PAGE
IDS Tax-Exempt Bond Fund
1994 semiannual report
(icon of) shield with Greek column
The goal of IDS Tax-Exempt Bond Fund, Inc. is to earn as much current
income exempt from federal income taxes as possible with only modest risk
to the shareholder's investment by investing primarily in investment
grade bonds and other debt securities.
Distributed by IDS Financial Services Inc.
(icon of) shield with Greek column
Double-barreled benefit
Most of the public facilities that we take for granted - schools,
water and sewer systems, highways, government buildings - are, in effect,
largely funded by loans from citizens. These loans take the form of state
and local government bonds (called "municipals"), which are bought by
investors, including Tax-Exempt Bond Fund. The government gets the
funding it needs, while the bond-buyers, including fund shareholders, get
ongoing interest income. But there's another, bigger benefit with
municipals: Investors pay no federal taxes on the income they generate
and potentially no state taxes.
Contents
From the president 3
From the portfolio manager 3
Ten largest holdings 5
Financial statements 6
Notes to financial statements 9
Investments in securities 15
Directors and officers 24
IDS mutual funds 25
To our shareholders
(Picture of William Pearce)
William R. Pearce
President of the fund
From the president
As you read this semiannual report, you'll find that it complements the
newly designed annual report you received six months ago. We hope the
substantial changes we've made to the design and organization will help
make information easier to find and understand.
A good place to begin is with the portfolio manager's letter, which
describes the events and investment strategies that most influenced the
fund's performance during the past period.
For a broader financial perspective, please consult your IDS planner, who
can help you make sure your investment and protection strategies continue
to meet the objectives in your financial plan.
William R. Pearce
<PAGE>
PAGE
(Picture of Terry Seirstad)
Terry L. Seirstad
Portfolio manager
From the portfolio manager
The stable-to-declining pattern that long-term interest rates had
generally been in for the past few years reversed direction during the
first half of the fund's fiscal period, ended May 31, 1994. Consequently,
the bond market experienced a substantial sell-off, which ultimately
resulted in a negative total return for shareholders.
The first two months of the period were markedly different, however, as
interest rates remained relatively stable, even falling a bit at times.
(Falling interest rates boost bond prices and, therefore, the net asset
value of the fund, while rising rates depress prices and fund value.)
Naturally, the fund benefited from this environment, enjoying positive
returns in December and January.
Rate rise begins
But things changed quickly in early February, as the Federal Reserve
Board began raising short-term interest rates to cool down the economy
and head off an increase in inflation.
Although we were not surprised to see some modest rate increases in
short-term securities as a pre-emptive strike against inflation,
professional bond investors reacted much more negatively than we
expected. They sold bonds in great numbers, igniting a sustained and
sharp increase in long-term bond interest rates.
These developments were particularly damaging to the significant holdings
we had in longer-term bonds. (Typically, the longer the maturity, the
more a bond's price is affected by rate changes.) Additionally, municipal
bonds fared worse than expected. Going into the year hopes had been high
for municipals entering 1994 because of increasing investor demand,
fostered by higher income taxes, and decreasing supply.
Municipals pick up
However, it is worth noting that municipal bonds, as a whole, did better
in April and May. We have remained fully invested throughout the period,
and we have added selectively to our holdings of bonds with slightly
lower credit ratings, although still of investment-grade quality.
(Overall risk to a shareholder's investment principal is minimized by the
overall high credit rating of the portfolio.)
Our strategy moving ahead is to hold to our present structure, as we
expect the environment for bonds to improve for several reasons. First,
we believe that the desired effect of raising short-term rates will be
achieved during the next several months. In other words, higher interest
rates will slow the economy and keep the brakes on inflation. We expect
the bond market to react favorably to positive trends regarding
inflation.
<PAGE>
PAGE
Second, we continue to believe that municipal bonds will benefit from a
favorable supply and demand picture.
Finally, we are maintaining a focus on a value approach to investing,
meaning that we look for buying opportunities among bargain-priced bonds
while we look to sell fully priced bonds.
Although we remain optimistic about the prospects for the bond market,
shareholders should remember that the market most likely will be
characterized by some volatility in the near term and that this should
not be viewed as a reason to alter long-term goals and strategies.
Terry L. Seierstad
(Note: Under federal law, some notes issued in the tax-free market are
subject to the alternative minimum tax. To eliminate any federal income
tax consequences for investors, we will continue to refrain from
purchasing these securities.)
6-month performance
(All figures per share)
Net asset value (NAV)
May 31, 1994 $3.87
Nov. 30, 1993 $4.19
Decrease ($0.32)
Distributions
Dec. 1, 1993 - May 31, 1994
From income $ 0.17
From capital gains $ 0.04
Total distributions $ 0.21
Total return* (2.92%)
*If you purchased shares in the fund during this period, your return also
would have been affected by the sales charge, as described in the
prospectus.
<PAGE>
PAGE
<TABLE>
IDS Tax-Exempt Bond Fund, Inc.
(Pie chart) The ten holdings listed here make up 19.28% of the fund's net assets
Your fund's ten largest holdings
<CAPTION>
______________________________________________________________________________________________________________
Percent Value
(of fund's net assets) (as of May 31, 1994)
_____________________________________________________________________________________
<S> <C> <C>
Milwaukee Wisconsin Metropolitan Sewerage District
General Obligation Capital Purpose Bonds Series 1992
6.25% 2005 2.30% $27,580,800
San Antonio Texas Water Refunding Revenue Bonds
6.40% 2007 2.20 26,295,000
Illinois Public Building Commission of Chicago Building
Revenue Bonds Board of Education of Chicago Series 1990A
6.50% 2018 2.15 25,694,665
Delaware County Pennsylvania Industrial Development
Authority Pollution Control Refunding Revenue Bonds
Philadelphia Electric Company
7.375% 2021 2.05 24,583,293
Texas Municipal Power Agency Refunding Revenue Bonds
Series 1993
6.10% 2013-2014 1.84 22,044,800
Massachusetts Municipal Wholesale Electric Power Supply
System Revenue Bonds Series 1992B
6.75% 2017 1.83 21,863,499
Valdez Alaska Marine Terminal Refunding Revenue Bonds
SOhio Pipeline Series 1985
7.125% 2025 1.77 21,190,200
Georgia Municipal Electric Authority
Special Obligation Bonds Project #1
4th Crossover Series X
6.50% 2020 1.72 20,554,674
New York State Urban Development
Correctional Capital Facility
Revenue Bonds Series 4
5.375% 2023 1.72 20,533,207
San Antonio Texas Electric & Gas Systems
Refunding Revenue Bonds Series 1989
6.50% 2012 1.70 20,359,200
/TABLE
<PAGE>
PAGE
<TABLE>
Financial statements
Statement of assets and liabilities
IDS Tax-Exempt Bond Fund, Inc.
