<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. _____
Post-Effective Amendment No. 33 (File No. 2-63552) X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 34 (File No. 811-2901) X
IDS HIGH YIELD TAX-EXEMPT FUND, INC.
IDS Tower 10, Minneapolis, MN 55440
Leslie L. Ogg
901 S. Marquette Avenue, Suite 2810
Minneapolis, MN 55440-0010
(612) 330-9283
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b)
X on January 29, 1996 pursuant to paragraph (b) of rule 485
60 days after filing pursuant to paragraph (a)(i)
on (date) pursuant to paragraph (a)(i) of rule 485
75 days after filing pursuant to paragraph (a)(ii)
on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
This Post-Effective Amendment designates a new effective date
for a previously filed Post-Effective Amendment.
Registrant has registered an indefinite number of securities under
the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940. Registrant filed its 24f-2 Notice
for the fiscal period ended November 30, 1995, on or about January
30, 1996.
<PAGE>
PAGE 2
Cross reference sheet showing the location in its prospectus and
the Statement of Additional Information of the information called
for by the items enumerated in Parts A and B of Form N-1A.
Negative answers omitted from prospectus are so indicated.
<TABLE>
<CAPTION>
PART A - PROSPECTUS PART A - FUND PROFILE
Section
Item No. in Prospectus Item No. Page in Profile
<C> <C> <C> <C>
1 Cover page of prospectus 1 Goals or Objectives. 40
2(a) Sales charge and Fund expenses 2 Investment Strategies. 40
(b) The Fund in brief
(c) The Fund in brief 3 Risks. 40
3(a) Financial highlights 4 Appropriateness. 40
(b) NA
(c) Performance 5 Fees & Expenses. 40
(d) Financial highlights
6 Past Performance. 41
4(a) The Fund in brief; Investment policies and a Bar Graph. 41
risks; How the Fund is organized b Yield or Total Return. 42
(b) Investment policies and risks c Disclosure Concerning Investment N/A
(c) Investment policies and risks Strategy.
5(a) Directors and officers; Directors and 7 Investment Adviser. 42
officers of the Fund (listing)
(b)(i) Investment manager and transfer agent; 8 Purchases. 42
About American Express Financial
Corporation -- General Information 9 Redemptions. 42
(b)(ii) Investment manager and transfer agent
(b)(iii) Investment manager and transfer agent 10 Distributions. 42
(c) Portfolio manager
(d) Investment manager and transfer agent 11 Other Services. 42
(e) Investment manager and transfer agent
(f) Distributor
(g) Investment manager and transfer agent;
About American Express Financial
Corporation -- General Information
5A(a) *
(b) *
6(a) Shares; Voting rights
(b) NA
(c) NA
(d) Voting rights
(e) Cover page; Special shareholder services
(f) Dividends and capital gains distributions;
Reinvestments
(g) Taxes
(h) Alternative sales arrangements; Special
considerations regarding master/feeder
structure
7(a) Distributor
(b) Valuing Fund shares
(c) How to purchase, exchange or redeem shares
(d) How to purchase shares
(e) NA
(f) Distributor
8(a) How to redeem shares
(b) NA
(c) How to purchase shares: Three ways to invest
(d) How to purchase, exchange or redeem shares:
Redemption policies -- "Important..."
9 None
*Designates information is located in annual report.
**Designates location in prospectus.
<PAGE>
PAGE 3
PART B
Section in
Item No. Statement of Additional Information
10 Cover page of SAI
11 Table of Contents
12 NA
13(a) Additional Investment Policies; all
appendices except Dollar-Cost Averaging
(b) Additional Investment Policies
(c) Additional Investment Policies
(d) Portfolio Transactions
14(a) Directors and officers of the Fund;**
Directors and officers
(b) Directors and Officers
(c) Directors and Officers
15(a) NA
(b) NA
(c) Directors and Officers
16(a)(i) How the Fund is organized; About American
Express Financial Corporation**
(a)(ii) Agreements: Investment Management Services
Agreement, Plan and Supplemental
Agreement of Distribution
(a)(iii) Agreements: Investment Management Services Agreement
(b) Agreements: Investment Management Services Agreement
(c) NA
(d) Agreements: Administrative Services
Agreement, Shareholder Service Agreement
(e) NA
(f) Agreements: Distribution Agreement
(g) NA
(h) Custodian; Independent Auditors
(i) Agreements: Transfer Agency Agreement; Custodian
17(a) Portfolio Transactions
(b) Brokerage Commissions Paid to Brokers Affiliated
with American Express Financial Corporation
(c) Portfolio Transactions
(d) Portfolio Transactions
(e) Portfolio Transactions
18(a) Shares; Voting rights**
(b) NA
19(a) Investing in the Fund
(b) Valuing Fund Shares; Investing in the Fund
(c) NA
20 Taxes
21(a) Agreements: Distribution Agreement
(b) Agreements: Distribution Agreement
(c) NA
22(a) Performance Information (for money market
funds only)
(b) Performance Information (for all funds except
money market funds)
23 Financial Statements
</TABLE>
<PAGE>
PAGE 4
IDS High Yield Tax-Exempt Fund
Prospectus
Jan. 29, 1996
The goal of IDS High Yield Tax-Exempt Fund, Inc. is to provide high
yield generally exempt from federal income taxes.
This prospectus contains facts that can help you decide if the Fund
is the right investment for you. Read it before you invest and
keep it for future reference.
Additional facts about the Fund are in a Statement of Additional
Information (SAI), filed with the Securities and Exchange
Commission. The SAI, dated Jan. 29, 1996, is incorporated here by
reference. For a free copy, contact American Express Shareholder
Service.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND SHARES ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN THE FUND
INVOLVE INVESTMENT RISK INCLUDING POSSIBLE LOSS OF PRINCIPAL.
American Express Shareholder Service
P.O. Box 534
Minneapolis, MN
55440-0534
612-671-3733
TTY: 800-846-4852
<PAGE>
PAGE 5
The Fund in brief
Goal
Types of Fund investments and their risks
Proposed conversion to master/feeder structure
Manager and distributor
Portfolio manager
Alternative purchase arrangements
Sales charge and Fund expenses
Performance
Financial highlights
Total returns
Yield
Investment policies and risks
Facts about investments and their risks
Valuing Fund shares
How to purchase, exchange or redeem shares
Alternative purchase arrangements
How to purchase shares
How to exchange shares
How to redeem shares
Reductions and waivers of the sales charge
Special shareholder services
Services
Quick telephone reference
Distributions and taxes
Dividend and capital gain distributions
Reinvestments
Taxes
How to determine the correct TIN
How the Fund is organized
Shares
Voting rights
Shareholder meetings
Special considerations regarding master/feeder structure
Board members and officers
Investment manager and transfer agent
Distributor
About American Express Financial Corporation
General information
Appendices
Description of bond ratings
Tax-exempt vs. taxable income
Descriptions of derivative instruments
<PAGE>
PAGE 6
The Fund in brief
Goal
IDS High Yield Tax-Exempt Fund (the Fund) seeks to provide
shareholders with a high yield generally exempt from federal income
taxes. Because any investment involves risk, achieving this goal
cannot be guaranteed. Only shareholders can change the goal.
Types of Fund investments and their risks
The Fund is a diversified mutual fund that usually invests in
medium- and lower-quality bonds and notes issued by or on behalf of
state and local governmental units whose interest generally is
exempt from federal income tax. The Fund also may invest in
derivative instruments and money market instruments. Some of the
Fund's investments may be considered speculative and involve
additional investment risks.
Proposed conversion to master/feeder structure
Subject to certain contingencies, the Fund intends to invest all of
its assets in the Aggressive Tax-Free Income Portfolio (the
Portfolio) of Tax-Free Income Trust (the Trust) rather than
directly investing in and managing its own portfolio of securities.
The Portfolio will have the same investment objective as the Fund.
The Fund anticipates this conversion will occur in early 1996.
Manager and distributor
The Fund is managed by American Express Financial Corporation
(AEFC), a provider of financial services since 1894. AEFC
currently manages more than $47 billion in assets for the IDS
MUTUAL FUND GROUP. Shares of the Fund are sold through American
Express Financial Advisors Inc., a wholly owned subsidiary of AEFC.
After the Fund converts to the master/feeder structure, the
Portfolio in which the Fund invests will be managed by AEFC with
the same portfolio manager.
Portfolio manager
Kurt Larson joined AEFC in 1961 and serves as vice president and
senior portfolio manager. He has managed this Fund since 1979.
Alternative purchase arrangements
The Fund offers its shares in three classes. Class A shares are
subject to a sales charge at the time of purchase. Class B shares
are subject to a contingent deferred sales charge (CDSC) on
redemptions made within six years of purchase and an annual
distribution (12b-1) fee. Class Y shares are sold without a sales
charge to qualifying institutional investors.
<PAGE>
PAGE 7
Sales charge and Fund expenses
Shareholder transaction expenses are incurred directly by an
investor on the purchase or redemption of Fund shares. Fund
operating expenses are paid out of Fund assets for each class of
shares. Operating expenses are reflected in the Fund's daily share
price and dividends, and are not charged directly to shareholder
accounts.
Shareholder transaction expenses
Class A Class B Class Y
Maximum sales charge on purchases*
(as a percentage of offering price).......5% 0% 0%
Maximum deferred sales charge
imposed on redemptions (as a
percentage of original purchase price)....0% 5% 0%
Annual Fund operating expenses**
(% of average daily net assets):
Class A Class B Class Y
Management fee 0.44% 0.44% 0.44%
12b-1 fee 0.00% 0.75% 0.00%
Other expenses*** 0.28% 0.29% 0.10%
Total 0.72% 1.48% 0.54%
*This charge may be reduced depending on your total investments in
IDS funds. See "Reductions of the sales charge."
**Expenses for Class A are based on actual expenses for the last
fiscal year, restated to reflect current fees. Expenses for Class
B and Class Y are based on the actual annualized expenses for the
period from March 20, 1995 to Nov. 30, 1995.
***Other expenses include an administrative services fee, a
shareholder services fee for Class A and Class B, a transfer agency
fee and other non-advisory expenses.
Example: Suppose for each year for the next 10 years, Fund
expenses are as above and annual return is 5%. If you sold your
shares at the end of the following years, for each $1,000 invested,
you would pay total expenses of:
1 year 3 years 5 years 10 years
Class A $57 $72 $ 88 $135
Class B $65 $87 $101 $157**
Class B* $15 $47 $ 81 $157**
Class Y $ 6 $17 $ 30 $ 68
*Assuming Class B shares are not redeemed at the end of the period.
**Based on conversion of Class B shares to Class A shares after
eight years.
This example does not represent actual expenses, past or future.
Actual expenses may be higher or lower than those shown. Expense
information in this table for Class A shares has been restated to
<PAGE>
PAGE 8
reflect estimates of Fund expenses from changes in fees approved by
shareholders in November 1994. Because Class B pays annual
distribution (12b-1) fees, long-term shareholders of Class B may
indirectly pay an equivalent of more than a 6.25% sales charge, the
maximum permitted by the National Association of Securities
Dealers.
Performance
Financial highlights
<TABLE>
<CAPTION>
Performance
Financial highlights
Fiscal year ended Nov. 30,
Per share income and capital changes*
Class A
1995 1994 1993 1992 1991** 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $4.18 $4.76 $4.65 $4.55 $4.44 $4.57 $4.42 $4.34 $4.69 $4.30
beginning of year
Income from investment operations:
Net investment income .28 .30 .30 .31 .30 .34 .34 .34 .35 .36
Net gains (losses) .48 (.56) .13 .12 .11 (.12) .15 .08 (.34) .49
(both realized
and unrealized)
Total from investment .76 (.26) .43 .43 .41 .22 .49 .42 .01 .85
operations
Less distributions:
Dividends from net (.28) (.30) (.30) (.32) (.30) (.34) (.34) (.34) (.35) (.36)
investment income
Distributions from -- (.02) (.02) (.01) -- (.01) -- -- (.01) (.10)
realized gains
Total distributions (.28) (.32) (.32) (.33) (.30) (.35) (.34) (.34) (.36) (.46)
Net asset value, $4.66 $4.18 $4.76 $4.65 $4.55 $4.44 $4.57 $4.42 $4.34 $4.69
end of year
Ratios/supplemental data
1995 1994 1993 1992 1991** 1990 1989 1988 1987 1986
Net assets, end of $6,316 $5,769 $6,733 $6,036 $5,291 $4,750 $4,594 $4,070 $3,740 $3,730
year (in millions)
Ratio of expenses to .68% .59% .61% .62% .60%+ .60% .60% .59% .60% .60%
average daily net assets
Ratio of net income 6.31% 6.50% 6.32% 6.86% 7.26%+ 7.62% 7.50% 7.66% 7.80% 7.84%
to average
daily net assets
Portfolio turnover rate 14% 17% 10% 12% 10% 22% 7% 13% 15% 12%
(excluding short-term
securities)
Total return++ 18.6% (5.8%) 9.6% 9.7% 10.1%+ 5.5% 11.7% 11.2% (1.8%) 22.7%
*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.
+Adjusted to an annual basis.
++Total return does not reflect payment of a sales charge.
<PAGE>
PAGE 9
Performance
Financial highlights
Fiscal period ended Nov. 30,
Per share income and capital changes*
Class B** Class Y**
1995 1995
Net asset value, $4.46 $4.46
beginning of period
Income from investment operations:
Net investment income .19 .22
Net gains (both realized .20 .20
and unrealized)
Total from investment .39 .42
operations
Less distributions:
Dividends from net (.19) (.22)
investment income
Net asset value, $4.66 $4.66
end of period
Ratios/supplemental data
1995 1995
Net assets, end of $71 $25
period (in millions)
Ratio of expenses to 1.48%+ 0.54%+
average daily net assets
Ratio of net income 5.36%+ 6.32%+
to average
daily net assets
Portfolio turnover rate 14% 14%
(excluding short-term
securities)
Total return++ 8.9% 9.5%
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Inception date was March 20, 1995 for Class B and Class Y.
+Adjusted to an annual basis.
++Total return does not reflect payment of a sales charge.
The information in this table has been audited by KPMG Peat Marwick LLP,
independent auditors. The independent auditors' report and additional
information about the performance of the Fund are contained in the Fund's
annual report which, if not included with this prospectus, may be obtained
without charge.
</TABLE>
Total returns
Total return is the sum of all of your returns for a given period,
assuming you reinvest all distributions. It is calculated by
taking the total value of shares you own at the end of the period
(including shares acquired by reinvestment), less the price of
shares you purchased at the beginning of the period.
Average annual total return is the annually compounded rate of
return over a given time period (usually two or more years). It is
the total return for the period converted to an equivalent annual
figure.
<PAGE>
PAGE 10
Average annual total returns as of Nov. 30, 1995
Purchase 1 year 5 years 10 years
made ago ago ago
IDS High Yield Tax-Exempt:
Class A +12.71% + 7.03% + 8.30%
Lehman Brothers
Municipal Bond
Index +18.91% + 8.66% + 9.01%
Cumulative total returns as of Nov. 30, 1995
Purchase 1 year 5 years 10 years
made ago ago ago
IDS High Yield Tax-Exempt:
Class A +12.71% +40.45% +121.97%
Lehman Brothers
Municipal Bond
Index +18.91% +51.47% +136.86%
These examples show total returns from hypothetical investments in
Class A shares of the Fund. These returns are compared to those of
a popular index for the same periods. Total returns for Class A,
Class B and Class Y for the period from March 20, 1995 to Nov. 30,
1995 were +3.78%, +3.87% and +9.45%, respectively. March 20, 1995
was the inception date for Class B and Class Y. Total return for
Class A is shown for comparative purposes. The performance of
Class B and Class Y will vary from the performance of Class A based
on differences in sales charges and fees. Past performance for
Class Y for the periods prior to March 20, 1995 may be calculated
based on the performance of Class A, adjusted to reflect
differences in sales charges although not other differences in
expenses.
For purposes of calculation, information about the Fund assumes:
o a sales charge of 5% for Class A shares
o redemption at the end of the period and deduction of the
applicable contingent deferred sales charge for Class B
shares
o no sales charge for Class Y shares
o no adjustments for taxes an investor may have paid on the
reinvested income and capital gains
o a period of widely fluctuating securities prices. Returns
shown should not be considered a representation of the Fund's
future performance.
Lehman Brothers Municipal Bond Index is made up of a representative
list of general obligation, revenue, insured and pre-refunded
bonds. The index is frequently used as a general measure of tax-
exempt bond market performance. However, the securities used to
create the index may not be representative of the bonds held in the
Fund. The index reflects reinvestment of all distributions and
changes in market prices, but excludes brokerage commissions or
other fees.
<PAGE>
PAGE 11
Yield
Yield is the net investment income earned per share for a specified
time period, divided by the offering price at the end of the
period. The Fund's SEC standardized yield for the 30-day period
ended Nov. 30, 1995, was 4.95% for Class A, 4.46% for Class B and
5.38% for Class Y. The Fund calculates this 30-day SEC
standardized yield by dividing:
o net investment income per share deemed earned during a 30-day
period by
o the public offering price per share on the last day of the
period, and
o converting the result to a yearly equivalent figure.
The Fund also may calculate a tax equivalent yield by dividing the
tax-exempt portion of its yield by one minus a stated income tax
rate. A tax equivalent yield demonstrates the taxable yield
necessary to produce an after-tax yield equivalent to that of a
fund that invests in exempt obligations.
These yield calculations do not include any contingent deferred
sales charge, ranging from 5% to 0% on Class B shares, which would
reduce the yields quoted.
The Fund's yield varies from day to day, mainly because share
values and offering prices (which are calculated daily) vary in
response to changes in interest rates. Net investment income
normally changes much less in the short run. Thus, when interest
rates rise and share values fall, yield tends to rise. When
interest rates fall, yield tends to follow.
Past yields should not be considered an indicator of future yields.
Investment policies and risks
Under normal market conditions, the Fund will invest at least 80%
of its net assets in bonds and notes issued by or on behalf of
state and local governmental units whose interest is exempt from
federal income tax (according to the opinion of counsel for the
issuer) and is not subject to the alternative minimum tax. This
policy cannot be changed without shareholder approval. Other
investments include derivative instruments, money market
instruments and bonds subject to the alternative minimum tax
computation.
Subject to certain contingencies, the Fund intends in early 1996 to
achieve its investment objective by investing all of its assets in
the Portfolio of the Trust, which is a separate investment company.
The Portfolio has the same investment objectives, policies and
restrictions as the Fund. The board of the Fund believes that by
investing all of its assets in the Portfolio, the Fund will be in a
position to realize directly or indirectly certain economies of
<PAGE>
PAGE 12
scale inherent in managing a larger asset base. When the Fund
converts to the master/feeder structure, the policies described
below will apply to both the Fund and the Portfolio.
The various types of investments the portfolio manager uses to
achieve investment performance are described in more detail in the
next section and in the SAI.
Facts about investments and their risks
Bonds and notes exempt from federal income taxes: The Fund usually
invests in medium- and lower-quality notes rated A, BBB or BB by
Standard & Poor's Corporation, Moody's Investors Service, Inc. or
Fitch Investors Services, Inc., or in securities the portfolio
manager believes have similar qualities even though they are not
rated or have been given a lower rating by a rating agency. The
Fund invests in higher-quality bonds and notes when the difference
in yield between higher- and lower-quality securities does not
warrant the increase in risk or there is not an adequate supply of
lower-quality securities. Securities that are subsequently
downgraded in quality may continue to be held by the Fund and will
be sold only when the Fund's investment manager believes it is
advantageous to do so.
The price of bonds generally falls as interest rates increase, and
rises as interest rates decrease. The price of bonds or notes also
fluctuates if the credit rating is upgraded or downgraded. The
price of bonds or notes below investment grade may react more to
the ability of a company to pay interest or principal when due than
to changes in interest rates. They have greater price
fluctuations, are more likely to experience a default, and
sometimes are referred to as junk bonds. Reduced market liquidity
for these bonds may occasionally make it more difficult to value
them.
Bond ratings and holdings for fiscal 1995
<TABLE>
<CAPTION>
S&P Rating Percent of
(or Moody's Protection of net assets in
Percent of or Fitch's principal and unrated securities
net assets equivalent) interest assessed by AEFC
<C> <C> <C> <C>
21.20% AAA Highest quality 5.90%
6.61 AA High quality --
20.96 A Upper medium grade 0.17
22.46 BBB Medium grade 2.18
4.11 BB Moderately speculative 8.98
0.80 B Speculative 2.62
-- CCC Highly speculative 0.09
-- CC Poor quality --
-- C Lowest quality 0.01
-- D In default 0.19
20.74 Unrated Unrated securities 0.60
</TABLE>
(See Appendix A to this prospectus describing bond ratings for
further information.)
Bonds sold at a deep discount: Some bonds are sold at deep
discounts because they do not pay interest until maturity. They
include zero coupon bonds and PIK (pay-in-kind) bonds. To comply
<PAGE>
PAGE 13
with tax laws, the Fund has to recognize a computed amount of
interest income and pay dividends to shareholders even though no
cash has been received. In some instances, the Fund may have to
sell securities to have sufficient cash to pay the dividends.
Concentration: The Fund may invest more than 25% of its total
assets in industrial revenue bonds, but it does not intend to
invest more than 25% of its total assets in industrial revenue
bonds issued for companies in the same industry or state. As the
similarity in issuers increases, the potential for fluctuation in
the net asset value of the Fund's shares also increases.
Derivative instruments: The portfolio manager may use derivative
instruments in addition to securities to achieve investment
performance. Derivative instruments include futures, options and
forward contracts. Such instruments may be used to maintain cash
reserves while remaining fully invested, to offset anticipated
declines in values of investments, to facilitate trading, to reduce
transaction costs, or to pursue higher investment returns.
Derivative instruments are characterized by requiring little or no
initial payment and a daily change in price based on or derived
from a security, a currency, a group of securities or currencies,
or an index. A number of strategies or combination of instruments
can be used to achieve the desired investment performance
characteristics. A small change in the value of the underlying
security, currency or index will cause a sizable gain or loss in
the price of the derivative instrument. Derivative instruments
allow the portfolio manager to change the investment performance
characteristics very quickly and at lower costs. Risks include
losses of premiums, rapid changes in prices, defaults by other
parties, and inability to close such instruments. The Fund will
use derivative instruments only to achieve the same investment
performance characteristics it could achieve by directly holding
those securities and currencies permitted under the investment
policies. The Fund will designate cash or appropriate liquid
assets to cover its portfolio obligations. The use of derivative
instruments may produce taxable income. No more than 5% of the
Fund's net assets can be used at any one time for good faith
deposits on futures and premiums for options on futures that do not
offset existing investment positions. The Fund is not limited as
to the percentage of its assets that may be invested in permissible
investments, including derivatives, except as otherwise explicitly
provided in this prospectus or the SAI. For descriptions of these
and other types of derivative instruments, see Appendix C to this
prospectus and the SAI.
Securities and derivative instruments that are illiquid: A
security or derivative instrument is illiquid if it cannot be sold
quickly in the normal course of business. Some investments cannot
be resold to the U.S. public because of their terms or government
regulations. All securities and derivative instruments, however,
can be sold in private sales, and many may be sold to other
institutions and qualified buyers or on foreign markets. The
portfolio manager will follow guidelines established by the board
and consider relevant factors such as the nature of the security
<PAGE>
PAGE 14
and the number of likely buyers when determining whether a security
is illiquid. No more than 10% of the Fund's net assets will be
held in securities and derivative instruments that are illiquid.
Money market instruments: Short-term tax-exempt debt securities
rated in the top two grades or the equivalent are used to meet
daily cash needs and at various times to hold assets until better
investment opportunities arise. Under extraordinary conditions
where, in the opinion of the portfolio manager, appropriate short-
term tax-exempt securities are not available, the Fund is
authorized to make certain taxable investments as described in the
SAI.
The investment policies described above may be changed by the
board.
Lending portfolio securities: The Fund may lend its securities to
earn income so long as borrowers provide collateral equal to the
market value of the loans. The risks are that borrowers will not
provide collateral when required or return securities when due.
Unless a majority of the outstanding voting securities approve
otherwise, loans may not exceed 30% of the Fund's net assets.
Valuing Fund shares
The public offering price is the net asset value (NAV) plus the
sales charge for Class A. It is the NAV for Class B and Class Y.
The NAV is the value of a single Fund share. The NAV usually
changes daily, and is calculated at the close of business, normally
3 p.m. Central time, each business day (any day the New York Stock
Exchange is open). NAV generally declines as interest rates
increase and rises as interest rates decline.
To establish the net assets, all securities are valued as of the
close of each business day. In valuing assets:
o Securities (except bonds) and assets with available market
values are valued on that basis.
o Securities maturing in 60 days or less are valued at
amortized cost.
o Bonds and assets without readily available market values are
valued according to methods selected in good faith by the
board.
How to purchase, exchange or redeem shares
Alternative purchase arrangements
The Fund offers three different classes of shares - Class A, Class
B and Class Y. The primary differences among the classes are in
the sales charge structures and in their ongoing expenses. These
differences are summarized in the table below. You may choose the
class that best suits your circumstances and objectives.
<PAGE>
PAGE 15
<TABLE>
<CAPTION>
Sales charge and
distribution
(12b-1) fee Service fee Other information
<S> <C> <C> <C>
Class A Maximum initial 0.175% of average Initial sales charge
sales charge of daily net assets waived or reduced
5%; no 12b-1 fee for certain purchases
Class B No initial sales 0.175% of average Shares convert to
charge; maximum CDSC daily net assets Class A after eight
of 5% declines to 0% years; CDSC waived in
after six years; 12b-1 certain circumstances
fee of 0.75% of average
daily net assets
Class Y None None Available only to
certain qualifying
institutional
investors
</TABLE>
Conversion of Class B shares to Class A shares - Eight calendar
years after Class B shares were originally purchased, Class B
shares will convert to Class A shares and will no longer be subject
to a distribution fee. The conversion will be on the basis of
relative net asset values of the two classes, without the
imposition of any sales charge. Class B shares purchased through
reinvested dividends and distributions will convert to Class A
shares in a pro rata portion as the Class B shares purchased other
than through reinvestment.
Considerations in determining whether to purchase Class A or Class
B shares - You should consider the information below in determining
whether to purchase Class A or Class B shares. The sales charges
and distribution fee (included in "Ongoing expenses") are
structured so that you will have approximately the same total
return at the end of eight years regardless of which class you
chose.
Sales charges on purchase or redemption
If you purchase Class A If you purchase Class B
shares shares
o You will not have all o All of your money is
of your purchase price invested in shares of
invested. Part of your stock. However, you will
purchase price will go pay a sales charge if you
to pay the sales charge. redeem your shares within
You will not pay a sales six years of purchase.
charge when you redeem
your shares.
o You will be able to o No reductions of the
take advantage of sales charge are
reductions in the sales available for large
charge. purchases.<PAGE>
PAGE 16
If your investments in IDS funds that are subject to a sales charge
total $250,000 or more, you are better off paying the reduced sales
charge in Class A than paying the higher fees in Class B. If you
qualify for a waiver of the sales charge, you should purchase Class
A shares.
Ongoing expenses
If you purchase Class A If you purchase Class B
shares shares
o Your shares will have o The distribution and
a lower expense ratio transfer agency fees for
than Class B shares Class B will cause your
because Class A does not shares to have a higher
pay a distribution fee expense ratio and to pay
and the transfer agency lower dividends than
fee for Class A is lower Class A shares. After
than the fee for Class B. eight years, Class B
As a result, Class A shares shares will convert to
will pay higher dividends Class A shares and will
than Class B shares. no longer be subject to
higher fees.
You should consider how long you plan to hold your shares and
whether the accumulated higher fees and CDSC on Class B shares
prior to conversion would be less than the initial sales charge on
Class A shares. Also consider to what extent the difference would
be offset by the lower expenses on Class A shares. To help you in
this analysis, the example in the "Sales charge and Fund expenses"
section of the prospectus illustrates the charges applicable to
each class of shares.
Class Y shares - Class Y shares are offered to certain
institutional investors. Class Y shares are sold without a front-
end sales charge or a CDSC and are not subject to either a service
fee or a distribution fee. The following investors are eligible to
purchase Class Y shares:
o Qualified employee benefit plans* if the plan:
- uses a daily transfer recordkeeping service offering
participants daily access to IDS funds and has
- at least $10 million in plan assets or
- 500 or more participants; or
- does not use daily transfer recordkeeping and has
- at least $3 million invested in funds of the IDS MUTUAL
FUND GROUP or
- 500 or more participants.
o Trust companies or similar institutions, and charitable
organizations that meet the definition in Section 501(c)(3)
of the Internal Revenue Code.* These must have at least $10
million invested in funds of the IDS MUTUAL FUND GROUP.
<PAGE>
PAGE 17
o Nonqualified deferred compensation plans* whose participants
are included in a qualified employee benefit plan described
above.
* Eligibility must be determined in advance by American Express
Financial Advisors. To do so, contact your financial advisor.
How to purchase shares
If you're investing in this Fund for the first time, you'll need to
set up an account. Your financial advisor will help you fill out
and submit an application. Once your account is set up, you can
choose among several convenient ways to invest.
Important: When opening an account, you must provide AEFC with
your correct Taxpayer Identification Number (Social Security or
Employer Identification number). See "Distributions and taxes."
When you purchase shares for a new or existing account, the price
you pay per share is determined at the close of business on the day
your investment is received and accepted at the Minneapolis
headquarters.
Purchase policies:
o Investments must be received and accepted in the Minneapolis
headquarters on a business day before 3 p.m. Central time to
be included in your account that day and to receive that day's
share price. Otherwise your purchase will be processed the
next business day and you will pay the next day's share price.
o The minimums allowed for investment may change from time to
time.
o Wire orders can be accepted only on days when your bank, AEFC,
the Fund and Norwest Bank Minneapolis are open for business.
o Wire purchases are completed when wired payment is received
and the Fund accepts the purchase.
o AEFC and the Fund are not responsible for any delays that
occur in wiring funds, including delays in processing by the
bank.
o You must pay any fee the bank charges for wiring.
o The Fund reserves the right to reject any application for any
reason.
o If your application does not specify which class of shares you
are purchasing, it will be assumed that you are investing in
Class A shares.
<PAGE>
PAGE 18
Three ways to invest
<TABLE>
<CAPTION>
<S> <C> <C>
1
By regular account Send your check and application Minimum amounts
(or your name and account number Initial investment: $2,000
if you have an established account) Additional
to: investments: $ 100
American Express Financial Advisors Inc. Account balances: $ 300*
P.O. Box 74
Minneapolis, MN 55440-0074
Your financial advisor will help
you with this process.
2
By scheduled Contact your financial advisor Minimum amounts
investment plan to set up one of the following Initial investment: $100
scheduled plans: Additional
investments: $100/mo.
o automatic payroll deduction Account balances: none
(on active plans of
o bank authorization monthly payments)
o direct deposit of
Social Security check
o other plan approved by the Fund
3
By wire If you have an established account, If this information is not
you may wire money to: included, the order may be
rejected and all money
Norwest Bank Minneapolis received by the Fund, less
Routing No. 091000019 any costs the Fund or AEFC
Minneapolis, MN incurs, will be returned
Attn: Domestic Wire Dept. promptly.
Give these instructions: Minimum amounts
Credit IDS Account #00-30-015 Each wire investment: $1,000
for personal account # (your
account number) for (your name).
*If your account balance falls below $300, you will be asked in writing to bring it up to $300 or establish a scheduled
investment plan. If you don't do so within 30 days, your shares can be redeemed and the proceeds mailed to you.
</TABLE>
How to exchange shares
You can exchange your shares of the Fund at no charge for shares of
the same class of any other publicly offered fund in the IDS MUTUAL
FUND GROUP available in your state. Exchanges into IDS Tax-Free
Money Fund must be made from Class A shares. For complete
information, including fees and expenses, read the prospectus
carefully before exchanging into a new fund.
If your exchange request arrives at the Minneapolis headquarters
before the close of business, your shares will be redeemed at the
net asset value set for that day. The proceeds will be used to
purchase new fund shares the same day. Otherwise, your exchange
will take place the next business day at that day's net asset
value.
For tax purposes, an exchange represents a redemption and purchase
and may result in a gain or loss. However, you cannot create a tax
loss (or reduce a taxable gain) by exchanging from the Fund within
91 days of your purchase. For further explanation, see the SAI.
<PAGE>
PAGE 19
How to redeem shares
You can redeem your shares at any time. American Express
Shareholder Service will mail payment within seven days after
receiving your request.
When you redeem shares, the amount you receive may be more or less
than the amount you invested. Your shares will be redeemed at net
asset value, minus any applicable sales charge, at the close of
business on the day your request is accepted at the Minneapolis
headquarters. If your request arrives after the close of business,
the price per share will be the net asset value, minus any
applicable sales charge, at the close of business on the next
business day.
A redemption is a taxable transaction. If your proceeds from your
redemption are more or less than the cost of your shares, you will
have a gain or loss, which can affect your tax liability.
Two ways to request an exchange or redemption of shares
<TABLE>
<CAPTION>
<S> <C>
1
By letter Include in your letter:
o the name of the fund(s)
o the class of shares to be exchanged or redeemed
o your account number(s) (for exchanges, both funds must be registered in the same
ownership)
o your Taxpayer Identification Number (TIN)
o the dollar amount or number of shares you want to exchange or redeem
o signature of all registered account owners
o for redemptions, indicate how you want your money delivered to you
o any paper certificates of shares you hold
Regular mail:
American Express Shareholder Service
Attn: Redemptions
P.O. Box 534
Minneapolis, MN 55440-0534
Express mail:
American Express Shareholder Service
Attn: Redemptions
733 Marquette Ave.
Minneapolis, MN 55402
2
By phone
American Express Telephone o The Fund and AEFC will honor any telephone exchange or redemption request believed to be
Transaction Service: authentic and will use reasonable procedures to confirm that they are. This includes
800-437-3133 or asking identifying questions and tape recording calls. If reasonable
612-671-3800 procedures are not followed, the Fund or AEFC will be liable for any loss resulting from
fraudulent requests.
o Phone exchange and redemption privileges automatically apply to all accounts except
custodial, corporate or qualified retirement accounts unless you request these privileges
NOT apply by writing American Express Shareholder Service. Each registered owner must sign
the request.
o AEFC answers phone requests promptly, but you may experience delays when call volume is
high. If you are unable to get through, use mail procedure as an alternative.
o Acting on your instructions, your financial advisor may conduct telephone transactions
on your behalf.
o Phone privileges may be modified or discontinued at any time.
