Brothers Holdings
02-22-05 1.15 42,000,000(c) 42,000,000
Total 102,679,692
Finance companies (1.6%)
Household Finance
02-03-04 1.10 30,000,000 29,997,250
03-22-04 1.12 42,000,000 41,933,360
Total 71,930,610
Multi-industry (1.5%)
GE Capital Intl Funding
02-11-04 1.11 50,000,000(b) 49,983,041
03-08-04 1.11 16,000,000(b) 15,981,747
Total 65,964,788
Total commercial paper
(Cost: $2,821,354,037) $2,821,354,037
Total investments in securities
(Cost: $4,466,057,757)(d) $4,466,057,757
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Commercial paper sold within terms of a private placement memorandum,
exempt from registration under Section 4(2) or 144A 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. These securities may be
resold in transactions exempt from registration, normally to qualified
institutional buyers. As of Jan. 31, 2004, the value of these securities
amounted to $2,000,886,389 or 44.9% of net assets.
(c) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Jan. 31,
2004.
(d) Also represents the cost of securities for federal income tax purposes at
Jan. 31, 2004.
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10 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Financial Statements
Statement of assets and liabilities
AXP Cash Management Fund
Jan. 31, 2004 (Unaudited)
Assets
Investments in securities, at value (Note 1)
(identified cost $4,466,057,757) $4,466,057,757
Cash in bank on demand deposit 10,582,416
Capital shares receivable 204,642
Accrued interest receivable 6,265,762
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Total assets 4,483,110,577
-------------
Liabilities
Dividends payable to shareholders 85,954
Capital shares payable 285,546
Payable for investment securities purchased 21,500,000
Accrued investment management services fee 38,248
Accrued distribution fee 15,484
Accrued transfer agency fee 13,067
Accrued administrative services fee 2,907
Other accrued expenses 697,349
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Total liabilities 22,638,555
----------
Net assets applicable to outstanding capital stock $4,460,472,022
==============
Represented by
Capital stock -- $.01 par value (Note 1) $ 44,604,996
Additional paid-in capital 4,415,826,827
Undistributed net investment income 40,200
Accumulated net realized gain (loss) (1)
--------------
Total -- representing net assets applicable to outstanding capital stock $4,460,472,022
==============
Net assets applicable to outstanding shares: Class A $3,990,622,319
Class B $ 219,221,881
Class C $ 3,038,067
Class Y $ 247,589,755
Net asset value per share of outstanding capital stock: Class A shares 3,990,391,649 $ 1.00
Class B shares 219,400,986 $ 1.00
Class C shares 3,038,152 $ 1.00
Class Y shares 247,668,811 $ 1.00
----------- --------------
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
11 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Statement of operations
AXP Cash Management Fund
Six months ended Jan. 31, 2004 (Unaudited)
Investment income
Income:
Interest $26,974,835
-----------
Expenses (Note 2):
Investment management services fee 7,530,005
Distribution fee
Class A 2,172,067
Class B 964,090
Class C 14,045
Transfer agency fee 5,684,139
Incremental transfer agency fee
Class A 500,134
Class B 30,730
Class C 369
Administrative services fees and expenses 616,018
Compensation of board members 17,166
Custodian fees 302,350
Printing and postage 1,016,500
Registration fees 321,115
Audit fees 18,250
Other 40,800
------
Total expenses 19,227,778
Expenses waived/reimbursed by AEFC (Note 2) (464,746)
--------
18,763,032
Earnings credits on cash balances (Note 2) (100,993)
--------
Total net expenses 18,662,039
----------
Investment income (loss) -- net 8,312,796
---------
Net increase (decrease) in net assets resulting from operations $ 8,312,796
===========
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
12 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Statements of changes in net assets
AXP Cash Management Fund
Jan. 31, 2004 July 31, 2003
Six months ended Year ended
(Unaudited)
Operations and distributions
Investment income (loss) -- net $ 8,312,796 $ 43,432,989
--------------- ---------------
Net increase (decrease) in net assets resulting from operations 8,312,796 43,432,989
--------- ----------
Distributions to shareholders from:
Net investment income
Class A (7,595,010) (40,755,461)
Class B (70,562) (747,377)
Class C (974) (9,174)
Class Y (608,651) (1,920,977)
-------- ----------
Total distributions (8,275,197) (43,432,989)
---------- -----------
Capital share transactions at constant $1 net asset value
Proceeds from sales
Class A shares (Note 2) 2,952,983,182 7,310,087,893
Class B shares 133,366,296 399,414,994
Class C shares 6,460,518 19,021,332
Class Y shares 94,511,544 263,665,221
Reinvestment of distributions at net asset value
Class A shares 7,731,502 40,976,910
Class B shares 71,807 754,160
Class C shares 964 8,811
Class Y shares 614,466 1,907,585
Payments for redemptions
Class A shares (3,619,012,227) (8,468,383,146)
Class B shares (Note 2) (192,416,238) (501,593,543)
Class C shares (Note 2) (7,856,551) (18,156,196)
Class Y shares (109,792,726) (205,942,507)
------------ ------------
Increase (decrease) in net assets from capital share transactions (733,337,463) (1,158,238,486)
------------ --------------
Total increase (decrease) in net assets (733,299,864) (1,158,238,486)
Net assets at beginning of period 5,193,771,886 6,352,010,372
------------- -------------
Net assets at end of period $ 4,460,472,022 $ 5,193,771,886
=============== ===============
Undistributed net investment income $ 40,200 $ 2,601
--------------- ---------------
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
13 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Notes to Financial Statements
AXP Cash Management Fund
(Unaudited as to Jan. 31, 2004)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a series of AXP Money Market Series, Inc. and is registered under
the Investment Company Act of 1940 (as amended) (the 1940 Act) as a diversified,
open-end management investment company. AXP Money Market 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 money
market instruments.