May 31, 1994
<CAPTION>
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
(Unaudited)
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $1,125,081,909) $1,169,913,405
Cash in bank on demand deposit 4,213,775
Accrued interest receivable 22,525,564
Receivable for investment securities sold 37,139,202
_____________________________________________________________________________________________________________
Total assets 1,233,791,946
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Dividends payable to shareholders 1,136,194
Payable for investment securities purchased 35,049,551
Accrued investment management and services fee 548,448
Accrued distribution fee 20,103
Accrued transfer agency fee 51,335
Other accrued expenses 227,295
_____________________________________________________________________________________________________________
Total liabilities 37,032,926
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $1,196,759,020
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 309,487,380 shares $ 3,094,874
Additional paid-in capital 1,171,718,978
Accumulated net realized loss (Notes 1 and 4) (22,886,328)
Unrealized appreciation 44,831,496
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $1,196,759,020
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 3.87
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE
Financial statements
Statement of operations
IDS Tax-Exempt Bond Fund, Inc.
Six months ended May 31, 1994
<CAPTION>
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
(Unaudited)
<S> <C>
Income:
Interest $ 39,551,208
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 3,296,266
Distribution fee 115,834
Transfer agency fee 290,573
Compensation of directors 16,608
Compensation of officers 5,433
Custodian fees 21,426
Postage 42,106
Registration fees 19,724
Reports to shareholders 3,414
Audit fees 15,000
Administrative 10,854
Other 13,157
_____________________________________________________________________________________________________________
Total expenses 3,850,395
_____________________________________________________________________________________________________________
Investment income -- net 35,700,813
_____________________________________________________________________________________________________________
Realized and unrealized loss -- net
_____________________________________________________________________________________________________________
Net realized loss on security transactions (Note 3) (12,783,386)
Net change in unrealized appreciation or depreciation (59,982,148)
_____________________________________________________________________________________________________________
Net loss on investments (72,765,534)
_____________________________________________________________________________________________________________
Net decrease in net assets resulting from operations $(37,064,721)
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE
Financial statements
Statements of changes in net assets
IDS Tax-Exempt Bond Fund, Inc.
<CAPTION>
_____________________________________________________________________________________________________________
Operations and distributions May 31, 1994 Nov. 30, 1993
_____________________________________________________________________________________________________________
Six months ended Year ended
(Unaudited)
<S> <C> <C>
Investment income -- net $ 35,700,813 $ 71,694,282
Net realized gain (loss) on investments (12,783,386) 27,788,192
Net change in unrealized appreciation or depreciation (59,982,148) 43,928,922
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations (37,064,721) 143,411,396
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (35,699,646) (71,687,635)
Net realized gain on investments (28,013,903) (5,478,900)
_____________________________________________________________________________________________________________
Total distributions (63,713,549) (77,166,535)
_____________________________________________________________________________________________________________
Capital share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
13,194,549 and 51,016,103 shares (Note 2) 53,146,468 209,394,147
Net asset value of 11,428,107 and 12,737,284 shares
issued in reinvestment of distributions 46,708,249 52,523,554
Payments for redemptions of
23,489,205 and 75,320,334 shares (93,695,375) (309,695,896)
_____________________________________________________________________________________________________________
Increase (decrease) in net assets from capital share transactions
representing net addition of
1,133,451 and net reduction of 11,566,947 shares 6,159,342 (47,778,195)
_____________________________________________________________________________________________________________
Total increase (decrease) in net assets (94,618,928) 18,466,666
Net assets at beginning of period 1,291,377,948 1,272,911,282
_____________________________________________________________________________________________________________
Net assets at end of period
(including undistributed net investment income of $0 and $(1,167)) $1,196,759,020 $1,291,377,948
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
(Unaudited as to May 31, 1994)
______________________________________________________________________________
1. Summary of significant accounting policies
The fund is registered under the Investment Company
Act of 1940 (as amended) as a diversified, open-end
management investment company. Significant accounting
policies followed by the fund are summarized below:
Valuation of securities
All securities are valued at the close of each
business day. Securities for which market quotations
are not readily available are valued at fair value
according to methods selected in good faith by the
board of directors. Determination of fair value
involves, among other things, reference to market
indexes, matrixes and data from independent brokers.
Short-term securities maturing in more than 60 days
from the valuation date are valued at the market price
or approximate market value based on current interest
rates; those maturing in 60 days or less are valued at
amortized cost.
Option transactions
In order to produce incremental earnings, protect
gains, and facilitate buying and selling of securities
for investment purposes, the fund may buy and sell put
and call options and write covered call options on
portfolio securities and may write cash-secured put
options. The risk in writing a call option is that the
fund gives up the opportunity of profit if the market
price of the security increases. The risk in writing a
put option is that the fund may incur a loss if the
market price of the security decreases and the option
is exercised. The risk in buying an option is that the
fund pays a premium whether or not the option is
exercised. The fund also has the additional risk of
not being able to enter into a closing transaction if
a liquid secondary market does not exist. The fund
also may write over-the-counter options where the
completion of the obligation is dependent upon the
credit standing of the other party.
<PAGE>
PAGE
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
______________________________________________________________________________
Option contracts are valued daily at the closing
prices on their primary exchanges and unrealized
appreciation or depreciation is recorded. The fund
will realize a gain or loss upon expiration or closing
of the option transaction. When options on debt
securities or futures are exercised, the fund will
realize a gain or loss. When other options are
exercised, the proceeds on sales for a written call
option, the purchase cost for a written put option or
the cost of a security for a purchased put or call
option is adjusted by the amount of premium received
or paid.