Minimum amount
Redemption: $100
Maximum amount
Redemption: $50,000
</TABLE>
<PAGE>
PAGE 20
Exchange policies:
o You may make up to three exchanges within any 30-day period,
with each limited to $300,000. These limits do not apply to
scheduled exchange programs and certain employee benefit plans or
other arrangements through which one shareholder represents the
interests of several. Exceptions may be allowed with pre-approval
of the Fund.
o Exchanges must be made into the same class of shares of the new
fund.
o If your exchange creates a new account, it must satisfy the
minimum investment amount for new purchases.
o Once we receive your exchange request, you cannot cancel it.
o Shares of the new fund may not be used on the same day for
another exchange.
o If your shares are pledged as collateral, the exchange will be
delayed until written approval is obtained from the secured party.
o AEFC and the Fund reserve the right to reject any exchange,
limit the amount, or modify or discontinue the exchange privilege,
to prevent abuse or adverse effects on the Fund and its
shareholders. For example, if exchanges are too numerous or too
large, they may disrupt the Fund's investment strategies or
increase its costs.
Redemption policies:
o A "change of mind" option allows you to change your mind after
requesting a redemption and to use all or part of the proceeds to
purchase new shares in the same class from which you redeemed. If
you reinvest in Class A, you will purchase the new shares at net
asset value rather than the offering price on the date of a new
purchase. If you reinvest in Class B, any CDSC you paid on the
amount you are reinvesting also will be reinvested. To take
advantage of this option, send a written request within 30 days of
the date your redemption request was received. Include your
account number and mention this option. This privilege may be
limited or withdrawn at any time, and it may have tax consequences.
o A telephone redemption request will not be allowed within 30
days of a phoned-in address change.
Important: If you request a redemption of shares you recently
purchased by a check or money order that is not guaranteed, the
Fund will wait for your check to clear. It may take up to 10 days
from the date of purchase before a check is mailed to you. (A
check may be mailed earlier if your bank provides evidence
satisfactory to the Fund and AEFC that your check has cleared.)
<PAGE>
PAGE 21
Three ways to receive payment when you redeem shares
<TABLE>
<CAPTION>
<S> <C>
1
By regular or express mail o Mailed to the address on record.
o Payable to names listed on the account.
NOTE: The express mail delivery charges
you pay will vary depending on the
courier you select.
2
By wire o Minimum wire redemption: $1,000.
o Request that money be wired to your bank.
o Bank account must be in the same
ownership as the IDS fund account.
NOTE: Pre-authorization required. For
instructions, contact your financial
advisor or American Express Shareholder Service.
3
By scheduled payout plan o Minimum payment: $50.
o Contact your financial advisor or American Express
Shareholder Service to set up regular
payments to you on a monthly, bimonthly,
quarterly, semiannual or annual basis.
o Purchasing new shares while under a payout
plan may be disadvantageous because of
the sales charges.
</TABLE>
Reductions and waivers of the sales charge
Class A - initial sales charge alternative
On purchases of Class A shares, you pay a 5% sales charge on the
first $50,000 of your total investment and less on investments
after the first $50,000:
Total investment Sales charge as a
percent of:*
Public Net
offering amount
price invested
Up to $50,000 5.0% 5.26%
Next $50,000 4.5 4.71
Next $400,000 3.8 3.95
Next $500,000 2.0 2.04
$1,000,000 or more 0.0 0.00
* To calculate the actual sales charge on an investment greater
than $50,000 and less than $1,000,000, amounts for each applicable
increment must be totaled. See the SAI.
Reductions of the sales charge on Class A shares
Your sales charge may be reduced, depending on the totals of:
o the amount you are investing in this Fund now,
o the amount of your existing investment in this Fund, if any, and
o the amount you and your immediate family (spouse or unmarried
children under 21) are investing or have in other funds in the IDS
MUTUAL FUND GROUP that carry a sales charge.<PAGE>
PAGE 22
Other policies that affect your sales charge:
o IDS Tax-Free Money Fund and Class A shares of IDS Cash
Management Fund do not carry sales charges. However, you may count
investments in these funds if you acquired shares in them by
exchanging shares from IDS funds that carry sales charges.
o Employee benefit plan purchases made through a payroll deduction
plan or through a plan sponsored by an employer, association of
employers, employee organization or other similar entity, may be
added together to reduce sales charges for all shares purchased
through that plan.
o If you intend to invest $1 million over a period of 13 months,
you can reduce the sales charges in Class A by filing a letter of
intent.
For more details, see the SAI.
Waivers of the sales charge for Class A shares
Sales charges do not apply to:
o Current or retired board members, officers or employees of the
Fund or AEFC or its subsidiaries, their spouses and unmarried
children under 21.
o Current or retired American Express financial advisors, their
spouses and unmarried children under 21.
o Qualified employee benefit plans* using a daily transfer
recordkeeping system offering participants daily access to IDS
funds.
(Participants in certain qualified plans for which the initial
sales charge is waived may be subject to a deferred sales charge of
up to 4% on certain redemptions. For more information, see the
SAI.)
o Shareholders who have at least $1 million invested in funds of
the IDS MUTUAL FUND GROUP. If the investment is redeemed in the
first year after purchase, a CDSC of 1% will be charged on the
redemption.
o Purchases made within 30 days after a redemption of shares (up
to the amount redeemed):
- of a product distributed by American Express Financial
Advisors in a qualified plan subject to a deferred
sales charge or
- a qualified plan where American Express Trust Company has a
recordkeeping, trustee, investment management or investment
servicing relationship.
Send the Fund a written request along with your payment, indicating
the amount of the redemption and the date on which it occurred.
<PAGE>
PAGE 23
o Purchases made with dividend or capital gain distributions from
another fund in the IDS MUTUAL FUND GROUP that has a sales charge.
o Purchases made through American Express Strategic Portfolio
Service (total amount of all investments made in the Strategic
Portfolio Service must be at least $50,000).
*Eligibility must be determined in advance by American Express
Financial Advisors. To do so, contact your financial advisor.
Class B - contingent deferred sales charge alternative
Where a CDSC is imposed on a redemption, it is based on the amount
of the redemption and the number of calendar years, including the
year of purchase, between purchase and redemption. The following
table shows the declining scale of percentages that apply to
redemptions during each year after a purchase:
If a redemption is The percentage rate
made during the for the CDSC is:
First year 5%
Second year 4%
Third year 4%
Fourth year 3%
Fifth year 2%
Sixth year 1%
Seventh year 0%
If the amount you are redeeming reduces the current net asset value
of your investment in Class B shares below the total dollar amount
of all your purchase payments during the last six years (including
the year in which your redemption is made), the CDSC is based on
the lower of the redeemed purchase payments or market value.
The following example illustrates how the CDSC is applied. Assume
you had invested $10,000 in Class B shares and that your investment
had appreciated in value to $12,000 after 15 months, including
reinvested dividend and capital gain distributions. You could
redeem any amount up to $2,000 without paying a CDSC ($12,000
current value less $10,000 purchase amount). If you redeemed
$2,500, the CDSC would apply only to the $500 that represented part
of your original purchase price. The CDSC rate would be 4% because
a redemption after 15 months would take place during the second
year after purchase.
Because the CDSC is imposed only on redemptions that reduce the
total of your purchase payments, you never have to pay a CDSC on
any amount you redeem that represents appreciation in the value of
your shares, income earned by your shares or capital gains. In
addition, when determining the rate of any CDSC, your redemption
will be made from the oldest purchase payment you made. Of course,
once a purchase payment is considered to have been redeemed, the
next amount redeemed is the next oldest purchase payment. By
redeeming the oldest purchase payments first, lower CDSCs are
imposed than would otherwise be the case.
<PAGE>
PAGE 24
Waivers of the contingent deferred sales charge
The CDSC on Class B shares will be waived on redemptions of shares:
o In the event of the shareholder's death,
o Purchased by any board member, officer or employee of a fund or
AEFC or its subsidiaries,
o Held in a trusteed employee benefit plan,
o Held in IRAs or certain qualified plans for which American
Express Trust Company acts as custodian, such as Keogh plans, tax-
sheltered custodial accounts or corporate pension plans, provided
that the shareholder is:
- at least 59-1/2 years old, and
- taking a retirement distribution (if the redemption is part
of a transfer to an IRA or qualified plan in a product
distributed by American Express Financial Advisors, or a
custodian-to-custodian transfer to a product not distributed
by American Express Financial Advisors, the CDSC will not be
waived), or
- redeeming under an approved substantially equal periodic
payment arrangement.
For investors in Class A shares who have over $1 million invested
in one year, the 1% CDSC on redemption of those shares will be
waived in the same circumstances described for Class B.
Special shareholder services
Services
To help you track and evaluate the performance of your investments,
AEFC provides these services:
Quarterly statements listing all of your holdings and transactions
during the previous three months.
Yearly tax statements featuring average-cost-basis reporting of
capital gains or losses if you redeem your shares along with
distribution information - which simplifies tax calculations.
A personalized mutual fund progress report detailing returns on
your initial investment and cash-flow activity in your account. It
calculates a total return to reflect your individual history in
owning Fund shares. This report is available from your financial
advisor.
Quick telephone reference
American Express 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
<PAGE>
PAGE 25
American Express Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
American Express Infoline
Automated account information (TouchToneR 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
Distributions and taxes
As a shareholder you are entitled to your share of the Fund's net
income and any gains realized on its investments. The Fund
distributes dividends and capital gain distributions to qualify as
a regulated investment company and to avoid paying corporate income
and excise taxes. Dividend and capital gain distributions will
have tax consequences you should know about.
Dividend and capital gain distributions
The Fund's net investment income from dividends and interest, is
distributed to you monthly as dividends. Short-term capital gains
are distributed at the end of the calendar year and included in net
investment income. The Fund realizes long-term capital gains
whenever it sells securities held for more than one year for a
higher price than it paid for them. Net realized long-term capital
gains, if any, are distributed at the end of the calendar year as
capital gain distributions. Before they're distributed, net long-
term capital gains are included in the value of each share. After
they're distributed, the value of each share drops by the per-share
amount of the distribution. (If your distributions are reinvested,
the total value of your holdings will not change.) Dividends for
each class will be calculated at the same time, in the same manner
and will be the same amount prior to deduction of expenses.
Expenses attributable solely to a class of shares will be paid
exclusively by that class. Class B shareholders will receive lower
per share dividends than Class A and Class Y shareholders because
expenses for Class B are higher than for Class A or Class Y. Class
A shareholders will receive lower per share dividends than Class Y
shareholders because expenses for Class A are higher than for Class
Y.
Reinvestments
Dividends and capital gain distributions are automatically
reinvested in additional shares in the same class of the Fund,
unless:
o you request the Fund in writing or by phone to pay
distributions to you in cash, or
<PAGE>
PAGE 26
o you direct the Fund to invest your distributions in any
publicly available IDS fund for which you've previously opened
an account. You pay no sales charge on shares purchased
through reinvestment from this Fund into any IDS fund.
The reinvestment price is the net asset value at close of business
on the day the distribution is paid. (Your quarterly statement
will confirm the amount invested and the number of shares
purchased.)
If you choose cash distributions, you will receive only those
declared after your request has been processed.
If the U.S. Postal Service cannot deliver the checks for the cash
distributions, we will reinvest the checks into your account at the
then-current net asset value and make future distributions in the
form of additional shares.
Taxes
Dividends distributed from interest earned on tax-exempt securities
(exempt-interest dividends) are exempt from federal income taxes
but may be subject to state and local taxes. Dividends distributed
from other income earned and capital gain distributions are not
exempt from federal income taxes. Distributions are taxable in the
year the Fund pays them regardless of whether you take them in cash
or reinvest them.
Interest on certain private activity bonds is a preference item for
purposes of the individual and corporate alternative minimum taxes.
To the extent the Fund earns such income, it will flow through to
its shareholders and may be taxable to those shareholders who are
subject to the alternative minimum tax.
Because interest on municipal bonds and notes is tax-exempt for
federal income tax purposes, any interest on borrowed money used
directly or indirectly to purchase Fund shares is not deductible on
your federal income tax return. You should consult a tax advisor
regarding its deductibility for state and local income tax
purposes.
Each January, you will receive a tax statement showing the kinds
and total amount of all distributions you received during the
previous year. You must report distributions on your tax returns,
even if they are reinvested in additional shares.
Buying a dividend creates a tax liability. This means buying
shares shortly before a capital gain distribution. You pay the
full pre-distribution price for the shares, then receive a portion
of your investment back as a distribution, which is taxable.
Redemptions and exchanges subject you to a tax on any capital gain.
If you sell shares for more than their cost, the difference is a
capital gain. Your gain may be either short term (for shares held
for one year or less) or long term (for shares held for more than
one year).
<PAGE>
PAGE 27
Your Taxpayer Identification Number (TIN) is important. As with
any financial account you open, you must list your current and
correct Taxpayer Identification Number (TIN) -- either your Social
Security or Employer Identification number. The TIN must be
certified under penalties of perjury on your application when you
open an account at AEFC.
If you don't provide the TIN, or the TIN you report is incorrect,
you could be subject to backup withholding of 31% of taxable
distributions and proceeds from certain sales and exchanges. You
also could be subject to further penalties, such as:
o a $50 penalty for each failure to supply your correct TIN
o a civil penalty of $500 if you make a false statement that
results in no backup withholding
o criminal penalties for falsifying information
You also could be subject to backup withholding because you failed
to report interest or dividends on your tax return as required.
How to determine the correct TIN
Use the Social Security or
For this type of account: Employer Identification number
of:
Individual or joint account The individual or individuals
listed on the account
Custodian account of a minor The minor
(Uniform Gifts/Transfers to
Minors Act)
A living trust The grantor-trustee (the person
who puts the money into the
trust)
An irrevocable trust, pension The legal entity (not the
trust or estate personal representative or
trustee, unless no legal entity
is designated in the account
title)
Sole proprietorship The owner
Partnership partnership
Corporate The corporation
Association, club or The organization
tax-exempt organization
For details on TIN requirements, ask your financial advisor or
local American Express Financial Advisors office for Federal Form
W-9, "Request for Taxpayer Identification Number and
Certification."
<PAGE>
PAGE 28
Important: This information is a brief and selective summary of
certain federal tax rules that apply to this Fund. Tax matters are
highly individual and complex, and you should consult a qualified
tax advisor about your personal situation.
How the Fund is organized
The Fund is a diversified, open-end management investment company,
as defined in the Investment Company Act of 1940. Originally
incorporated on Dec. 21, 1978 in Nevada, the Fund changed its state
of incorporation on June 13, 1986 by merging into a Minnesota
corporation incorporated on April 7, 1986. The Fund headquarters
are at 901 S. Marquette Ave., Suite 2810, Minneapolis, MN 55402-
3268.
Shares
The Fund is owned by its shareholders. The Fund issues shares in
three classes - Class A, Class B and Class Y. Each class has
different sales arrangements and bears different expenses. Each
class represents interests in the assets of the Fund. Par value is
one cent per share. Both full and fractional shares can be issued.
The Fund no longer issues stock certificates.
Voting rights
As a shareholder, you have voting rights over the Fund's management
and fundamental policies. You are entitled to one vote for each
share you own. Shares of the Fund have cumulative voting rights.
Each class has exclusive voting rights with respect to the
provisions of the Fund's distribution plan that pertain to a
particular class and other matters for which separate class voting
is appropriate under applicable law.
Shareholder meetings
The Fund does not hold annual shareholder meetings. However, the
board members may call meetings at their discretion, or on demand
by holders of 10% or more of the outstanding shares, to elect or
remove board members.
Special considerations regarding master/feeder structure
An investor in the Fund should be aware that, subject to certain
contingencies, the Fund intends to achieve its investment objective
in early 1996 by investing its assets in the Portfolio of the
Trust, which has an identical investment objective to the Fund.
This arrangement is commonly known as a master/feeder structure.
The Trust is a separate investment company. Therefore, the Fund's
interest in securities owned by the Portfolio will be indirect.
The board has considered the advantages and disadvantages of
investing the assets of the Fund in the Portfolio. The board
believes that this approach offers opportunities for economies of
scale. In determining to convert to a master/feeder structure, the
board considered whether the aggregate of the fees of the Fund and
<PAGE>
PAGE 29
the Portfolio will be more or less than if the Fund invested
directly in the securities to be held by the Portfolio. The board
negotiated certain expense reimbursement arrangements with AEFC to
mitigate the impact of increases in aggregate costs, and believes
that any additional costs not covered by such arrangements will be
outweighed by the anticipated benefits to the Fund and its
shareholders of conversion to a master/feeder structure.
The investment objective, policies and restrictions of the
Portfolio are described under the captions "Investment policies and
risks" and "Facts about investments and their risks."
To date, AEFC has sponsored and advised only traditionally
structured funds that invest directly in a portfolio of securities
and retain their own investment manager. Funds that invest all
their assets in interests in a separate investment company are a
relatively new development in the mutual fund industry and may be
subject to additional regulations and risks.
In addition to selling units to the Fund, the Portfolio may sell
units to other affiliated and non-affiliated mutual funds and to
institutional investors. Such investors will invest in the
Portfolio on the same terms and conditions and will pay a
proportionate share of the Portfolio's expenses. However, the
other investors investing in the Portfolio are not required to sell
their shares at the same price as the Fund due to variations in
sales commissions and other operating expenses. Therefore,
investors in the Fund should be aware that these differences may
result in differences in returns experienced by investors in the
different funds that invest in the same Portfolio.
The Fund may withdraw (completely redeem) all its assets from the
Portfolio at any time if the board determines that it is in the
best interest of the Fund to do so. In the event the Fund
withdraws all of its assets from the Portfolio, the board would
consider what action might be taken, including investing all assets
of the Fund in another pooled investment entity or retaining an
investment advisor to manage the Fund's assets in accordance with
its investment objective. The investment objective of the Fund and
its Portfolio can only be changed with the approval of a majority
of the outstanding voting securities. If the objective of the
Portfolio changes and shareholders of the Fund do not approve a
parallel change in the Fund's investment objective, the Fund would
seek an alternative investment vehicle for the Fund or retain an
investment advisor on its behalf.
Investors in the Fund should be aware that smaller funds investing
in the Portfolio may be adversely affected by the actions of larger
funds investing in the Portfolio. For example, if a large fund
withdraws from the Portfolio, the remaining funds may experience
higher prorated operating expenses, thereby producing lower
returns. Additionally, the Portfolio may become less diverse,
resulting in increased portfolio risk, and experience decreasing
economies of scale. Institutional investors in the Portfolio that
have a greater pro rata ownership than the Fund could have
effective voting control over the operation of the Portfolio.
Certain changes in the Portfolio's fundamental objectives, policies
<PAGE>
PAGE 30
and restrictions could require the Fund to redeem its interest in
the Portfolio. Any such withdrawal could result in a distribution
of in-kind portfolio securities (as opposed to cash distribution).
If securities are distributed, the Fund could incur brokerage, tax
or other charges in converting the securities to cash. In
addition, a distribution in kind may result in a less diversified
portfolio of investments or adversely affect the liquidity of the
Fund.
Wherever the Fund, as an investor in the Portfolio, is requested to
vote on matters pertaining to the Portfolio, the Fund will hold a
meeting of Fund shareholders. The Fund will vote its units in the
Portfolio for or against such matters proportionately to the
instructions to vote for or against such matters received from Fund
shareholders. The Fund will vote shares for which it receives no
voting instructions in the same proportion as the shares for which
it receives voting instructions. See "Investment manager and
transfer agent" for a complete description of the management and
other expenses associated with the Fund's investment in the
Portfolio.
Board members and officers
Shareholders elect a board that oversees the operations of the Fund
and chooses its officers. Its officers are responsible for day-to-
day business decisions based on policies set by the board. The
board has named an executive committee that has authority to act on
its behalf between meetings. The board members also serve on the
boards of all of the other funds in the IDS MUTUAL FUND GROUP,
except for Mr. Dudley, who is a board member of all publicly
offered funds.
Board members and officers of the Fund
President and interested board member
William R. Pearce
President of all funds in the IDS MUTUAL FUND GROUP.
Independent board members
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.
Heinz F. Hutter
Former president and chief operating officer, Cargill, Inc.
Anne P. Jones
Attorney and telecommunications consultant.
Donald M. Kendall
Former chairman and chief executive officer, PepsiCo, Inc.
<PAGE>
PAGE 31
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.
C. Angus Wurtele
Chairman of the board and chief executive officer, The Valspar
Corporation.
Interested board members who are officers and/or employees of AEFC
William H. Dudley
Executive vice president, AEFC.
David R. Hubers
President and chief executive officer, AEFC.
John R. Thomas
Senior vice president, AEFC.
Officers who also are officers and/or employees of AEFC
Peter J. Anderson
Vice president of all funds in the IDS MUTUAL FUND GROUP.
Melinda S. Urion
Treasurer of all funds in the IDS MUTUAL FUND GROUP.
Other officer
Leslie L. Ogg
Vice president, general counsel and secretary of all funds in the
IDS MUTUAL FUND GROUP.
Refer to the SAI for the board members' and officers' biographies.
Investment manager and transfer agent
The Fund pays AEFC for managing its portfolio, providing
administrative services and serving as transfer agent (handling
shareholder accounts).
Under its Investment Management Services Agreement, AEFC determines
which securities will be purchased, held or sold (subject to the
direction and control of the board). Under the current agreement,
effective March 20, 1995, the Fund pays AEFC a fee for these
services based on the average daily net assets of the Fund, as
follows:
<PAGE>
PAGE 32
Assets Annual rate
(billions) at each asset level
First $1.0 0.490%
Next 1.0 0.465
Next 1.0 0.440
Next 3.0 0.415
Next 3.0 0.390
Over 9.0 0.360
Upon the implementation of the new fund structure, AEFC will
provide these services to the Portfolio at the same annual rate
currently paid by the Fund.
For the fiscal year ended Nov. 30, 1995, under the current and
prior agreements, the Fund paid AEFC a total investment management
fee of 0.45% of its average daily net assets. Under the Agreement,
the Fund also pays taxes, brokerage commissions and nonadvisory
expenses.
Under an Administrative Services Agreement, the Fund pays AEFC for
administration and accounting services at an annual rate of 0.04%
decreasing in gradual percentages to 0.02% as assets increase.
In addition, under a separate Transfer Agency Agreement, AEFC
maintains shareholder accounts and records. The Fund pays AEFC an
annual fee per shareholder account for this service as follows:
o Class A $15.50
o Class B $16.50
o Class Y $15.50
Distributor
The Fund has an exclusive distribution agreement with American
Express Financial Advisors, a wholly owned subsidiary of AEFC.
Financial advisors representing American Express Financial Advisors
provide information to investors about individual investment
programs, the Fund and its operations, new account applications,
and exchange and redemption requests. The cost of these services
is paid partially by the Fund's sales charges.
Persons who buy Class A shares pay a sales charge at the time of
purchase. Prior to March 20, 1995, the date when the Fund began
offering more than one class of shares, the Fund paid an account-
based distribution fee. That fee is part of Class A's total
expenses shown below and was 0.01% of average daily net assets for
the fiscal year ended Nov. 30, 1995. Persons who buy Class B
shares are subject to a contingent deferred sales charge on a
redemption in the first six years and pay an asset-based sales
charge (also known as a 12b-1 plan) of 0.75% of the Fund's average
daily net assets. For the fiscal period from March 20, 1995 to
Nov. 30, 1995, the asset-based sales charge paid by Class B
shareholders was 0.75% of the average daily net assets. Class Y
shares are sold without a sales charge and without an asset-based
sales charge.
<PAGE>
PAGE 33
Financial advisors may receive different compensation for selling
Class A, Class B and Class Y shares. Portions of the sales charge
also may be paid to securities dealers who have sold the Fund's
shares or to banks and other financial institutions. The amounts
of those payments range from 0.8% to 4% of the Fund's offering
price depending on the monthly sales volume.
Under a Shareholder Service Agreement, the Fund also pays a fee for
service provided to shareholders by financial advisors and other
servicing agents. The fee is calculated at a rate of 0.175% of the
Fund's average daily net assets attributable to Class A and Class B
shares.
Total expenses paid by the Fund's Class A shares for the fiscal
year ended Nov. 30, 1995, restated to reflect current agreements,
were 0.72% of its average daily net assets. Annualized expenses
for Class B and Class Y were 1.48% and 0.54%, respectively, based
on the period from March 20, 1995 (the inception date for Class B
and Class Y) to Nov. 30, 1995.
Total fees and expenses (excluding taxes and brokerage commissions)
cannot exceed the most restrictive applicable state expense
limitation.
About American Express Financial Corporation
General information
The AEFC family of companies offers not only mutual funds but also
insurance, annuities, investment certificates and a broad range of
financial management services.
Besides managing investments for all publicly offered funds in the
IDS MUTUAL FUND GROUP, AEFC also manages investments for itself and
its subsidiaries, IDS Certificate Company and IDS Life Insurance
Company. Total assets under management on Nov. 30, 1995 were more
than $127 billion.
American Express Financial Advisors serves individuals and
businesses through its nationwide network of more than 175 offices
and more than 7,800 advisors.
Other AEFC subsidiaries provide investment management and related
services for pension, profit sharing, employee savings and
endowment funds of businesses and institutions.
AEFC is located at IDS Tower 10, Minneapolis, MN 55440-0010. It is
a wholly owned subsidiary of American Express Company (American
Express), a financial services company with headquarters at
American Express Tower, World Financial Center, New York, NY 10285.
The Fund may pay brokerage commissions to broker-dealer affiliates
of American Express and AEFC.
<PAGE>
PAGE 34
Appendix A
Description of bond ratings
Bond ratings concern the quality of the issuing state or local
governmental unit. They are not an opinion of the market value of
the security. Such ratings are opinions on whether the principal
and interest will be repaid when due. A security's rating may
change, which could affect its price. Ratings by Moody's Investors
Service, Inc. are Aaa, Aa, A, Baa, Ba, B, Caa, Ca and C. Ratings
by Standard & Poor's Corporation are AAA, AA, A, BBB, BB, B, CCC,
CC, C and D. The following is a compilation of the two agencies'
rating descriptions. For further information, see the SAI.
Aaa/AAA - Judged to be of the best quality and carry the smallest
degree of investment risk. Interest and principal are secure.
Aa/AA - Judged to be high-grade although margins of protection for
interest and principal may not be quite as good as Aaa or AAA rated
securities.
A - Considered upper-medium grade. Protection for interest and
principal is deemed adequate but may be susceptible to future
impairment.
Baa/BBB - Considered medium-grade obligations. Protection for
interest and principal is adequate over the short-term; however,
these obligations may have certain speculative characteristics.
Ba/BB - Considered to have speculative elements. The protection of
interest and principal payments may be very moderate.
B - Lack characteristics of more desirable investments. There may
be small assurance over any long period of time of the payment of
interest and principal.
Caa/CCC - Are of poor standing. Such issues may be in default or
there may be risk with respect to principal or interest.
Ca/CC - Represent obligations that are highly speculative. Such
issues are often in default or have other marked shortcomings.
C - Are obligations with a higher degree of speculation. These
securities have major risk exposures to default.
D - Are in payment default. The D rating is used when interest
payments or principal payments are not made on the due date.
Non-rated securities will be considered for investment when they
possess a risk comparable to that of rated securities consistent
with the Fund's objectives and policies. When assessing the risk
involved in each non-rated security, the Fund will consider the
financial condition of the issuer or the protection afforded by the
terms of the security.
<PAGE>
PAGE 35
Definitions of zero-coupon and pay-in-kind securities
A zero-coupon security is a security that is sold at a deep
discount from its face value and makes no periodic interest
payments. The buyer of such a security receives a rate of return
by gradual appreciation of the security, which is redeemed at face
value on the maturity date.
A pay-in-kind security is a security in which the issuer has the
option to make interest payments in cash or in additional
securities. The securities issued as interest usually have the
same terms, including maturity date, as the pay-in-kind securities.
<PAGE>
PAGE 36
Appendix B
1996 Federal Tax-Exempt and Taxable Equivalent Yield Calculation
These tables will help you determine your federal taxable yield
equivalents for given rates of tax-exempt income.
STEP 1: Calculating your marginal tax rate.
Using your Taxable Income and Adjusted Gross Income figures as
guides, you can locate your Marginal Tax Rate in the table below.
First locate your Taxable Income in a filing status and income
range in the left-hand column. Then, locate your Adjusted Gross
Income at the top of the chart. At the point where your Taxable
Income line meets your Adjusted Gross Income column the percentage
indicated is an approximation of your Marginal Tax Rate. For
example: Let's assume you are married filing jointly, your taxable
income is $138,000 and your adjustable gross income is $175,000.
Under Taxable Income married filing jointly status, $138,000 is in
the $96,900-$147,700 range. Under Adjusted Gross Income, $175,000
is in the $117,950 to $176,950 column. The Taxable Income line and
Adjusted Gross Income column meet at 31.93%. This is the rate
you'll use in Step 2.
<TABLE>
<CAPTION>
Taxable income** Adjusted gross income*
__________________________________________________________________________________________
$0 $117,950 $176,950 Over
to to to
$117,950(1) $176,950(2) $299,450(3) $299,450(2)
__________________________________________________________________________________________
Married Filing Jointly
<S> <C> <C> <C> <C>
$ 0 - $ 40,100 15.00%
40,100 - 96,900 28.00 28.84%
96,900 - 147,700 31.00 31.93 33.19%
147,700 - 263,750 36.00 37.08 38.55 37.08%
263,750 + 39.60 42.40*** 40.79
__________________________________________________________________________________________
0 $117,950 Over
to to
$117,950(1) $240,450(3) $240,450(2)
__________________________________________________________________________________________
Single
$ 0 - $ 24,000 15.00%
24,000 - 58,150 28.00
58,150 - 121,300 31.00 32.56%
121,300 - 263,750 36.00 37.81 37.08%
263,750 + 39.60 40.79
__________________________________________________________________________________________
*Gross income with certain adjustments before taking itemized deductions and personal exemptions.
**Amount subject to federal income tax after itemized deductions and personal exemptions.
***This rate is applicable only in the limited case where your adjusted gross income is less than $299,450
and your taxable income exceeds $263,750.
</TABLE>
<PAGE>
PAGE 37
(1) No Phase-out -- Assumes no phase-out of itemized deductions or
personal exemptions.
(2) Itemized Deductions Phase-out -- Assumes a single taxpayer has
one personal exemption and joint taxpayers have two personal
exemptions.
(3) Itemized Deductions and Personal Exemption Phase-outs --
Assumes a single taxpayer has one personal exemption, joint
taxpayers have two personal exemptions and itemized deductions
continue to phase-out.
If these assumptions do not apply to you, it will be necessary to
construct your own personalized tax equivalency table.
STEP 2: Determing your federal taxable yield equivalents.
Using 31.93%, you may determine that a tax-exempt yield of 4% is
equivalent to earning a taxable 5.88% yield.
<TABLE>
<CAPTION>
For these Tax-Exempt Rates:
___________________________________________________________________________________________
3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00%
___________________________________________________________________________________________
Marginal Tax Rates Equal the Taxable Rates shown below:
___________________________________________________________________________________________
<C> <C> <C> <C> <C> <C> <C> <C> <C>
15.00% 4.12 4.71 5.29 5.88 6.47 7.06 7.65 8.24
28.00% 4.86 5.56 6.25 6.94 7.64 8.33 9.03 9.72
28.84% 4.92 5.62 6.32 7.03 7.73 8.43 9.13 9.84
31.00% 5.07 5.80 6.52 7.25 7.97 8.70 9.42 10.14
31.93% 5.14 5.88 6.61 7.35 8.08 8.81 9.55 10.28
32.56% 5.19 5.93 6.67 7.41 8.16 8.90 9.64 10.38
33.19% 5.24 5.99 6.74 7.48 8.23 8.98 9.73 10.48
36.00% 5.47 6.25 7.03 7.81 8.59 9.38 10.16 10.94
37.08% 5.56 6.36 7.15 7.95 8.74 9.54 10.33 11.13
37.81% 5.63 6.43 7.24 8.04 8.84 9.65 10.45 11.26
38.55% 5.70 6.51 7.32 8.14 8.95 9.76 10.58 11.39
39.60% 5.79 6.62 7.45 8.28 9.11 9.93 10.76 11.59
40.79% 5.91 6.76 7.60 8.44 9.29 10.13 10.98 11.82
42.40% 6.08 6.94 7.81 8.68 9.55 10.42 11.28 12.15
___________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 38
Appendix C
Descriptions of derivative instruments
What follows are brief descriptions of derivative instruments the
Fund may use. At various times the Fund may use some or all of
these instruments and is not limited to these instruments. It may
use other similar types of instruments if they are consistent with
the Fund's investment goal and policies. For more information on
these instruments, see the SAI.
Options and futures contracts. An option is an agreement to buy or
sell an instrument at a set price during a certain period of time.
A futures contract is an agreement to buy and sell an instrument
for a set price on a future date. The Fund may buy and sell
options and futures contracts to manage its exposure to changing
interest rates, security prices and currency exchange rates.
Options and futures may be used to hedge the Fund's investments
against price fluctuations or to increase market exposure.
Asset-backed and mortgage-backed securities. Asset-backed
securities include interests in pools of assets such as motor
vehicle installment sale contracts, installment loan contracts,
leases on various types of real and personal property, receivables
from revolving credit (credit card) agreements or other categories
of receivables. Mortgage-backed securities include collateralized
mortgage obligations and stripped mortgage-backed securities.
Interest and principal payments depend on payment of the underlying
loans or mortgages. The value of these securities may also be
affected by changes in interest rates, the market's perception of
the issuers and the creditworthiness of the parties involved. The
non-mortgage related asset-backed securities do not have the
benefit of a security interest in the related collateral. Stripped
mortgage-backed securities include interest only (IO) and principal
only (PO) securities. Cash flows and yields on IOs and POs are
extremely sensitive to the rate of principal payments on the
underlying mortgage loans or mortgage-backed securities.
Indexed securities. The value of indexed securities is linked to
currencies, interest rates, commodities, indexes or other financial
indicators. Most indexed securities are short- to intermediate-
term fixed income securities whose values at maturity or interest
rates rise or fall according to the change in one or more specified
underlying instruments. Indexed securities may be more volatile
than the underlying instrument itself.