The Fund offers Class A, Class B, Class C and Class Y shares.
o Class A shares have no 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.
Effective March 4, 2004, the Fund will offer an additional class of shares,
Class I, exclusively to certain institutional investors. Class I shares are made
available through a separate prospectus supplement provided to investors
eligible to purchase the shares.
All classes of shares have identical voting, dividend and liquidation rights.
The distribution fee and incremental transfer agency 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
Pursuant to Rule 2a-7 of the 1940 Act, all securities are valued daily at
amortized cost, which approximates market value, in order to maintain a constant
net asset value of $1 per share.
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.
- --------------------------------------------------------------------------------
14 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes. The character of distributions made during
the year from net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. Also, due to the
timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gains (losses)
were recorded by the Fund.
Dividends to shareholders
Dividends from net investment income, declared daily and payable monthly, are
reinvested in additional shares of the Fund at net asset value or payable in
cash.
Other
Security transactions are accounted for on the date securities are purchased or
sold. Interest income, including amortization of premium and discount, is
recognized 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 0.36% to 0.25% annually.
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 0.03% 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 Deferred Compensation Plan (the Plan), non-interested board members may
defer receipt of their compensation. Deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of the Fund or other
American Express mutual funds. The Fund's liability for these amounts is
adjusted for market value changes and remains in the Fund until distributed in
accordance with the Plan.
Under a separate Transfer Agency Agreement, American Express Client Service
Corporation (AECSC) maintains shareholder accounts and records. The Fund pays
AECSC an annual fee per shareholder account for this service as follows:
o Class A $22.00
o Class B $23.00
o Class C $22.50
o Class Y $20.00
The incremental transfer agency fee is the amount charged to the specific
classes for the additional expense above the fee for Class Y.
- --------------------------------------------------------------------------------
15 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
In addition, AECSC is entitled to charge 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. However, the closed account fee is currently not
effective.
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 0.10% of
the Fund's average daily net assets attributable to Class A shares, up to 0.85%
for Class B shares and up to 0.75% for Class C shares. As of Jan. 31, 2004, the
Fund paid an annual rate of 0.75% of the Fund's average daily net assets
attributable to Class B shares.
Sales charges received by the Distributor for distributing Fund shares were
$878,744 for Class B and $3,309 for Class C for the six months ended Jan. 31,
2004.
AEFC and its affiliates may limit the expenses of one or more classes for the
purpose of increasing its yield. This expense limitation policy may be revised
or terminated at any time without notice. As of Jan. 31, 2004, AEFC and its
affiliates waived certain fees and expenses to 1.06% for Class B and 1.05% for
Class C.
During the six months ended Jan. 31, 2004, the Fund's custodian and transfer
agency fees were reduced by $100,993 as a result of earnings credits from
overnight cash balances.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities aggregated
$9,313,273,123 and $10,057,362,000, respectively, for the six months ended Jan.
31, 2004. Realized gains and losses are determined on an identified cost basis.
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 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. The Fund had no borrowings
outstanding during the six months ended Jan. 31, 2004.