Futures transactions
In order to gain exposure to or protect itself from
changes in the market, the fund may buy and sell
interest rate futures contracts. Risks of entering
into futures contracts and related options include the
possibility that there may be an illiquid market and
that a change in the value of the contract or option
may not correlate with changes in the value of the
underlying securities.
Upon entering into a futures contract, the fund is
required to deposit either cash or securities in an
amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation
margin) are made or received by the fund each day. The
variation margin payments are equal to the daily
changes in the contract value and are recorded as
unrealized gains and losses. The fund recognizes a
realized gain or loss when the contract is closed or
expires.
Federal taxes
Since the fund's policy is to comply with all sections
of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its
taxable income to shareholders, no provision for
income or excise taxes is required.
<PAGE>
PAGE
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
______________________________________________________________________________
Net investment income (loss) and net realized gains
(losses) may differ for financial statement and tax
purposes primarily because of the deferral of losses
on certain futures contracts, the recognition of
certain foreign currency gains (losses) as ordinary
income (loss) for tax purposes, and losses deferred
due to "wash sale" transactions. 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. Capital gains, when available, are distributed
along with the last income dividend of the calendar
year.
Other
Security transactions are accounted for on the date
securities are purchased or sold. Interest income,
including level-yield amortization of premium and
discount, is accrued daily.
<PAGE>
PAGE
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
______________________________________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991, the
fund pays IDS Financial Corporation (IDS) a fee for
managing its investments, recordkeeping and other
specified services. The fee is a percentage of the
fund's average daily net assets consisting of a group
asset charge in reducing percentages from 0.46% to
0.32% annually on the combined net assets of all non-
money market funds in the IDS MUTUAL FUND GROUP and an
individual annual asset charge of 0.13% of average
daily net assets.
The fund also pays IDS a distribution fee at an annual
rate of $6 per shareholder account and a transfer
agency fee at an annual rate of $15.50 per shareholder
account. The transfer agency fee is reduced by
earnings on monies pending shareholder redemptions.
IDS will assume and pay any expenses (except taxes and
brokerage commissions) that exceed the most
restrictive applicable state expense limitation.
Sales charges by IDS Financial Services Inc. for
distributing fund shares were $1,302,128 for the six
months ended May 31, 1994.
The fund has a retirement plan for its independent
directors. Upon retirement, directors receive monthly
payments equal to one-half of the retainer fee for as
many months as they served as directors up to 120
months. There are no death benefits. The plan is not
funded but the fund recognizes the cost of payments
during the time the directors serve on the board. The
retirement plan expense amounted to $5,606 for the six
months ended May 31, 1994.
<PAGE>
PAGE
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
______________________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of
securities (other than short-term obligations)
aggregated $376,870,701 and $396,895,946,
respectively, for the six months ended May 31, 1994.
Realized gains and losses are determined on an
identified cost basis.
______________________________________________________________________________
4. Capital loss carryover
For federal income tax purposes, the fund has a
capital loss carryover of approximately $23,096,000 at
May 31, 1994, that will expire in 1998 through 2001 if
not offset by subsequent capital gains. It is unlikely
the board of directors will authorize a distribution
of any net realized capital gains until the available
capital loss carryover has been offset or expires.
<PAGE>
PAGE
<TABLE>
Notes to financial statements
IDS Tax-Exempt Bond Fund, Inc.
______________________________________________________________________________
5. Financial highlights
The table below shows certain important financial
information for evaluating the fund's results.
Fiscal period ended Nov. 30,
Per share income and capital changes*
<CAPTION>
1994*** 1993 1992 1991** 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $4.19 $3.98 $3.93 $3.88 $3.98 $3.96
beginning of period
Income from investment operations:
Net investment income .12 .22 .22 .22 .26 .28
Net gains (losses) on (.23) .23 .11 .05 (.01) .17
securities (both realized
and unrealized)
Total from investment (.11) .45 .33 .27 .25 .45
operations
Less distributions:
Dividends from net (.12) (.22) (.22) (.22) (.26) (.28)
investment income
Distributions from (.09) (.02) (.06) -- (.09) (.15)
realized gains
Total distributions (.21) (.24) (.28) (.22) (.35) (.43)
Net asset value, $3.87 $4.19 $3.98 $3.93 $3.88 $3.98
end of period
Ratios/supplemental data
1994*** 1993 1992 1991** 1990 1989
Net assets, end of period $1,197 $1,291 $1,273 $1,188 $1,094 $1,010
(in millions)
Ratio of expenses to .61%+ .63% .64% .60%+ .61% .61%
average daily net assets
Ratio of net income to 5.69%+ 5.54% 5.68% 6.11%+ 6.61% 6.90%
average daily net assets
Portfolio turnover rate 31% 43% 63% 69% 112% 96%
(excluding short-term
securities)
Total return++ (2.9%)+++ 11.7% 8.7% 8.3%+ 6.1% 12.1%
*For a share outstanding throughout the period. Rounded to the nearest cent.
**The fund's fiscal year-end was changed from Dec. 31 to Nov. 30, effective 1991.
***Six months ended May 31, 1994 (Unaudited).
+Adjusted to an annual basis.
++Total return does not reflect payment of a sales charge.
+++For the fiscal period ended May 31, 1994, the annualized total return is (5.8%).