Inverse floaters. Inverse floaters are created by underwriters
using the interest payment on securities. A portion of the
interest received is paid to holders of instruments based on
current interest rates for short-term securities. The remainder,
minus a servicing fee, is paid to holders of inverse floaters. As
interest rates go down, the holders of the inverse floaters receive
more income and an increase in the price for the inverse floaters.
As interest rates go up, the holders of the inverse floaters
receive less income and a decrease in the price for the inverse
floaters.
<PAGE>
PAGE 39
Structured products. Structured products are over-the-counter
financial instruments created specifically to meet the needs of one
or a small number of investors. The instrument may consist of a
warrant, an option or a forward contract embedded in a note or any
of a wide variety of debt, equity and/or currency combinations.
Risks of structured products include the inability to close such
instruments, rapid changes in the market and defaults by other
parties.
<PAGE>
PAGE 40
IDS HIGH YIELD TAX-EXEMPT FUND
Fund Profile
dated Dec. 31, 1995
This profile contains key information about the Fund. More details
appear in the Fund's accompanying prospectus.
1. Goal: The Fund seeks to provide shareholders with a high yield
generally exempt from federal income taxes.
2. Investment Strategies: The Fund usually invests in medium- and
lower-quality bonds and notes issued by or on behalf of state and
local governmental units whose interest generally is exempt from
federal income tax.
3. Risks: Some of the Fund's investments may be considered
speculative and involve additional investment risks. Medium- and
lower-quality bonds have greater price fluctuations and are more
likely to experience a default than investment grade bonds.
4. Appropriateness: The Fund is designed for long-term investors
who are willing to tolerate fluctuations in principal in exchange
for the potential for higher yields, and whose yield from
investments exempt from federal income tax would exceed their
after-tax return from similar taxable investments.
5. Fees and expenses: Shareholder transaction expenses are
incurred by an investor upon the purchase or redemption of Fund
shares. Fund operating expenses are paid out of the Fund's assets
and are not charged directly to shareholder accounts, and are
reflected in the Fund's daily share price and dividends.
Shareholder transaction expenses
Class A Class B Class Y
Maximum sales charge on purchases
(as a percentage of offering price).......5% 0% 0%
Maximum deferred sales charge
imposed on redemptions (as a
percentage of original purchase price)....0% 5% 0%
Annual fund operating expenses*
(% of average daily net assets):
Class A Class B Class Y
Management fee 0.44% 0.44% 0.44%
12b-1 fee 0.00% 0.75% 0.00%
Other expenses 0.28% 0.29% 0.10%
Total 0.72% 1.48% 0.54%
* Expenses for Class A are based on actual expenses for the last
fiscal year, restated to reflect current fees. Expenses for
Class B and Class Y are based on actual annualized expenses for
the period from March 20, 1995 to Nov. 30, 1995.
<PAGE>
PAGE 41
Example: Suppose for each year for the next 10 years, Fund
expenses are as above and annual return is 5%. If you sold your
shares at the end of the following years, for each $1,000 invested,
you would pay total expenses of:
1 year 3 years 5 years 10 years
Class A $57 $72 $ 88 $135
Class B $65 $87 $101 $157**
Class B* $15 $47 $ 81 $157**
Class Y $ 6 $17 $ 30 $ 68
* Assuming Class B shares are not redeemed at the end of the
period.
** Based on conversion of Class B shares to Class A shares after
eight years.
This example does not represent actual expenses, past or future.
Actual expenses may be higher or lower than those shown.
6. Past Performance:
Performance
(Average Annual Returns 1986-1995)
25
20 20.3
19.1 17.5
15 17.4
11.4 12.1 12.3
10 10.2 10.7 12.1 8.8 9.7
7.8 7.4 8.7
5 5.1
3.2
0 0.3
-4.6
-5 -5.2
-10
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
XX IDS High Yield Tax-Exempt
XX Lehman Muni. Bond Index
The graph above does not reflect the imposition of a sales charge
at the time of purchase or redemption.
<PAGE>
PAGE 42
Average annual total returns as of Dec. 31, 1995
Purchase made 1 year ago 5 years ago 10 years ago
Class A +11.52% +7.18% +8.18%
The returns shown above reflect maximum sales charges. Total
returns for Class A, Class B and Class Y for the period from March
20, 1995 to Dec. 31, 1995 were +4.97%, +5.06% and +10.72%,
respectively. March 20, 1995 was the inception date for Class B
and Class Y. Total return for Class A is shown for comparative
purposes. The performance of Class B and Class Y will vary from
the performance of Class A based on differences in sales charges
and fees.
The Fund's SEC standardized yield for the 30-day period ending Dec.
31, 1995 was 4.84% for Class A, 4.35% for Class B and 5.28% for
Class Y.
Returns shown should not be considered a representation of the
Fund's future performance.
7. Investment Advisor: The Fund's investment advisor is American
Express Financial Corporation.
8. Purchases: You may purchase shares by contacting your financial
advisor. The minimum initial investment (other than investments
made by scheduled investment plan or by wire) is $2,000. Sales
charges on Class A shares range from 5.0% of the public offering
price on the first $50,000 invested to 0% of the public offering
price on amounts invested of $1,000,000 or more. No sales charge
applies at the time of purchase of Class B shares although Class B
shares may be subject to a contingent deferred sales charge ranging
from 5% to 1% on redemptions made within six years and are subject
to annual distribution (12b-1) fees. Class Y shares are sold
without a sales charge to qualified institutional investors.
9. Redemptions: To sell (redeem) your shares, contact your
financial advisor. Holders of Class B shares may be subject to a
sales charge if they redeem within six years of purchase.
10. Distributions: The Fund distributes its net investment income,
including short-term capital gains, to shareholders of record
monthly. Net realized long-term capital gains, if any, from
selling securities are distributed at the end of the calendar year.
Dividends and capital gain distributions are automatically
reinvested in additional shares of the Fund unless you make
alternative arrangements.
11. Other Services: You may redeem or exchange shares, and obtain
additional information about your account and the Fund, by
telephone. The Fund also provides telephone service for the
hearing impaired. To help you track and evaluate the performance
of your shares, American Express Financial Corporation provides you
with quarterly statements, yearly tax statements and a personalized
mutual fund progress report.
<PAGE>
PAGE 43
STATEMENT OF ADDITIONAL INFORMATION
FOR
IDS HIGH YIELD TAX-EXEMPT FUND
Jan. 29, 1996
This Statement of Additional Information (SAI) is not a prospectus.
It should be read together with the prospectus and the financial
statements contained in the Annual Report which may be obtained
from your American Express financial advisor or by writing to
American Express Shareholder Service, P.O. Box 534, Minneapolis, MN
55440-0534.
This SAI is dated Jan. 29, 1996, and it is to be used with the
prospectus dated Jan. 29, 1996, and the Annual Report for the
fiscal year ended Nov. 30, 1995.
<PAGE>
PAGE 44
TABLE OF CONTENTS
Goal and Investment Policies.........................See Prospectus
Additional Investment Policies................................p. 3
Portfolio Transactions........................................p. 6
Brokerage Commissions Paid to Brokers Affiliated with
American Express Financial Corporation........................p. 8
Performance Information.......................................p. 9
Valuing Fund Shares...........................................p. 11
Investing in the Fund.........................................p. 12
Redeeming Shares..............................................p. 16
Pay-out Plans.................................................p. 17
Capital Loss Carryover........................................p. 18
Taxes.........................................................p. 18
Agreements....................................................p. 19
Board Members and Officers....................................p. 23
Custodian.....................................................p. 27
Independent Auditors..........................................p. 27
Financial Statements..............................See Annual Report
Prospectus....................................................p. 28
Appendix A: Description of Short-Term Securities.............p. 28
Appendix B: Options and Interest Rate Futures Contracts......p. 30
Appendix C: Dollar-Cost Averaging............................p. 36
<PAGE>
PAGE 45
ADDITIONAL INVESTMENT POLICIES
Subject to certain contingencies, the Fund intends in early 1996 to
achieve its goals by investing all of its assets in Aggressive Tax-
Free Portfolio (the "Portfolio") of the Tax-Free Income Trust (the
"Trust"), a separate investment company, rather than by directly
investing in and managing its own portfolio of securities. The
Portfolio has the same investment objectives, policies and
restrictions as the Fund.
Fundamental investment restrictions adopted by a Fund or Portfolio
cannot be changed without the approval of a majority of the
outstanding voting securities of the Fund or Portfolio, as defined
in the Investment Company Act of 1940. Whenever a Fund is
requested to vote on a change in the investment restrictions of the
corresponding Portfolio, the Fund will hold a meeting of Fund
shareholders and will cast the Fund's vote as instructed by the
shareholders.
These are investment policies in addition to those presented in the
prospectus. The policies below are fundamental policies of the
Fund and the Portfolio and may be changed only with shareholder
approval. Unless holders of a majority of the outstanding voting
securities agree to make the change, the Fund will not:
'Act as an underwriter (sell securities for others). However,
under the securities laws, the Fund may be deemed to be an
underwriter when it purchases securities directly from the issuer
and later resells them.
'Borrow money or property, except as a temporary measure for
extraordinary or emergency purposes, in an amount not exceeding
one-third of the market value of its total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing. The Fund has not borrowed in the past and has
no present intention to borrow.
'Make cash loans if the total commitment amount exceeds 5% of the
Fund's total assets.
'Invest more than 5% of its total assets in securities of any one
company, government or political subdivision thereof, except the
limitation will not apply to investments in securities issued by
the U.S. government, its agencies or instrumentalities, and except
that up to 25% of the Fund's total assets may be invested without
regard to this 5% limitation. For purposes of this policy, the
terms of a municipal security determine the issuer.
'Buy or sell real estate, unless acquired as a result of ownership
of securities or other instruments, except this shall not prevent
the Fund from investing in securities or other instruments backed
by real estate or securities of companies engaged in the real
estate business or real estate investment trusts. For purposes of
this policy, real estate includes real estate limited partnerships.
<PAGE>
PAGE 46
'Buy or sell physical commodities unless acquired as a result of
ownership of securities or other instruments, except this shall not
prevent the Fund from buying or selling options and futures
contracts or from investing in securities or other instruments
backed by, or whose value is derived from, physical commodities.
'Lend Fund securities in excess of 30% of its net assets. The
current policy of the Fund's board is to make these loans, either
long- or short-term, to broker-dealers. In making such loans the
Fund gets the market price in cash, U.S. government securities,
letters of credit or such other collateral as may be permitted by
regulatory agencies and approved by the board. If the market price
of the loaned securities goes up, the Fund will get additional
collateral on a daily basis. The risks are that the borrower may
not provide additional collateral when required or return the
securities when due. During the existence of the loan, the Fund
receives cash payments equivalent to all interest or other
distributions paid on the loaned securities. A loan will not be
made unless the investment manager believes the opportunity for
additional income outweighs the risks.
Unless changed by the board, the Fund will not:
'Buy on margin or sell short, but it may enter into interest rate
futures contracts.
'Pledge or mortgage its assets beyond 15% of total assets. If the
Fund were ever to do so, valuation of the pledged or mortgaged
assets would be based on market values. For purposes of this
restriction, collateral arrangements for margin deposits on futures
contracts are not deemed to be a pledge of assets.
'Invest more than 5% of its total assets in securities whose issuer
or guarantor of principal and interest has been in operation for
less than three years.
'Invest in voting securities, securities of investment companies or
exploration or development programs, such as oil, gas or mineral
leases.
'Invest more than 5% of its net assets in warrants. Under one
state's law no more than 2% of the Fund's net assets may be
invested in warrants not listed on the New York or American Stock
Exchange.
'Invest more than 10% of the Fund's net assets in securities and
derivative instruments that are illiquid. In determining the
liquidity of municipal lease obligations, the investment manager,
under guidelines established by the board, will consider the
essential nature of the leased property, the likelihood that the
municipality will continue appropriating funding for the leased
property, and other relevant factors related to the general credit
quality of the municipality and the marketability of the municipal
lease obligation. For purposes of complying with Ohio law, the
Fund will not invest more than 15% of its total assets in a
<PAGE>
PAGE 47
combination of illiquid securities, 144A securities and securities
of companies, including any predecessor, that have a record of less
than three years continuous operations.
'Purchase securities of an issuer if the board members and officers
of the Fund and of American Express Financial Corporation (AEFC)
hold more than a certain percentage of the issuer's outstanding
securities. The holdings of all board members and officers of the
Fund and of AEFC who own more than 0.5% of an issuer's securities
are added together, and if in total they own more than 5%, the Fund
will not purchase securities of that issuer.
The Fund may make contracts to purchase securities for a fixed
price at a future date beyond normal settlement time (when-issued
securities or forward commitments). Under normal market
conditions, the Fund does not intend to commit more than 5% of its
total assets to these practices. The Fund does not pay for the
securities or receive dividends or interest on them until the
contractual settlement date. The Fund will designate cash or
liquid high-grade debt securities at least equal in value to its
commitments to purchase the securities. When-issued securities or
forward commitments are subject to market fluctuations and they may
affect the Fund's total assets the same as owned securities.
The Fund may invest up to 20% of its net assets in certain taxable
investments for temporary defensive purposes. It may purchase
short-term U.S. and Canadian government securities. It may invest
in bank obligations including negotiable certificates of deposit,
non-negotiable fixed time deposits, bankers' acceptances and
letters of credit. The issuing bank or savings and loan generally
must have capital, surplus and undivided profits (as of the date of
its most recently published annual financial statements) in excess
of $100 million (or the equivalent in the instance of a foreign
branch of a U.S. bank) at the date of investment.
The Fund may purchase short-term corporate notes and obligations
rated in the top two classifications by Moody's Investors Service,
Inc. (Moody's) or Standard & Poor's Corporation (S&P) or the
equivalent. It also may use repurchase agreements with broker-
dealers registered under the Securities Exchange Act of 1934 and
with commercial banks. Repurchase agreements involve investments
in debt securities where the seller (broker-dealer or bank) agrees
to repurchase the securities from the Fund at cost plus an agreed-
to interest rate within a specified time. A risk of a repurchase
agreement is that if the seller seeks the protection of the
bankruptcy laws, the Fund's ability to liquidate the security
involved could be impaired, and it might subsequently incur a loss
if the value of the security declines or if the other party to a
repurchase agreement defaults on its obligation.
The Fund may invest in commercial paper issued in transactions not
involving a public offering under Section 4(2) of the Securities
Act of 1933 (4(2) paper). In determining the liquidity of 4(2)
paper, the investment manager, under guidelines established by the
<PAGE>
PAGE 48
board, will evaluate relevant factors such as the issuer and the
size and nature of its commercial paper programs, the willingness
and ability of the issuer or dealer to repurchase the paper, and
the nature of the clearance and settlement procedures for the
paper.
Notwithstanding any of the Fund's other investment policies, the
Fund may invest its assets in an open-end management investment
company having substantially the same investment objectives,
policies and restrictions as the Fund for the purpose of having
those assets managed as part of a combined pool.
For a description of short-term securities, see Appendix A. For a
discussion on options and interest rate futures contracts, see
Appendix B.
PORTFOLIO TRANSACTIONS
Subject to policies set by the board, AEFC is authorized to
determine, consistent with the Fund's investment goal and policies,
which securities will be purchased, held or sold. In determining
where the buy and sell orders are to be placed, AEFC has been
directed to use its best efforts to obtain the best available price
and most favorable execution except where otherwise authorized by
the board.
AEFC has a strict Code of Ethics that prohibits its affiliated
personnel from engaging in personal investment activities that
compete with or attempt to take advantage of planned portfolio
transactions for any fund in the IDS MUTUAL FUND GROUP. AEFC
carefully monitors compliance with its Code of Ethics.
Normally, the Fund's securities are traded on a principal rather
than an agency basis. In other words, AEFC will trade directly
with the issuer or with a dealer who buys or sells for its own
account, rather than acting on behalf of another client. AEFC does
not pay the dealer commissions. Instead, the dealer's profit, if
any, is the difference, or spread, between the dealer's purchase
and sale price for the security.
On occasion, it may be desirable to compensate a broker for
research services or for brokerage services by paying a commission
that might not otherwise be charged or a commission in excess of
the amount another broker might charge. The board has adopted a
policy authorizing AEFC to do so to the extent authorized by law,
if AEFC determines, in good faith, that such commission is
reasonable in relation to the value of the brokerage or research
services provided by a broker or dealer, viewed either in the light
of that transaction or AEFC's overall responsibilities to the funds
in the IDS MUTUAL FUND GROUP and other funds for which it acts as
investment advisor.
Research provided by brokers supplements AEFC's own research
activities. Such services include economic data on, and analysis
of, U.S. and foreign economies, information on specific industries;
<PAGE>
PAGE 49
information about specific companies, including earnings estimates;
purchase recommendations for stocks and bonds; portfolio strategy
services; political, economic, business and industry trend
assessments; historical statistical information; market data
services providing information on specific issues and prices; and
technical analysis of various aspects of the securities markets,
including technical charts. Research services may take the form of
written reports, computer software or personal contact by telephone
or at seminars or other meetings. AEFC has obtained, and in the
future may obtain, computer hardware from brokers, including but
not limited to personal computers that will be used exclusively for
investment decision-making purposes, which include the research,
portfolio management and trading functions and other services to
the extent permitted under an interpretation by the Securities and
Exchange Commission (SEC).
When paying a commission that might not otherwise be charged or a
commission in excess of the amount another broker might charge,
AEFC must follow procedures authorized by the board. To date,
three procedures have been authorized. One procedure permits AEFC
to direct an order to buy or sell a security traded on a national
securities exchange to a specific broker for research services it
has provided. The second procedure permits AEFC, in order to
obtain research, to direct an order on an agency basis to buy or
sell a security traded in the over-the-counter market to a firm
that does not make a market in that security. The commission paid
generally includes compensation for research services. The third
procedure permits AEFC, in order to obtain research and brokerage
services, to cause the Fund to pay a commission in excess of the
amount another broker might have charged. AEFC has advised the
Fund it is necessary to do business with a number of brokerage
firms on a continuing basis to obtain such services as the handling
of large orders, the willingness of a broker to risk its own money
by taking a position in a security, and the specialized handling of
a particular group of securities that only certain brokers may be
able to offer. As a result of this arrangement, some portfolio
transactions may not be effected at the lowest commission, but AEFC
believes it may obtain better overall execution. AEFC has assured
the Fund that under all three procedures the amount of commission
paid will be reasonable and competitive in relation to the value of
the brokerage services performed or research provided.
All other transactions shall be placed on the basis of obtaining
the best available price and the most favorable execution. In so
doing, if in the professional opinion of the person responsible for
selecting the broker or dealer, several firms can execute the
transaction on the same basis, consideration will be given by such
person to those firms offering research services. Such services
may be used by AEFC in providing advice to all the funds in the IDS
MUTUAL FUND GROUP even though it is not possible to relate the
benefits to any particular fund or account.
Each investment decision made for the Fund is made independently
from any decision made for another fund in the IDS MUTUAL FUND
GROUP or other account advised by AEFC or any of its subsidiaries.
<PAGE>
PAGE 50
When the Fund buys or sells the same security as another fund or
account, AEFC carries out the purchase or sale in a way the Fund
agrees in advance is fair. Although sharing in large transactions
may adversely affect the price or volume purchased or sold by the
Fund, the Fund hopes to gain an overall advantage in execution.
AEFC has assured the Fund it will continue to seek ways to reduce
brokerage costs.
On a periodic basis, AEFC makes a comprehensive review of the
broker-dealers and the overall reasonableness of their commissions.
The review evaluates execution, operational efficiency and research
services.
The Fund paid total brokerage commissions of $0 for the fiscal year
ended Nov. 30, 1995, $204,722 for fiscal year 1994, and $-0- for
fiscal year 1993. Substantially all firms through whom
transactions were executed provide research services.
No transactions were directed to brokers because of research
services they provided to the Fund.
As of the fiscal year ended Nov. 30, 1995, the Fund held no
securities of its regular brokers or dealers or of the parents of
those brokers or dealers that derived more than 15% of gross
revenue from securities-related activities.
The portfolio turnover rate was 14% in the fiscal year ended Nov.
30, 1995, and 17% in fiscal year 1994.
BROKERAGE COMMISSIONS PAID TO BROKERS AFFILIATED WITH AMERICAN
EXPRESS FINANCIAL CORPORATION
Affiliates of American Express Company (American Express) (of which
AEFC is a wholly owned subsidiary) may engage in brokerage and
other securities transactions on behalf of the Fund according to
procedures adopted by the Fund's board and to the extent consistent
with applicable provisions of the federal securities laws. AEFC
will use an American Express affiliate only if (i) AEFC determines
that the Fund will receive prices and executions at least as
favorable as those offered by qualified independent brokers
performing similar brokerage and other services for the Fund and
(ii) the affiliate charges the Fund commission rates consistent
with those the affiliate charges comparable unaffiliated customers
in similar transactions and if such use is consistent with terms of
the Investment Management Services Agreement.
AEFC may direct brokerage to compensate an affiliate. AEFC will
receive research on South Africa from New Africa Advisors, a
wholly-owned subsidiary of Sloan Financial Group. AEFC owns 100%
of IDS Capital Holdings Inc. which in turn owns 40% of Sloan
Financial Group. New Africa Advisors will send research to AEFC
and in turn AEFC will direct trades to a particular broker. The
broker will have an agreement to pay New Africa Advisors. All
transactions will be on a best execution basis. Compensation
received will be reasonable for the services rendered.
<PAGE>
PAGE 51
No brokerage commissions were paid to brokers affiliated with AEFC
for the three most recent fiscal years.
PERFORMANCE INFORMATION
The Fund may quote various performance figures to illustrate past
performance. Average annual total return and current yield
quotations used by the Fund are based on standardized methods of
computing performance as required by the SEC. An explanation of
the methods used by the Fund to compute performance follows below.
Average annual total return
The Fund may calculate average annual total return for a class for
certain periods by finding the average annual compounded rates of
return over the period that would equate the initial amount
invested to the ending redeemable value, according to the following
formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment, made at the beginning of a period, at the
end of the period (or fractional portion thereof)
Aggregate total return
The Fund may calculate aggregate total return for a class for
certain periods representing the cumulative change in the value of
an investment in the Fund over a specified period of time according
to the following formula:
ERV - P
P
where: P = a hypothetical initial payment of $1,000
ERV = ending redeemable value of a hypothetical $1,000
payment, made at the beginning of a period, at the
end of the period (or fractional portion thereof)
Annualized yield
The Fund may calculate an annualized yield for a class by dividing
the net investment income per share deemed earned during a 30-day
period by the public offering price per share (including the
maximum sales charge) on the last day of the period and annualizing
the results.
Yield is calculated according to the following formula:
Yield = 2[(a-b + 1)6 - 1]
cd
<PAGE>
PAGE 52
where: a = dividends and interest earned during the period
b = expenses accrued for the period (net of
reimbursements
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends
d = the maximum offering price per share on the last
day of the period
The Fund's annualized yield was 4.95% for Class A, 4.46% for Class
B, and 5.38% for Class Y for the 30-day period ended Nov. 30, 1995.
Distribution yield
Distribution yield is calculated according to the following
formula:
D divided by POP F equals DY
30 30
where: D = sum of dividends for 30-day period
POP = sum of public offering price for 30-day period
F = annualizing factor
DY = distribution yield
The Fund's distribution yield was 5.61% for Class A, 5.16% for
Class B, and 6.07% for Class Y for the 30-day period ended Nov. 30,
1995.
Tax-Equivalent Yield
Tax-equivalent yield is calculated by dividing that portion of the
yield (as calculated above) which is tax-exempt by one minus a
stated income tax rate and adding the result to that portion, if
any, of the yield that is not tax-exempt. The following table
shows the fund's tax equivalent yield, based on federal but not
state tax rates, for the 30-day period ended Nov. 30, 1995.
Marginal
Income Tax Tax-Equivalent Yield
Bracket Distribution Annualized
Class A
15.0% 6.60% 5.82%
28.0% 7.79% 6.88%
33.0% 8.37% 7.39%
Class B
15.0% 6.07% 5.25%
28.0% 7.17% 6.19%
33.0% 7.70% 6.66%
Class Y
15.0% 7.14% 6.33%
28.0% 8.43% 7.47%
33.0% 9.06% 8.03%
<PAGE>
PAGE 53
In its sales material and other communications, the Fund may quote,
compare or refer to rankings, yields or returns as published by
independent statistical services or publishers and publications
such as The Bank Rate Monitor National Index, Barron's, Business
Week, Donoghue's Money Market Fund Report, Financial Services Week,
Financial Times, Financial World, Forbes, Fortune, Global Investor,
Institutional Investor, Investor's Daily, Kiplinger's Personal
Finance, Lipper Analytical Services, Money, Mutual Fund Forecaster,
Newsweek, The New York Times, Personal Investor, Stanger Report,
Sylvia Porter's Personal Finance, USA Today, U.S. News and World
Report, The Wall Street Journal and Wiesenberger Investment
Companies Service.
VALUING FUND SHARES
The value of an individual share for each class is determined by
using the net asset value before shareholder transactions for the
day. On Nov. 30, 1995, the first business day following the end of
the fiscal year, the computation looked like this:
<TABLE>
<CAPTION>
Net assets before Shares outstanding Net asset value
shareholder transactions at end of previous day of one share
<S> <C> <C> <C> <C> <C>
Class A $6,327,490,481 divided by 1,356,375,237 equals $4.665
Class B 71,544,288 15,336,396 4.665
Class Y 24,928,184 5,343,662 4.665
</TABLE>
In determining net assets before shareholder transactions, the
Fund's securities are valued as follows as of the close of business
of the New York Stock Exchange (the Exchange):
'Securities, except bonds other than convertibles, traded on a
securities exchange for which a last-quoted sales price is readily
available are valued at the last-quoted sales price on the exchange
where such security is primarily traded.
'Securities traded on a securities exchange for which a last-quoted
sales price is not readily available are valued at the mean of the
closing bid and asked prices, looking first to the bid and asked
prices on the exchange where the security is primarily traded and,
if none exist, to the over-the-counter market.
'Securities included in the NASDAQ National Market System are
valued at the last-quoted sales price in this market.
'Securities included in the NASDAQ National Market System for which
a last-quoted sales price is not readily available, and other
securities traded over-the-counter but not included in the NASDAQ
National Market System are valued at the mean of the closing bid
and asked prices.
'Futures and options traded on major exchanges are valued at the
last-quoted sales price on their primary exchange.
'Foreign securities traded outside the United States are generally
valued as of the time their trading is complete, which is usually
different from the close of the Exchange. Foreign securities
<PAGE>
PAGE 54
quoted in foreign currencies are translated into U.S. dollars at
the current rate of exchange. Occasionally, events affecting the
value of such securities may occur between such times and the close
of the Exchange that will not be reflected in the computation of
the Fund's net asset value. If events materially affecting the
value of such securities occur during such period, these securities
will be valued at their fair value according to procedures decided
upon in good faith by the Fund's board.
'Short-term securities maturing more than 60 days from the
valuation date are valued at the readily available market price or
approximate market value based on current interest rates. Short-
term securities maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at
amortized cost using the market value on the 61st day before
maturity. Short-term securities maturing in 60 days or less at
acquisition date are valued at amortized cost. Amortized cost is
an approximation of market value determined by systematically
increasing the carrying value of a security if acquired at a
discount, or reducing the carrying value if acquired at a premium,
so that the carrying value is equal to maturity value on the
maturity date.
'Securities without a readily available market price, bonds other
than convertibles and other assets are valued at fair value as
determined in good faith by the board. The board is responsible
for selecting methods it believes provide fair value. When
possible, bonds are valued by a pricing service independent from
the Fund. If a valuation of a bond is not available from a pricing
service, the bond will be valued by a dealer knowledgeable about
the bond if such a dealer is available.
The Exchange, AEFC and the Fund will be closed on the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day.
INVESTING IN THE FUND
Sales Charge
Shares of the Fund are sold at the public offering price determined
at the close of business on the day an application is accepted.
The public offering price is the net asset value of one share plus
a sales charge, if applicable. For Class B and Class Y, there is
no initial sales charge so the public offering price is the same as
the net asset value. For Class A, the public offering price for an
investment of less than $50,000, made Dec. 1, 1995, was determined
by dividing the net asset value of one share, $4.665, by 0.95
(1.00-0.05 for a maximum 5% sales charge) for a public offering
price of $4.91. The sales charge is paid to American Express
Financial Advisors by the person buying the shares.
<PAGE>
PAGE 55
Class A - Calculation of the Sales Charge
Sales charges are determined as follows:
Within each increment,
sales charge as a
percentage of:
Public Net
Amount of Investment Offering Price Amount Invested
First $ 50,000 5.0% 5.26%
Next 50,000 4.5 4.71
Next 400,000 3.8 3.95
Next 500,000 2.0 2.04
$1,000,000 or more 0.0 0.00
Sales charges on an investment greater than $50,000 and less than
$1,000,000 are calculated for each increment separately and then
totaled. The resulting total sales charge, expressed as a
percentage of the public offering price and of the net amount
invested, will vary depending on the proportion of the investment
at different sales charge levels.
For example, compare an investment of $60,000 with an investment of
$85,000. The $60,000 investment is composed of $50,000 that incurs
a sales charge of $2,500 (5.0% x $50,000) and $10,000 that incurs a
sales charge of $450 (4.5% x $10,000). The total sales charge of
$2,950 is 4.92% of the public offering price and 5.17% of the net
amount invested.
In the case of the $85,000 investment, the first $50,000 also
incurs a sales charge of $2,500 (5.0% x $50,000) and $35,000 incurs
a sales charge of $1,575 (4.5% x $35,000). The total sales charge
of $4,075 is 4.79% of the public offering price and 5.04% of the
net amount invested.
The following table shows the range of sales charges as a
percentage of the public offering price and of the net amount
invested on total investments at each applicable level.
<TABLE>
<CAPTION>
On total investment, sales
charge as a percentage of
Public Net
Offering Price Amount Invested
Amount of Investment ranges from:
<S> <C> <C>
First $ 50,000 5.00% 5.26%
More than 50,000 to 100,000 5.00-4.50 5.26-4.71
More than 100,000 to 500,000 4.50-3.80 4.71-3.95
More than 500,000 to 999,999 3.80-2.00 3.95-2.04
$1,000,000 or more 0.00 0.00
</TABLE>
<PAGE>
PAGE 56
Class A - Reducing the Sales Charge
Sales charges are based on the total amount of your investments in
the fund. The amount of all prior investments plus any new
purchase is referred to as your "total amount invested." For
example, suppose you have made an investment of $20,000 and later
decide to invest $40,000 more. Your total amount invested would be
$60,000. As a result, $10,000 of your $40,000 investment qualifies
for the lower 4.5% sales charge that applies to investments of more
than $50,000 and up to $100,000.
The total amount invested includes any shares held in the Fund in
the name of a member of your immediate family (spouse and unmarried
children under 21). For instance, if your spouse already has
invested $20,000 and you want to invest $40,000, your total amount
invested will be $60,000 and therefore you will pay the lower
charge of 4.5% on $10,000 of the $40,000.
Until a spouse remarries, the sales charge is waived for spouses
and unmarried children under 21 of deceased board members, officers
or employees of the Fund or AEFC or its subsidiaries and deceased
advisors.
The total amount invested also includes any investment you or your
immediate family already have in the other publicly offered funds
in the IDS MUTUAL FUND GROUP where the investment is subject to a
sales charge. For example, suppose you already have an investment
of $25,000 in IDS Stock Fund and $5,000 in this Fund. If you
invest $40,000 more in this fund, your total amount invested in the
funds will be $70,000 and therefore $20,000 of your $40,000
investment will incur a 4.5% sales charge.
Class A - Letter of Intent (LOI)
If you intend to invest $1 million over a period of 13 months, you
can reduce the sales charges in Class A by filing a LOI. The
agreement can start at any time and will remain in effect for 13
months. Your investment will be charged normal sales charges until
you have invested $1 million. At that time, your account will be
credited with the sales charges previously paid. Class A
investments made prior to signing an LOI may be used to reach the
$1 million total, excluding Cash Management Fund and Tax-Free Money
Fund. However, we will not adjust for sales charges on investments
made prior to the signing of the LOI. If you do not invest $1
million by the end of 13 months, there is no penalty, you'll just
miss out on the sales charge adjustment. A LOI is not an option
(absolute right) to buy shares.
Here's an example. You file a LOI to invest $1 million and make an
investment of $100,000 at that time. You pay the normal 5% sales
charge on the first $50,000 and 4.5% sales charge on the next
$50,000 of this investment. Let's say you make a second investment
of $900,000 (bringing the total up to $1 million) one month before
the 13-month period is up. On the date that you bring your total
to $1 million, AEFC makes an adjustment to your account. The
<PAGE>
PAGE 57
adjustment is made by crediting your account with additional
shares, in an amount equivalent to the sales charges previously
paid.
Systematic Investment Programs
After you make your investment of $2,000 or more, you can arrange
to make additional payments of $100 or more on a regular basis.
These minimums do not apply to all systematic investment programs.
You decide how often you want to make payments - monthly,
quarterly, or semiannually. You are not obligated to make any
payments. You can omit payments or discontinue the investment
program altogether. The Fund also can change the program or end it
at any time. If there is no obligation, why do it? Putting money
aside is an important part of financial planning. With a
systematic investment program, you have a goal to work for.
How does this work? Your regular investment amount will purchase
more shares when the net asset value per share decreases, and fewer
shares when the net asset value per share increases. Each purchase
is a separate transaction. After each purchase your new shares
will be added to your account. Shares bought through these
programs are exactly the same as any other fund shares. They can
be bought and sold at any time. A systematic investment program is
not an option or an absolute right to buy shares.
The systematic investment program itself cannot ensure a profit,
nor can it protect against a loss in a declining market. If you
decide to discontinue the program and redeem your shares when their
net asset value is less than what you paid for them, you will incur
a loss.
For a discussion on dollar-cost averaging, see Appendix C.
