American Express 2004 Annual Report Download - page 23

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the past 15 years. The integration enhanced AEFA’s international asset management capa-
bilities and scale. AEFA transferred management of its international and global equity port-
folios to Threadneedle in late 2003.
Investment Performance
Improving performance in AEFA’s institutional, retail and owned asset portfolios has been
a top priority. Over the past several years, AEFA has taken major steps to enhance its invest-
ment leadership, talent and infrastructure, and these efforts resulted in solid progress in 2004.
Focused on outperforming specific benchmarks, AEFA began improving its fixed income
performance in 2003 and followed it up with a very strong 2004. In equities, AEFA saw strong
results in many portfolios, particularly those led by new fund managers brought in over the
past several years. However, a few large equity portfolios under-performed in 2004.
New Products and Services
To deepen relationships with clients and attract new assets, AEFA launched a variety of new
products and services in 2004. As part of its strategy to provide tiered offerings and differ-
entiated products, AEFA completed the nationwide rollout of American Express Gold Finan-
cial Services. This offering is designed for clients with more than $100,000 in assets with
the firm. AEFA also offers Platinum Financial Services, which targets clients with more than
$500,000 in assets with the firm.
AEFA launched eight new mutual funds in 2004, as it continued to round out and reposi-
tion its offerings. A solid win in terms of asset gathering has been the AXP Portfolio Builder
Series — a group of six strategic asset allocation funds that address multiple investment
needs. Portfolio Builder funds attracted more than $900 million in assets in 2004.
For institutional clients, AEFA launched new services to support 401(k) programs of small
and mid-sized companies to complement its established position servicing the large com-
pany 401(k) market. AEFA also expanded Financial Education and Planning Services
(FEPS), through which corporations provide employees with access to financial planning
and advice services in the workplace. FEPS has also proven to be an effective vehicle for
retail client acquisition.
Over the past three years, AEFA has made good progress in wide-ranging efforts to
strengthen its business and position it for long-term success. These efforts have included:
improving its earnings, revenues and return on equity
growing the advisor force and improving the economics of its distribution network
broadening its asset management reach internationally through the Threadneedle
acquisition and the creation of a global fund of hedge funds platform
significantly enhancing its investment management leadership, talent and infrastructure
AXP
AR.04
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21