/TABLE
<PAGE>
PAGE
<TABLE>
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
May 31, 1994 (Unaudited) investments compared to net assets)
<CAPTION>
_____________________________________________________________________________________________________________________________
Municipal bonds (97.7%)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Alaska (2.2%)
State Housing Finance Veterans Mortgage Corporation Collateralized Bonds
Series 1990 7.50 % 2030 $ 5,230,000 $ 5,405,989
Valdez Marine Terminal Refunding Revenue Bonds SOhio Pipeline
Series 1985 7.125 2025 20,000,000 21,190,200
______________
Total 26,596,189
_____________________________________________________________________________________________________________________________
Arizona (1.6%)
Phoenix Junior Lien Street & Highway User Refunding Revenue Bonds
Series 1992 6.25 2011 10,350,000 10,534,954
Tucson Street & Highway User Revenue Bonds Series 1991B 6.25 2010 8,250,000 8,518,538
______________
Total 19,053,492
_____________________________________________________________________________________________________________________________
California (8.4%)
Loma Linda University Medical Center Hospital Refunding Revenue Bonds
Series C (MBIA Insured) 5.375 2022 21,000,000 18,392,850
Los Angeles State Building Authority Lease Revenue Bonds
State Department of General Services Series 1993A 5.625 2011 3,250,000 3,071,900
Los Angeles Wastewater System
Refunding Revenue Bonds Series D (FGIC Insured) 5.20 2021 10,300,000 8,841,211
Oakland Redevelopment Agency Special Tax Assessment Bonds Inverse Floater 8.574 2019 6,000,000 (e) 5,482,500
Palomar Pomerado Hotel System Revenue Bonds
(MBIA Insured) 4.75 2023 4,115,000 3,238,176
Rancho Water District Finance Authority Refunding Revenue Bonds
(AMBAC Insured) 4.75 2021 2,000,000 1,582,460
Sacramento Municipal Utilities District Electric Refunding Revenue Bonds
Series D (MBIA Insured) 5.25 2020 4,000,000 3,457,800
San Diego County Certificates of Participation Capital Asset Leasing
Master Refunding Bonds Series 1993 Inverse Floater (AMBAC Insured) 7.97 2012 11,700,000 (e) 10,281,375
San Jose Redevelopment Agency Merged Area Redevelopment
Tax Allocation Bonds Series 1993 (MBIA Insured) 5.00 2020 8,940,000 7,448,361
Southern California Public Power Authority Revenue Bonds Series 1993
Inverse Floater (FGIC Insured) 7.47 2012 12,100,000 (e) 9,891,750
State Health Facilities Revenue Bonds
Catholic Healthcare West Series 1994B (AMBAC Insured) 5.00 2021 15,500,000 12,879,415
State Housing Authority Finance Agency Bonds Series 1991A 7.375 2017 10,395,000 10,609,864
University of California Refunding Revenue Bonds
Multiple Purpose Project Series C (AMBAC Insured) 4.875 2019 6,500,000 5,283,525
______________
Total 100,461,187
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
May 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Colorado (0.2%)
Larimer County Single Family Mortgage Revenue Bonds
Larimer County & Weld County Program Series 1984A Zero Coupon 5.80 % 2015 $11,820,000 (d)$ 2,892,709
_____________________________________________________________________________________________________________________________
Connecticut (1.6%)
State General Obligation Bonds Series 1992A 6.40 2006 18,000,000 19,381,140
_____________________________________________________________________________________________________________________________
Delaware (0.2%)
State University Revenue Bonds Series 1989 6.00 2014 2,000,000 1,949,360
_____________________________________________________________________________________________________________________________
Florida (4.2%)
Duvall County Housing Authority Single Family Mortgage
Refunding Revenue Bonds Series 1991 (FGIC Insured) 7.35 2024 3,430,000 3,610,384
Jacksonville Electric Revenue Bonds St. John's River Series A 6.00 2016 6,900,000 6,815,751
Jacksonville Electric Revenue Bonds St. John's River 2nd Series 1986 6.50 2020 10,000,000 10,065,800
Jacksonville Excise Taxes Refunding Revenue Bonds Series 1992
(AMBAC Insured) 6.50 2008 5,000,000 5,272,650
Lakeland Electric & Water Refunding Revenue Bonds Series 1986
(AMBAC Insured) 6.00 2012 5,500,000 5,469,200
St. John's River Water Management District Land Acquisition Revenue Bonds
Series 1989 (AMBAC Insured) 6.00 2009 7,000,000 7,057,400
State Board of Education Administration Capital Outlay
Public Education Bonds Series 1991C 6.50 2008-09 11,225,000 11,771,737
______________
Total 50,062,922
_____________________________________________________________________________________________________________________________
Georgia (3.3%)
Municipal Electric Authority Refunding Revenue Bonds
Series EE Project #1 Bonds (AMBAC Insured) 5.50 2026 4,000,000 3,598,560
Municipal Electric Authority Refunding Revenue Bonds
Series B (Secondary FGIC) 5.70 2019 10,500,000 9,828,630
Municipal Electric Authority Refunding Revenue Bonds
Series 1989T 6.50 2025 5,000,000 5,062,650
Municipal Electric Authority Special Obligation Bonds Project #1
4th Crossover Series X (Secondary MBIA) 6.50 2020 19,550,000 20,554,674
______________
Total 39,044,514
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
May 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Hawaii (1.9%)
City & County of Honolulu General Obligation Bonds Series 1992A 6.25 % 2005 $ 5,880,000 $ 6,231,447
City & County of Honolulu General Obligation Bonds Series 1992A 6.30 2006 5,880,000 6,308,711
City & County of Honolulu Refunding & Improvement General Obligation Bonds
Series 1993B Inverse Floater 7.32 2006 5,300,000 (e) 5,035,000
City & County of Honolulu Refunding & Improvement General Obligation Bonds
Series 1993B Inverse Floater 7.62 2008 5,300,000 (e) 4,948,875
______________
Total 22,524,033
_____________________________________________________________________________________________________________________________
Illinois (8.1%)
Cook County Unlimited Tax General Obligation Bonds Series 1989 6.50 2009 5,800,000 5,937,402
Educational Facility Authority Adjustable Demand Revenue Bonds
University of Chicago Series 1985 7.10 2020 3,250,000 (f) 3,510,845
Health Facilities Authority Refunding Revenue Bonds
Masonic Medical Center Series 1993 5.50 2019 7,000,000 5,870,060
Health Facilities Authority Refunding Revenue Bonds
University of Chicago Hospital Series 1993 Inverse Floater (MBIA Insured) 8.22 2014 5,000,000 (e) 4,362,500