Automatic Directed Dividends
Dividends, including capital gain distributions, paid by another
fund in the IDS MUTUAL FUND GROUP subject to a sales charge, may be
used to automatically purchase shares in the same class of this
Fund without paying a sales charge. Dividends may be directed to
existing accounts only. Dividends declared by a fund are exchanged
to this Fund the following day. Dividends can be exchanged into
one fund but cannot be split to make purchases in two or more
funds. Automatic directed dividends are available between accounts
of any ownership except:
Between a non-custodial account and an IRA, or 401(k) plan account
or other qualified retirement account of which American Express
Trust Company acts as custodian;
Between two American Express Trust Company custodial accounts with
different owners (for example, you may not exchange dividends from
your IRA to the IRA of your spouse);
<PAGE>
PAGE 58
Between different kinds of custodial accounts with the same
ownership (for example, you may not exchange dividends from your
IRA to your 401(k) plan account, although you may exchange
dividends from one IRA to another IRA).
Dividends may be directed from accounts established under the
Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors
Act (UTMA) only into other UGMA or UTMA accounts with identical
ownership.
The Fund's investment goal is described in its prospectus along
with other information, including fees and expense ratios. Before
exchanging dividends into another fund, you should read its
prospectus. You will receive a confirmation that the automatic
directed dividend service has been set up for your account.
REDEEMING SHARES
You have a right to redeem your shares at any time. For an
explanation of redemption procedures, please see the prospectus.
During an emergency, the board can suspend the computation of net
asset value, stop accepting payments for purchase of shares or
suspend the duty of the Fund to redeem shares for more than seven
days. Such emergency situations would occur if:
'The Exchange closes for reasons other than the usual weekend and
holiday closings or trading on the Exchange is restricted, or
'Disposal of the Fund's securities is not reasonably practicable or
it is not reasonably practicable for the Fund to determine the fair
value of its net assets, or
'The SEC, under the provisions of the Investment Company Act of
1940 (the 1940 Act), as amended, declares a period of emergency to
exist.
Should the Fund stop selling shares, the board may make a deduction
from the value of the assets held by the Fund to cover the cost of
future liquidations of the assets so as to distribute fairly these
costs among all shareholders.
The Fund has elected to be governed by Rule 18f-1 under the
Investment Company Act of 1940, which obligates the Fund to redeem
shares in cash, with respect to any one shareholder during any 90-
day period, up to lesser of $250,000 or 1% of the net assets of the
Fund at the beginning of the period. Although redemptions in
excess of this limitation would normally be paid in cash, the Fund
reserves the right to make these payments in whole or in part in
securities or other assets in case of an emergency, or if the
payment of a redemption in cash would be detrimental to the
existing shareholders of the Fund as determined by the board. In
these circumstances, the securities distributed would be valued as
<PAGE>
PAGE 59
set forth in the prospectus. Should the Fund distribute
securities, a shareholder may incur brokerage fees or other
transaction costs in converting the securities to cash.
PAY-OUT PLANS
You can use any of several pay-out plans to redeem your investment
in regular installments. If you redeem Class B shares you may be
subject to a contingent deferred sales charge as discussed in the
prospectus. While the plans differ on how the pay-out is figured,
they all are based on the redemption of your investment. Net
investment income dividends and any capital gain distributions will
automatically be reinvested, unless you elect to receive them in
cash.
Applications for a systematic investment in a class of any fund
subject to a sales charge normally will not be accepted while a
pay-out plan for any of those funds is in effect. Occasional
investments, however, may be accepted.
To start any of these plans, please write or call American Express
Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534,
612-671-3733. Your authorization must be received in the
Minneapolis headquarters at least five days before the date you
want your payments to begin. The initial payment must be at least
$50. Payments will be made on a monthly, bimonthly, quarterly,
semiannual or annual basis. Your choice is effective until you
change or cancel it.
The following pay-out plans are designed to take care of the needs
of most shareholders in a way AEFC can handle efficiently and at a
reasonable cost. If you need a more irregular schedule of
payments, it may be necessary for you to make a series of
individual redemptions, in which case you'll have to send in a
separate redemption request for each pay-out. The Fund reserves
the right to change or stop any pay-out plan and to stop making
such plans available.
Plan #1: Pay-out for a fixed period of time
If you choose this plan, a varying number of shares will be
redeemed at regular intervals during the time period you choose.
This plan is designed to end in complete redemption of all shares
in your account by the end of the fixed period.
Plan #2: Redemption of a fixed number of shares
If you choose this plan, a fixed number of shares will be redeemed
for each payment and that amount will be sent to you. The length
of time these payments continue is based on the number of shares in
the account.
<PAGE>
PAGE 60
Plan #3: Redemption of a fixed dollar amount
If you decide on a fixed dollar amount, whatever number of shares
is necessary to make the payment will be redeemed in regular
installments until the account is closed.
Plan #4: Redemption of a percentage of net asset value
Payments are made based on a fixed percentage of the net asset
value of the shares in your account computed on the day of each
payment. Percentages range from 0.25% to 0.75%. For example, if
you are on this plan and arrange to take 0.5% each month, you will
get $50 if the value of your account is $10,000 on the payment
date.
CAPITAL LOSS CARRYOVER
For federal income tax purposes, the Fund had capital loss
carryover of $37,326,194 at Nov. 30, 1995, that will expire in
2002.
It is unlikely that the board will authorize a distribution of any
net realized capital gains until the available capital loss
carryover has been offset or has expired.
TAXES
If you buy shares in one of the funds and then exchange into
another fund, it is considered a sale and subsequent purchase of
shares. Under tax laws, if this exchange is done within 91 days,
any sales charge waived on Class A shares on a subsequent purchase
of shares applies to the new shares acquired in the exchange.
Therefore, you cannot create a tax loss or reduce a tax gain
attributable to the sales charge when exchanging shares within 91
days.
All distributions of net investment income during the year will
have the same percentage designated as tax-exempt. This annual
percentage is expected to be substantially the same as the
percentage of tax-exempt income actually earned during any
particular distribution period. For the fiscal year ended Nov. 30,
1995, 100% of the income distribution was designated as exempt from
federal income taxes.
Capital gain distributions received by individual and corporate
shareholders should be treated as long-term capital gains
regardless of how long they owned their shares. Short-term capital
gains earned by the Fund are paid to shareholders as part of their
ordinary income dividend and are taxable.
If you are a "substantial user" (or related person) of facilities
financed by industrial development bonds, you should consult your
tax advisor before investing. The income from such bonds may not
be tax-exempt for you.
<PAGE>
PAGE 61
Interest on private activity bonds generally issued after August
1986 is a preference item for purposes of the individual and
corporate alternative minimum taxes. "Private-activity" (non-
governmental purpose) municipal bonds include industrial revenue
bonds, student-loan bonds and multi- and single-family housing
bonds. An exception is made for private-activity bonds issued for
qualified--501(c)(3)--organizations, including non-profit colleges,
universities and hospitals. These bonds will continue to be tax-
exempt and will not be subject to the alternative minimum tax for
individuals. To the extent a fund earns income subject to the
alternative minimum tax, it will flow through to that fund's
shareholders and may subject some shareholders, depending on their
tax status, to the alternative minimum tax. The Fund reports the
percentage of its income earned from these bonds to shareholders
with their other tax information.
State law determines whether interest income on a particular
municipal bond is tax-exempt for state tax purposes. It also
determines the tax treatment of those bonds when earned by a mutual
fund and paid to the Fund's shareholders. The Fund will tell you
the percentage of interest income from municipal bonds it received
during the year on a state-by-state basis. Your tax advisor should
help you report this income for state tax purposes.
Under federal tax law and an election made by the Fund under
federal tax rules, by the end of a calendar year the fund must
declare and pay dividends representing 98% of ordinary income
through Dec. 31 and 98% of net capital gains (both long-term and
short-term) for the 12-month period ending Nov. 30 of that calendar
year. The Fund is subject to an excise tax equal to 4% of the
excess, if any, of the amount required to be distributed over the
amount actually distributed. The Fund intends to comply with
federal tax law and avoid any excise tax.
This is a brief summary that relates to federal income taxation
only. Shareholders should consult their tax advisor for more
complete information as to the application of federal, state and
local income tax laws to Fund distributions.
AGREEMENTS
Investment Management Services Agreement
The Fund has an Investment Management Services Agreement with AEFC.
For its services, AEFC is paid a fee based on the following
schedule:
Assets Annual rate at
(billions) each asset level
First $1.0 0.490%
Next 1.0 0.465
Next 1.0 0.440
Next 3.0 0.415
Next 3.0 0.390
Over 9.0 0.360
<PAGE>
PAGE 62
On Nov. 30, 1995, the daily rate applied to the Fund's net assets
was equal to 0.437% on an annual basis. The fee is calculated for
each calendar day on the basis of net assets as of the close of
business two business days prior to the day for which the
calculation is made.
The management fee is paid monthly. Under the prior and current
agreements, the total amount paid was $27,955,627 for the fiscal
year ended Nov. 30, 1995, $32,334,785 for fiscal year 1994, and
$33,286,494 for fiscal year 1993.
Under the current Agreement, the Fund also pays taxes, brokerage
commissions and nonadvisory expenses, which include custodian fees;
audit and certain legal fees; fidelity bond premiums; registration
fees for shares; Fund office expenses; consultants' fees;
compensation of board members, officers and employees; corporate
filing fees; organizational expenses; expenses incurred in
connection with lending securities of the Fund; and expenses
properly payable by the Fund, approved by the board. Under the
prior and current agreements, the Fund paid nonadvisory expenses of
$1,286,967 for the fiscal year ended Nov. 30, 1995, $1,279,548 for
fiscal year 1994, and $1,834,752 for fiscal year 1993.
Administrative Services Agreement
The Fund has an Administrative Services Agreement with AEFC. Under
this agreement, the Fund pays AEFC for providing administration and
accounting services. The fee is calculated as follows:
Assets Annual rate
(billions) each asset level
First $1.0 0.040%
Next 1.0 0.035
Next 1.0 0.030
Next 3.0 0.025
Next 3.0 0.020
Over 9.0 0.020
On Nov. 30, 1995, the daily rate applied to the Fund's net assets
was equal to 0.029% on an annual basis. The fee is calculated for
each calendar day on the basis of net assets as of the close of
business two business days prior to the day for which the
calculation is made. Under the agreement, the Fund paid fees of
$1,291,773 for the fiscal period ended Nov. 30, 1995.
Transfer Agency Agreement
The Fund has a Transfer Agency Agreement with AEFC. This agreement
governs AEFC's responsibility for administering and/or performing
transfer agent functions, for acting as service agent in connection
with dividend and distribution functions and for performing
shareholder account administration agent functions in connection
with the issuance, exchange and redemption or repurchase of the
Fund's shares. Under the agreement, AEFC will earn a fee from the
<PAGE>
PAGE 63
Fund determined by multiplying the number of shareholder accounts
at the end of the day by a rate determined for each class per year
and dividing by the number of days in the year. The rate for Class
A and Class Y is $15.50 per year and for Class B is $16.50 per
year. The fees paid to AEFC may be changed from time to time upon
agreement of the parties without shareholder approval. Under the
agreement, the Fund paid fees of $2,895,775 for the fiscal year
ended Nov. 30, 1995.
Distribution Agreement
Under a Distribution Agreement, sales charges deducted for
distributing Fund shares are paid to American Express Financial
Advisors daily. These charges amounted to $10,983,283 for the
fiscal year ended Nov. 30, 1995. After paying commissions to
personal financial advisors, and other expenses, the amount
retained was $2,241,689. The amounts were $16,213,287 and
$5,755,330 for fiscal year 1994, and $30,119,652 and $10,653,657
for fiscal year 1993.
Additional information about commissions and compensation for the
fiscal year ended Nov. 30, 1994, is contained in the following
table:
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Net Compensation
Name of Underwriting on Redemption
Principal Discounts and and Brokerage Other
Underwriter Commissions Repurchases Commissions Compensation
<S> <C> <C> <C> <C>
AEFC None None None* $531,404**
American
Express
Financial
Advisors $10,983,283 None None None
</TABLE>
*For further information see "Brokerage Commissions Paid to Brokers
Affiliated with AEFC."
**Distribution fees paid pursuant to the Plan and Agreement of
Distribution.
Shareholder Service Agreement
The Fund pays a fee for service provided to shareholders by
financial advisors and other servicing agents. The fee is
calculated at a rate of 0.175% of the Fund's average daily net
assets attributable to Class A and Class B shares.
Plan and Agreement of Distribution
For Class B shares, to help American Express Financial Advisors
defray the cost of distribution and servicing, not covered by the
sales charges received under the Distribution Agreement, the Fund
and American Express Financial Advisors entered into a Plan and
<PAGE>
PAGE 64
Agreement of Distribution (Plan). These costs cover almost all
aspects of distributing the Fund's shares except compensation to
the sales force. A substantial portion of the costs are not
specifically identified to any one fund in the IDS MUTUAL FUND
GROUP. Under the Plan, American Express Financial Advisors is paid
a fee at an annual rate of 0.75% of the Fund's average daily net
assets attributable to Class B shares.
The Plan must be approved annually by the board, including a
majority of the disinterested board members, if it is to continue
for more than a year. At least quarterly, the board must review
written reports concerning the amounts expended under the Plan and
the purposes for which such expenditures were made. The Plan and
any agreement related to it may be terminated at any time by vote
of a majority of board members who are not interested persons of
the Fund and have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan, or
by vote of a majority of the outstanding voting securities of the
Fund or by American Express Financial Advisors. The Plan (or any
agreement related to it) will terminate in the event of its
assignment, as that term is defined in the Investment Company Act
of 1940, as amended. The Plan may not be amended to increase the
amount to be spent for distribution without shareholder approval,
and all material amendments to the Plan must be approved by a
majority of the board members, including a majority of the board
members who are not interested persons of the Fund and who do not
have a financial interest in the operation of the Plan or any
agreement related to it. The selection and nomination of
disinterested board members is the responsibility of the other
disinterested board members. No board member who is not an
interested person, has any direct or indirect financial interest in
the operation of the Plan or any related agreement. For the fiscal
year ended Nov. 30, 1995, under the prior and current agreements,
the Fund paid fees of $531,404.
Total fees and expenses
Total fees and nonadvisory expenses cannot exceed the most
restrictive applicable state limitation. Currently, the most
restrictive applicable state expense limitation, subject to
exclusion of certain expenses, is 2.5% of the first $30 million of
the Fund's average daily net assets, 2% of the next $70 million and
1.5% of average daily net assets over $100 million, on an annual
basis. At the end of each month, if the fees and expenses of the
Fund exceed this limitation for the Fund's fiscal year in progress,
AEFC will assume all expenses in excess of the limitation. AEFC
then may bill the Fund for such expenses in subsequent months up to
the end of that fiscal year, but not after that date. No interest
charges are assessed by AEFC for expenses it assumes. The Fund
paid total fees and nonadvisory expenses of $41,551,291 for the
fiscal year ended Nov. 30, 1995.
<PAGE>
PAGE 65
BOARD MEMBERS AND OFFICERS
The following is a list of the Fund's board members who, except for
Mr. Dudley, also are board members of all other funds in the IDS
MUTUAL FUND GROUP. Mr. Dudley is a board member of all publicly
offered funds. All shares have cumulative voting rights with
respect to the election of board members.
Lynne V. Cheney'
Born in 1941.
American Enterprise Institute
for Public Policy Research (AEI)
1150 17th St., N.W.
Washington, D.C.
Distinguished Fellow AEI. Former Chair of National Endowment of
the Humanities. Director, The Reader's Digest Association Inc.,
Lockheed-Martin, and the Interpublic Group of Companies, Inc.
(advertising), and FPL Group, Inc. (holding company for Florida
Power and Light).
William H. Dudley**
Born in 1932.
2900 IDS Tower
Minneapolis, MN
Executive vice president and director of AEFC.
Robert F. Froehlke+
Born in 1922.
1201 Yale Place
Minneapolis, MN
Former president of all funds in the IDS MUTUAL FUND GROUP.
Director, the ICI Mutual Insurance Co., Institute for Defense
Analyses, Marshall Erdman and Associates, Inc. (architectural
engineering) and Public Oversight Board of the American Institute
of Certified Public Accountants.
David R. Hubers+**
Born in 1943.
2900 IDS Tower
Minneapolis, MN
President, chief executive officer and director of AEFC.
Previously, senior vice president, finance and chief financial
officer of AEFC.
<PAGE>
PAGE 66
Heinz F. Hutter+'
Born in 1929.
P.O. Box 5724
Minneapolis, MN
President and chief operating officer, Cargill, Incorporated
(commodity merchants and processors) from February 1991 to
September 1994. Executive vice president from 1981 to February
1991.
Anne P. Jones
Born in 1935.
5716 Bent Branch Rd.
Bethesda, MD
Attorney and telecommunications consultant. Former partner, law
firm of Sutherland, Asbill & Brennan. Director, Motorola, Inc. and
C-Cor Electronics, Inc.
Donald M. Kendall'
Born in 1921.
PepsiCo, Inc.
Purchase, NY
Former chairman and chief executive officer, PepsiCo, Inc.
Melvin R. Laird
Born in 1922.
Reader's Digest Association, Inc.
1730 Rhode Island Ave., N.W.
Washington, D.C.
Senior counsellor for national and international affairs, The
Reader's Digest Association, Inc. Chairman of the board, COMSAT
Corporation, former nine-term congressman, secretary of defense and
presidential counsellor. Director, Martin Marietta Corp.,
Metropolitan Life Insurance Co., The Reader's Digest Association,
Inc., Science Applications International Corp., Wallace Reader's
Digest Funds and Public Oversight Board (SEC Practice Section,
American Institute of Certified Public Accountants).
Lewis W. Lehr'
Born in 1921.
3050 Minnesota World Trade Center
30 E. Seventh St.
St. Paul, MN
Former chairman of the board and chief executive officer, Minnesota
Mining and Manufacturing Company (3M). Director, Jack Eckerd
Corporation (drugstores). Advisory Director, Peregrine Inc.
(microelectronics).
<PAGE>
PAGE 67
William R. Pearce+*
Born in 1927.
901 S. Marquette Ave.
Minneapolis, MN
President of all funds in the IDS MUTUAL FUND GROUP since June
1993. Former vice chairman of the board, Cargill, Incorporated
(commodity merchants and processors).
Edson W. Spencer+
Born in 1926.
4900 IDS Center
80 S. 8th St.
Minneapolis, MN
President, Spencer Associates Inc. (consulting). Chairman of the
board, Mayo Foundation (healthcare). Former chairman of the board
and chief executive officer, Honeywell Inc. Director, Boise
Cascade Corporation (forest products) and CBS Inc. Member of
International Advisory Councils, Robert Bosch (Germany) and NEC
(Japan).
John R. Thomas**
Born in 1937.
2900 IDS Tower
Minneapolis, MN
Senior vice president and director of AEFC.
Wheelock Whitney+
Born in 1926.
1900 Foshay Tower
821 Marquette Ave.
Minneapolis, MN
Chairman, Whitney Management Company (manages family assets).
C. Angus Wurtele'
Born in 1934.
Valspar Corporation
Suite 1700
Foshay Tower
Minneapolis, MN
Chairman of the board and chief executive officer, The Valspar
Corporation (paints). Director, Bemis Corporation (packaging),
Donaldson Company (air cleaners & mufflers) and General Mills, Inc.
(consumer foods).
+ Member of executive committee.
' Member of joint audit committee.
* Interested person by reason of being an officer and employee of
the Fund.
**Interested person by reason of being an officer, board member,
employee and/or shareholder of AEFC or American Express.
<PAGE>
PAGE 68
The board also has appointed officers who are responsible for day-
to-day business decisions based on policies it has established.
In addition to Mr. Pearce, who is president, the Fund's other
officers are:
Leslie L. Ogg
Born in 1938.
901 S. Marquette Ave.
Minneapolis, MN
Vice president, general counsel and secretary of all funds in the
IDS MUTUAL FUND GROUP.
Officers who also are officers and/or employees of AEFC
Peter J. Anderson
Born in 1942.
IDS Tower 10
Minneapolis, MN
Vice president-investments of all funds in the IDS MUTUAL FUND
GROUP. Director and senior vice president-investments of AEFC.
Melinda S. Urion
Born in 1953.
IDS Tower 10
Minneapolis, MN
Treasurer of all funds in the IDS MUTUAL FUND GROUP. Director,
Senior Vice president and chief financial officer of AEFC.
Director and executive vice president and controller of IDS Life
Insurance Company.
Members of the board who are not officers of the Fund of AEFC
receive an annual fee of $6,500. They also receive attendance and
other fees, the cost of which the Fund shares with the other funds
in the IDS MUTUAL FUND GROUP. These fees include attendance of
meetings of the Board, $1,000; meetings of the Contracts Committee,
$750; meetings of the Audit, Executive or Investment Review
Committees, $500; meetings of the Personnel Committee, $300; out-
of-state, $500; and Chair of the Contracts Committee, $5,000.
Expenses for attending those meetings are also reimbursed. Upon
retirement, or earlier if for approved reasons, the independent
board members receive monthly payments equal to 1/2 of the annual
fee divided by 12 for as many months as the board member served on
the board up to 120 months or until the date of death. There are
no death benefits and the plan is not funded.
During the fiscal year ended Nov. 30, 1995, the members of the
board, for attending up to 27 meetings, received the following
compensation:
<PAGE>
PAGE 69
Compensation Table
<TABLE>
<CAPTION>
Aggregate Retirement Estimated Total cash
compensation benefits annual compensation
from the accrued as benefit on from the IDS
Board member Fund Fund expenses retirement MUTUAL FUND GROUP
<S> <C> <C> <C> <C>
Lynne V. Cheney $7,799 $ 2,864 $3,750 $70,000
Robert F. Froehlke 7,826 11,023 3,750 71,100
Heinz F. Hutter 7,734 4,877 1,813 67,500
Anne P. Jones 7,825 2,820 3,750 71,000
Donald M. Kendall 7,671 13,421 3,750 65,000
Melvin R. Laird 7,825 9,717 3,750 71,000
Lewis W. Lehr 7,805 13,305 3,656 70,200
Edson W. Spencer 7,882 6,581 2,000 73,500
Wheelock Whitney 7,801 5,537 3,750 70,100
C. Angus Wurtele 7,695 4,764 3,719 66,000
</TABLE>
On Nov. 30, 1995, the Fund's board members and officers as a group
owned less than 1% of the outstanding shares. During the fiscal
year ended Nov. 30, 1995, no board member or officer earned more
than $60,000 from this Fund. All board members and officers as a
group earned $209,269, including $74,909 of retirement plan
benefits, from this Fund.
CUSTODIAN
The Fund's securities and cash are held by First Bank National
Association, 180 E. Fifth St., St. Paul, MN 55101-1631, through a
custodian agreement. The custodian is permitted to deposit some or
all of its securities in central depository systems as allowed by
federal law.
INDEPENDENT AUDITORS
The financial statements contained in the Annual Report to
shareholders for the fiscal year ended Nov. 30, 1995, were audited
by independent auditors, KPMG Peat Marwick LLP, 4200 Norwest
Center, 90 S. Seventh St., Minneapolis, MN 55402-3900. The
independent auditors also provide other accounting and tax-related
services as requested by the Fund.
FINANCIAL STATEMENTS
The Independent Auditors' Report and the Financial Statements,
including Notes to the Financial Statements and the Schedule of
Investments in Securities, contained in the 1995 Annual Report to
shareholders, pursuant to Section 30(d) of the Investment Company
Act of 1940, as amended, are hereby incorporated in this SAI by
reference. No other portion of the Annual Report, however, is
incorporated by reference.
PROSPECTUS
The prospectus for IDS High Yield Tax-Exempt Fund dated Jan. 29,
1996, is hereby incorporated in this SAI by reference.
<PAGE>
PAGE 70
APPENDIX A
DESCRIPTION OF SHORT-TERM SECURITIES
Short-term Tax-exempt Securities
A portion of the Fund's assets are in cash and short-term
securities for day-to-day operating purposes. The investments will
usually be in short-term municipal bonds and notes. These include:
(1) Tax anticipation notes sold to finance working capital needs
of municipalities in anticipation of receiving taxes on a future
date.
(2) Bond anticipation notes sold on an interim basis in
anticipation of a municipality issuing a longer term bond in the
future.
(3) Revenue anticipation notes issued in anticipation of revenues
from sources other than taxes, such as federal revenues available
under the Federal Revenue Sharing Program.
(4) Tax and revenue anticipation notes issued in anticipation of
revenues from taxes and other sources of revenue, except bond
placements.
(5) Construction loan notes insured by the Federal Housing
Administration which remain outstanding until permanent financing
by the Federal National Mortgage Association (FNMA) or the
Government National Mortgage Association (GNMA) at the end of the
project construction period.
(6) Tax-exempt commercial paper with a stated maturity of 365
days or less issued by agencies of state and local governments to
finance seasonal working capital needs or as short-term financing
in anticipation of longer-term financing.
(7) Project notes issued by local housing authorities to finance
urban renewal and public housing projects. These notes are
guaranteed by the full faith and credit of the U.S. government.
(8) Variable rate demand notes, on which the yield is adjusted at
periodic intervals not exceeding 31 days and on which the principal
may be repaid after not more than seven days' notice, are
considered short-term regardless of the stated maturity.
Short-term Taxable Securities and Repurchase Agreements
Depending on market conditions, a portion of the Fund's investments
may be in short-term taxable securities. These include:
(1) Obligations of the U.S. government, its agencies and
instrumentalities resulting principally from lending programs of
the U.S. government;
<PAGE>
PAGE 71
(2) U.S. Treasury bills with maturities up to one year. The
difference between the purchase price and the maturity value or
resale price is the interest income to the Fund;
(3) Certificates of deposit or receipts with fixed interest rates
issued by banks in exchange for deposit of funds;
(4) Bankers' acceptances arising from short-term credit
arrangements designed to enable business to obtain funds to finance
commercial transactions;
(5) Letters of credit which are short-term notes issued in bearer
form with a bank letter of credit obligating the bank to pay the
bearer the amount of the note;
(6) Commercial paper rated in the two highest grades by Standard
& Poor's or Moody's. Commercial paper is generally defined as
unsecured short-term notes issued in bearer form by large well-
known corporations and finance companies. These ratings reflect a
review of management, economic evaluation of the industry
competition, liquidity, long-term debt and ten-year earning trends;
Standard & Poor's rating A-1 indicates that the degree of safety
regarding timely payment is either overwhelming or very strong.
Standard & Poor's rating A-2 indicates that capacity for timely
payment on issues with this designation is strong.
Moody's rating Prime-1 (P-1) indicates a superior capacity for
repayment of short-term promissory obligations.
Moody's rating Prime-2 (P-2) indicates a strong capacity for
repayment of short-term promissory obligations.
(7) Repurchase agreements involving acquisition of securities by
the Fund with a concurrent agreement by the seller, usually a bank
or securities dealer, to reacquire the securities at cost plus
interest within a specified time. From this investment, the Fund
receives a fixed rate of return that is insulated from market rate
changes while it holds the security.
<PAGE>
PAGE 72
APPENDIX B
OPTIONS AND INTEREST RATE FUTURES CONTRACTS
The Fund may buy or write options traded on any U.S. or foreign
exchange or in the over-the-counter market. The Fund may enter
into interest rate futures contracts traded on any U.S. or foreign
exchange. The Fund also may buy or write put and call options on
these futures. Options in the over-the-counter market will be
purchased only when the investment manager believes a liquid
secondary market exists for the options and only from dealers and
institutions the investment manager believes present a minimal
credit risk. Some options are exercisable only on a specific date.
In that case, or if a liquid secondary market does not exist, the
Fund could be required to buy or sell securities at disadvantageous
prices, thereby incurring losses.
OPTIONS. An option is a contract. A person who buys a call option
for a security has the right to buy the security at a set price for
the length of the contract. A person who sells a call option is
called a writer. The writer of a call option agrees to sell the
security at the set price when the buyer wants to exercise the
option, no matter what the market price of the security is at that
time. A person who buys a put option has the right to sell a
security at a set price for the length of the contract. A person
who writes a put option agrees to buy the security at the set price
if the purchaser wants to exercise the option, no matter what the
market price of the security is at that time. An option is covered
if the writer owns the security (in the case of a call) or sets
aside the cash (in the case of a put) that would be required upon
exercise.
The price paid by the buyer for an option is called a premium. In
addition the buyer generally pays a broker a commission. The
writer receives a premium, less a commission, at the time the
option is written. The cash received is retained by the writer
whether or not the option is exercised. A writer of a call option
may have to sell the security for a below-market price if the
market price rises above the exercise price. A writer of a put
option may have to pay an above-market price for the security if
its market price decreases below the exercise price.
Options can be used to produce incremental earnings, protect gains
and facilitate buying and selling securities for investment
purposes. The use of options and futures contracts may benefit the
Fund and its shareholders by improving the Fund's liquidity and by
helping to stabilize the value of its net assets.
Buying options. Put and call options may be used as a trading
technique to facilitate buying and selling securities for
investment reasons. Options are used as a trading technique to
take advantage of any disparity between the price of the underlying
security in the securities market and its price on the options
market. It is anticipated the trading technique will be utilized
<PAGE>
PAGE 73
only to effect a transaction when the price of the security plus
the option price will be as good or better than the price at which
the security could be bought or sold directly. When the option is
purchased, the Fund pays a premium and a commission. It then pays
a second commission on the purchase or sale of the underlying
security when the option is exercised. For record-keeping and tax
purposes, the price obtained on the purchase of the underlying
security will be the combination of the exercise price, the premium
and both commissions. When using options as a trading technique,
commissions on the option will be set as if only the underlying
securities were traded.
Put and call options also may be held by the Fund for investment
purposes. Options permit the Fund to experience the change in the
value of a security with a relatively small initial cash
investment. The risk the Fund assumes when it buys an option is
the loss of the premium. To be beneficial to the Fund, the price
of the underlying security must change within the time set by the
option contract. Furthermore, the change must be sufficient to
cover the premium paid, the commissions paid both in the
acquisition of the option and in a closing transaction or in the
exercise of the option and subsequent sale (in the case of a call)
or purchase (in the case of a put) of the underlying security.
Even then the price change in the underlying security does not
ensure a profit since prices in the option market may not reflect
such a change.
Writing covered options. The Fund will write covered options when
it feels it is appropriate and will follow these guidelines:
'Underlying securities will continue to be bought or sold solely on
the basis of investment considerations consistent with the Fund's
goal.
'All options written by the Fund will be covered. For covered call
options if a decision is made to sell the security, the Fund will
attempt to terminate the option contract through a closing purchase
transaction.
'The Fund will write options only as permitted under federal or
state laws or regulations, such as those that limit the amount of
total assets subject to the options. While no limit has been set
by the Fund, it will conform to the requirements of those states.
For example, California limits the writing of options to 50% of the
assets of a fund.
Net premiums on call options closed or premiums on expired call
options are treated as short-term capital gains. Since the Fund is
taxed as a regulated investment company under the Internal Revenue
Code, any gains on options and other securities held less than
three months must be limited to less than 30% of its annual gross
income.
If a covered call option is exercised, the security is sold by the
Fund. The Fund will recognize a capital gain or loss based upon
the difference between the proceeds and the security's basis.<PAGE>
PAGE 74
Options on many securities are listed on options exchanges. If the
Fund writes listed options, it will follow the rules of the options
exchange. Options are valued at the close of the Exchange. An
option listed on a national exchange, Chicago Board Options
Exchange (CBOE) or NASDAQ will be valued at the last-quoted sales
price or, if such a price is not readily available, at the mean of
the last bid and asked prices.
FUTURES CONTRACTS. A futures contract is an agreement between two
parties to buy and sell a security for a set price on a future
date. They have been established by boards of trade which have
been designated contracts markets by the Commodity Futures Trading
Commission (CFTC). Futures contracts trade on these markets in a
manner similar to the way a stock trades on a stock exchange, and
the boards of trade, through their clearing corporations, guarantee
performance of the contracts. Currently, there are futures
contracts based on such debt securities as long-term U.S. Treasury
bonds, Treasury notes, GNMA modified pass-through mortgage-backed
securities, three-month U.S. Treasury bills and bank certificates
of deposit. While futures contracts based on debt securities do
provide for the delivery and acceptance of securities, such
deliveries and acceptances are very seldom made. Generally, the
futures contract is terminated by entering into an offsetting
transaction. An offsetting transaction for a futures contract sale
is effected by the Fund entering into a futures contract purchase
for the same aggregate amount of the specific type of financial
instrument and same delivery date. If the price in the sale
exceeds the price in the offsetting purchase, the Fund immediately
is paid the difference and realizes a gain. If the offsetting
purchase price exceeds the sale price, the Fund pays the difference
and realizes a loss. Similarly, closing out a futures contract
purchase is effected by the Fund entering into a futures contract
sale. If the offsetting sale price exceeds the purchase price, the
Fund realizes a gain, and if the offsetting sale price is less than
the purchase price, the Fund realizes a loss. At the time a
futures contract is made, a good-faith deposit called initial
margin is set up within a segregated account at the Fund's
custodian bank. The initial margin deposit is approximately 1.5%
of a contract's face value. Daily thereafter, the futures contract
is valued and the payment of variation margin is required so that
each day the Fund would pay out cash in an amount equal to any
decline in the contract's value or receive cash equal to any
increase. At the time a futures contract is closed out, a nominal
commission is paid, which is generally lower than the commission on
a comparable transaction in the cash markets.
The purpose of a futures contract, in the case of a portfolio
holding long-term debt securities, is to gain the benefit of
changes in interest rates without actually buying or selling long-
term debt securities. For example, if the Fund owned long-term
bonds and interest rates were expected to increase, it might enter
into futures contracts to sell securities which would have much the
same effect as selling some of the long-term bonds it owned.
<PAGE>
PAGE 75
Futures contracts are based on types of debt securities referred to
above, which have historically reacted to an increase or decline in
interest rates in a fashion similar to the debt securities the Fund
owns. If interest rates did increase, the value of the debt
securities in the portfolio would decline, but the value of the
Fund's futures contracts would increase at approximately the same
rate, thereby keeping the net asset value of the Fund from
declining as much as it otherwise would have. If, on the other
hand, the Fund held cash reserves and interest rates were expected
to decline, the Fund might enter into interest rate futures
contracts for the purchase of securities. If short-term rates were
higher than long-term rates, the ability to continue holding these
cash reserves would have a very beneficial impact on the Fund's
earnings. Even if short-term rates were not higher, the Fund would
still benefit from the income earned by holding these short-term
investments. At the same time, by entering into futures contracts
for the purchase of securities, the Fund could take advantage of
the anticipated rise in the value of long-term bonds without
actually buying them until the market had stabilized. At that
time, the futures contracts could be liquidated and the Fund's cash
reserves could then be used to buy long-term bonds on the cash
market. The Fund could accomplish similar results by selling bonds
with long maturities and investing in bonds with short maturities
when interest rates are expected to increase or by buying bonds
with long maturities and selling bonds with short maturities when
interest rates are expected to decline. But by using futures
contracts as an investment tool, given the greater liquidity in the
futures market than in the cash market, it might be possible to
accomplish the same result more easily and more quickly.
