The funds are:

AXP® Limited Duration Fund: Team managed, led by Tom Murphy, CFA – Investment Grade Credit Sector Leader. The fund invests in a diversified blend of intermediate-term (0-10 years) investment grade securities, including securities issued by the U.S. Government, corporate securities and mortgage- and asset-backed securities.

AXP® Core Bond Fund: Team managed, led by Tom Murphy, CFA – Investment Grade Credit Sector Leader. The fund invests in a diversified blend of intermediate-term investment grade securities included in the Lehman Brothers Aggregate Bond Index.

AXP® Income Opportunities Fund: Team managed, led by Brian Lavin, CFA – member, high yield sector team. The fund invests primarily in income-producing debt securities, preferred stocks and convertible securities, with an emphasis on the higher rated segment of the high-yield market.

“With Michelle Keeley joining American Express as head of fixed income last year and our efforts to build around new and existing investment talent, we have fully implemented a new organizational model within our fixed income group that leverages best practices across portfolios,” said Paula R Meyer, senior vice president of Mutual Funds and Certificates for American Express Financial Advisors. “These three new mutual funds take advantage of the new investment teams and further differentiate our taxable fixed income product line.”

Fund Characteristics
AXP® Limited Duration Fund

• Portfolio management – Led by Tom Murphy, CFA – Investment Grade Credit Sector Leader.
• The fund seeks to provide shareholders with a level of current income consistent with preservation of capital.
• Benchmark – Lehman Brothers Intermediate Aggregate Index.
• The fund invests in a diversified blend of intermediate-term (0-10 years) investment grade securities, including securities issued by the U.S. Government, corporate securities and mortgage- and asset-backed securities.
• The fund will not invest in securities rated below investment grade at time of investment.
• Management targets an average duration of 2 to 4 years.
• The fund will have a duration between AXP Federal Income Fund and AXP U.S. Government Mortgage Fund.
• Available in A, B, C and Y shares.

AXP® Core Bond Fund

• Portfolio management – Led by Tom Murphy, CFA – Investment Grade Credit Sector Leader.
• The fund seeks to provide shareholders with a high total return through current income and capital appreciation.
• Benchmark – Lehman Brothers Aggregate Bond Index.
• The fund invests primarily in a diversified blend of intermediate-term investment grade securities issued by the U.S. Government, corporate securities and mortgage- and asset-backed securities.
• The fund will not invest in securities rated below investment grade at time of purchase.
• Management targets an average duration of 4 to 6 years.
• The fund will have a duration between AXP U.S. Government Mortgage Fund and AXP Bond Fund.
• Available in A, B, C and Y shares.

AXP® Income Opportunities Fund

• Portfolio management – Led by Brian Lavin, CFA – member, high yield sector team.
• The fund seeks to provide shareholders with a high total return through current income and capital appreciation.
• Benchmark – Merrill Lynch U.S. High Yield Cash Pay BB-B Rated Constrained Index.
• The fund invests primarily in income-producing debt securities, preferred stock and convertible securities, with an emphasis on the higher rated segment of the high-yield market.
• The fund will purchase only securities rated B or above or unrated securities believed to be of the same quality.
• The fund will invest in a higher quality tier of the high yield market than AXP Extra Income Fund and will likely produce a yield between AXP Bond Fund and AXP Extra Income Fund.
• Available in A, B, C and Y shares.

“These new funds are examples of our ongoing efforts to build upon American Express' core strengths as a leading asset management organization and provide a complete range of investment options. Through the leadership of Michelle Keeley, we've added products that reinforce the American Express Funds fixed-income lineup,” Meyer added. “With interest rates at more than 40-year lows, our clients are demanding fixed-income solutions they can count on. We're pleased to expand our offerings in bond sectors that have historically provided attractive returns in a multitude of rate environments.”

American Express Funds consists of 64 retail mutual funds with more than $61 billion in assets under management. The funds provide investors with a wide spectrum of investment options, including growth, growth and income, income, international, tax-free income and index choices. American Express Funds can trace its history back to 1940. Today, with offices in Minneapolis, New York, Boston, Cambridge, Mass., San Diego, Tokyo, Singapore and London, American Express Financial Corporation, the investment manager for American Express Funds, owns, manages or administers about $228 billion in assets.

American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, business services, insurance and international banking.

American Express Financial Advisors Inc. Member NASD and SIPC. American Express Company is separate from American Express Financial Advisors Inc. and is not a broker-dealer.

For more complete information on mutual funds, including fees and expenses, call (800) AXP-FUND for a prospectus. Read it carefully before you invest or send money.

Investments are not guaranteed and are subject to investment risk, including the possible loss of principal. The investment return and principal value of the security will fluctuate so that when redeemed, may be worth more or less than the original investment.