University of Chigago Hospital Series 1994 (MBIA Insured) 6.125 2026 4,500,000 4,325,535
Metropolitan Pier & Exposition Authority McCormick Place Expansion Bonds
Series A Zero Coupon (FGIC Insured) 5.64 2015-16 20,715,000 (d) 5,113,380
Metropolitan Pier & Exposition Authority McCormick Place Expansion Bonds
Series 1992A 6.50 2027 20,395,000 20,311,584
Northwest Suburban Joint Action Water Supply System Refunding Revenue Bonds
(MBIA Insured) 5.75 2012 4,815,000 4,577,187
Public Building Commission of Chicago Building Revenue Bonds
Board of Education of Chicago Series 1990A (MBIA Insured) 6.50 2018 23,500,000 25,694,665
Public Building Commission of Chicago Building Revenue Bonds
State Development Finance Authority Power Refunding Bonds Series 1991A 7.375 2021 10,000,000 10,642,300
State Development Finance Authority Regency Park Retirement Housing
Revenue Bonds Series 1991B Zero Coupon 6.50 2025 10,000,000 (d) 1,072,800
State Health Facility Authority Revenue Bonds Sisters Hospital Services
Series 1991B Inverse Floater 10.067 2015 5,200,000 (e) 5,512,000
______________
Total 96,930,258
_____________________________________________________________________________________________________________________________
Indiana (2.0%)
Municipal Power Agency Power Supply System Refunding Revenue Bonds
Series 1989A (AMBAC Insured) 6.50 2016 8,800,000 9,512,184
Seymour Economic Development Revenue Bonds Union Camp Series 1992 6.25 2012 2,870,000 2,854,416
Transportation Finance Authority Highway Revenue Bonds Series 1990A 7.25 2015 10,000,000 11,249,000
______________
Total 23,615,600
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
May 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Iowa (0.4%)
State Finance Authority Single Family Mortgage-Backed Securities
Program Bonds Series 1991A 7.25 % 2016 $ 4,220,000 $ 4,343,899
_____________________________________________________________________________________________________________________________
Kansas (0.8%)
Reno & Labette Counties Single Family Mortgage Revenue Bonds
Escrowed to Maturity Zero Coupon 6.25 2015 25,000,000 (d) 5,984,500
Reno Sedgwick Finney Counties Single Family Mortgage Revenue Bonds
Escrowed to Maturity Zero Coupon (MBIA Insured) 6.02 2016 17,015,000 (d) 3,984,573
______________
Total 9,969,073
_____________________________________________________________________________________________________________________________
Kentucky (0.2%)
Jefferson County Pollution Control Revenue Bonds Louisville Gas & Electric
Series 1985A 9.25 2015 1,750,000 1,882,318
_____________________________________________________________________________________________________________________________
Louisiana (2.5%)
Industrial Development Board of Bastrop Percent Pollution Control
Refunding Revenue Bonds International Paper Company Series 1992A 6.90 2007 6,875,000 7,399,425
New Orleans Capital Appreciation Refunding Bonds
Zero Coupon (AMBAC Insured) 5.75 2009 17,500,000 (d) 6,715,625
New Orleans General Obligation Bonds Series 1986 (AMBAC Insured) 6.00 2004 4,685,000 4,891,936
New Orleans General Obligation Refunding Bonds Series 1991 (AMBAC Insured) 6.00 2004 1,165,000 1,182,207
New Orleans Home Mortgage Authority Special Obligation Refunding Bonds
Series 1992 6.25 2011 9,000,000 9,026,820
Parish of Pointe Coupee Pollution Control Refunding Revenue Bonds
Gulf States Utilities Series 1993 6.70 2013 1,350,000 1,338,431
______________
Total 30,554,444
_____________________________________________________________________________________________________________________________
Maryland (2.1%)
State Community Development Administration Department of Housing &
Community Development Single Family Program Bonds Series 1991-1 7.30 2017 10,500,000 10,871,385
State Health & Higher Educational Facility Authority Revenue Bonds
Anne Arndel Medical Center (AMBAC Insured) 5.00 2023 7,000,000 5,825,260
State Health & Higher Educational Facility Authority Revenue Bonds
University of Maryland Medical Systems (FGIC Insured) 4.75 2023 10,000,000 7,910,800
______________
Total 24,607,445
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
May 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Massachusetts (2.4%)
State Health & Education Authority Beverly Hospital Inverse Floater
(MBIA Insured) 7.92 % 2020 $ 2,950,000 (e) $ 2,503,813
State Municipal Wholesale Electric Power Supply System Revenue Bonds
Series 1992B 6.75 2017 20,000,000 21,863,499
State Municipal Wholesale Electric Power Supply System Revenue Bonds
Series 1993A Inverse Floater (AMBAC Insured) 8.02 2018 5,000,000 (e) 3,950,000
______________
Total 28,317,312
_____________________________________________________________________________________________________________________________
Michigan (1.0%)
Detroit Water Supply System Refunding Revenue Bonds
Series 1992 (FGIC Insured) 6.25 2007 2,000,000 2,069,400
State Hospital Finance Authority Refunding Revenue Bonds
Detroit Medical Center Obligation Group Series 1993A 6.50 2018 5,000,000 4,897,900
State Strategic Fund Percent Limited Obligation Refunding Revenue Bonds
Ford Motor Company Series 1991A 7.10 2006 5,000,000 5,464,900
______________
Total 12,432,200
_____________________________________________________________________________________________________________________________
Minnesota (2.8%)
Cambridge 1st Mortgage Nursing Home Revenue Bonds
Cambridge Nursing Care Center (FHA Insured) 10.15 2013 3,040,000 3,074,291
Minneapolis & St. Paul Housing & Redevelopment Authority
Health Care System Series 1990A 7.40 2005 4,500,000 4,975,515
Osseo Independent School District #279 General Obligation
School Building Bonds Series 1994A Inverse Floater 7.30 2012 7,000,000 (e) 6,028,750
Regents of the University General Obligation Bonds
Series 1993A Inverse Floater 7.173 2003 5,000,000 (e) 4,637,500
State Housing Finance Agency Single Family Mortgage Bonds
Series 1990C (FHA Insured) 7.70 2014 3,925,000 4,028,895
State Housing Finance Agency Single Family Mortgage Revenue Bonds
Series 1988E 7.65 2014 10,695,000 10,996,064
______________
Total 33,741,015
_____________________________________________________________________________________________________________________________
Missouri (0.9%)
Lee's Summit Industrial Development Authority Bonds Pfizer Series 1984 10.50 2009 1,450,000 1,538,914