Successful use of futures contracts depends on the investment
manager's ability to predict the future direction of interest
rates. If the investment manager's prediction is incorrect, the
Fund would have been better off had it not entered into futures
contracts.
OPTIONS ON FUTURES CONTRACTS. Options on futures contracts give
the holder a right to buy or sell futures contracts in the future.
Unlike a futures contract, which requires the parties to the
contract to buy and sell a security on a set date, an option on a
futures contract merely entitles its holder to decide on or before
a future date (within nine months of the date of issue) whether to
enter into such a contract. If the holder decides not to enter
into the contract, all that is lost is the amount (premium) paid
for the option. Furthermore, because the value of the option is
fixed at the point of sale, there are no daily payments of cash to
reflect the change in the value of the underlying contract.
However, since an option gives the buyer the right to enter into a
contract at a set price for a fixed period of time, its value does
change daily and that change is reflected in the net asset value of
the Fund.
<PAGE>
PAGE 76
RISKS. There are risks in engaging in each of the management tools
described above. The risk the Fund assumes when it buys an option
is the loss of the premium paid for the option. Purchasing options
also limits the use of monies that might otherwise be available for
long-term investments.
The risk involved in writing options on futures contracts the Fund
owns, or on securities held in its portfolio, is that there could
be an increase in the market value of such contracts or securities.
If that occurred, the option would be exercised and the asset sold
at a lower price than the cash market price. To some extent, the
risk of not realizing a gain could be reduced by entering into a
closing transaction. The Fund could enter into a closing
transaction by purchasing an option with the same terms as the one
it had previously sold. The cost to close the option and terminate
the Fund's obligation, however, might be more or less than the
premium received when it originally wrote the option. Furthermore,
the Fund might not be able to close the option because of
insufficient activity in the options market.
A risk in employing futures contracts to protect against the price
volatility of portfolio securities is that the prices of securities
subject to futures contracts may not correlate perfectly with the
behavior of the cash prices of the Fund's securities. The
correlation may be distorted because the futures market is
dominated by short-term traders seeking to profit from the
difference between a contract or security price and their cost of
borrowed funds. Such distortions are generally minor and would
diminish as the contract approached maturity.
Another risk is that the Fund's investment manager could be
incorrect in anticipating as to the direction or extent of various
interest rate movements or the time span within which the movements
take place. For example, if the Fund sold futures contracts for
the sale of securities in anticipation of an increase in interest
rates, and interest rates declined instead, the Fund would lose
money on the sale.
TAX TREATMENT. As permitted under federal income tax laws, the
Fund intends to identify futures contracts as mixed straddles and
not mark them to market, that is, not treat them as having been
sold at the end of the year at market value. Such an election may
result in the Fund being required to defer recognizing losses
incurred by entering into futures contracts and losses on
underlying securities identified as being hedged against.
Federal income tax treatment of gains or losses from transactions
in options on futures contracts and indexes will depend on whether
such option is a section 1256 contract . If the option is a non-
equity option, the Fund will either make a 1256(d) election and
treat the option as a mixed straddle or mark to market the option
at fiscal year end and treat the gain/loss as 40% short-term and
60% long-term. Certain provisions of the Internal Revenue Code may
also limit the Fund's ability to engage in futures contracts and
<PAGE>
PAGE 77
related options transactions. For example, at the close of each
quarter of the Fund's taxable year, at least 50% of the value of
its assets must consist of cash, government securities and other
securities, subject to certain diversification requirements. Less
than 30% of its gross income must be derived from sales of
securities held less than three months.
The IRS has ruled publicly that an exchange-traded call option is a
security for purposes of the 50%-of-assets test and that its issuer
is the issuer of the underlying security, not the writer of the
option, for purposes of the diversification requirements. In order
to avoid realizing a gain within the three-month period, the Fund
may be required to defer closing out a contract beyond the time
when it might otherwise be advantageous to do so. The Fund also
may be restricted in purchasing put options for the purpose of
hedging underlying securities because of applying the short sale
holding period rules with respect to such underlying securities.
Accounting for futures contracts will be according to generally
accepted accounting principles. Initial margin deposits will be
recognized as assets due from a broker (the Fund's agent in
acquiring the futures position). During the period the futures
contract is open, changes in value of the contract will be
recognized as unrealized gains or losses by marking to market on a
daily basis to reflect the market value of the contract at the end
of each day's trading. Variation margin payments will be made or
received depending upon whether gains or losses are incurred. All
contracts and options will be valued at the last-quoted sales price
on their primary exchange.
<PAGE>
PAGE 78
APPENDIX C
DOLLAR-COST AVERAGING
A technique that works well for many investors is one that
eliminates random buy and sell decisions. One such system is
dollar-cost averaging. Dollar-cost averaging involves building a
portfolio through the investment of fixed amounts of money on a
regular basis regardless of the price or market condition. This
may enable an investor to smooth out the effects of the volatility
of the financial markets. By using this strategy, more shares will
be purchased when the price is low and less when the price is high.
As the accompanying chart illustrates, dollar-cost averaging tends
to keep the average price paid for the shares lower than the
average market price of shares purchased, although there is no
guarantee.
While this does not ensure a profit and does not protect against a
loss if the market declines, it is an effective way for many
shareholders who can continue investing through changing market
conditions to accumulate shares in a fund to meet long-term goals.
Dollar-cost averaging
___________________________________________________________________
Regular Market Price Shares
Investment of a Share Acquired
$100 $6.00 16.7
100 4.00 25.0
100 4.00 25.0
100 6.00 16.7
100 5.00 20.0
$500 $25.00 103.4
Average market price of a share over 5 periods:
$5.00 ($25.00 divided by 5).
The average price you paid for each share:
$4.84 ($500 divided by 103.4).
<PAGE>
PAGE 79
Independent auditors' report
___________________________________________________________________
The board of directors and shareholders
IDS High Yield Tax-Exempt Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments in securities,
of IDS High Yield Tax-Exempt Fund, Inc. as of November 30, 1995,
and the related statement of operations for the year then ended and
the statements of changes in net assets for each of the years in
the two-year period ended November 30, 1995, and the financial
highlights for each of the years in the four-year period ended
November 30, 1995, the eleven months ended November 30, 1991, and
for each of the years in the five-year period ended December 31,
1990. These financial statements and the financial highlights are
the responsibility of fund management. Our responsibility is to
express an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and the financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Investment securities held in custody are
confirmed to us by the custodian. As to securities purchased and
sold but not received or delivered, we request confirmations from
brokers, and where replies are not received, we carry out other
appropriate auditing procedures. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IDS
High Yield Tax-Exempt Fund, Inc. at November 30, 1995, and the
results of its operations for the year then ended and the changes
in its net assets for each of the years in the two-year period
ended November 30, 1995 and the financial highlights for the
periods stated in the first paragraph above, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
January 5, 1996
<PAGE>
PAGE 80
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS High Yield Tax-Exempt Fund, Inc.
Nov. 30, 1995
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $5,819,390,076) $6,368,385,523
Accrued interest receivable 133,225,662
Receivable for investment securities sold 8,075,387
_____________________________________________________________________________________________________________
Total assets 6,509,686,572
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 8,039,134
Dividends payable to shareholders 3,129,604
Payable for investment securities purchased 85,670,999
Accrued investment management services fee 152,575
Accrued distribution fee 2,892
Accrued service fee 60,851
Accrued transfer agency fee 8,882
Accrued administrative services fee 10,269
Other accrued expenses 414,061
_____________________________________________________________________________________________________________
Total liabilities 97,489,267
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $6,412,197,305
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value $ 13,770,553
Additional paid-in capital 5,919,751,620
Undistibuted net investment income 6,694
Accumulated net realized loss (Notes 1 and 5) (86,902,133)
Unrealized appreciation (Note 4) 565,570,571
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $6,412,197,305
_____________________________________________________________________________________________________________
Net assets applicable to outstanding shares: Class A $6,315,912,069
Class B $ 71,409,025
Class Y $ 24,876,211
Net asset value per share of outstanding capital stock: Class A shares 1,356,375,237 $ 4.66
Class B shares 15,336,396 $ 4.66
Class Y shares 5,343,662 $ 4.66
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 81
Financial statements
Statement of operations
IDS High Yield Tax-Exempt Fund, Inc.
Year ended Nov. 30, 1995
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
Income:
Interest $ 426,651,811
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management services fee 27,955,627
Distribution fee
Class A 340,583
Class B 190,821
Transfer agency fee 2,894,330
Incrementel transfer agency fee - Class B 1,445
Service fee
Class A 7,545,233
Class B 44,512
Administrative services fee 1,291,773
Compensation of directors 154,268
Compensation of officers 55,001
Custodian fees 251,981
Postage 416,409
Registration fees 100,498
Reports to shareholders 239,742
Audit fees 41,250
Administrative 44,577
Other 68,769
_____________________________________________________________________________________________________________
Total expenses 41,636,819
_____________________________________________________________________________________________________________
Earning credits on cash balances (Note 2) (85,528)
_____________________________________________________________________________________________________________
Total net expenses 41,551,291
_____________________________________________________________________________________________________________
Investment income -- net 385,100,520
_____________________________________________________________________________________________________________
Realized and unrealized gain -- net
_____________________________________________________________________________________________________________
Net realized gain on security transactions (Note 3) 9,976,656
Net realized gain on financial futures contracts 1,876,411
_____________________________________________________________________________________________________________
Net realized gain on investments 11,853,067
Net change in unrealized appreciation or depreciation 641,790,089
_____________________________________________________________________________________________________________
Net gain on investments 653,643,156
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $1,038,743,676
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 82
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS High Yield Tax-Exempt Fund, Inc.
Year ended Nov. 30,
_____________________________________________________________________________________________________________
Operations and distributions 1995 1994
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 385,100,520 $ 416,298,236
Net realized gain (loss) on investments 11,853,067 (76,837,611)
Net change in unrealized appreciation or depreciation 641,790,089 (714,013,228)
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations 1,038,743,676 (374,552,603)
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (383,035,556) (416,298,458)
Class B (1,365,603) --
Class Y (697,056) --
Net realized gain
Class A -- (30,681,908)
_____________________________________________________________________________________________________________
Total distributions (385,098,215) (446,980,366)
_____________________________________________________________________________________________________________
Capital share transactions (Note 6)
_____________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 911,837,002 1,010,567,033
Class B shares 71,192,048 --
Class Y shares 125,163,992 --
Reinvestment of distributions at net asset value
Class A shares 263,493,454 316,177,064
Class B shares 1,122,982 --
Class Y shares 450 --
Payments for redemptions
Class A shares (1,278,436,169) (1,469,116,761)
Class B shares (Note 2) (2,940,998) --
Class Y shares (101,934,182) --
_____________________________________________________________________________________________________________
Decrease in net assets from capital share transactions (10,501,421) (142,372,664)
_____________________________________________________________________________________________________________
Total increase (decrease) in net assets 643,144,040 (963,905,633)
Net assets at beginning of year 5,769,053,265 6,732,958,898
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$6,694 and $0) $6,412,197,305 $5,769,053,265
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 83
Notes to financial statements
IDS High Yield Tax-Exempt Fund, Inc.
___________________________________________________________________
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. The Fund offers Class A, Class B and Class Y shares.
Class A shares are sold with a front-end sales charge. Class B
shares, which the Fund began offering on March 20, 1995, may be
subject to a contingent deferred sales charge. Class B shares
automatically convert to Class A after eight years. Class Y
shares, which the Fund also began offering on March 20, 1995,
have no sales charge and are offered only to qualifying
institutional investors.
All classes of shares have identical voting, dividend, liquidation
and other rights, and the same terms and conditions, except that
the level of distribution fee, transfer agency fee and service fee
(class specific expenses) differs among classes. Income, expenses
(other than class specific expenses) and realized and unrealized
gains or losses on investments are allocated to each class of
shares based upon its relative net assets.
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 the 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 84
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.
Securities purchased on a when-issued basis
Delivery and payment for securities that have been purchased by the
Fund on a forward-commitment or when-issued basis can take place
one month or more after the transaction date. During this period,
such securities are subject to market fluctuations, and they may
affect the Fund's net assets the same as owned securities. The
Fund designates cash or liquid high-grade short-term debt
securities at least equal to the amount of its commitment. As of
Nov. 30, 1995, the Fund had entered into outstanding when-issued or
forward commitments of $63,207,971.
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.
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.<PAGE>
PAGE 85
On the statement of assets and liabilities, as a result of
permanent book-to-tax differences, undistributed net investment
income has been increased by $4,389 and accumulated net realized
loss has been increased by $4,389.
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.
___________________________________________________________________
2. Expenses and sales charges
Under terms of a prior agreement that ended March 19, 1995, the
Fund paid AEFC a fee for managing its investments, recordkeeping
and other specified services. The fee was 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 0.11% of
average daily net assets.
Also under terms of the prior agreement, the Fund paid AEFC 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.
Effective March 20, 1995, when the Fund began offering multiple
classes of shares, the Fund entered into agreements with AEFC for
managing its portfolio, providing administrative services and
serving as transfer agent as follows: Under its Investment
Management Services Agreement, AEFC determines which securities
will be purchased, held or sold. The management fee is a
percentage of the Fund's average daily net assets in reducing
percentages from 0.49% to 0.36% annually.
Under an Administrative Services Agreement, the Fund pays AEFC for
administration and accounting services at a percentage of the
Fund's average daily net assets in reducing percentages from 0.04%
to 0.02% annually.
Under a separate Transfer Agency Agreement, AEFC maintains
shareholder accounts and records. The Fund pays AEFC an annual fee
per shareholder account for this service as follows:
o Class A $15.50
o Class B $16.50
o Class Y $15.50
<PAGE>
PAGE 86
Also effective March 20, 1995, the Fund entered into agreements
with American Express Financial Advisors Inc. for distribution and
shareholder servicing-related services as follows: Under a Plan and
Agreement of Distribution, the Fund pays a distribution fee at an
annual rate of 0.75% of the Fund's average daily net assets
attributable to Class B shares for distribution-related services.
Under a Shareholder Service Agreement, the Fund pays a fee for
service provided to shareholders by financial advisors and other
servicing agents. The fee is calculated at a rate of 0.175% of the
Fund's average daily net assets attributable to Class A and Class B
shares.
AEFC will assume and pay any expenses (except taxes and brokerage
commissions) that exceed the most restrictive applicable state
expense limitation.
Sales charges received by American Express Financial Advisors Inc.
for distributing Fund shares were $10,966,401 for Class A and
$16,882 for Class B for the year ended Nov. 30, 1995. During the
year ended Nov. 30, 1995, the Fund's custodian and transfer agency
fees were reduced by $85,528 as a result of earnings credits from
overnight cash balances.
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 $74,909 for the year ended Nov. 30, 1995.
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $849,400,189 and $837,487,421,
respectively, for the year ended Nov. 30, 1995. Realized gains and
losses are determined on an identified cost basis.
___________________________________________________________________
4. Interest rate futures contracts
At Nov. 30, 1995, investments in securities included securities
valued at $35,302,175 that were pledged as collateral to cover
initial margin deposits on 3,051 open purchase contracts. The
market value of the open contracts at Nov. 30, 1995 was
$365,410,406 with a net unrealized gain of $16,575,124. The Fund
maintains, in a segregated account with its custodian, securities
with at least a market value equal to the value of these open long
futures contracts.
<PAGE>
PAGE 87
___________________________________________________________________
5. Capital loss carryover
For federal income tax purposes, the Fund has a capital loss
carryover of $37,326,194 at Nov. 30, 1995 that will expire in 2002
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.
___________________________________________________________________
6. Capital share transactions
Transactions in shares of capital stock for the years indicated are
as follows:
<TABLE>
<CAPTION>
_______________________________________________________________________________________
Year ended Nov. 30, 1995 Year ended
11/30/94
Class A Class B* Class Y* Class A
_______________________________________________________________________________________
<S> <C> <C> <C> <C>
Sold 205,021,043 15,737,180 27,954,933 222,781,222
Issued for reinvested 58,903,368 246,893 100 70,023,194
distributions
Redeemed (288,309,966) (647,677) (22,611,371) (327,007,352)
_______________________________________________________________________________________
Net increase (decrease) (24,385,555) 15,336,396 5,343,662 (34,202,936)
_______________________________________________________________________________________
*Inception date was March 20, 1995.
</TABLE>
7. Financial highlights
"Financial highlights" showing per share data and selected
information is presented on pages 6 and 7 of the prospectus.
<PAGE>
PAGE 88
<TABLE>
<CAPTION>
Investments in securities
IDS High Yield Tax-Exempt Fund, Inc. (Percentages represent value of
Nov. 30, 1995 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (97.5%)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b,c,j) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Alabama (1.0%)
Baldwin County Eastern Shore Health Care Authority Hospital Revenue Bonds
Thomas Hospital Series 1991 8.50 % 2016 $ 4,765,000 $ 5,246,932
Camden Industrial Development Board Solid Waste Disposal Revenue Bonds
MacMillan Bloedel Series 1991A A.M.T. 7.75 2019 8,500,000 9,100,355
Columbia Industrial Development Board Pollution Control Revenue Bonds
Alabama Power Farley Plant Series E 9.25 2015 11,500,000 11,731,725
Courtland Industrial Development Board Pollution Control Refunding Bonds
Champion International 6.15 2019 17,000,000 17,209,610
Marengo County Limited Obligation Capital Outlay Warrants Series 1988 8.50 2018 3,000,000 3,415,980
Mobile Industrial Development Board Solid Waste Refunding Revenue Bonds
Mobile Energy Services 6.95 2020 11,250,000 11,826,337
Mobile Medical Clinic Board Psychiatric Revenue Bonds Charter Medical 11.50 2008 2,740,000 2,788,279
______________
Total 61,319,218
_____________________________________________________________________________________________________________________________
Alaska (0.6%)
Anchorage Municipality Senior Lien Electric Revenue Bonds Series 1986
(AMBAC Insured) 6.00 2019 10,150,000 10,179,740
North Slope Borough General Obligation Bonds Series 1984B
Zero Coupon (CGIC Insured) 7.051 2004 7,000,000 (f) 4,600,680
North Slope Borough General Obligation Bonds Series 1984B
Zero Coupon (CGIC Insured) 7.151 2005 7,000,000 (f) 4,336,290
State Finance Housing Authority Series 1995A (MBIA Insured) 5.875 2030 18,500,000 18,539,405
______________
Total 37,656,115
_____________________________________________________________________________________________________________________________
Arizona (0.4%)
Chandler Industrial Development Authority Beverly Enterprises
Series 1994 7.625 2008 2,900,000 3,011,505
Maricopa County Hospital System Revenue Bonds Samaritan Health Services
Series 1981 12.00 2008 4,715,000 5,370,811
Maricopa County Industrial Development Authority Hospital System
Refunding Revenue Bonds Samaritan Health Services Series 1985A 9.25 2015 7,000,000 7,141,050
Maricopa County Pollution Control Refunding Revenue Bonds
Palo Verde Public Service 6.375 2023 3,500,000 3,421,740
Phoenix Civic Improvement Waste Water System
Lease Refunding Revenue Bonds 5.00 2018 5,000,000 4,765,650
Scottsdale Industrial Development Authority Beverly Enterprises
Series 1994 7.625 2008 3,170,000 3,291,887
______________
Total 27,002,643
_____________________________________________________________________________________________________________________________
Arkansas (0.2%)
Pope County Pollution Control Revenue Bonds Arkansas Power & Light
Series 1985 11.00 2015 7,380,000 7,533,283
Pope County Solid Waste Disposal Revenue Bonds Arkansas Power & Light
Series 1991 A.M.T. 8.00 2021 3,250,000 3,544,775
______________
Total 11,078,058
_____________________________________________________________________________________________________________________________
California (7.3%)
Burbank Redevelopment Agency Tax Allocation Bonds
Golden State Series 1993A 6.00 2013-23 9,500,000 9,389,020
Community Development Authority Health Facilities Unihealth America
Certificate of Participation Series 1993 Inverse Floater (AMBAC Insured) 7.215 2011 22,400,000 (d) 23,436,000
East Bay Municipal Utility District Water Revenue Bonds
Series 1993 Inverse Floater (MBIA Insured) 6.67 2008 15,500,000 (d) 15,713,125
Eden Township Hospital District Insured Health Facilities
Refunding Revenue Bonds Certificate of Participation
Eden Hospital Health Services Series 1993 5.85 2018 3,750,000 3,671,625
Foothill Eastern Transportation Corridor Agency Toll Road Revenue Bonds
Series 1995A 5.00 2035 41,070,000 34,474,569
Foothill Eastern Transportation Corridor Agency Toll Road Revenue Bonds
Series 1995A 6.00 2034 32,250,000 31,585,972
Fresno Health Facility Refunding Revenue Bonds
Holy Cross Health System (MBIA Insured) 5.625 2013 3,000,000 3,066,750
<PAGE>
PAGE 89
Los Angeles County Certificate of Participation Inverse Floater 6.708 2015 20,000,000 (d) 19,366,600
Los Angeles County Metropolitan Transportation Authority Proposition C
Sales Tax Revenue Bonds (AMBAC Insured) 5.00 2025 17,750,000 16,656,423
Los Angeles International Airport Regional Airports Improvement
Corporation Refunding Revenue Bonds United Airlines Series 1984 8.80 2021 11,650,000 13,115,687
Los Angeles International Airport Regulatory Airports Improvement
Sublease Revenue Bonds Western Airlines Issue 1985 11.25 2025 10,000,000 10,309,900
Los Angeles Water & Power Electric Plant Refunding Revenue Bonds
Series 1992 6.375 2020 10,000,000 10,589,300
Modesto Santa Clara Redding Public Power Bonds San Juan Series C
(AMBAC Insured) 5.50 2021 4,500,000 4,373,460
Northern California Power Agency Geothermal #3 Revenue Bonds 5.00 2009 49,635,000 47,738,447
Novato Community Facility District #1 Vintage Oaks Public
Improvement Special Tax Refunding Bonds 7.25 2021 5,000,000 5,259,950
Oceanside Certificate of Participation Refunding Bonds
Oceanside Civic Center (MBIA Insured) 5.25 2019 7,000,000 6,796,370
Orange County Special Tax Community Facilities Bonds
Aliso Veijo District 88-1 Series 1992A 7.35 2018 6,000,000 7,119,180
Pleasanton Joint Powers Financing Authority Reassessment
Revenue Bonds Series 1993A 6.15 2012 4,865,000 4,975,435
Regional Airports Improvement Facilities Sublease Revenue Bonds
Continental Airlines Los Angeles International Airport
Series 1988 A.M.T. 9.00 2008-17 12,600,000 13,656,772
Sacramento Cogeneration Authority Revenue Bonds
Proctor & Gamble Series 1995 6.50 2014-21 11,800,000 12,252,910
Sacramento Municipal Utility District Electric Refunding Revenue Bonds
Series R 6.00 2015-17 20,385,000 20,390,552
Sacramento Municipal Utility District Electric Refunding Revenue Bonds
Series 1993D Inverse Floater (FSA Insured) 6.47 2005 15,800,000 (d) 17,202,250
Sacramento Municipal Utility District Electric Refunding Revenue Bonds
Series 1993D Inverse Floater (FSA Insured) 6.67 2006 16,400,000 (d) 17,712,000
Sacramento Municipal Utility District Electric Refunding Revenue Bonds
Series 1993D Inverse Floater (MBIA Insured) 7.12 2015 15,000,000 (d) 14,943,750
San Joaquin Hills Orange County Transportation Corridor Agency
Senior Lien Toll Road Revenue Bonds 6.75 2032 14,785,000 15,352,744
San Jose Redevelopment Agency Merged Area Tax Allocation Bonds
Series 1993 Inverse Floater (MBIA Insured) 5.591 2014 30,600,000 (d) 30,561,750
San Marcos Public Facility Authority Refunding Revenue Bonds
Civic Center Public Improvement Series A 6.20 2022 12,300,000 12,125,094
Sierra Unified School District Fresno County Certificate of Participation
Capital Financing Refunding Bonds Series 1993 6.125 2018 6,470,000 6,476,599
Southern California Public Power Authority Power Revenue Bonds
Palo Verde Series 1993 Inverse Floater (FGIC Insured) 6.521 2017 20,000,000 (d) 19,225,000
Southern California Public Power Authority Power Revenue Bonds
Series 1986B 5.75 2017 2,025,000 2,024,879
Southern California Public Power Authority Transmission
Refunding Revenue Bonds Series 1986B 7.00 2022 1,500,000 1,566,080
South Tahoe Joint Power Financing Authority Refunding Revenue Bonds
South Tahoe Area #1 Series 1995B 6.00 2028 4,500,000 4,325,265
Ukiah Unified School District Mendocino County
Certificate of Participation Series 1993 6.00 2010 5,000,000 5,033,250
University of California Refunding Revenue Bonds
Multiple Purpose Project (AMBAC Insured) 5.25 2016 6,000,000 5,866,020
______________
Total 466,352,728
_____________________________________________________________________________________________________________________________
Colorado (5.1%)
Arapahoe County Capital Improvement Trust Fund E-470 Highway Revenue Bonds 7.00 2026 19,000,000 20,480,290
Arapahoe County Industrial Development Revenue Bonds
Dillion Real Estate-Kroger 8.00 2009 4,000,000 4,398,040
Aurora Centretech Metropolitan District Arapahoe County Series 1987B 6.00 2023 5,732,785 4,458,903
Briargate Public Building Authority Landowner Assessment Lien Bonds
Series 1985A 10.25 2000 5,000,000 (e) 3,000,000
Colorado Health Facility Authorization Revenue Bonds
Escrowed to Maturity Liberty Heights Zero Coupon 7.50 2022 81,465,000 (f) 14,314,215
Colorado Springs Cottonwood General Improvement District
General Obligation Bonds Series 1986 9.25 2031 3,500,000 1,155,000
Colorado Springs Hospital Revenue Bonds Memorial Hospital Series 1990 7.875 2010 5,000,000 5,821,050
Colorado Springs Stetson Hills Public Building Authority
Landowner Assessment Lien Bonds Series 1988A 9.75 2008 2,869,110 (e) 84,639
Colorado Springs Utilities System Refunding Revenue Bonds Series 1991C 6.50 2015 24,895,000 27,034,725
Colorado Springs Utilities System Refunding Revenue Bonds Series 1991C 6.75 2001-21 30,000,000 33,559,298
Colorado Springs Utilities System PreRefunded Revenue Bonds Series 1991C 6.50 2015 1,505,000 1,696,496
Denver City & County Airport Systems Revenue Bonds Series 1991A A.M.T. 8.75 2023 10,000,000 11,844,000
Denver City & County Airport Systems Revenue Bonds Series 1991D A.M.T. 7.75 2021 8,650,000 9,663,347
Denver City & County Airport Systems Revenue Bonds Series 1992A 7.25 2025 20,975,000 22,989,859
Denver City & County Airport Systems Revenue Bonds Series 1992B A.M.T. 7.25 2023 20,500,000 22,186,945
Denver City & County Airport Systems Revenue Bonds Series 1994A A.M.T. 7.50 2013-23 24,340,000 27,021,931
Denver City & County Airport Systems Revenue Bonds Series 1995A
(MBIA Insured) 5.70 2025 20,000,000 20,068,200
<PAGE>
PAGE 90
Denver City & County GVR Metropolitan District
General Obligation Refunding & Improvement Bonds Series 1985 10.25 2002 4,000,000 4,040,720
Denver City & County GVR Metropolitan District
General Obligation Refunding Bonds Series 1991 8.00 2006 1,385,000 1,410,304
Denver City & County GVR Metropolitan District
General Obligation Refunding Bonds Series 1995B 11.00 2006 730,000 704,450
Denver Special Facility Airport Revenue Bonds United Air Lines
Series A A.M.T. 6.875 2032 25,400,000 26,132,790
Denver Urban Renewal Authority Tax Increment Revenue Bonds
South Broadway Montgomery Ward Urban Renewal Series 1992 8.50 2016 14,520,000 15,270,684
Denver West Metropolitan District General Obligation Refunding
Improvement Bonds Series 1995 7.00 2014 4,230,000 4,414,682
El Paso County School District #20 General Obligation Refunding Bonds
Series 1993A 6.10 2005 2,215,000 2,398,181
El Paso County School District #20 General Obligation Refunding Bonds
Series 1993A 6.15 2008 1,000,000 1,078,300
El Paso County School District #20 General Obligation Refunding Bonds
Series 1993A 6.20 2007 1,250,000 1,356,300
Hotchkiss Industrial Development Revenue Bonds Dillion Real Estate-Kroger 8.00 2009 1,500,000 1,652,565
Housing Finance Authority Single Family Program Senior Bonds
Series 1991B (FGIC Insured) 7.25 2011 3,170,000 3,394,626
Housing Finance Authority Single Family Program Senior Bonds
Series 1991B (FGIC Insured) 7.30 2018 2,865,000 3,034,665
Northern Colorado Water District Revenue Bonds Series D 6.00 2015 4,000,000 4,018,080
Superior Metropolitan District #2 Limited Tax General Obligation
Refunding Bonds MDC Holdings Series 1994B 7.50 1998 3,300,000 3,427,314
Superior Metropolitan District #2 Limited Tax General Obligation
Refunding Bonds MDC Holdings Series 1994B 8.25 2013 2,580,000 2,799,558
Superior Metropolitan District #2 Limited Tax General Obligation