- --------------------------------------------------------------------------------
16 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
5. 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, 2004(i) 2003 2002 2001 2000
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income (loss) -- .01 .02 .05 .05
Less distributions:
Dividends from net investment income -- (.01) (.02) (.05) (.05)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
Ratios/supplemental data
Net assets, end of period (in millions) $3,991 $4,649 $5,766 $6,149 $5,438
Ratio of expenses to average daily net assets(c) .76%(d) .69% .59% .59% .58%
Ratio of net investment income (loss) to average daily net assets .35%(d) .78% 1.89% 5.18% 5.37%
Total return(g) .18%(h) .77% 1.93% 5.35% 5.55%
Class B
Per share income and capital changes(a)
Fiscal period ended July 31, 2004(i) 2003 2002 2001 2000
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income (loss) -- -- .01 .05 .05
Less distributions:
Dividends from net investment income -- -- (.01) (.05) (.05)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
Ratios/supplemental data
Net assets, end of period (in millions) $219 $278 $380 $273 $232
Ratio of expenses to average daily net assets(c) 1.06%(d),(e) 1.26%(e) 1.34% 1.34% 1.33%
Ratio of net investment income (loss) to average daily net assets .06%(d) .21% 1.13% 4.37% 4.64%
Total return(g) .03%(h) .20% 1.13% 4.57% 4.76%
See accompanying notes to financial highlights.
- --------------------------------------------------------------------------------
17 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Class C
Per share income and capital changes(a)
Fiscal period ended July 31, 2004(i) 2003 2002 2001 2000(b)
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income (loss) -- -- .01 .05 --
Less distributions:
Dividends from net investment income -- -- (.01) (.05) --
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
Ratios/supplemental data
Net assets, end of period (in millions) $3 $4 $4 $1 $--
Ratio of expenses to average daily net assets(c) 1.05%(d),(f) 1.27%(f) 1.34% 1.34% 1.33%(d)
Ratio of net investment income (loss) to average daily net assets .06%(d) .21% .99% 3.88% 6.10%(d)
Total return(g) .03%(h) .20% 1.14% 4.68% .63%(h)
Class Y
Per share income and capital changes(a)
Fiscal period ended July 31, 2004(i) 2003 2002 2001 2000
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income (loss) -- .01 .02 .05 .05
Less distributions:
Dividends from net investment income -- (.01) (.02) (.05) (.05)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
Ratios/supplemental data
Net assets, end of period (in millions) $248 $262 $203 $174 $142
Ratio of expenses to average daily net assets(c) .64%(d) .62% .57% .57% .57%
Ratio of net investment income (loss) to average daily net assets .48%(d) .82% 1.86% 5.18% 5.42%
Total return(g) .24%(h) .85% 1.95% 5.37% 5.56%
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) AEFC waived/reimbursed the Fund for certain expenses. Had AEFC not done so,
the annual ratios of expenses for Class B would have been 1.41% for the six
months ended Jan. 31, 2004 and 1.38% for the year ended July 31, 2003.
(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 1.41% for the six
months ended Jan. 31, 2004 and 1.38% for the year ended July 31, 2003.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
(i) Six months ended Jan. 31, 2004 (Unaudited).
- --------------------------------------------------------------------------------
18 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
Proxy Voting
The policy of the Board is to vote all proxies of the companies in which the
Fund holds investments. The procedures are stated in the Statement of Additional
Information (SAI). You may obtain a copy of the SAI without charge by calling
(800) 862-7919; by looking at the Web site americanexpress.com/funds; or by
searching the Web site of the Securities and Exchange Commission
http://www.sec.gov. You may view the Fund's voting record for all portfolio
companies whose shareholders meetings were completed the previous quarter on
americanexpress.com/funds or obtain a copy by calling the Fund's administrator,
Board Services Corporation, collect at (612) 330-9283. In addition, after Aug.
1, 2004, information regarding how the Fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 will be
available at http://www.sec.gov.
- --------------------------------------------------------------------------------
19 - AXP CASH MANAGEMENT FUND - 2004 SEMIANNUAL REPORT
(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. Code of Ethics. Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert. Not applicable for semi-annual
reports.
Item 4. Principal Accountant Fees and Services. Not applicable for
semi-annual reports.
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. Purchase of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers. Not applicable.
Item 9. Submission of matters to a vote of security holders. Not applicable.
Item 10. 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 11. Exhibits.
(a)(1) Not applicable for semi-annual reports.
(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.
(a)(3) Not applicable.
(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 Money Market Series, Inc.
By /s/ Paula R. Meyer
------------------
Paula R. Meyer
President and Principal Executive Officer
Date April 6, 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 April 6, 2004
By /s/ Jeffrey P. Fox
------------------
Jeffrey P. Fox
Treasurer and Principal Financial Officer
Date April 6, 2004