St. Louis Region Convention & Sports Complex Authority Series 1991C 7.90 2021 8,500,000 9,387,825
______________
Total 10,926,739
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
May 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Nevada (0.4%)
Clark County School District Series B Zero Coupon (FGIC Insured) 5.76 % 2009 $12,050,000 (d)$ 4,717,455
_____________________________________________________________________________________________________________________________
New Hampshire (0.4%)
Business Finance Authority Pollution Control & Solid Waste Disposal
Revenue Bonds James River Series 1993 6.625 2022 5,000,000 4,753,800
_____________________________________________________________________________________________________________________________
New Jersey (1.4%)
Turnpike Authority Revenue Bonds Series 1991C 6.50 2005 16,000,000 16,940,480
_____________________________________________________________________________________________________________________________
New Mexico (0.3%)
Incorporated County of Los Alamos Utility System
Refunding Revenue Bonds Series 1994A (FSA Insured) 6.00 2015 3,905,000 3,809,015
_____________________________________________________________________________________________________________________________
New York (6.4%)
City Municipal Water Finance Authority Water & Sewer System Revenue Bonds
Series A 5.50 2020 18,370,000 16,436,006
City Municipal Water Finance Authority Water & Sewer System Revenue Bonds
Series B 6.375 2022 4,065,000 4,410,728
State Dormitory Authority City University Revenue Bonds
Series F 5.00 2014 12,970,000 11,049,792
State Local Government Assistance Series B 6.00 2018 7,640,000 7,404,077
State Mortgage Agency Homeowner Mortgage Revenue Bonds Series TT 7.50 2015 15,945,000 17,058,120
State Urban Development Correctional Capital Facility Revenue Bonds
Series 4 5.375 2023 24,025,000 20,533,207
________________
Total 76,891,930
_____________________________________________________________________________________________________________________________
North Carolina (2.8%)
Eastern Municipal Power Agency System Refunding Revenue Bonds
Series 1989A 6.50 2024 20,000,000 20,006,200
State Municipal Power Agency #1 Catawba Electric Revenue Bonds Series 1993
Inverse Floater (MBIA Insured) 8.03 2012 15,000,000 (e) 13,068,750
______________
Total 33,074,950
_____________________________________________________________________________________________________________________________
Ohio (0.7%)
Columbus Sewerage System Refunding Revenue Bonds Series 1992 6.30 2005 3,500,000 3,715,915
State Building Authority Bonds Toledo Government Center 6.00 2007 4,620,000 4,631,781
______________
Total 8,347,696
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
May 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Oregon (1.1%)
Hospital Facility Authority of Clackamas County Revenue Bonds
Kaiser-Permanente Series 1985 9.375% 2015 $ 2,750,000 $ 2,987,435
State Housing & Community Services Department Mortgage Revenue Bonds
Single Family Mortgage Series 1992B 6.875 2028 10,000,000 10,214,100
______________
Total 13,201,535
_____________________________________________________________________________________________________________________________
Pennsylvania (3.6%)
Commonwealth General Obligation Bonds Series 1992-1 6.30 2005 11,000,000 11,665,500
Delaware County Industrial Development Authority Pollution Control
Refunding Revenue Bonds Philadelphia Electric Company 7.375 2021 23,540,000 24,583,293
State Housing Finance Agency Single Family Mortgage Revenue Bonds
Series 1987L 7.125 2014 6,165,000 6,541,188
Westmoreland County Service Revenue Capital Appreciation Bonds
Series C Zero Coupon (FGIC Insured) 5.70 2021 5,440,000 (d) 952,054
______________
Total 43,742,035
_____________________________________________________________________________________________________________________________
Rhode Island (1.4%)
State & Providence Plantations General Obligation Refunding Bonds
Series 1992A (FGIC Insured) 6.25 2007 16,000,000 16,664,960
_____________________________________________________________________________________________________________________________
South Carolina (2.2%)
Horry County Hospital Refunding Revenue Bonds Conway Hospital Series 1992 6.75 2012 4,000,000 3,991,400
Piedmont Municipal Power Agency Electric Refunding Revenue Bonds
Series 1986 6.00 2024 13,060,000 12,336,476
Piedmont Municipal Power Agency Electric Refunding Revenue Bonds
Series 1986A 5.75 2024 2,390,000 2,161,373
Public Service Revenue Bonds Series D 6.375 2022 8,000,000 7,952,800
______________
Total 26,442,049
_____________________________________________________________________________________________________________________________
Tennessee (0.9%)
Chattanooga Municipal Improvement & Sewer Facility Unlimited Tax Bonds 6.50 2009-11 6,000,000 6,237,540
Knox County Health Education & Housing Facility Board Hospital Refunding
Revenue Bonds Fort Sanders Alliance Obligation Group
Series 1993 (MBIA Insured) 5.25 2015 5,000,000 4,483,650
______________
Total 10,721,190
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
May 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Texas (15.0%)
Austin Utility System Combined Utility Refunding Revenue Bonds Series 1992
(AMBAC Insured) 6.25 % 2006 $10,500,000 $ 10,975,020
Coastal Water Authority Water Conveyance System Refunding Revenue Bonds
Series 1991 (AMBAC Insured) 6.25 2017 5,000,000 5,234,000
Corpus Christi Independent School District
Unlimited Tax School Building Bonds 6.00 2005-06 4,845,000 4,881,419
Cypress-Fairbanks Independent School District Harris County
Unlimited Tax Schoolhouse Bonds Series 1990 (FGIC Insured) 6.50 2008 1,500,000 1,618,005
Fort Worth Tarrant & Denton Counties Water & Sewer System
Refunding Revenue Bonds Series 1991B 6.30 2004 11,390,000 11,900,386
Fort Worth Tarrant & Denton Counties Water & Sewer System
Refunding Revenue Bonds Series 1991B 6.40 2005 8,760,000 9,146,316
Harris County Toll Road Senior Lien Refunding Revenue Bonds 5.375 2020 5,000,000 4,444,850
Houston Water & Sewer System Junior Lien Refunding Revenue Bonds
Series C Zero Coupon (AMBAC Insured) 5.92 2007 17,030,000 (d) 7,606,620
Houston Water & Sewer System Junior Lien Refunding Revenue Bonds
Series C Zero Coupon (AMBAC Insured) 6.05 2008 19,260,000 (d) 7,861,739
Municipal Power Agency Bonds (BIG Insured) 6.25 2010 7,000,000 7,482,650