Refunding Bonds MDC Holdings Series 1994B 8.50 2013 12,000,000 13,263,720
Thornton Industrial Development Revenue Bonds Dillion Real Estate-Kroger 8.00 2009 4,500,000 4,500,000
Westminster Industrial Development Revenue Bonds Dillion Real Estate-Kroger 8.00 2009 3,500,000 3,848,285
______________
Total 326,522,162
_____________________________________________________________________________________________________________________________
Connecticut (0.1%)
State Transportation Infrastructure Special Tax Obligation Revenue Bonds
Series B 5.70 1997 4,300,000 4,430,204
_____________________________________________________________________________________________________________________________
District of Columbia (1.0%)
General Obligation Refunding Bonds Series A 7.875 2006 12,625,000 13,136,313
General Obligation Refunding Bonds Series 1994A (MBIA Insured) 6.00 2010 27,875,000 28,930,626
General Obligation Refunding Bonds Series 1994A (MBIA Insured) 6.10 2011 7,580,000 7,896,162
General Obligation Refunding Bonds Series 1994B-2 (FSA Insured) 5.50 2006 12,405,000 12,703,216
Housing Finance Agency Multiple Family Mortgage Revenue Bonds
Temple Courts Section 8 Series 1985 (FHA Insured) 12.00 2022 1,320,000 1,485,884
______________
Total 64,152,201
_____________________________________________________________________________________________________________________________
Florida (4.5%)
Broward County Airport System Revenue Bonds Series 1989B A.M.T. 7.625 2013 15,000,000 16,544,700
Broward County Resource Recovery Revenue Bonds L.P. South Project 7.95 2008 42,040,000 47,589,700
Charlotte County Development Authority 1st Mortgage
Refunding Revenue Bonds Royal Palm Retirement Centre Series 1991 9.50 2014 4,230,000 4,507,192
Crossings at Fleming Island Community Development District
Special Assessment Bonds Series 1995 8.25 2016 10,375,000 11,142,543
Crossings at Fleming Island Community Development District Utility
Revenue Bonds Series 1994 7.375 2019 14,000,000 13,958,980
Department of Transportation Turnpike Revenue Bonds Series 1991A
(AMBAC Insured) 6.25 2020 20,000,000 20,907,200
Gateway Centre Development District Pinellas County Special Assessment
Revenue Bonds Series 1988 9.125 2009 2,195,000 2,334,448
Hillsborough County Utility Refunding Revenue Bonds Series 1991A
(MBIA Insured) 6.50 2016 24,760,000 26,843,554
Hillsborough County Utility Refunding Revenue Bonds Series 1991A 7.00 2014 24,000,000 26,045,987
Jacksonville Electric Authority St. John's River Power Park System
Revenue Bonds Series 1989 6.00 2015 10,300,000 10,471,495
Jacksonville Health Facilities Authority Hospital Refunding Revenue Bonds
Riverside Hospital Series 1989 7.625 2013 1,600,000 1,687,872
Lakeland Electric & Water Refunding Revenue Bonds Series 1986 7.00 2009 5,000,000 5,127,500
Lakewood Ranch Community Development District #1 Special Assessment Bonds
Series 1994 8.25 2014 9,105,000 9,591,753
Lee County Industrial Development Authority Industrial Development
Revenue Bonds Gulf Utility Series 1988A A.M.T. 9.625 2018 5,545,000 6,359,228
Lee County Industrial Development Authority Industrial Development
Revenue Bonds Gulf Utilities Series 1988B A.M.T. 9.50 2020 3,970,000 4,540,013
Miami Health Facility Authorization Revenue Bonds
Inverse Floater (AMBAC Insured) 6.37 2015 3,500,000 (d) 3,281,250
Municipal Power Agency Refunding Revenue Bonds St. Lucie Series 1986 7.375 2016 6,000,000 6,308,700
<PAGE>
PAGE 91
Palm Beach County Health Facilities Authority Hospital Revenue Bonds
Good Samaritan Health Series 1993 6.30 2022 4,250,000 4,368,703
Pinellas County Capital Improvement Revenue Bonds Series 1991 5.40 1997 5,570,000 5,719,332
Polk County Industrial Development Authority 1st Mortgage
Refunding Revenue Bonds Spring Haven II 8.75 2014 6,545,000 7,051,452
Port Everglades Port Authority Revenue Bonds Junior Lien 5.00 2016 18,635,000 17,598,894
Riverwood Community Development District Charlotte County
Special Assessment Revenue Bonds Series 1992A 8.50 2012 5,655,000 5,998,880
Riverwood Community Development District Charlotte County
Special Assessment Revenue Bonds Series 1992B 8.50 2012 1,140,000 1,209,323
State Board of Education Refunding Bonds Series 1989A 6.00 2025 16,750,000 16,980,145
Sumter County Village Community Development District #1
Capital Improvement Revenue Bonds Series 1992 8.40 2012 3,790,000 4,018,120
Sunrise Utility System Refunding & Improvement Revenue Bonds 10.75 2018 5,000,000 6,357,700
______________
Total 286,544,664
_____________________________________________________________________________________________________________________________
Georgia (2.3%)
Atlanta Special Purpose Facility Revenue Bonds Delta Air Lines
Series 1989B A.M.T. 6.25 2019 8,685,000 8,642,270
Atlanta Special Purpose Facility Revenue Bonds Delta Air Lines
Series 1989B A.M.T. 7.90 2018 13,500,000 14,474,295
Colquitt County Development Authority Revenue Bonds
Escrowed to Maturity Zero Coupon 6.87 2021 46,350,000 (f) 8,483,904
Effingham County Pollution Control Revenue Bonds Fort Howard
Series 1988 7.90 2005 19,850,000 21,275,230
Fulco Hospital Authority Revenue Anticipation Certificate
Georgia Baptist Health Care Systems Series 1992A 6.375 2022 20,300,000 20,344,660
Municipal Electric Authority Power Refunding Bonds Series 1989R 6.00 2014 9,130,000 9,203,405
Municipal Electric Authority Power Revenue Bonds 6.00 2020 3,350,000 3,349,933
Municipal Electric Authority Power Revenue Bonds 7.00 2019 1,340,000 1,343,913
Municipal Electric Authority Power Revenue Bonds Series 5 (FGIC Insured) 6.00 2025 34,490,000 35,010,454
Municipal Electric Authority Power Revenue Bonds Series L 5.00 2020 1,150,000 1,052,215
Municipal Electric Authority Power Revenue Bonds Series 1986A 7.875 2018 2,625,000 2,686,819
Rockdale County Development Authority Solid Waste Disposal Revenue Bonds
Visy Paper Series 1993 A.M.T. 7.50 2026 10,000,000 10,312,700
Savannah Georgia Economic Development Authority Revenue Bonds
Escrowed to Maturity Zero Coupon 6.87 2021 64,220,000 (f) 11,754,829
______________
Total 147,934,627
_____________________________________________________________________________________________________________________________
Hawaii (0.3%)
City & County of Honolulu Refunding & Improvement
General Obligation Bonds Series 1993B Inverse Floater 6.47 2006 10,000,000 (d) 10,712,500
City & County of Honolulu Refunding & Improvement
General Obligation Bonds Series 1993B Inverse Floater 6.62 2008 10,000,000 (d) 10,725,000
______________
Total 21,437,500
_____________________________________________________________________________________________________________________________
Idaho (--%)
The Regents of the University Student Fee Refunding Revenue Bonds
Series 1986 (FGIC Insured) 7.00 2010 1,050,000 1,071,326
_____________________________________________________________________________________________________________________________
Illinois (8.8%)
Bradley Kankakee County Tax Increment Refunding Revenue Bonds
Series 1993 8.40 2012 5,800,000 6,339,342
Broadview Cook County Senior Lien Tax Increment Revenue Bonds
Series 1993 8.25 2013 12,000,000 13,047,000
Chicago General Obligation Refunding Bonds
Series 1995A (AMBAC Insured) 5.50 2018 20,000,000 (h) 19,500,000
Chicago General Obligation Bonds Series 1991 (AMBAC Insured) 6.00 2016 6,170,000 6,344,549
Chicago General Obligation Bonds Series 1994A (AMBAC Insured) 5.875 2022 17,850,000 18,095,259
Chicago O'Hare International Airport General Airport Revenue Bonds
Series 1990A A.M.T. 6.00 2018 29,000,000 29,203,580
Chicago O'Hare International Airport General Airport Revenue Bonds
Series 1990A A.M.T. 7.50 2016 21,000,000 23,039,730
Chicago O'Hare International Airport General Airport
Refunding Revenue Bonds Series 1993A 5.00 2016 14,450,000 13,527,367
Chicago O'Hare International Airport Special Revenue Facility Bonds
Delta Airlines Series 1992 6.45 2018 10,000,000 10,200,800
Chicago O'Hare International Airport Special Revenue Facility Bonds
United Airlines Series C 8.20 2018 23,665,000 26,048,066
Chicago O'Hare International Airport Terminal Special Revenue Bonds A.M.T. 7.50 2017 32,250,000 35,270,212
Chicago O'Hare International Airport Terminal Special Revenue Bonds
(FGIC Insured) A.M.T. 7.875 2025 17,750,000 19,216,328
Chicago Ridge Special Service Area #1 Unlimited Ad Valorem Tax Bonds
Series 1990 9.00 2008 2,700,000 2,970,108
Chicago Wastewater Transmission Revenue Bonds Series 1994 (MBIA Insured) 6.375 2024 22,500,000 24,000,975
Civic Center Bonds Dedicated Tax Revenue Bonds Series 1985 9.50 2015 10,000,000 10,323,700
<PAGE>
PAGE 92
Cook County Bedford Park Senior Lien Tax Increment Revenue Bonds
Mark IV Series 1992 9.75 2012 1,740,000 1,996,493
Development Finance Authority Pollution Control Refunding Revenue Bonds
Central Illinois Public Service Series 1993B-2 5.90 2028 2,500,000 2,536,300
Development Finance Authority Pollution Control Refunding Revenue Bonds
Commonwealth Edison Series 1994 5.70 2009 2,000,000 2,044,420
Development Finance Authority Pollution Control Refunding Revenue Bonds
Commonwealth Edison Series 1994 5.85 2014 4,500,000 4,315,410
Development Finance Authority Pollution Control Refunding Revenue Bonds
Illinois Power Series 1991A 7.375 2021 19,250,000 21,432,565
Development Finance Authority Pollution Control Revenue Bonds
Illinois Power Series 1986A A.M.T. 7.625 2016 25,000,000 26,369,250
Development Finance Authority Pollution Control Revenue Bonds
Illinois Power Series 1986B A.M.T. 7.625 2016 2,000,000 2,109,540
Development Finance Authority Pollution Control Revenue Bonds
Illinois Power Series 1986C A.M.T. 7.625 2016 15,560,000 16,412,221
Development Finance Authority Retirement Housing Revenue Bonds
Escrowed to Maturity Zero Coupon 7.75 2020 68,000,000 (f) 13,859,080
Development Finance Authority Solid Waste Disposal Facility Revenue Bonds
Ford Heights Waste Tire to Energy Series 1994 A.M.T. 7.875 2011 32,000,000 31,640,000
Educational Facilities Authority Refunding Revenue Bonds
Art Institute of Chicago Series 1993 5.75 2018 1,750,000 1,745,468
Educational Facilities Authority Refunding Revenue Bonds
Art Institute of Chicago Series 1993 5.80 2027 3,350,000 3,340,051
Educational Facilities Authority Refunding Revenue Bonds
Loyola University of Chicago Series 1993 Inverse Floater (FGIC Insured) 6.22 2012 11,000,000 (d) 11,233,750
Granite City Madison County Hospital Refunding Revenue Bonds
St. Elizabeth Medical Center Series 1989A 8.125 2008 3,500,000 3,653,020
Hanover Park Cook & DuPage Counties 1st Mortgage Revenue Bonds
Windsor Park Manor Series 1989 9.50 2014 7,000,000 7,683,620
Health Facilities Authority Refunding Revenue Bonds
Edwards Hospital Series 1993A 6.00 2019 6,350,000 6,263,259
Health Facilities Authority Refunding Revenue Bonds
Masonic Hospital 6.125 2023 3,005,000 2,820,193
Health Facilities Authority Refunding Revenue Bonds
Masonic Medical Center Series 1993 5.50 2019 2,000,000 1,847,720
Health Facilities Authority Refunding Revenue Bonds
Peoria Methodist Medical Center Series 1985A 8.00 2014 4,000,000 4,011,600
Health Facilities Authority Refunding Revenue Bonds
University of Chicago Series 1993 Inverse Floater
(MBIA Insured) 7.32 2014 10,000,000 (d) 10,112,500
Health Facility Authority Revenue Bonds Delnore Community Hospital
Series 1989 8.00 2019 7,000,000 7,956,830
Health Facility Authority Revenue Bonds Sarah Bush Lincoln Health Center
Series 1992 7.25 2012-22 4,000,000 4,212,640
Health Facility Authority Revenue Bonds South Suburban Hospital
Series 1992 7.00 2009-18 9,000,000 9,603,870
Hodgkins General Obligation Tax Increment Bonds Series 1991 9.50 2009 13,000,000 16,058,762
Hodgkins General Obligation Tax Increment Bonds Series 1995C 9.00 2001 1,450,000 1,450,000
Hodgkins General Tax Increment Bonds Series 1995 A 7.625 2013 9,000,000 9,340,560
Jefferson County Housing Development Rome Meadows Elderly Housing
Section 8 8.90 2006 2,000,000 2,022,280
Lansing Cook County Tax Increment Revenue Bonds Series 1987 10.00 2007 10,000,000 10,206,100
Lansing Tax Increment Refunding Revenue Bonds Landings Redevelopment Area
Limited Sales Tax Pledge Series 1992 7.00 2008 10,000,000 11,042,500
Marion General Obligation Hospital Alternate Revenue Source Bonds
Series 1991 7.50 2016 3,800,000 4,127,066
Metropolitan Fair & Exposition Authority Dedicated State Tax
Revenue Bonds 6.00 2014 5,585,000 5,592,372
Metropolitan Pier & Exposition Authority Dedicated State Tax
Refunding Revenue Bonds McCormick Place Zero Coupon (MBIA Insured) 6.61 2017 11,210,000 (f) 3,354,480
Northwest Suburban Water Supply Joint Action Water Agency (MBIA Insured) 5.75 2012 2,000,000 2,000,000
Northwest Water Commission Cook & Lake County Water Revenue Bonds
(MBIA Insured) 6.50 2012 5,025,000 5,309,415
Pekin Pollution Control Revenue Bonds Commonwealth Edison Series 1979B 6.75 2004 2,250,000 2,256,998
Regional Transportation Authority General Obligation Bonds
Counties of Cook, Dupage, Kane, Lake, McHenery and Will
Series 1992A (AMBAC Insured) 6.125 2022 7,200,000 7,415,496
Richland County Hospital Revenue Bonds Richland Memorial Hospital
Series B 10.70 2009 2,000,000 2,040,380
Tinley Park Cook & Will Counties Limited Sales Tax Revenue Bonds
Series 1988 10.25 1999 895,000 (e) 358,000
Tinley Park Cook & Will Counties Unlimited Ad Valorem Tax Bonds
of Special Service 10.65 2007 1,390,000 1,209,300
Robbins Cook County Resource Recovery Revenue Bonds
Robbins Resource Recovery Partners Series 1994A A.M.T. 9.25 2014 18,000,000 19,526,940
Waukegan Pollution Control Revenue Bonds Commonwealth Edison Series B 6.875 2009 5,000,000 5,016,500
______________
Total 562,653,965
_____________________________________________________________________________________________________________________________
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Indiana (3.1%)
Brazil 1st Mortgage Revenue Bonds Hoosier Care II Series 1990 10.375 2020 4,280,000 4,826,342
Carmel Retirement Rental Housing Refunding Revenue Bonds
Beverly Enterprises Series 1992 8.75 2008 7,000,000 (g) 7,807,030
Hammond Multi-School Building 1st Mortgage Bonds
Series 1995 (MBIA Insured) 5.80 2015 3,590,000 3,656,631
Hammond Multi-School Building 1st Mortgage Bonds
Series 1995 (MBIA Insured) 5.85 2020 16,015,000 16,352,596
Hanover 1st Mortgage Revenue Bonds Hoosier Care II Series 1990 10.375 2020 6,995,000 7,779,979
Health Facility Authority Hospital Revenue Bonds
Community Hospital of Anderson Series 1993 6.00 2023 10,000,000 9,725,700
Health Facility Authority Hospital Revenue Bonds Union Hospital
(MBIA Insured) Series 1993 5.125 2018 10,000,000 9,392,300
Indianapolis Resource Recovery Revenue Bonds
Ogden Martin System of Indianapolis Series 1985AB 7.80 2004 9,400,000 9,978,248
Indianapolis Resource Recovery Revenue Bonds
Ogden Martin System of Indianapolis Series 1985B 7.90 2008 2,050,000 2,179,970
Kokomo Hospital Authority Hospital Refunding Revenue Bonds
St. Joseph's Hospital Series 1988A 8.75 2013 5,000,000 5,641,650
La Porte County Hospital Authority Hospital Refunding Revenue Bonds
La Porte Hospital Series 1993 6.00 2023 2,990,000 2,732,561
La Porte County Hospital Authority Hospital Refunding Revenue Bonds
La Porte Hospital Series 1993 6.25 2012 5,070,000 5,018,438
Lawrenceburg Pollution Control Refunding Revenue Bonds
Indiana-Michigan Electric Series E 5.90 2019 8,100,000 7,857,405
Marion County Hospital Authority Hospital Facility Revenue Bonds
Methodist Hospital Series 1989 6.50 2008-13 19,670,000 20,941,298
Muncie Economic Development 1st Mortgage Revenue Bonds
Delaware Advancement Series 1986 A.M.T. 8.25 2016 3,000,000 3,124,890
Municipal Power Agency Power Supply System Refunding Revenue Bonds 5.75 2018 6,470,000 6,469,288
Princeton Pollution Control Revenue Bonds State Public Service Series 1987C
(MBIA Insured) 7.60 2012 16,000,000 16,962,080
Rockport Pollution Control Refunding Revenue Bonds
Indiana-Michigan Electric Series B 7.60 2016 5,500,000 6,041,915
St. Joseph County Hospital Facility Revenue Bonds
Memorial Hospital of South Bend 9.40 2010 2,000,000 2,511,120
Sullivan Pollution Control Refunding Revenue Bonds
Indiana-Michigan Electric Series C 5.95 2009 18,500,000 18,792,115
Vincennes Community School Building 1st Mortgage Refunding Bonds
Series 1986 6.00 2016 10,000,000 10,137,600
Vincennes Economic Development Revenue Bonds Southwest Indiana
Regional Youth Village Facility Series 1993 8.50 2024 16,575,000 17,311,096
______________
Total 195,240,252
_____________________________________________________________________________________________________________________________
Iowa (0.7%)
Iowa City Refunding Revenue Bonds Mercy Hospital Series 1986 6.00 2012 6,300,000 6,339,942
Keokuk Hospital Facilities Refunding Revenue Bonds
Keokuk Area Hospital Series 1991 7.625 2021 5,350,000 5,707,112
Muscatine Electric Refunding Revenue Bonds Series 1986 5.00 2007-08 7,720,000 7,618,337
Muscatine Electric Refunding Revenue Bonds Series 1986 6.00 2005-06 23,280,000 23,302,758
Sioux City Hospital Facility Revenue Bonds
St. Lukes Regional Medical Center 10.875 2013 3,670,000 4,050,873
______________
Total 47,019,022
_____________________________________________________________________________________________________________________________
Kentucky (1.2%)
Development Finance Authority Hospital Facility Revenue Bonds
St. Luke Hospital Series 1989B 6.00 2019 22,695,000 22,214,320
Development Finance Authority Medical Center
Refunding Revenue Improvement Bonds Ashland Hospital Series 1987 9.75 2011 4,000,000 4,489,539
Jefferson County Multi-family Housing Revenue Bonds Brownsboro Gardens
Series 1986A (FHA Insured) A.M.T. 8.00 2026 5,515,000 5,681,718
Louisville Airport Lease Revenue Bonds Series 1989A A.M.T. 7.875 2019 4,000,000 4,441,680
Louisville & Jefferson County Riverport Authority Mortgage Revenue Bonds
Series 1986 A.M.T. 7.875 2016 7,185,000 7,444,307
Louisville Parking Authority of River City PARC 1st Mortgage
Refunding Revenue & Improvement Bonds Series 1985 9.25 2015 5,000,000 5,150,750
McCracken County Revenue Bonds Lourdes Hospital 6.00 2012 8,300,000 8,475,628
Muhlenberg County Hospital Refunding Revenue Bonds
Muhlenberg Community Hospital Series 1988 9.50 2010 4,205,000 4,617,847
Turnpike Authority Economic Road Development Refunding Revenue Bonds
Series 1993 Inverse Floater (AMBAC Insured) 7.006 2012 15,000,000 (d) 15,450,000
______________
Total 77,965,789
_____________________________________________________________________________________________________________________________
Louisiana (3.0%)
Calcasieu Parish Industrial Development Pollution Control
Refunding Revenue Bonds Gulf State Utilities Series 1992 6.75 2012 10,500,000 10,782,555
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Energy & Power Authority Refunding Revenue Bonds Rodemacher Unit #2
Series 1991 (FGIC Insured) 6.00 2013 28,000,000 28,649,600
Hodge Village Combined Utility System Revenue Bonds Stone Container
Series 1990 A.M.T. 9.00 2010 23,000,000 25,228,240
New Orleans Audobon Park Commission Aquarium Revenue Bonds Series 1992A 7.00 1997 1,000,000 1,032,900
New Orleans Audobon Park Commission Aquarium Revenue Bonds Series 1992A 8.00 2012 7,100,000 7,797,930
New Orleans Housing Development Elderly Assisted Tivoli Place Section 8 7.875 2010 1,500,000 1,527,015
Public Facilities Authority Revenue Bonds Alton Ochsner Medical Foundation
Series 1985A 6.00 2005 4,165,000 4,289,867
Public Facilities Authority Revenue Bonds Glen Retirement Systems
Series 1995 6.50 2015 1,000,000 994,470
Public Facilities Authority Revenue Bonds Glen Retirement Systems
Series 1995 6.70 2025 1,500,000 1,488,870
St. Charles Parish Pollution Control Revenue Bonds Louisiana Power & Light
Series 1984 8.25 2014 28,600,000 32,136,390
St. Charles Parish Pollution Control Revenue Bonds Louisiana Power & Light
Series 1991 A.M.T. 7.50 2021 20,700,000 21,801,033
St. Charles Parish Pollution Control Revenue Bonds Louisiana Power & Light
2nd Series 1984 8.00 2014 29,155,000 32,907,831
St. James Parish Pollution Control Revenue Bonds B.F. Goodrich
Series 1981 14.50 2011 500,000 563,425
Southern Louisiana Port Commission Dock & Wharf Facilities B.F. Goodrich 14.50 2011 3,335,000 3,758,045
Southern Louisiana Port Commission Terminal Refunding Revenue Bonds
Gatx Terminal Series 1993 7.00 2023 13,180,000 13,677,413
West Feliciana Parish Demand Pollution Control Revenue Bonds
Gulf State Utilities Series 1985B 9.00 2015 6,000,000 6,848,040
______________
Total 193,483,624
_____________________________________________________________________________________________________________________________
Maine (0.3%)
Bucksport Solid Waste Disposal Revenue Bonds
Champion International Series 1985 6.25 2010 14,185,000 14,378,483
Health & Higher Educational Facilities Authority Revenue Bonds
St. Mary's Hospital Series 1989 8.625 2022 3,500,000 4,035,080
______________
Total 18,413,563
_____________________________________________________________________________________________________________________________
Maryland (0.6%)
Frederick County Economic Refunding Revenue Bonds Alumax Series 1992 7.25 2017 9,880,000 10,414,804
Harford County Industrial Development Revenue Bonds Dorsey 8.00 2005 573,000 574,834
Prince George's County Hospital Revenue Bonds Dimensions Health
Series 1992 7.00 2022 7,000,000 8,135,610
Prince George's County Hospital Revenue Bonds Dimensions Health
Series 1992 7.25 2017 11,400,000 13,410,846
State Transportation Authority Facility Revenue Bonds
Series 1992 Capital Appreciation Zero Coupon (FGIC Insured) 6.33 2010-11 9,700,000 (f) 4,378,277
State Transportation Authority Facility Revenue Bonds
Series 1992 Zero Coupon (FGIC Insured) 6.35 2012 5,000,000 (f) 2,096,350
______________
Total 39,010,721
______________________________________________________________________________________________________________________________
Massachusetts (2.3%)
Bay Transportation Authority Refunding Revenue Bonds
Series 1994A (MBIA Insured) 6.00 2012 8,000,000 8,422,560
Greater Lawrence Sanitary District North Andover
General Obligation Bonds 8.50 2005 4,080,000 4,220,556
Health & Educational Facilities Authority Revenue Bonds
Berkshire Health Systems Series C 5.90 2011 2,000,000 1,865,380
Health & Educational Facilities Authority Revenue Bonds
Berkshire Health Systems Series C 6.00 2020 4,000,000 3,565,920
Health & Educational Facilities Authority Revenue Bonds
Beverly Hospital Inverse Floater (MBIA Insured) 7.27 2020 8,000,000 (d) 8,030,000
Health & Educational Facilities Authority Revenue Bonds
Charlton Memorial Hospital Series B 7.25 2013 6,455,000 6,903,300
Industrial Finance Agency 1st Mortgage Revenue Bonds
Berkshire Retirement Community Lennox Series 1988 9.00 2000 130,000 132,981
Industrial Finance Agency 1st Mortgage Revenue Bonds
Berkshire Retirement Community Lennox Series 1988 9.875 2018 2,800,000 3,005,828
Industrial Finance Agency 1st Mortgage Revenue Bonds
Berkshire Retirement Community Lennox Series 1989 9.875 2018 550,000 590,942
Industrial Finance Agency Pollution Control
Refunding Revenue Bonds Eastern Edison Series 1993 5.875 2008 4,250,000 4,247,322
Industrial Finance Agency Resource Recovery Revenue Bonds
SEMASS Series 1991A 9.00 2015 18,885,000 20,823,923
Industrial Finance Agency Resource Recovery Revenue Bonds
SEMASS Series 1991B A.M.T. 9.25 2015 25,000,000 27,691,250
Municipal Wholesale Electric Power Supply System Revenue Bonds
Series 1992B 6.75 2017 10,130,000 11,629,949
Municipal Wholesale Electric Power Supply System Revenue Bonds
Series 1993A Inverse Floater (AMBAC Insured) 6.72 2018 6,500,000 (d) 6,183,125
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State General Obligation Consolidated Loan Bonds Series 1989
(AMBAC Insured) 6.90 1997 2,500,000 2,612,175
Water Resources Authority General Refunding Revenue Bonds Series 1992B 5.50 2015 22,175,000 21,779,176
Water Resources Authority General Revenue Bonds Series 1992A 6.50 2019 3,500,000 3,939,425
Water Resources Authority General Revenue Bonds Series 1993B
(MBIA Insured) 5.00 2022 10,000,000 9,361,500
______________
Total 145,005,312
_____________________________________________________________________________________________________________________________
Michigan (4.1%)
Crawford County Economic Development Corporation Environmental
Improvement Revenue Bonds Weyerhaeuser Series 1991A 7.125 2007 10,800,000 11,950,524
Detroit Unlimited Tax General Obligation Bonds Series 1993 6.35 2014 6,300,000 6,378,876
Detroit Unlimited Tax General Obligation Bonds Series 1995A 6.80 2015 1,375,000 1,474,798
Lincoln Consolidated School District Unlimited Tax General Obligation
Refunding Bonds (FGIC Insured) 5.85 2018 6,455,000 6,606,305
Midland County Economic Development Corporation Pollution Control Limited
Obligation Refunding Revenue Bonds Midland Cogeneration
Series 1990B A.M.T. 9.50 2009 35,200,000 38,768,928
Midland County Economic Development Corporation Pollution Control Limited
Obligation Refunding Revenue Bonds Midland Cogeneration Series 1990C 8.50 2009 18,900,000 20,262,312
Monroe County Pollution Control Revenue Bonds Detroit Edison A.M.T. 7.75 2019 40,250,000 (g) 44,267,755
Monroe County Pollution Control Revenue Bonds Detroit Edison Series 1985A 10.50 2016 10,000,000 10,301,800
Regents of the University of Michigan Hospital Refunding Revenue Bonds
Series 1986A 7.75 2012 5,000,000 5,298,950
State Hospital Finance Authority Hospital Refunding Revenue Bonds
Detroit Medical Center Series 1993A 6.50 2018 10,000,000 10,370,200
State Hospital Finance Authority Hospital Revenue Bonds
McLaren Obligated Group Series 1991A 7.50 2021 7,500,000 8,814,300
State Hospital Finance Authority Hospital Refunding Revenue Bonds
Sinai Hospital Greater Detroit Series 1995 6.625 2016 2,750,000 2,727,203
State Hospital Finance Authority Hospital Refunding Revenue Bonds
Sinai Hospital Greater Detroit Series 1995 6.70 2026 3,000,000 2,984,370
State Job Development Authority Pollution Control Revenue Bonds Chrysler 5.70 1999 4,350,000 4,518,084
Strategic Fund Limited Obligation Refunding Revenue Bonds Detroit Edison
Series 1995AA (MBIA Insured) 6.40 2025 12,000,000 13,011,120
Strategic Fund Limited Obligation Refunding Revenue Bonds Ford Motor
Series 1991A 7.10 2006 16,400,000 18,696,164
Strategic Fund Limited Obligation Refunding Revenue Bonds
Great Lakes Pulp & Fibre Series 1994 A.M.T. 10.25 2016 35,000,000 37,037,350
Troy City Downtown Development Authority Revenue Bonds
Oakland County Series 1995A 6.375 2018 1,000,000 1,051,570
Van Buren County Downtown Development Authority
Tax Increment Revenue Bonds Series 1994 8.40 2016 4,000,000 4,480,640
Wayne County Special Airport Facilities Refunding Revenue Bonds
Northwest Airlines Series 1995 6.75 2015 11,325,000 11,599,178
______________
Total 260,600,427
_____________________________________________________________________________________________________________________________
Minnesota (3.3%)
Appleton Correctional Facility Revenue Bonds Series 1990A 9.875 2020 15,000,000 (e) 8,550,000
Apple Valley 1st Mortgage Nursing Home Revenue Bonds
Apple Valley Health Care (FHA Insured) 10.50 2012 445,000 513,334
Becker Solid Waste Disposal Facility Revenue Bonds
Liberty Paper Series 1994B A.M.T. 9.00 2015 18,000,000 19,136,160
Bloomington Community Development Refunding Revenue Note
24th Avenue Motel 8.50 2005 1,561,406 1,592,634
Bloomington Health Care Facility Revenue Bonds
Friendship Village of Bloomington Series 1992 8.50 2002 4,785,000 5,274,888
Brainerd Economic Development Authority Health Care Facility Revenue Bonds
Benedictine Health System St. Joseph Medical Center Series 1990 8.375 2020 4,670,000 5,479,218
Duluth Economic Development Authority Health Care Facility Revenue Bonds
Benedictine Health System St. Mary's Medical Center Series 1990 8.375 2020 8,300,000 9,738,224
Duluth Housing & Redevelopment Authority Lakeshore Lutheran Home
1st Mortgage Revenue Bonds 8.00 2000 170,000 169,998
Duluth Housing & Redevelopment Authority Lakeshore Lutheran Home
1st Mortgage Revenue Bonds 8.25 2009 750,000 750,000
Fergus Falls Health Care Facilities Revenue Bonds Series 1995 6.50 2025 1,530,000 1,530,000
International Falls Solid Waste Disposal Revenue Bonds Boise Cascade
Series 1990 A.M.T. 7.75 2015 10,000,000 10,569,600
Maplewood Elder Care Facility Revenue Bonds Care Institute Series 1994 7.75 2024 8,000,000 8,196,320
Maplewood Multifamily Housing Refunding Revenue Bonds
Carefree Cottages Series 1995 AMT 7.20 2032 5,000,000 5,027,300
Mille Lacs Capital Improvement Authority Infrastructure Revenue Bonds
Series 1992A 9.25 2012 4,710,000 5,259,704
Minneapolis Water & Sewer Revenue Bonds Series 1992 5.00 1995 7,800,000 7,800,234
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group Series 1993 Inverse Floater
(AMBAC Insured) 4.825 2005 9,200,000 (d) 8,889,500
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St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group Series 1993 Inverse Floater
(AMBAC Insured) 5.825 2013 18,000,000 (d) 16,380,000
St. Louis Park Health Care Park Nicollet Medical Center Facility
Revenue Bonds Series 1990A 9.25 2020 6,000,000 7,200,540
St. Paul Housing & Redevelopment Authority Health Care Facility
Revenue Bonds Lyngblomsten Care Center Series 1993A 7.125 2017 2,840,000 2,927,756
St. Paul Housing & Redevelopment Authority Health Care Facility
Revenue Bonds Lyngblomsten Care Center Series 1993A 9.60 2006 2,025,000 2,198,603
St. Paul Housing & Redevelopment Authority Health Care Facility
Revenue Bonds Lyngblomsten Multi-family Rental Housing Series 1993B 7.00 2024 2,845,000 2,827,304
Southern Minnesota Municipal Power Agency Power Supply System
Refunding Revenue Bonds Series 1986B 7.00 2016 2,000,000 2,045,720
Southern Minnesota Municipal Power Agency Power Supply System
Refunding Revenue Bonds Series 1992 5.75 2018 32,210,000 32,366,541
Southern Minnesota Municipal Power Agency Power Supply System
Revenue Bonds Series 1985A 7.00 2018 8,265,000 8,289,133
Southern Minnesota Municipal Power Agency Power Supply System
Revenue Bonds Series 1985C 7.00 2016 3,885,000 3,896,344
Southern Minnesota Municipal Power Agency Power Supply System
Revenue Bonds Series 1994A Zero Coupon (MBIA Insured) 6.72 2021 13,500,000 (f) 3,476,385
Southern Minnesota Municipal Power Agency Power Supply System
Revenue Bonds Series 1994A Zero Coupon (MBIA Insured) 6.73 2022 17,500,000 (f) 4,263,700
Southern Minnesota Municipal Power Agency Power Supply System
Revenue Bonds Series 1994A Zero Coupon (MBIA Insured) 6.74 2023 27,500,000 (f) 6,340,400
Southern Minnesota Municipal Power Agency Power Supply System
Revenue Bonds Series 1994A Zero Coupon (MBIA Insured) 6.75 2024-27 87,410,000 (f) 17,694,394
______________
Total 208,383,934
_____________________________________________________________________________________________________________________________
Mississippi (1.0%)
Claiborne County Pollution Control Refunding Revenue Bonds
System Energy Resources Series 1995 7.30 2025 4,000,000 4,174,000
Claiborne County Pollution Control Revenue Bonds
Middle South Energy 9.50 2013-16 21,750,000 22,892,393
Claiborne County Pollution Control Revenue Bonds Middle South Energy
Series C 9.875 2014 15,375,000 17,656,496
Harrison County Waste Water Management District Refunding Bonds
Series 1986 5.00 2015 4,250,000 4,082,550
Jackson Industrial Development Revenue Bonds Dorsey 8.00 2005 487,000 493,813
Lowndes County Solid Waste Disposal Pollution Control Revenue Bonds
Weyerhaeuser Series 1989 A.M.T. 7.875 2005 12,250,000 13,411,055
Lowndes County Solid Waste Disposal Pollution Control
Refunding Revenue Bonds Weyerhaeuser Series 1989 Inverse Floater 8.15 2022 4,000,000 (d) 4,538,360
______________
Total 67,248,667
_____________________________________________________________________________________________________________________________
Missouri (0.7%)
Regional Convention & Sports Complex Authority Bonds
St. Louis Sponsor Series 1991B 7.00 2021 5,810,000 6,746,746
Regional Convention & Sports Complex Authority Bonds
St. Louis Sponsor Series 1991C 7.90 2021 2,700,000 3,030,237
State Environment & Improvement Energy Resources Authority
Pollution Control Revenue Bonds Chrysler 5.70 1999 9,250,000 9,456,553
Sikeston Electric System Refunding Revenue Bonds Series 1992
(MBIA Insured) 5.60 2000 4,040,000 4,252,908
Sikeston Electric System Refunding Revenue Bonds Series 1992
(MBIA Insured) 5.80 2002 4,165,000 4,467,337
St. Louis Industrial Development Authority Refunding Revenue Bonds
Kiel Center Multipurposes Arena Series 1992 A.M.T. 7.875 2024 15,400,000 16,362,654
______________
Total 44,316,435
_____________________________________________________________________________________________________________________________
Nebraska (--%)
Omaha Public Power District Electric System Revenue Bonds Series 1986A 6.00 2015 1,370,000 1,447,063
Nevada (0.5%)
Clark County Collateralized Pollution Control Revenue Bonds
State Power A.M.T. 7.80 2009 11,850,000 12,678,789
Clark County Industrial Development Revenue Bonds State Power
Series 1990 A.M.T. 7.80 2020 5,000,000 5,371,800
Humboldt County Collateralized Pollution Control & Water Facilities
Washoe County Hospital Revenue Bonds Washoe Medical Center Series 1989A 7.60 2019 2,750,000 3,075,243
Las Vegas Redevelopment Agency Tax Increment Subordinate Lien
Revenue Bonds Series 1994A 6.00 2010 2,000,000 2,000,700
Las Vegas Redevelopment Agency Tax Increment Subordinate Lien
Revenue Bonds Series 1994A 6.10 2014 2,750,000 2,752,007
Washoe County Hospital Revenue Bonds Washoe Medical Center Series 1993A 6.00 2015 7,250,000 7,307,420
______________
Total 33,185,959
_____________________________________________________________________________________________________________________________
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New Hampshire (2.6%)
