Press Release

AXP DIVERSIFIED EQUITY INCOME FUND (Y-SHARE) RECEIVES 2005 LIPPER FUND AWARD IN EQUITY INCOME CATEGORY

The fund's three-year risk-adjusted performance as of December 31, 2004, tops equity income peers

MINNEAPOLIS — March 22, 2005 — AXP^® Diversified Equity Income Fund – Y-share class – has received the 2005 Lipper Fund Award as the leading fund in its Lipper equity income category for the three-year period ending Dec. 31, 2004. A Lipper Fund Award is presented to one fund in each Lipper classification for achieving the strongest trend of consistent risk-adjusted performance against its classification peers over a three-year period.

"AXP Diversified Equity Income Fund is one of several funds managed by our deep value team that has provided shareholders with strong absolute and peer-group performance," said Paula R. Meyer, senior vice president – Mutual Funds and Certificates and president of American Express Funds. "This is well-deserved recognition for an outstanding group of investment professionals."

AXP Diversified Equity Income Fund is managed by a team of three portfolio managers: Warren Spitz, Steve Schroll and Laton Spahr. Spitz is the senior member of the team and has been the lead portfolio manager since November 2000. During that time, the fund has provided shareholders with strong risk-adjusted performance through various market cycles.

William F. "Ted" Truscott, chief investment officer of American Express Financial Advisors, commented, "Warren and the team have a distinct investment process supported by dedicated research, which is representative of our commitment to driving equity results by building focused teams of portfolio managers and analysts. The team has done an excellent job providing shareholders with consistent, competitive performance over time as well as advisors and 401(k) plan sponsors with products they can rely on."

In addition to AXP Diversified Equity Income Fund, the deep value team at American Express Financial Advisors manages other portfolios including the following mutual funds:

AXP^® Equity Value Fund, a large-cap diversified value fund.
AXP^® Dividend Opportunity Fund, a multi-cap diversified equity income fund. ^{(1, 2)}
AXP^® Mid Cap Value Fund, a mid-cap diversified value fund. ⁽¹⁾
AXP^® Real Estate Fund, a real estate sector fund. ⁽³⁾

American Express Funds includes 66 U.S.-distributed mutual funds with more than $64 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, sector and index choices. American Express Funds can trace its history back to 1940. Today, with offices in Boston, Cambridge, New York, Minneapolis, Los Angeles, San Diego, London and Geneva, American Express Financial Corporation and affiliates, the investment manager for American Express Funds, owns or manages more than $350 billion in assets.*

Although Lipper makes reasonable efforts to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Lipper. Users acknowledge that they have not relied upon any warranty, condition, guarantee or representation made by Lipper. Any use of the data for analyzing, managing or trading financial instruments is at the user's own risk. This is not an offer to buy or sell securities.

About Lipper: Lipper, a wholly owned subsidiary of Reuters, is a leading global provider of mutual fund information and analysis to fund companies, financial intermediaries, and media organizations. Lipper clients manage more than 95% of U.S. fund assets. The firm, founded in 1973 and headquartered in New York, tracks 125,000 funds worldwide through its offices in major financial capitals in North America, Europe and Asia.

American Express Financial Advisors (AEFA) is one of the nation's leading financial planning, asset management and insurance companies. Through its nationwide network of more than 10,000 financial advisors, AEFA helps clients achieve their financial goals by building long-term relationships based on knowledgeable advice. The company specializes in meeting the retirement-related financial needs of the mass affluent. AEFA provides retail and institutional asset management products and services in the U.S. through American Express Financial Corporation, and in Europe through Threadneedle Asset Management, Limited. Insurance products are issued by IDS Life Insurance Company, IDS Property Casualty Insurance Company and their subsidiaries. American Express Retirement Services provides investment management and recordkeeping services to large and mid-size company 401(k) plans, as well as workplace financial education programs.

On Feb. 1, 2005, American Express Company announced plans to pursue a spin-off to shareholders of the American Express Financial Advisors unit. The transaction is expected to be completed in the third quarter of 2005, subject to certain conditions.

Investment products, including shares of mutual funds, are not federally or FDIC insured, are not deposits or obligations of, or guaranteed by, any financial institution and involve investment risks including possible loss of principal and fluctuation in value.

Stocks of small- or medium-sized companies may be subject to more abrupt or erratic price movements than stocks of larger companies. Some of these companies also may have fewer financial resources.
Stock prices of established companies that pay dividends may be less volatile than the stock market as a whole.
Because AXP Real Estate Fund is a narrowly focused sector fund, it may exhibit higher volatility than funds with broader investment objectives. Principal risks associated with the Fund include market risk, issuer risk and sector/concentration risk.

You should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. For a free copy of the Fund's prospectus, which contains this and other information, call (800) 297-2863. Read the prospectus carefully before you invest.

AXP Diversified Equity Income Fund Performance – Y Shares:
Source: Lipper data as of 12-31-04
Ticker Symbol (PLKV)
1YR – 18.40%, 12th of 229 funds
3YR – 11.23%, 4th of 156 funds
5YR – 6.82%, 29th of 128 funds
10YR – n/a

AXP Diversified Equity Income Fund Performance – A Shares:
Source: Lipper data as of 12-31-04
Ticker Symbol (BCZS)
1YR – 18.23%, 13th of 229 funds
3YR – 11.02%, 6th of 156 funds
5YR – 6.63%, 31st of 128 funds
10YR – 11.51%, 27th of 59 funds

Past performance is no guarantee of future results.
Lipper's rankings are based upon annualized total returns, including sales charges.

* Asset data as of December 31, 2004.

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

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AXP DIVERSIFIED EQUITY INCOME FUND (Y-SHARE) RECEIVES 2005 LIPPER FUND AWARD IN EQUITY INCOME CATEGORY

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