North Central Texas Health Facilities Development Bonds
Kaiser Foundation of Texas 9.375 2015 4,500,000 4,903,560
Orange County Industrial Development Revenue Bonds Wal-Mart Stores 10.75 2009 1,840,000 1,938,826
Randall County Industrial Development Revenue Bonds Wal-Mart Stores 10.75 2009 1,840,000 1,948,431
Round Rock Independent School District Capital Appreciation
Refunding Bonds Permanent School Fund Guarantee Zero Coupon 5.97 2008 13,580,000 (d) 5,896,844
San Antonio Electric & Gas Systems Refunding Revenue Bonds Series 1989 6.00 2014 6,000,000 5,844,060
San Antonio Electric & Gas Systems Refunding Revenue Bonds Series 1989 6.50 2012 20,000,000 20,359,200
San Antonio Electric & Gas Systems Refunding Revenue Bonds Series 1989A 6.50 2012 6,250,000 6,362,250
San Antonio Water Refunding Revenue Bonds (FGIC Insured) 6.40 2007 25,000,000 26,295,000
State General Obligation Capital Appreciation Refunding Bonds
Superconducting Series C Zero Coupon (FGIC Insured) 5.92 2010 4,965,000 (d) 1,831,142
State Municipal Power Agency Refunding Revenue Bonds
Series 1993 Zero Coupon (MBIA Insured) 6.10 2013-14 76,000,000 (d) 22,044,800
State Turnpike Authority Revenue Bonds 6.00 2020 10,000,000 10,483,700
______________
Total 179,058,818
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
May 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Utah (1.6%)
Emery County Pollution Control Revenue Bonds Utah Power & Light 10.70 % 2014 $ 2,000,000 $ 2,074,760
Intermountain Power Authority Special Obligation Bonds 1st Crossover Series 6.00 2015 15,970,000 15,577,457
West Valley City Industrial Development Revenue Bonds Albertson's 10.875 2009 1,825,000 1,888,291
______________
Total 19,540,508
_____________________________________________________________________________________________________________________________
Virginia (2.8%)
Fairfax County Economic Development Authority
Lease Revenue Bonds Government Center Properties Series 1994 5.25 2018 2,550,000 2,201,084
5.50 2018 11,500,000 10,395,885
State Housing Development Authority Commonwealth Mortgage Bonds
Series 1992A 7.10 2017 12,500,000 12,830,625
State Transportation Board Revenue Bonds 6.00 2019 8,000,000 7,738,640
______________
Total 33,166,234
_____________________________________________________________________________________________________________________________
Washington (5.0%)
Auburn School District #408 King County Unlimited Tax
General Obligation Bonds Series 1992A 6.375 2006 8,000,000 8,404,880
Issaquah School District #411 King County Unlimited Tax
General Obligation Refunding Bonds 1992 6.375 2008 16,675,000 17,406,365
Public Power Supply System Nuclear Project #1 Revenue Bonds Series 1989A 6.00 2017 12,130,000 11,520,104
Seattle Light & Power Refunding Revenue Bonds 5.875 2009-10 8,310,000 8,600,767
State Public Power Supply System Nuclear Project #1 Revenue Refunding Bonds
Bonneville Power Administration Series 1993A Inverse Floater (FSA Insured) 8.53 2011 15,000,000 (e) 13,706,250
______________
Total 59,638,366
_____________________________________________________________________________________________________________________________
West Virginia (0.9%)
School Building Authority Capital Improvement Revenue Bonds Series 1990B
(MBIA Insured) 6.00 2020 9,730,000 9,479,258
State Parkways Economic Development & Tourism Authority
Capital Appreciation Refunding Bonds Zero Coupon (FGIC Insured) 5.99 2007 2,735,000 (d) 1,250,907
______________
Total 10,730,165
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
May 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Wisconsin (3.0%)
Milwaukee Metropolitan Sewerage District General Obligation
Capital Purpose Bonds Series 1992 6.25 % 2005 $26,000,000 $ 27,580,800
State General Obligation Refunding Bonds Series 1992 6.10 2005 8,500,000 8,985,350
______________
Total 36,566,150
_____________________________________________________________________________________________________________________________
Wyoming (1.0%)
Casper Industrial Development Revenue Bonds Albertson's 9.875 2010 2,525,000 2,775,707
Community Development Authority Single Family Mortgage Bonds
Federally Insured or Guaranteed Mortgage Loan 7.40 2031 3,510,000 3,652,471
Gillette Pollution Control Revenue Bonds Black Hills Power & Light
Series 1984 10.50 2014 5,035,000 5,192,042
______________
Total 11,620,220
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $1,124,081,909) $1,168,913,405
_____________________________________________________________________________________________________________________________
<CAPTION>
Short-term security (0.1%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Municipal note
East Baton Rouge Parish Louisiana Polution Control Revenue Bonds
Series 1989
09-01-23 3.25% $1,000,000 (f)$ 1,000,000
_____________________________________________________________________________________________________________________________
Total short-term security
(Cost: $1,000,000) $ 1,000,000
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $1,125,081,909)(g) $1,169,913,405
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Exempt Bond Fund, Inc. (Percentages represent value of
May 31, 1994 (Unaudited) investments compared to net assets)
<CAPTION>
_____________________________________________________________________________________________________________________________
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Investments in bonds, by rating category as a percentage of total bonds, are as follows:
(Unaudited)
_________________________________________
<S> <C> <C>
Rating 5-31-94 11-30-93
_______________________________________________________________________________________________________
AAA 41% 35%
AA 35 36
A 17 23
BBB and below 7 6
Non-rated - -
_______________________________________________________________________________________________________
Total 100% 100%
_______________________________________________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
(d) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition.
(e) Inverse floaters represent securities which pay interest at a rate that increases (decreases) based on (decreases)
increases of market short-term rates. Interest rate disclosed is the rate in effect on May 31, 1994.
(f) Interest rate varies to reflect current market conditions; rate shown is the effective rate on May 31, 1994.