Business Financial Authority Pollution Control Refunding Revenue Bonds
United Illuminating Series 1993A 5.875 2033 13,200,000 12,393,348
Industrial Development Authority Pollution Control Revenue Bonds
State Public Service Series 1991B 7.50 2021 51,485,000 54,650,813
Industrial Development Authority Pollution Control Revenue Bonds
State Public Service Series 1991C A.M.T. 7.65 2021 25,000,000 26,486,000
Industrial Development Authority Pollution Control Revenue Bonds
United Illuminating Series 1987A A.M.T. 9.375 2012 15,000,000 16,552,650
Industrial Development Authority Pollution Control Revenue Bonds
United Illuminating Series 1989A A.M.T. 8.00 2014 8,000,000 8,541,360
State Higher Education & Health Facility Authority Hospital Revenue Bonds
Hitchcock Clinic Series 1994 (MBIA Insured) 6.00 2024 13,000,000 13,389,350
State Higher Education & Health Facility Authority Hospital Revenue Bonds
Mary Hitchcock Memorial Hospital Series 1993 Inverse Floater
(FGIC Insured) 5.22 2013 17,000,000 (d) 16,513,630
State Turnpike System Refunding Revenue Bonds Series 1992 5.75 2020 20,615,000 20,707,973
______________
Total 169,235,124
_____________________________________________________________________________________________________________________________
New Jersey (0.2%)
Economic Development Authority 1st Mortgage Gross Revenue Bonds
Mega Care Union Hospital 8.625 2007 2,500,000 2,731,500
Health Care Facility Finance Authority Revenue Bonds
St. Peter Medical Center Series 1994F (MBIA Insured) 5.00 2016 10,000,000 9,518,000
Health Care Facility Finance Authority Revenue Bonds
Zurbrugg Memorial Hospital Series C 8.50 2012 3,500,000 3,703,770
______________
Total 15,953,270
_____________________________________________________________________________________________________________________________
New Mexico (1.8%)
Albuquerque Airport Revenue Bonds Series 1987B A.M.T. 8.75 2019 15,000,000 16,224,450
Albuquerque Health Care System Revenue Bonds Lovelace Medical Fund 10.25 2011 55,000 55,762
Cibola County Correctional Facility Certificate of Participation
Series 1993 8.50 2015 17,355,000 18,680,922
Farmington Pollution Control Refunding Revenue Bonds State Public Service
San Juan Series 1994A 6.40 2023 30,650,000 30,488,781
Farmington Pollution Control Revenue Bonds State Public Service 6.50 2009 5,935,000 5,935,237
Farmington Pollution Control Revenue Bonds State Public Service San Juan
Series 1978A 6.00 2008 9,105,000 9,031,614
Farmington Power Refunding Revenue Bonds Generating Division 9.875 2013 5,000,000 6,805,900
Las Vegas Hospital Facility Refunding Revenue Bonds
Northeastern Regional Hospital Series 1987 9.625 2013 5,805,000 6,210,073
Lordsberg Pollution Control Refunding Revenue Bonds Phelps Dodge 6.50 2013 20,000,000 21,070,000
______________
Total 114,502,739
_____________________________________________________________________________________________________________________________
New York (7.2%)
Battery Park City Authority Refunding Revenue Bonds
Series 1993A 5.50 2010 9,940,000 9,947,057
Dormitory Authority New York State University Education Facility
Pre-Refunded Revenue Bonds Series 1990A 7.70 2012 10,000,000 11,584,400
Dormitory Authority New York State University Education Facility
Revenue Bonds Series 1993A 5.50 2013 24,530,000 24,124,274
Dormitory Authority New York City University System Consolidated
2nd General Resource Revenue Bonds Series 1990C 5.00 2017 20,820,000 18,783,179
Dormitory Authority New York City University System Consolidated
2nd General Resource Revenue Bonds Series 1990C 6.00 2016 39,465,000 39,556,559
Dormitory Authority New York City University System Consolidated
2nd General Resource Revenue Bonds Series 1990D 7.00 2009 5,000,000 5,731,550
Dormitory Authority New York City University System Consolidated
2nd General Resource Revenue Bonds Series 1994A 5.75 2018 5,500,000 5,506,600
Dormitory Authority New York Court Facility Lease Revenue Bonds
Series 1993A 5.375 2016 11,000,000 10,381,030
Metropolitan Transportation Authority Commuter Facility Revenue Bonds
Series H 6.00 2014 6,150,000 6,161,808
Metropolitan Transportation Authority Transit Facility Revenue Bonds
Series G 6.00 2014 4,970,000 4,979,542
Metropolitan Transportation Transit Facilities Service Contract Series 3 6.00 2019 6,395,000 6,402,226
New York City General Obligation Bonds Series 1992B 7.40 2000 30,000,000 32,641,500
New York City General Obligation Bonds Series 1994B 7.00 2016 16,500,000 18,008,100
New York City Industrial Development Agency Special Facility Revenue Bonds
American Airlines Series 1990 A.M.T. 8.00 2020 16,130,000 17,412,496
New York City Municipal Water Financial Authority Water & Sewer System
Revenue Bonds Series 1994B Inverse Floater (MBIA Insured) 6.32 2009 15,500,000 (d) 15,422,500
New York City Municipal Water Financial Authority Water & Sewer System
Revenue Bonds Series A 6.25 2021 55,500,000 56,799,255
New York City Municipal Water Financial Authority Water & Sewer System
Revenue Bonds Series B 5.00 2017 6,255,000 5,915,729
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Port Authority Special Project Bonds La Guardia Airport Passenger Terminal
Continental & Eastern Airlines A.M.T. 9.00 2006 2,645,000 2,978,905
Port Authority Special Project Bonds La Guardia Airport Passenger Terminal
Continental & Eastern Airlines Series 2 A.M.T. 9.00 2010 8,800,000 9,927,104
Port Authority Special Project Bonds La Guardia Airport Passenger Terminal
Continental & Eastern Airlines Series 2 A.M.T. 9.125 2015 17,500,000 19,874,225
State Energy Research & Development Authority Electric Facility
Revenue Bonds Consolidated Edison A.M.T. 7.125 2022 10,750,000 11,253,638
State Energy Research & Development Authority Electric Facility
Revenue Bonds Consolidated Edison A.M.T. 7.375 2024 23,000,000 24,626,330
State Energy Research & Development Authority Electric Facility
Revenue Bonds Consolidated Edison A.M.T. 7.50 2021 9,000,000 9,394,920
State Energy Research & Development Authority Electric Facility
Revenue Bonds Consolidated Edison Series 1990A A.M.T. 7.50 2025 30,975,000 33,852,578
State Housing Finance Agency Service Contract Obligation Revenue Bonds
Series 1995A 6.50 2025 12,475,000 13,038,371
State Housing Finance Agency State University Construction
Refunding Bonds Series 1986A 6.50 2013 3,500,000 3,943,695
State Local Government Assistance Corporation Series 1991A 6.50 2020 11,000,000 11,729,630
State Medical Facilities Finance Agency Mental Health Services
Improvement Refunding Revenue Bonds Series 1993D 5.25 2023 15,000,000 13,714,050
State Medical Facilities Finance Agency Mental Health Services
Improvement Refunding Revenue Bonds Series 1993F 5.25 2019 5,790,000 5,330,737
State Urban Development Correctional Facility Refunding Revenue Bonds
Series A 5.50 2016 2,750,000 2,655,868
State Urban Development Correctional Facility Revenue Bonds Series A 7.00 2016 1,800,000 1,841,256
State Urban Development Correctional Facility Revenue Bonds Series B 7.00 2016 10,750,000 10,996,390
______________
Total 464,515,502
_____________________________________________________________________________________________________________________________
North Carolina (4.0%)
Eastern Municipal Power Agency Power Supply System
Refunding Revenue Bonds Series 1993B 6.25 2012 24,655,000 25,236,365
Eastern Municipal Power Agency Power Supply System Revenue Bonds
Series 1985D 7.50 2012 510,000 511,086
Eastern Municipal Power Agency Power System Refunding Revenue Bonds
Series 1986A 4.00 2018 8,675,000 7,099,447
Eastern Municipal Power Agency Power System Refunding Revenue Bonds
Series 1986A 5.00 2017 6,500,000 6,101,784
Eastern Municipal Power Agency Power System Refunding Revenue Bonds
Series 1988A 6.00 2026 3,125,000 3,285,797
Eastern Municipal Power Agency Power System Refunding Revenue Bonds
Series 1989A 5.50 2011 37,800,000 36,520,470
Eastern Municipal Power Agency Power System Refunding Revenue Bonds
Series 1989A 6.50 2024 16,750,000 16,995,722
Eastern Municipal Power Agency Power System Refunding Revenue Bonds
Series 1989A 7.50 2010 29,160,000 34,635,593
Eastern Municipal Power Agency Power System Refunding Revenue Bonds
Series 1991A 5.75 2019 55,000,000 52,958,400
Eastern Municipal Power Agency Power System Refunding Revenue Bonds
Series 1994B 7.25 2007 5,000,000 5,585,600
Eastern Municipal Power Agency Power System Refunding Revenue Bonds
Series B 6.125 2009 10,000,000 10,344,700
Eastern Municipal Power Agency Power System Revenue Bonds
Series 1993D 5.875 2013 2,300,000 2,274,240
Municipal Power Agency #1 Catawba Electric Revenue Bonds Series 1985A 7.00 2020 9,000,000 9,016,917
Municipal Power Agency #1 Catawba Electric Revenue Bonds Series 1985B 8.50 2017 13,000,000 13,314,470
Municipal Power Agency #1 Catawba Electric Revenue Bonds Series 1988 7.00 2016 5,140,000 5,359,735
Municipal Power Agency #1 Catawba Electric Revenue Bonds Series 1993
Inverse Floater (MBIA Insured) 6.72 2012 7,400,000 (d) 7,233,500
Municipal Power Agency #1 Catawba Electric Revenue Bonds Series 1993
Inverse Floater (MBIA Insured) 6.87 2020 15,000,000 (d) 14,643,750
Offiss Incorporation Recreational Facilities Gross Revenue Bonds
Smoky Mountain Golf Course Series 1994 7.50 2019 5,695,000 5,646,422
______________
Total 256,763,998
_____________________________________________________________________________________________________________________________
North Dakota (0.3%)
Fargo Hospital Refunding Revenue & Improvement Bonds Dakota Hospital
Series 1992 6.875 2012 3,000,000 3,465,570
Fargo Hospital Refunding Revenue & Improvement Bonds Dakota Hospital
Series 1992 7.00 2022 4,250,000 4,885,843
General Obligation Bonds Real Estate Series 1986A 6.00 2013 10,000,000 10,217,200
______________
Total 18,568,613
_____________________________________________________________________________________________________________________________
Ohio (2.5%)
Air Quality Development Authority Pollution Control Refunding Revenue Bonds
Ohio Edison Series A 5.95 2029 13,300,000 12,814,683
<PAGE>
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Air Quality Development Authority Pollution Control Revenue Bonds
Cincinnati Gas & Electric 10.125 2015 10,000,000 10,251,700
Air Quality Development Authority Pollution Control Revenue Bonds
Dayton Power & Light 9.50 2015 7,050,000 7,227,378
Air Quality Development Authority Pollution Control Revenue Bonds
Ohio Edison Series 1989A 7.625 2023 6,750,000 7,262,258
Bellefontaine Hospital Facilities Refunding Revenue Bonds
Mary Rutan Health Association Series 1993 6.00 2013 5,330,000 5,148,140
Butler County Hospital Facilities Refunding Revenue & Improvement Bonds
Fort Hamilton-Hughes Memorial Center Series 1991 7.50 2010 8,650,000 9,150,835
Cleveland Parking Facilities Improvement Revenue Bonds Series 1992 8.10 2022 15,000,000 16,440,900
Coshocton County Solid Waste Disposal Refunding Revenue Bonds
Stone Container Series 1992 7.875 2013 17,500,000 18,887,925
Erie County Hospital Improvement & Refunding Revenue Bonds
Firelands Community Hospital Series 1992 6.75 2015 6,540,000 6,845,941
Marion County Health Care Facilities Refunding & Improvement
Revenue Bonds United Church Homes Series 1993 6.30 2015 1,800,000 1,725,120
Marion County Health Care Facilities Refunding & Improvement
Revenue Bonds United Church Homes Series 1993 6.375 2010 2,000,000 2,027,120
Montgomery County Health Facilities Refunding Revenue Bonds
Friendship Village of Dayton Series 1990A 9.25 2016 9,000,000 (e) 9,526,770
Water Development Authority Collateralized Pollution Control
Refunding Revenue Bonds Cleveland Electric Series 1995 7.70 2025 13,000,000 13,662,610
Water Development Authority Collateralized Pollution Control Revenue Bonds
Cleveland Electric Series 1989 A.M.T. 8.00 2023 10,000,000 10,724,500
Water Development Authority Collateralized Pollution Control Revenue Bonds
Toledo Edison Series 1989 A.M.T. 8.00 2023 8,500,000 8,879,695
Water Development Authority Pollution Control Revenue Bonds
Ohio Edison A.M.P. 8.10 2023 10,000,000 10,772,200
Water Development Authority Pollution Control Refunding Revenue Bonds
Toledo Edison Series 1994A A.M.T. 8.00 2023 10,000,000 10,710,000
___________
Total 162,057,775
_____________________________________________________________________________________________________________________________
Oklahoma (1.6%)
Grand River Dam Authority Refunding Revenue Bonds Series 1987 5.00 2012 10,105,000 9,667,150
Hinton Economic Development Authority Certificate of Participation
Series 1994 8.75 2015 12,475,000 13,314,942
Hinton Economic Development Authority Certificate of Participation
Dominion Leasing Series 1990A 9.75 2015 19,090,000 21,357,701
Jackson County Memorial Hospital Authority Hospital
Refunding Revenue Bonds Jackson County Memorial Hospital Series 1994 7.30 2015 6,580,000 6,448,729
Midwest City Memorial Hospital Authority Hospital Revenue Bonds
Series 1992 7.375 2022 7,815,000 8,151,827
Municipal Power Authority Power Supply System Revenue Bonds
Series 1985C 9.625 2023 6,740,000 6,908,702
Oklahoma City Central Oklahoma Transportation & Parking Authority
Parking System Refunding Revenue Bonds Series 1986 (AMBAC Insured) 6.90 2008 8,180,000 8,484,787
Tulsa Municipal Airport Trust Revenue Bonds American Airlines Series 1995 6.25 2020 27,050,000 27,137,912
______________
Total 101,471,750
_____________________________________________________________________________________________________________________________
Oregon (0.5%)
State Veterans Welfare Department Pre-Refunded Bonds Series LXVII 12.40 2000 2,000,000 2,167,740
Western Generation Agency Revenue Bonds Wauna Cogeneration
Series 1994A 7.125 2021 19,200,000 20,121,600
Western Generation Agency Revenue Bonds Wauna Cogeneration
Series 1994B A.M.T. 7.40 2016 9,000,000 9,506,430
______________
Total 31,795,770
_____________________________________________________________________________________________________________________________
Pennsylvania (4.3%)
Alleghany County Industrial Development Authority
Environment Improvement Revenue Bonds USX Corporation Series 1994A 6.70 2020 6,000,000 6,210,300
Beaver County Industrial Development Authority Collateralized Pollution
Control Refunding Revenue Bonds Cleveland Electric Illuminating
Series 1995 7.625 2025 7,500,000 7,985,250
Beaver County Industrial Development Authority Collateralized Pollution
Control Refunding Revenue Bonds Cleveland Electric Illuminating
Series 1995A 7.75 2025 21,150,000 22,744,076
Beaver County Industrial Development Authority Collateralized Pollution
Control Refunding Revenue Bonds Toledo Edison Series 1995A 7.75 2020 14,000,000 15,037,680
Beaver County Industrial Development Authority Pollution Control
Revenue Bonds Toledo Edison-Beaver Valley Series 1995 7.625 2020 11,700,000 12,295,647
Beaver County Industrial Development Authority Pollution Control
Revenue Bonds Ohio Edison 7.75 2024 34,650,000 37,054,017
Butler County Industrial Development Authority Health Care
Refunding Revenue Bonds Pittsburgh Lifetime Care Community Sherwood Oaks
Series 1993 5.75 2011 2,000,000 1,948,020
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Butler County Industrial Development Authority Health Care
Refunding Revenue Bonds Pittsburgh Lifetime Care Community Sherwood Oaks
Series 1993 5.75 2016 3,000,000 2,864,580
Convention Center Authority Refunding Revenue Bonds Philadelphia
Series 1994A 6.75 2019 5,300,000 5,684,886
Delaware County Authority 1st Mortgage Revenue Bonds
Whitehorse Village Continuing Care Series 1989 9.70 2009-19 11,000,000 12,306,340
Delaware County Industrial Development Authority Pollution Control
Refunding Revenue Bonds Philadelphia Electric Series A 7.375 2021 900,000 976,995
Fayette County Hospital Authority Hospital Refunding Revenue Bonds
Uniontown Hospital Series 1987 7.625 2015 9,000,000 9,377,190
Montgomery County Higher Education and Health Authority
Retirement Community Revenue Bonds G.D.L. Farms Series A 9.50 2020 3,000,000 3,608,370
Philadelphia Airport Revenue Bonds Philadelphia Airport System Series 1985 8.875 2005 1,680,000 1,739,405
Philadelphia Airport Revenue Bonds Philadelphia Airport System Series 1985 9.00 2015 5,750,000 5,952,342
Philadelphia Gas Works Revenue Bonds Series 13 7.70 2021 4,150,000 4,893,348
Philadelphia Hospital & Higher Education Facility Authority Hospital
Revenue Bonds Albert Einstein Medical Center 7.625 2011 15,545,000 16,931,303
Philadelphia Municipal Authority Lease Refunding Revenue Bonds
Series 1993D 6.25 2013 2,500,000 2,546,800
Philadelphia Municipal Authority Lease Refunding Revenue Bonds
Series 1993D 6.30 2017 1,550,000 1,573,312
Philadelphia Water & Sewer Revenue Bonds 12th Series 6.00 2016 10,000,000 10,143,400
Philadelphia Water & Sewer Revenue Bonds 12th Series 7.25 2014 12,000,000 12,375,840
Philadelphia Water & Sewer Revenue Bonds 16th Series 7.00 2018 14,000,000 15,845,200
Philadelphia Water & Sewer Revenue Bonds 16th Series 7.50 2010 13,200,000 15,475,020
Philadelphia Water & Wastewater Revenue Bonds Series 1993 (CGIC Insured) 5.50 2015 11,000,000 10,934,550
Pittsburgh Public Parking Authority Parking System Revenue Bonds
Series 1985 9.50 2007 4,200,000 4,284,672
State Department of General Services Certificate of Participation
Series 1994A (AMBAC Insured) 5.00 2015 25,000,000 23,828,250
Wilkins Industrial Development Authority Revenue Bonds
Retirement Community Longwood at Oakmont Series 1991A 10.00 2021 8,495,000 10,456,388
______________
Total 275,073,181
_____________________________________________________________________________________________________________________________
Puerto Rico (0.7%)
Electric Power Agency Revenue Bonds Series N 6.00 2010 40,000,000 40,640,800
Electric Power Agency Revenue Bonds Series O 6.00 2010 5,305,000 5,389,986
______________
Total 46,030,786
_____________________________________________________________________________________________________________________________
Rhode Island (0.1%)
Public Building Authority Revenue Bonds Series 1994A (AMBAC Insured) 5.25 2007 3,485,000 3,525,182
_____________________________________________________________________________________________________________________________
South Carolina (1.3%)
Cherokee County Spring City Knitting Cluett Peabody 7.40 2009 5,200,000 5,812,144
Greenville County Industrial Development Revenue Bonds
Merscot-Greenville Waste Water Treatment Series 1986A A.M.T. 8.00 2008 8,530,000 8,795,112
Piedmont Municipal Power Agency Electric Refunding Revenue Bonds
Series 1985 7.00 2025 17,430,000 17,480,896
Piedmont Municipal Power Agency Electric Refunding Revenue Bonds
Series 1986B 5.75 2024 7,550,000 7,334,674
Public Service Authority Electric System Expansion Revenue Bonds
Santee Cooper Series 1986D 6.375 2022 2,250,000 2,256,435
Public Service Authority Electric System Expansion Revenue Bonds
Santee Cooper Series 1991D 6.625 2031 14,975,000 17,086,325
Public Service Authority Electric System Revenue Bonds
Santee Cooper Series 1991B 6.00 2031 8,000,000 8,040,880
Public Service Authority Electric System Revenue Bonds
Santee Cooper Series 1993A Inverse Floater (MBIA Insured) 6.893 2013 17,700,000 (d) 17,434,500
______________
Total 84,240,966
_____________________________________________________________________________________________________________________________
South Dakota (0.3%)
Heartland Consumers Power District Electric System
Refunding Revenue Bonds Series 1986 6.00 2010 10,205,000 11,097,938
State Lease Revenue Trust Certificates Series 1993
(CGIC Insured) 6.70 2017 7,260,000 8,458,553
______________
Total 19,556,491
_____________________________________________________________________________________________________________________________
Tennessee (0.4%)
Chattanooga Municipal Improvement & Sewer Facility Unlimited Tax Bonds 6.50 2007 2,000,000 2,091,340
Nashville & Davidson County Health & Education Facility 1st Mortgage
Revenue Bonds Blakeford at Green Hills CCRC 9.25 2024 12,230,000 13,125,725
Knox County Health Education & Housing Facility Hospital Revenue Bonds
Baptist Health System East Tennessee Series 1989 8.60 2016 10,000,000 10,708,700
______________
Total 25,925,765
<PAGE>
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_____________________________________________________________________________________________________________________________
Texas (8.7%)
Alliance Airport Authority Special Facility Revenue Bonds
American Airlines Series 1990 A.M.T. 7.50 2029 37,400,000 39,965,266
Arlington Limited Tax General Obligation Bonds 6.50 2004 1,500,000 1,518,180
Austin Combined Utility Systems Refunding Revenue Bonds Series 1985 10.75 2010-15 12,000,000 15,084,360
Austin Combined Utility Systems Refunding Revenue Bonds Series 1986 5.00 2013 20,000,000 19,020,800
Austin General Obligation Public Improvement Bonds Series 1986 6.75 2006 2,000,000 2,046,940
Austin General Obligation Public Improvement Bonds Series 1986 7.00 2007 5,450,000 5,587,940
Board of Regents of the University System General Refunding Revenue Bonds
Series 1986 6.50 2007 17,500,000 17,929,409
Brazos River Authority Collateralized Pollution Control Revenue Bonds
Texas Utility Electric Series 1989A A.M.T. 8.25 2019 14,000,000 15,525,860
Brazos River Authority Collateralized Pollution Control Revenue Bonds
Texas Utility Electric Series 1990A A.M.T. 8.125 2020 13,205,000 14,737,176
Brazos River Authority Collateralized Pollution Control Revenue Bonds
Texas Utility Electric Series 1991A A.M.T. 7.875 2021 24,450,000 27,384,978
Brazos River Authority Collateralized Refunding Revenue Bonds
Houston Lighting & Power (MBIA Insured) 5.80 2015 15,000,000 15,147,150
Brazos River Authority Collateralized Refunding Revenue Bonds
Houston Lighting & Power Series 1989A 7.625 2019 26,300,000 29,071,231
Brownsville Utility System Priority Revenue Bonds Series 1990
(AMBAC Isured) 6.50 2017 10,015,000 11,138,683
Colony Municipal Utility District #1 Denton County Series 1980 9.25 2007 1,000,000 1,376,730
Dallas & Fort Worth International Airport Special Facility Revenue Bonds
American Airlines Series 1990 A.M.T. 7.50 2025 26,200,000 27,953,828
Dallas & Fort Worth International Airport Special Facility Revenue Bonds
Delta Air Lines Series 1991 A.M.T. 7.125 2026 13,500,000 13,995,180
Denison Hospital Authority Hospital Revenue Bonds
Texoma Medical Center Series 1994 7.10 2024 3,950,000 4,105,551
El Paso Water & Sewer Revenue Bonds 7.00 2003-05 7,100,000 7,160,279
Fort Bend County Municipal Utility District #23 Unlimited Tax Bonds 6.625 2016 3,085,000 3,105,484
Garland Utility System Revenue Bonds Series 1986 6.80 2003 3,335,000 3,361,213
Harris County Health Facilities Development Hospital
Refunding Revenue Bonds Memorial Hospital Series 1985 6.00 2004 6,460,000 6,460,000
Harris County Health Facilities Hospital Revenue Bonds Memorial Hospital
Series 1992 7.125 2015 16,000,000 17,528,960
Harris County Industrial Development Marine Terminal Refunding Revenue Bonds
GATX Terminal Series 1992 6.95 2022 15,000,000 15,838,650
Karnes County Public Facility Lease Revenue Bonds 9.20 2015 15,990,000 16,610,732
Kings Manor Municipal Utility District Waterworks & Sewer Systems
Combination Unlimited Tax & Revenue Bonds Series 1995 6.875 2018 2,470,000 2,582,978
Lower Colorado River Authority Priority Revenue Bonds 7.00 2013 17,000,000 17,049,640
Lower Colorado River Authority Priority Revenue Bonds 9.00 2009 10,000,000 10,245,500
Lower Colorado River Authority Priority Revenue Bonds Series 1985 8.00 2014 2,500,000 2,564,575
Matagorda County Navigation District #1 Collateral Pollution Control
Refunding Revenue Bonds Houston Power & Light (MBIA Insured) 5.80 2015 15,000,000 15,134,100
Matagorda County Navigation District #1 Collateral Pollution Control
Revenue Bonds Central Power & Light Series 1986A (AMBAC Insured) A.M.T. 7.50 2020 6,500,000 7,228,260
Matagorda County Navigation District #1 Collateral Pollution Control
Revenue Bonds Houston Power & Light Series 1986A A.M.T. 7.875 2016 8,000,000 8,422,720
Matagorda County Navigation District #1 Collateral Pollution Control
Revenue Bonds Houston Power & Light Series 1989A A.M.T. 7.875 2019 10,060,000 10,901,117
Matagorda County Navigation District #1 Pollution Control Revenue Bonds
Central Power & Light Series 1986 A.M.T. 7.875 2016 18,000,000 18,886,140
Midland County Hospital District Revenue Bonds Series 1992 7.50 2016 3,025,000 3,259,891
Mills Road Municipal Utility District Harris County Unlimited Tax
Refunding Bonds Series 1993 6.50 2014 2,690,000 2,734,681
Municipal Power Agency Refunding Revenue Bonds (MBIA Insured) 5.25 2009 8,000,000 8,085,360
Municipal Power Agency Revenue Bonds Series 1986 6.50 2014 4,000,000 4,086,520
Municipal Power Agency Revenue Bonds 5.50 2013 7,410,000 7,334,863
Municipal Power Agency Revenue Bonds (BIG Insured) 6.25 2010 13,940,000 14,749,356
North Austin Municipal Utility District #1 Austin Contract Revenue Bonds
Series 1985 9.90 2006-07 2,800,000 3,000,648
North Austin Municipal Utility District #1 Austin Contract Revenue Bonds
Series 1985 10.00 2008-09 2,625,000 2,815,339
North Central Texas Health Facility Development Hospital Revenue Bonds
University Medical Center 8.20 2019 4,245,000 4,489,936
North Central Texas Health Facility Development Hospital Revenue Bonds
University Medical Center Series 1987 7.75 2017 7,500,000 7,806,525
Plano Collin & Denton County General Obligation Bonds Limited Tax
Series 1986 6.00 2006 1,600,000 1,607,776
Rio Grande City Consolidated Independent School District Public Facilities
Lease Revenue Bonds Series 1995 6.75 2010 4,000,000 4,210,680
Sabine River Authority Collateralized Pollution Control Revenue Bonds
Texas Utilities Electric Series 1990A A.M.T. 8.125 2020 30,500,000 33,249,880
San Antonio Electric & Gas System Refunding Revenue Bonds Series 1989B 5.00 2016 11,000,000 10,346,710
San Antonio Electric & Gas System Revenue Bonds Series 1987 5.00 2014 8,680,000 8,194,180
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West Side Calhoun County Navigation District Solid Waste Disposal
Revenue Bonds Union Carbide Chemical & Plastics Series 1991 A.M.T. 8.20 2021 17,550,000 19,987,344
_____________
Total 560,629,299
_____________________________________________________________________________________________________________________________
Utah (2.0%)
Association Municipal Power System Hunter Series A (AMBAC Insured) 5.50 2012 4,000,000 4,000,000
Carbon County Solid Waste Disposal Refunding Revenue Bonds
Sunnyside Cogeneration Associates Series 1991 A.M.T. 9.25 2018 25,350,000 27,906,801
Housing Finance Agency Single Family Mortgage Senior Bonds Series 1991C
(FGIC Insured) 7.30 2011 1,385,000 1,488,515
Housing Finance Agency Single Family Mortgage Senior Bonds Series 1991C
(FGIC Insured) 7.35 2016 1,100,000 1,176,670
Hurricane Health Facilities Development Revenue Bonds
Mission Health Services Series 1990 10.50 2020 7,770,000 8,924,078
Intermountain Power Agency Power Supply Refunding Revenue Bonds
Series F (AMBAC Insured) 5.00 2013 5,000,000 4,752,700
Intermountain Power Agency Power Supply Refunding Revenue Bonds
Series 1993B Inverse Floater 6.811 2011 7,600,000 (d) 7,628,500
Intermountain Power Agency Power Supply Refunding Revenue Bonds
Series 1996C (MBIA Insured) 5.70 2017 46,000,000 (h) 44,334,800
Intermountain Power Agency Power Supply Revenue Bonds Series 1987A
(MBIA Insured) 5.00 2012 8,000,000 7,685,760
Intermountain Power Agency Power Supply Revenue Bonds Series 1989A 6.00 2023 3,500,000 3,530,030
Intermountain Power Agency Power Supply Revenue Bonds Series 1989B 6.00 2023 10,165,000 10,252,216
Salt Lake City & County General Obligation Public Building Bonds 6.875 2010-11 5,700,000 5,858,118
West Valley City Salt Lake County K mart Industrial Development
Revenue Bonds 10.50 2005 1,450,000 1,493,761
______________
Total 129,031,949
_____________________________________________________________________________________________________________________________
Virginia (0.3%)
Hopewell City Industrial Development Authority Pollution Control
Refunding Revenue Bonds Stone Container Series 1992 8.25 2010 3,170,000 3,477,997
Housing Development Authority Commonwealth Mortgage Bonds Series 1992A 7.15 2033 15,000,000 15,904,200
_____________
Total 19,382,197
_____________________________________________________________________________________________________________________________
Washington (3.7%)
Health Care Facilities Authority Revenue Bonds
Seattle Highline Community Hospital Series 1993 (Connie Lee Insured) 5.50 2014 7,500,000 7,447,425
King County Housing Authority Pooled Housing Refunding Revenue Bonds
Series 1995A 7.20 2026 4,000,000 4,082,840
Longview Industrial Development Corporation Solid Waste Revenue Bonds
Weyerhauser Series 1991 A.M.T. 7.45 2013 20,000,000 21,695,000
Public Power Supply System Nuclear Project #1 Refunding Revenue Bonds
Series A 6.50 2015 21,000,000 22,199,940
Public Power Supply System Nuclear Project #1 Refunding Revenue Bonds
Bonneville Power Administration Series 1993A Inverse Floater
(FSA Insured) 7.17 2011 25,000,000 (d) 26,531,250
Public Power Supply System Nuclear Project #1 Revenue Bonds Series 1989 6.00 2017 28,070,000 28,130,912
Public Power Supply System Nuclear Project #1 Revenue Bonds Series 1990A 6.00 2017 38,875,000 38,980,351
Public Power Supply System Nuclear Project #2 Revenue Bonds Series 1994A 5.375 2011 10,000,000 9,606,900
Public Power Supply System Nuclear Project #2
Revenue Linked Bonds (FGIC Insured) 5.55 2010 20,000,000 20,176,400
Public Power Supply System Nuclear Project #3 Revenue Bonds Series 1989B 5.50 2017-18 27,550,000 26,189,984
Seattle Municipal Light & Power Refunding Revenue Bonds Series 1986 5.875 2010 6,000,000 6,115,140
Snohomish County Public Utility District #1 Generation System
Revenue Bonds Series 1986A 5.00 2020 17,750,000 16,730,263
State Housing Finance Commission Refunding Revenue Bonds
Horizon House Series 1995A (Asset Guaranty Insured) 6.00 2017 3,700,000 3,766,637
State Housing Finance Commission Refunding Revenue Bonds
Horizon House Series 1995A (Asset Guaranty Insured) 6.125 2027 3,600,000 3,669,084
______________
Total 235,322,126
_____________________________________________________________________________________________________________________________
West Virginia (1.7%)
Board of Regents State System Tuition Fee Revenue Bonds University 7.75 2011 8,000,000 8,265,760
Kanawha County Pollution Control Revenue Bonds Union Carbide Series 1984 7.35 2004 3,000,000 3,349,800
Marion County Solid Waste Disposal Facility Revenue Bonds
American Power Paper Recycling Series 1993 A.M.T. 7.75 2011 20,000,000 17,237,600
Marion County Solid Waste Disposal Facility Revenue Bonds
American Power Paper Recycling Series 1994 A.M.T. 8.25 2011 10,000,000 9,027,400
Marion County Solid Waste Disposal Facility Revenue Bonds
American Power Paper Recycling Series 1995 A.M.T. 9.00 2011 5,000,000 4,832,150
Mason County Pollution Control Refunding Revenue Bonds
Appalachian Power Series 1992J 6.60 2022 25,000,000 26,066,750
Pea Ridge Public Service District Sewer Refunding Revenue Bonds
Series 1990 9.25 2020 2,630,000 2,785,670
Putnam County Pollution Control Revenue Bonds Appalachian Power Series C 6.60 2019 10,600,000 11,079,014
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School Building Authority Capital Improvement Revenue Bonds Series 1991A 6.00 2021 20,785,000 21,247,882
South Charleston Pollution Control Refunding Revenue Bonds Union Carbide
Series 1985 7.625 2005 3,000,000 3,494,910
______________
Total 107,386,936
_____________________________________________________________________________________________________________________________
Wisconsin (0.7%)
Health & Education Facilities Authority Revenue Bonds St. Clare Hospital 7.00 2022 12,115,000 12,930,218
Health Facilities Authority Refunding Revenue Bonds Villa Clement
Series 1986 8.75 2012 4,500,000 4,553,235
Madison Industrial Development Refunding Revenue Bonds
Madison Gas & Electric Series 1992B 6.70 2027 19,300,000 20,595,802
Superior Water Supply Facility Revenue Bonds
Superior Water Light & Power Series 1986 A.M.T. 7.875 2021 6,500,000 6,787,300
______________
Total 44,866,555
_____________________________________________________________________________________________________________________________
Wyoming (0.2%)
Green River & Rock Springs Sweetwater County Joint Powers
Water Board Revenue Bonds Series 1988A 8.50 2007 2,500,000 2,772,250
Natrona County Hospital Revenue Bonds Wyoming Medical Center 8.125 2010 6,500,000 7,082,530
State Farm Loan Board Capital Facilities Revenue Bonds Series 1994 6.10 2024 5,000,000 5,196,450
______________
Total 15,051,230
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $5,701,378,790) $6,250,363,383
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (1.84%)
_____________________________________________________________________________________________________________________________
Issuer (c,j) Annualized Amount Value(a)
yield on date payable at
of purchase maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Municipal Notes
Breckenridge Health Facility Revenue Bonds (MBIA Insured)
11-15-13 4.00% $ 2,595,000 (i) $ 2,595,000
Burke County Pollution Control Revenue Bonds
Georgia Power & Light V.R.D.B. Series 1994
07-01-24 4.00 7,700,000 (i) 7,700,000
Columbia Alabama Pollution Control Revenue Bonds
Alabama Power V.R.D.B. Series D
10-01-22 3.85 13,200,000 (i) 13,200,000
Emery County Utah Pollution Control Revenue Bonds
Pacificorp V.R.D B. Series 1994
11-01-24 3.70 6,000,000 (i) 6,000,000
Georgia Municipal Electric Authority Bonds
Series C
12-04-95 3.85 10,000,000 10,000,000
Los Angeles Country T.R.A.N.
