American Express Introduces Two New Mutual Funds

American Express Financial Corporation, a unit of American Express Company, has launched two new mutual funds an equity fund and a fixed income fund. The funds will be available through American Express financial advisors, American Express Brokerage and through select

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American Express Financial Corporation, a unit of American Express Company, has launched two new mutual funds – an equity fund and a fixed-income fund. The funds will be available through American Express financial advisors, American Express Brokerage and through select American Express retirement plans.

The funds are:

AXP Mid Cap Value Fund1: Managed by Warren Spitz – a mid-cap fund that will pursue a deep value strategy by investing in companies whose stock is trading well below its intrinsic value.

AXP U.S. Government Mortgage Fund2: Managed by Scott Kirby – a core fixed income fund that will pursue a high-quality investment strategy by investing at least 80 percent of its net assets in mortgage-backed securities with the remainder in government issues.

“If there’s one thing 2001 taught investors, it’s that diversification can help your portfolio,” said Paula R. Meyer, vice president and managing director – American Express Funds. “These two funds will provide important diversification options for long-term investors due to their focused strategies in mid-cap value and mortgage-backed securities.”

Fund Characteristics

AXP Mid Cap Value Fund1

Portfolio Manager – Warren SpitzBenchmark – Russell Mid Cap Value IndexDeep value investment styleInvests at least 80 percent of its net assets in mid-cap companies consistent with the companies that are in the Russell Mid Cap Value Index -capitalizations between $300 million and $13.4 billion – the remaining 20 percent can be invested in smaller or larger companies

Exposure to an individual stock is limited to 5 percent of the portfolioAverage of 70-90 holdingsAvailable in A, B, C and Y sharesWarren Spitz also manages AXP Diversified Equity Income Fund and AXPEquity Value FundAXP U.S. Government Mortgage Fund2

Portfolio Manager – Scott Kirby Benchmark – Lehman Brothers Mortgage-backed Index At least 80 percent of its net assets will be in a variety of AAA-rated mortgage-backed securities including GNMA, FNMA and FHLMC – remaining 20 percent will be invested in other AAA rated debt Will have a greater mortgage exposure and longer duration than AXP Federal Income Fund2 Available in A, B, C and Y shares Scott Kirby also manages AXP Federal Income Fund2 According to Meyer, “We will now offer large-, mid- and small-cap value funds as well as build on our strength in fixed income.”

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