(g) At May 31, 1994, the cost of securities for federal income tax purposes was approximately $1,124,872,000 and the
approximate aggregate gross unrealized appreciation and depreciation based on that cost was:
<S> <C>
Unrealized appreciation $65,415,000
Unrealized depreciation (20,374,000)
______________________________________________________________________________________________________
Net unrealized appreciation $45,041,000
______________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE
Directors and officers
Directors and officers of the fund
_____________________________________________________________________
President and interested director
William R. Pearce
President of all funds in the IDS MUTUAL FUND GROUP.
_____________________________________________________________________
Independent directors
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for
Public Policy Research.
Robert F. Froehlke
Former president of all funds in the IDS MUTUAL FUND GROUP.
Donald M. Kendall
Former chairman and chief executive officer, PepsiCo, Inc.
Melvin R. Laird
Senior counsellor for national and international affairs,
The Reader's Digest Association, Inc.
Lewis W. Lehr
Former chairman and chief executive officer,
Minnesota Mining and Manufacturing Company (3M).
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
_____________________________________________________________________
Interested director who is a partner in a law firm that has
represented an IDS subsidiary
Anne P. Jones
Partner, law firm of Sutherland, Asbill & Brennan.
_____________________________________________________________________
Interested directors who are officers and/or employees of IDS
William H. Dudley
Executive vice president, IDS.
David R. Hubers
President and chief executive officer, IDS.
John R. Thomas
Senior vice president, IDS.
_____________________________________________________________________
Other officer
Leslie L. Ogg
Vice president of all funds in the IDS MUTUAL FUND GROUP and general
counsel and treasurer of the publicly offered funds.<PAGE>
PAGE
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conservation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposit (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income.
Secondary objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
seek high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed income
securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) cornucopia<PAGE>
PAGE
IDS mutual funds
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher rated,
lower risk bond categories, or the equivalent, and in government bonds.
(icon of) greek column
IDS Strategy, Income Fund
Invests primarily in corporate and government bonds to seek high
current income while conserving capital. Also may seek capital
appreciation when consistent with its primary goals.
(icon of) chess piece
IDS Selective Fund
Invests in high-quality corporate bonds and other highly rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests primarily in securities issued or guaranteed as to the timely
payment of principal and interest by the U.S. government, its agencies
and instrumentalities. Seeks a high level of current income and
safety of principal consistent with its type of investments.
(icon of) federal building
IDS Strategy, Short-Term Income Fund
Invests primarily in short-term and intermediate-term bonds and notes
to seek a high level of current income.
(icon of) chess piece
Tax-exempt income investments
These funds provide tax-free income by investing in municipal bonds.
The income is generally free from federal income tax. Risk varies
by bond quality.
IDS High Yield Tax-Exempt Fund
Invests primarily in medium- and lower-quality municipal bonds and
notes. Lower-quality securities generally involve greater risk of
principal and income.
(icon of) shield with basket of apples enclosed<PAGE>
PAGE
IDS mutual funds
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities
to provide income to residents of each respective state that is
exempt from federal, state and local income taxes. (New York
is the only state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government
units, with at least 75% in the four highest rated, lowest risk bond
categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the fund but does not guarantee
the market value of the fund's shares.
(icon of) shield with eagle head
Growth and income investments
These funds focus on securities of medium to large, well-established
companies that offer long-term growth of capital and reasonable income
from dividends and interest. Moderate risk.
IDS International Fund
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The fund may invest up to 20%
of its assets in the U.S. market.
(icon of) three flags
IDS Strategy, Worldwide Growth Fund
Invests primarily in common stocks of companies throughout the world
that offer potential for superior growth. Holdings may range from
small- to large-capitalization stocks, including those of companies
involved in areas of rapid economic growth.
(icon of) chess piece
IDS Managed Retirement Fund
Invests in a combination of common stocks, fixed-income
investments and money market securities to seek a maximum total
return through a combination of growth of capital and current income.
(icon of) bird in a nest
<PAGE>
PAGE
IDS mutual funds
IDS Equity Plus Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of
capital and income.
(icon of) three apple trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by IDS research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund
Invests in common stocks of companies representing many
sectors of the economy. Seeks current income and growth of capital.
(icon of) building with columns
IDS Strategy, Equity Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) chess piece
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek
high current income and growth of income and capital with reduced
volatility.
(icon of) electrical cord
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to seek high current
income and, secondarily, to benefit from the growth potential offered
by stock investments.
(icon of) four puzzle pieces
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice<PAGE>
PAGE
IDS mutual funds
Growth investments
Funds in this group seek capital growth, primarily from common stocks.
They are high risk mutual funds with a potential for high reward.
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Strategy, Aggressive Equity Fund
Invests primarily in common stocks of companies that are selected
for their potential for above-average growth. Above-average means
that their growth potential is better, in the opinion of the
portfolio's investment manager, than the Standard & Poor's
Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS Growth Fund
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) flower
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy.
These companies offer above-average potential for long-term growth.
(icon of) world
IDS New Dimensions Fund
Invests primarily in companies with significant growth
potential due to superiority in technology, marketing or management.
The fund frequently changes its industry mix.
(icon of) dimension
IDS Progressive Fund
Invests primarily in undervalued common stocks. The fund holds
stocks for the long term with the goal of capital growth.
(icon of) shooting star
<PAGE>
PAGE
IDS mutual funds
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against inflation.
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic companies
that explore for, mine and process or distribute gold and other
precious metals. This is the most aggressive and most speculative
IDS mutual fund.
(icon of) cart of precious gems
For more complete information about any of these funds, including charges
and expenses, you can obtain a prospectus by contacting your financial
planner or writing to IDS Shareholder Service, P.O. Box 534, Minneapolis,
MN 55440-0534. Read it carefully before you invest or send money.
<PAGE>
PAGE
Quick telephone reference
IDS Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota:
800-437-3133
Mpls./St. Paul area:
671-3800
IDS Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
IDS Infoline
Automated account information (TouchTone phones only), including current
fund prices and performance, account values and recent account
transactions
National/Minnesota:
800-272-4445
Mpls./St. Paul area:
671-1630
Your IDS financial planner
AN AMERICAN EXPRESS COMPANY
1894 IDS 1994
A CENTURY OF INVESTING IN THE FUTURE
IDS Tax-Exempt Bond Fund
IDS Tower 10
Minneapolis, MN 55440-0010