07-01-96 4.50 7,000,000 7,042,140
Minneapolis Minnesota Special School District (MBIA Insured)
02-01-15 4.00 1,285,000 (i) 1,285,000
Minnesota Housing & Redevelopment Health Care Bonds
Minneapolis & St. Paul Children's Hospital V.R.D.B. Series B
8-15-25 3.75 5,000,000 (i) 5,000,000
Moffat County Colorado Pollution Control Refunding Revenue Bonds
Pacificorp V.R.D.B. Series 1994
05-01-13 3.80 3,000,000 (i) 3,000,000
Monroe County Georgia Development Authority
Pollution Control Revenue Bonds V.R.D.B. Series 1995
09-01-24 4.00 2,200,000 (i) 2,200,000
07-01-25 4.00 5,100,000 (i) 5,100,000
New York City General Obligation Bonds V.R.D.N.
Series B (FGIC Insured)
10-01-22 4.00 3,200,000 (i) 3,200,000
Ohio State Air Quality Development Authority Revenue Bonds
Cincinnati Gas & Electric V.R.D.B. Series B
09-01-30 3.70 10,200,000 (i) 10,200,000
Parish of St. Charles Louisiana Shell Oil Bonds V.R.D.B. Series 1992B
10-01-22 3.70 2,900,000 (i) 2,900,000
Port Arthur District of Jefferson Texas
Pollution Control Revenue Bonds Texaco
10-01-24 3.75 2,000,000 (i) 2,000,000
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Sabine River Authority Pollutin Control Revenue Utility Notes
V.R.D.N. Series B
06-01-30 4.00 3,600,000 (i) 3,600,000
St. Louis Park Minnesota Health System Revenue Bonds V.R.D.B.
07-01-13 4.00 25,000,000 (i) 25,000,000
Valdez Alaska Marine Terminal Refunding Revenue Bonds
Exxon V.R.D.B. Series 1993A
12-01-33 3.75 8,000,000 (i) 8,000,000
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $118,011,286) $ 118,022,140
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $5,819,390,076)(k) $6,368,385,523
_____________________________________________________________________________________________________________________________
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)
__________________________________________
Rating 11-30-95 11-30-94
______________________________________________________________________
AAA 29% 28%
AA 6 7
A 20 23
BBB 27 25
BB and below 18 16
Non-rated 0 1
_______________________________________________________________________
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
CGIC -- Capital Guaranty Insurance Company
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
(d) Inverse floaters represent securities, that pay interest at a rate that
increases (decreases) in the same magnitude as, or in a multiple of, a
decline (increase) in market short-term rates. Interest rate disclosed
is the rate in effect on Nov. 30, 1995. Inverse floaters in the aggregate
represent 5.8% of the Fund's net assets as of Nov. 30, 1995.
(e) Presently non-income producing. For long-term debt securities items
identified are in default as to payment of interest and/or principal.
(f) For zero coupon bonds, the interest rate disclosed represents the
annualized effective yield on the date of acquisition.
(g) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 4 to the financial statements):
Type of security National amount
Purchase contracts
_________________________________________________________________
Municipal Bonds Index Dec. 1995 $ 30,000,000
Dec. 1995 15,100,000
Dec. 1995 85,500,000
U.S. Treasury Bonds Dec. 1995 144,500,000
Dec. 1995 30,000,000
_________________________________________________________________
Total $305,100,000
_________________________________________________________________
(h) At Nov. 30, 1995, the cost of securities purchased on a when-issued basis
was $63,207,971.
(i) Interest rate varies to reflect current market conditions; rate shown is
the effective rate on Nov. 30, 1995.
<PAGE>
PAGE 105
(j) The following abbreviations are used in portfolio descriptions:
T.R.A.N. -- Tax & Revenue Anticipation Note
V.R.D.B. -- Variable Rate Demand Bond
V.R.D.N. -- Variable Rate Demand Note
A.M.T. -- Alternative Minimum Tax - As of Nov. 30, 1995, the value of
securities subject to alternate minimum tax represented 19.59%
of net assets.
(k) At Nov. 30, 1995, the cost of securities for federal income tax purposes was
$5,814,291,169 and the aggregate gross unrealized appreciation and depreciation
based on that cost was:
Unrealized appreciation $575,291,509
Unrealized depreciation (21,197,155)
___________________________________________________________________________
Net unrealized appreciation $554,094,354
___________________________________________________________________________
</TABLE>
<PAGE>
PAGE 106
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) FINANCIAL STATEMENTS:
Financial statements filed electronically in Part B of this
Registration Statement:
- Independent Auditors' Report dated January 5, 1996
- Statement of Assets and Liabilities, Nov. 30, 1995
- Statement of Operations, Year ended Nov. 30, 1995
- Statement of Changes in Net Assets, for the two-year
period ended Nov. 30, 1994 and Nov. 30, 1995
- Notes to Financial Statements
- Investments in Securities, Nov. 30, 1995
- Notes to Investments in Securities
(b) EXHIBITS:
1. Copy of Articles of Incorporation, filed as Exhibit 1 to
Registrant's Post-Effective Amendment No. 19 to Registration
Statement No. 2-63552, is incorporated herein by reference.
2. Copy of By-laws, as amended Jan. 12, 1989, filed as Exhibit 2 to
Registrant's Post-Effective Amendment No. 20 to Registration
Statement No. 2-63552, is incorporated herein by reference.
3. Not applicable.
4. Form of Stock certificate, filed as Exhibit 4 to Registrant's
Registration Statement No. 2-62552, on February 9, 1979, is
incorporated herein by reference.
5. Form of Investment Management Services Agreement between
Registrant and American Express Financial Corporation, dated
March 20, 1995, filed electronically as Exhibit 5 to
Registrant's Post-Effective Amendment No. 31 to Registration
Statement No. 2-63552 is incorporated herein by reference.
6. Form of Distribution Agreement Between Registrant and American
Express Financial Advisors Inc., dated March 20, 1995, filed
electronically as Exhibit 6 to Registrant's Post-Effective
Amendment No. 31 to Registration Statement No. 2-63552 is
incorporated herein by reference.
7. All employees are eligible to participate in a profit sharing
plan. Entry into the plan is Jan. 1 or July 1. The Registrant
contributes each year an amount up to 15 percent of their annual
salaries, the maximum deductible amount permitted under Section
404(a) of the Internal Revenue Code.
8. Form of Custodian Agreement between Registrant and First
National Bank of Minneapolis, dated August 16, 1979, is filed
electronically herewith.
<PAGE>
PAGE 107
9(a). Copy of Plan and Agreement of Merger, filed electronically as
Exhibit No. 9 to Registrant's Post-Effective Amendment No. 13
to Registration Statement No. 2-63552, is incorporated herein
by reference.
9(b). Form of Transfer Agency Agreement between Registrant and
American Express Financial Corporation, dated March 20, 1995,
filed electronically as Exhibit 9(b) to Registrant's Post-
Effective Amendment No. 31 to Registration Statement No. 2-
63552 is incorporated herein by reference.
9(c). Copy of License Agreement between Registrant and IDS
Financial Corporation dated January 25, 1988, filed as
Exhibit 9(c) to Registrant's Post-Effective Amendment No. 21
to Registration Statement No. 2-63552, is incorporated herein
by reference.
9(d). Form of Shareholder Service Agreement between Registrant and
American Express Financial Advisors Inc., dated March 20,
1995, filed electronically as Exhibit 9(d) to Registrant's
Post-Effective Amendment No. 31 to Registration Statement No.
2-63552 is incorporated herein by reference.
9(e). Form of Administrative Service Agreement between Registrant
and American Express Financial Advisors Inc., dated March 20,
1995, filed electronically as Exhibit 9(e) to Registrant's
Post-Effective Amendment No. 31 to Registration Statement No.
2-63552 is incorporated herein by reference.
10. Opinion and consent of counsel as to the legality of the
securities being registered is filed with Registrant's most
recent 24f-2 Notice.
11. Independent Auditors' Consent, is filed electronically
herewith.
12. None.
13. Not Applicable.
14. Forms of Keogh, IRA and other retirement plans, filed as
Exhibits 14(a) through 14(n) to IDS Growth Fund, Inc., Post-
Effective Amendment No. 19 to Registration Statement No. 2-
54516 are incorporated herein by reference.
15. Form of Plan and Agreement of Distribution between Registrant
and American Express Financial Advisors Inc., dated March 20,
1995, filed electronically as Exhibit 15 to Registrant's Post-
Effective Amendment No. 31 to Registration Statement No. 2-
63552 is incorporated herein by reference.
16. Schedule for computation of each performance quotation
provided in the Registration Statement in response to Item 22,
filed electronically as Exhibit 16(b) to Registrant's Post-
Effective Amendment No. 25 to Registration Statement No. 2-
63552 is incorporated herein by reference.
17. Financial Data Schedule, is filed electronically herewith.
<PAGE>
PAGE 108
18. Copy of Plan pursuant to Rule 18f-3 under the 1940 Act, filed
electronically as Exhibit 18 to Registrant's Post-Effective
Amendment No. 32 to Registration Statement No. 2-63552 is
incorporated herein by reference.
19(a). Directors' Power of Attorney dated November 10, 1994 to sign
amendments to this Registration Statement filed
electronically as Exhibit 18(a) to Registrant's Post-
Effective Amendment No. 29, is incorporated herein by
reference.
19(b). Officers' Power of Attorney dated November 1, 1995, to sign
amendments to this Registration Statement, is filed
electronically herewith.
Item 25. Persons Controlled by or under Common Control with
Registrant
None.
Item 26. Number of Holders of Securities
(1) (2)
Number of Record
Title of as of
Class Jan. 22, 1996
Common Stock 183,364
Item 27. Indemnification
The Articles of Incorporation of the registrant provide that the
Fund shall indemnify any person who was or is a party or is
threatened to be made a party, by reason of the fact that she or he
is or was a director, officer, employee or agent of the Fund, or is
or was serving at the request of the Fund as a director, officer,
employee or agent of another company, partnership, joint venture,
trust or other enterprise, to any threatened, pending or completed
action, suit or proceeding, wherever brought, and the Fund may
purchase liability insurance and advance legal expenses, all to the
fullest extent permitted by the laws of the State of Minnesota, as
now existing or hereafter amended. The By-laws of the registrant
provide that present or former directors or officers of the Fund
made or threatened to be made a party to or involved (including as
a witness) in an actual or threatened action, suit or proceeding
shall be indemnified by the Fund to the full extent authorized by
the Minnesota Business Corporation Act, all as more fully set forth
in the By-laws filed as an exhibit to this registration statement.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
<PAGE>
PAGE 109
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
Any indemnification hereunder shall not be exclusive of any other
rights of indemnification to which the directors, officers,
employees or agents might otherwise be entitled. No
indemnification shall be made in violation of the Investment
Company Act of 1940.
<PAGE>
PAGE 110
<PAGE>
PAGE 1
<TABLE><CAPTION>
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)
Directors and officers of American Express Financial Corporation who are directors and/or
officers of one or more other companies:
<S> <C> <C>
Ronald G. Abrahamson, Vice President--Service Quality and Reengineering
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Service Quality
and Reengineering
American Express Service Corporation Vice President
Douglas A. Alger, Vice President--Total Compensation
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Total Compensation
Peter J. Anderson, Director and Senior Vice President--Investments
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Investments
IDS Advisory Group Inc. Director and Chairman
of the Board
IDS Capital Holdings Inc. Director and President
IDS International, Inc. Director, Chairman of the
Board and Executive Vice
President
IDS Securities Corporation Executive Vice President-
Investments
NCM Capital Management Group, Inc. 2 Mutual Plaza Director
501 Willard Street
Durham, NC 27701
Ward D. Armstrong, Vice President-Sales and Marketing, American Express Institutional Services
American Express Financial Advisors IDS Tower 10 Vice President-Sales and
Minneapolis, MN 55440 Marketing, American
Express Institutional
Services
Joseph M. Barsky III, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
IDS Advisory Group Inc. Vice President
Robert C. Basten, Vice President--Tax and Business Services
American Express Financial Advisors IDS Tower 10 Vice President-Tax
Minneapolis, MN 55440 and Business Services
American Express Tax & Business Director, President and
Services Inc. Chief Executive Officer
<PAGE>
PAGE 2
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Timothy V. Bechtold, Vice President--Risk Management Products
American Express Financial Advisors IDS Tower 10 Vice President-Risk
Minneapolis, MN 55440 Management Products
IDS Life Insurance Company Vice President-Risk
Management Products
Carl E. Beihl, Vice President--Strategic Technology Planning
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Strategic Technology
Planning
Alan F. Bignall, Vice President--Technology and Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Technology and
Development
American Express Service Corporation Vice President
John C. Boeder, Vice President--Mature Market Group
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Mature Market Group
IDS Life Insurance Company of New York Box 5144 Director
Albany, NY 12205
Karl J. Breyer, Director, Senior Vice President--Corporate Affairs and General Counsel
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Corporate Affairs and
Special Counsel
American Express Minnesota Foundation Director
IDS Aircraft Services Corporation Director and President
Harold E. Burke, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
Daniel J. Candura, Vice President--Marketing Support
American Express Financial Advisors IDS Tower 10 Vice President-Marketing
Minneapolis, MN 55440 Support
Cynthia M. Carlson, Vice President--American Express Securities Services
American Enterprise Investment IDS Tower 10 Director, President and
Services Inc. Minneapolis, MN 55440 Chief Executive Officer
American Express Financial Advisors Vice President-American
Express Securities Services
<PAGE>
PAGE 3
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Orison Y. Chaffee III, Vice President--Field Real Estate
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Real Estate
James E. Choat, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Insurance Agency of Nevada Inc. Vice President--North
Central Region
American Express Minnesota Foundation Director
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President--North
Central Region
IDS Insurance Agency of Arkansas Inc. Vice President--North
Central Region
IDS Insurance Agency of Massachusetts Inc. Vice President--North
Central Region
IDS Insurance Agency of New Mexico Inc. Vice President--North
Central Region
IDS Insurance Agency of North Carolina Inc. Vice President--North
Central Region
IDS Insurance Agency of Ohio Inc. Vice President--North
Central Region
IDS Insurance Agency of Wyoming Inc. Vice President-- North
Central Region
Kenneth J. Ciak, Vice President and General Manager--IDS Property Casualty
AMEX Assurance Co. Director and President
American Express Financial Advisors IDS Tower 10 Vice President and General
Minneapolis, MN 55440 Manager-IDS Property
Casualty
IDS Property Casualty Insurance Co. I WEG Blvd. Director and President
DePere, Wisconsin 54115
Colleen Curran, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
American Express Service Corporation Vice President and Chief
Legal Counsel
Alan R. Dakay, Vice President--Institutional Products Group
American Centurion Life Assurance Co. IDS Tower 10 Director and Vice Chairman
Minneapolis, MN 55440 and President, Financial
Institutions Division
American Enterprise Life Insurance Co. Director and President
<PAGE>
PAGE 4
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
IDS Life Insurance Company Vice President -
Institutional Insurance
American Express Financial Advisors Vice President -
Institutional Products
Group Marketing
Regenia David, Vice President--Systems Services
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Systems Services
William H. Dudley, Director and Executive Vice President--Investment Operations
American Express Financial Advisors IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Investment Operations
IDS Advisory Group Inc. Director
IDS Capital Holdings Inc. Director
IDS Futures Corporation Director
IDS Futures III Corporation Director
IDS International, Inc. Director
IDS Securities Corporation Director, Chairman of the
Board, President and
Chief Executive Officer
Roger S. Edgar, Director, Senior Vice President and Technology Advisor
American Express Financial Advisors IDS Tower 10 Senior Vice President and
Minneapolis, MN 55440 Technology Advisor
Gordon L. Eid, Director, Senior Vice President and Deputy General Counsel
American Express Financial Advisors IDS Tower 10 Senior Vice President and
Minneapolis, MN 55440 General Counsel
American Express Insurance Agency of Nevada Inc. Director and Vice President
IDS Insurance Agency of Alabama Inc. Director and Vice President
IDS Insurance Agency of Arkansas Inc. Director and Vice President
IDS Insurance Agency of Massachusetts Inc. Director and Vice President
IDS Insurance Agency of New Mexico Inc. Director and Vice President
IDS Insurance Agency of North Carolina Inc. Director and Vice President
IDS Insurance Agency of Ohio Inc. Director and Vice President
IDS Insurance Agency of Wyoming Inc. Director and Vice President
IDS Real Estate Services, Inc. Vice President
Investors Syndicate Development Corp. Director
Robert M. Elconin, Vice President--Government Relations
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Government Relations
IDS Life Insurance Company Vice President
<PAGE>
PAGE 5
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Mark A. Ernst, Vice President--Retail Services
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Vice President-
Retail Services
American Express Tax & Business Director and Chairman of
Services Inc. the Board
Gordon M. Fines, Vice President--Mutual Fund Equity Investments
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Mutual Fund Equity
Investments
IDS Advisory Group Inc. Executive Vice President
IDS International, Inc. Vice President and
Portfolio Manager
Robert G. Gilbert, Vice President--Real Estate
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Real Estate
John J. Golden, Vice President--Field Compensation Development
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Compensation Development
Harvey Golub, Director
American Express Company American Express Tower Chairman and Chief
World Financial Center Executive Officer
New York, New York 10285
American Express Travel Chairman and Chief
Related Services Company, Inc. Executive Officer
Morris Goodwin Jr., Vice President and Corporate Treasurer
American Centurion Life Assurance Co. Vice President and
Treasurer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Treasurer
American Enterprise Life Insurance Vice President and
Company Treasurer
American Express Financial Advisors Vice President and
Corporate Treasurer
American Express Insurance Agency of Nevada Inc. Vice President and
Treasurer
American Express Minnesota Foundation Vice President and
Treasurer
American Express Service Corporation Vice President and
Treasurer
American Express Tax & Business Vice President and
Services Inc. Treasurer
American Partners Life Insurance Co. Vice President and
Treasurer<PAGE>
PAGE 6
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
AMEX Assurance Co. Vice President and
Treasurer
IDS Advisory Group Inc. Vice President and
Treasurer
IDS Aircraft Services Corporation Vice President and
Treasurer
IDS Cable Corporation Director, Vice President
and Treasurer
IDS Cable II Corporation Director, Vice President
and Treasurer
IDS Capital Holdings Inc. Vice President and
Treasurer
IDS Certificate Company Vice President and
Treasurer
IDS Deposit Corp. Director, President
and Treasurer
IDS Futures Corp. Director
IDS Futures III Corp. Director
IDS Insurance Agency of Alabama Inc. Vice President and
Treasurer
IDS Insurance Agency of Arkansas Inc. Vice President and
Treasurer
IDS Insurance Agency of Massachusetts Inc. Vice President and
Treasurer
IDS Insurance Agency of New Mexico Inc. Vice President and
Treasurer
IDS Insurance Agency of North Carolina Inc. Vice President and
Treasurer
IDS Insurance Agency of Ohio Inc. Vice President and
Treasurer
IDS Insurance Agency of Wyoming Inc. Vice President and
Treasurer
IDS International, Inc. Vice President and
Treasurer
IDS Life Insurance Company Vice President and
Treasurer
IDS Life Series Fund, Inc. Vice President and
Treasurer
IDS Life Variable Annuity Funds A&B Vice President and
Treasurer
IDS Management Corporation Director, Vice President
and Treasurer
IDS Partnership Services Corporation Director, Vice President
and Treasurer
IDS Plan Services of California, Inc. Vice President and
Treasurer
IDS Property Casualty Insurance Co. Vice President and
Treasurer
IDS Real Estate Services, Inc Vice President and
Treasurer
IDS Realty Corporation Director, Vice President
and Treasurer
IDS Sales Support Inc. Director, Vice President
and Treasurer
<PAGE>
PAGE 7
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
IDS Securities Corporation Vice President and
Treasurer
Investors Syndicate Development Corp. Vice President and
Treasurer
National Computer Systems, Inc. 11000 Prairie Lakes Drive Director
Minneapolis, MN 55440
NCM Capital Management Group, Inc. 2 Mutual Plaza Director
501 Willard Street
Durham, NC 27701
Sloan Financial Group, Inc. Director
Suzanne Graf, Vice President--Systems Services
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Systems Services
David A. Hammer, Vice President and Marketing Controller
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Marketing Controller
IDS Plan Services of California, Inc. Director and Vice President
Lorraine R. Hart, Vice President--Insurance Investments
American Enterprise Life IDS Tower 10 Vice President-Investments
Insurance Company Minneapolis, MN 55440
American Express Financial Advisors Vice President-Insurance
Investments
American Partners Life Insurance Co. Director and Vice
President-Investments
AMEX Assurance Co. Vice President-Investments
IDS Certificate Company Vice President-Investments
IDS Life Insurance Company Vice President-Investments
IDS Life Series Fund, Inc. Vice President-Investments
IDS Life Variable Annuity Funds A and B Vice President-Investments
IDS Property Casualty Insurance Company Vice President-Investment
Officer
Investors Syndicate Development Corp. Director and Vice
President-Investments
Scott A. Hawkinson, Vice President--Assured Assets Product Development and Management
American Express Financial Advisors IDS Tower 10 Vice President-Assured
Minneapolis, MN 55440 Assets Product
Development & Management
James G. Hirsh, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
IDS Securities Corporation Director, Vice President
and General Counsel
<PAGE>
PAGE 8
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Darryl G. Horsman, Vice President--Product Development and Technology, American Express
Institutional Retirement Services
American Express Trust Company IDS Tower 10 Director and President
Minneapolis, MN 55440
Kevin P. Howe, Vice President--Government and Customer Relations and Chief Compliance Officer
American Enterprise Investment IDS Tower 10 Vice President and Chief
Services Inc. Minneapolis, MN 55440 Compliance Officer
American Express Financial Advisors Vice President-
Government and
Customer Relations
American Express Service Corporation Vice President
IDS Securities Corporation Vice President and Chief
Compliance Officer
David R. Hubers, Director, President and Chief Executive Officer
American Express Financial Advisors IDS Tower 10 Chairman, Chief Executive
Minneapolis, MN 55440 Officer and President
American Express Service Corporation Director and President
AMEX Assurance Co. Director
IDS Aircraft Services Corporation Director
IDS Certificate Company Director
IDS Life Insurance Company Director
IDS Plan Services of California, Inc. Director and President
IDS Property Casualty Insurance Co. Director
Marietta L. Johns, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
James E. Kaarre, Vice President--Marketing Information
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Marketing Information
Linda B. Keene, Vice President--Market Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Market Development
G. Michael Kennedy, Vice President--Investment Services and Investment Research
American Express Financial Advisors IDS Tower 10 Vice President-Investment
Minneapolis, MN 55440 Services and Investment
Research
Susan D. Kinder, Director and Senior Vice President--Human Resources
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Human Resources
American Express Minnesota Foundation Director
American Express Service Corporation Vice President<PAGE>
PAGE 9
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Richard W. Kling, Director and Senior Vice President--Risk Management Products
American Centurion Life Assurance Co. Director
American Enterprise Life Insurance Co. IDS Tower 10 Director and Chairman of
Minneapolis, MN 55440 the Board
American Express Financial Advisors Senior Vice President-
Risk Management Products
American Express Insurance Agency of Nevada Inc. Director and President
American Partners Life Insurance Co. Director and Chairman of
the Board
AMEX Assurance Co. Director and Chairman of
the Board
IDS Insurance Agency of Alabama Inc. Director and President
IDS Insurance Agency of Arkansas Inc. Director and President
IDS Insurance Agency of Massachusetts Inc. Director and President
IDS Insurance Agency of New Mexico Inc. Director and President
IDS Insurance Agency of North Carolina Inc. Director and President
IDS Insurance Agency of Ohio Inc. Director and President
IDS Insurance Agency of Wyoming Inc. Director and President
IDS Life Insurance Company Director and President
IDS Life Series Fund, Inc. Director and President
IDS Life Variable Annuity Funds A and B Director and Chairman of
the Board and President
IDS Property Casualty Insurance Co. Director and Chairman of
the Board
IDS Life Insurance Company P.O. Box 5144 Director, Chairman of the
of New York Albany, NY 12205 Board and President
Paul F. Kolkman, Vice President--Actuarial Finance
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Actuarial Finance
IDS Life Insurance Company Director and Executive
Vice President
IDS Life Series Fund, Inc. Vice President and Chief
Actuary
IDS Property Casualty Insurance Company Director
Claire Kolmodin, Vice President--Service Quality
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Service Quality
Steven C. Kumagai, Director and Senior Vice President--Field Management and Business Systems
American Express Financial Advisors IDS Tower 10 Director and Senior Vice
Minneapolis, MN 55440 President-Field
Management and Business
Systems
American Express Service Corporation Vice President<PAGE>
PAGE 10
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Edward Labenski, Jr.., Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio
Manager
IDS Advisory Group Inc. Senior Vice President
Kurt A. Larson, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio Manager
Lori J. Larson, Vice President--Variable Assets Product Development
American Express Financial Advisors IDS Tower 10 Vice President-Variable
Minneapolis, MN 55440 Assets Product
Development
IDS Cable Corporation Director and Vice President
IDS Cable II Corporation Director and Vice President
IDS Futures Brokerage Group Assistant Vice President-
General Manager/Director
IDS Futures Corporation Director and Vice President
IDS Futures III Corporation Director and Vice President
IDS Management Corporation Director and Vice President
IDS Partnership Services Corporation Director and Vice President
IDS Realty Corporation Director and Vice President
Ryan R. Larson, Vice President--IPG Product Development
American Centurion Life Assurance Co. Director and
Vice President-Product
Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 IPG Product Development
IDS Life Insurance Company Vice President-
Annuity Product
Development
Daniel E. Laufenberg, Vice President and Chief U.S. Economist
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Chief U.S. Economist
Richard J. Lazarchic, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
<PAGE>
PAGE 11
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Peter A. Lefferts, Director and Senior Vice President--Corporate Strategy and Development
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Corporate Strategy and
Development
American Express Service Corporation Director
American Express Trust Company Director
IDS Plan Services of California, Inc. Director
Investors Syndicate Development Corp. Director
Douglas A. Lennick, Director and Executive Vice President--Private Client Group
American Express Financial Advisors IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-Private
Client Group
American Express Service Corporation Vice President
Jonathan S. Linen, Director
Mary J. Malevich, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio
Manager
IDS International, Inc. Vice President and
Portfolio Manager
Fred A. Mandell, Vice President--Field Marketing Readiness
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Marketing Readiness
William J. McKinney, Vice President--Field Management Support
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management Support
Thomas W. Medcalf, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
William C. Melton, Vice President-International Research and Chief International Economist
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 International Research
and Chief International
Economist
<PAGE>
PAGE 12
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Janis E. Miller, Vice President--Variable Assets
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Variable Assets
IDS Cable Corporation Director and President
IDS Cable II Corporation Director and President
IDS Futures Corporation Director and President
IDS Futures III Corporation Director and President
IDS Life Insurance Company Director and Executive
Vice President-Variable
Assets
IDS Life Series Fund, Inc. Director
IDS Life Variable Annuity Funds A&B Director
IDS Management Corporation Director and President
IDS Partnership Services Corporation Director and President
IDS Realty Corporation Director and President
IDS Life Insurance Company of New York Box 5144 Executive Vice President
Albany, NY 12205
James A. Mitchell, Director and Executive Vice President--Marketing and Products
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Executive Vice President-
Marketing and Products
American Express Tax and Business Director
Services Inc.
AMEX Assurance Co. Director
IDS Certificate Company Director and Chairman of
the Board
IDS Life Insurance Company Director, Chairman of
the Board and Chief
Executive Officer
IDS Plan Services of California, Inc. Director
IDS Property Casualty Insurance Co. Director
Pamela J. Moret, Vice President--Corporate Communications
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Communications
American Express Minnesota Foundation Director and President
Barry J. Murphy, Director and Senior Vice President--Client Service
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Client Service
IDS Life Insurance Company Director and Executive
Vice President-Client
Service
Mary Owens Neal, Vice President--Mature Market Segment
American Express Financial Advisors Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Mature Market Segment<PAGE>
PAGE 13
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Robert J. Neis, Vice President--Technology Services
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Technology Services
James R. Palmer, Vice President--Insurance Operations
American Express Financial Advisors IDS Tower 10 Vice President-Taxes
Minneapolis, MN 55440
IDS Aircraft Services Corp. Vice President
IDS Life Insurance Company Vice President-Taxes
Carla P. Pavone, Vice President--Specialty Service Teams and Emerging Business
American Express Financial Advisors IDS Tower 10 Vice President-Specialty
Minneapolis, MN 55440 Service Teams and
Emerging Business
Susan B. Plimpton, Vice President--Segmentation Development and Support
American Express Financial Advisors IDS Tower 10 Vice President--
Minneapolis, MN 55440 Segmentation Development
and Support
Ronald W. Powell, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
IDS Cable Corporation Vice President and
Assistant Secretary
IDS Cable II Corporation Vice President and
Assistant Secretary
IDS Management Corporation Vice President and
Assistant Secretary
IDS Partnership Services Corporation Vice President and
Assistant Secretary
IDS Plan Services of California, Inc. Vice President and
Assistant Secretary
IDS Realty Corporation Vice President and
Assistant Secretary
James M. Punch, Vice President--Geographic Service Teams
American Express Financial Advisors IDS Tower 10 Vice President-Geographic
Minneapolis, MN 55440 Services Teams
Frederick C. Quirsfeld, Vice President--Taxable Mutual Fund Investments
American Express Financial Advisors IDS Tower 10 Vice President--
Minneapolis, MN 55440 Taxable Mutual Fund
Investments
IDS Advisory Group Inc. Vice President
<PAGE>
PAGE 14
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
ReBecca K. Roloff, Vice President--1994 Program Director
American Express Financial Advisors IDS Tower 10 Vice President-1994
Minneapolis, MN 55440 Program Director
Stephen W. Roszell, Vice President--Advisory Institutional Marketing
American Express Financial Advisors IDS Tower 10 Vice President-Advisory
Minneapolis, MN 55440 Institutional Marketing
IDS Advisory Group Inc. President and Chief
Executive Officer
IDS Fund Management Limited Director
IDS International, Inc. Director
Robert A. Rudell, Vice President--American Express Institutional Retirement Services
American Express Financial Advisors IDS Tower 10 Vice President-American
Minneapolis, MN 55440 Express Institutional
Services
American Express Trust Company Director and Chairman of
the Board
IDS Sales Support Inc. Director and President
John P. Ryan, Vice President and General Auditor
American Express Financial Advisors IDS Tower 10 Vice President and General
Minneapolis, MN 55440 Auditor
Erven A. Samsel, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Insurance Agency of Nevada Inc. Vice President-
New England Region
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President-
New England Region
IDS Insurance Agency of Arkansas Inc. Vice President-
New England Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
New England Region
IDS Insurance Agency of New Mexico Inc. Vice President-
New England Region
IDS Insurance Agency of North Carolina Inc. Vice President-
New England Region
IDS Insurance Agency of Ohio Inc. Vice President-
New England Region
IDS Insurance Agency of Wyoming Inc. Vice President-
New England Region
<PAGE>
PAGE 15
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Stuart A. Sedlacek, Vice President--Assured Assets
American Centurion Life Assurance Co. Director and Chairman
and President
American Enterprise Life Insurance Co. IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President, Assured
Assets
American Express Financial Advisors Vice President-
Assured Assets
American Partners Life Insurance Co. Director and President
IDS Certificate Company Director and President
IDS Life Insurance Company Director and Executive
Vice President, Assured
Assets
Investors Syndicate Development Corp. Director and Chairman of
the Board and President
Donald K. Shanks, Vice President--Property Casualty
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Property Casualty
IDS Property Casualty Insurance Co. Senior Vice President
F. Dale Simmons, Vice President--Senior Portfolio Manager, Insurance Investments
American Enterprise Life Insurance Co. IDS Tower 10 Vice President-Real
Minneapolis, MN 55440 Estate Loan Management
American Express Financial Advisors Vice President-Senior
Portfolio Manager,
Insurance Investments
American Partners Life Insurance Co. Vice President-Real
Estate Loan Management
AMEX Assurance Co. Vice President
IDS Certificate Company Vice President-Real
Estate Loan Management
IDS Life Insurance Company Vice President-Real
Estate Loan Management
IDS Partnership Services Corporation Vice President
IDS Real Estate Services Inc. Director and Vice President
IDS Realty Corporation Vice President
IDS Life Insurance Company of New York Box 5144 Vice President and
Albany, NY 12205 Assistant Treasurer
Judy P. Skoglund, Vice President--Human Resources and Organization Development
American Express Financial Advisors IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources and
Organization Development
Ben C. Smith, Vice President--Workplace Marketing
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Workplace Marketing
<PAGE>
PAGE 16
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
William A. Smith, Vice President and Controller--Private Client Group
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller-Private
Client Group
Bridget Sperl, Vice President--Human Resources Management Services
American Express Financial Advisors IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources Management
Services
William A. Stoltzmann, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
American Partners Life Insurance Co. Director, Vice President,
General Counsel and
Secretary
IDS Life Insurance Company Vice President, General
Counsel and Secretary
American Enterprise Life Insurance P.O. Box 534 Director, Vice President,
Company Minneapolis, MN 55440 General Counsel
and Secretary
James J. Strauss, Vice President--Corporate Planning and Analysis
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Planning and
Analysis
Jeffrey J. Stremcha, Vice President--Information Resource Management/ISD
American Express Financial Advisors IDS Tower 10 Vice President-Information
Minneapolis, MN 55440 Resource Management/ISD
John R. Thomas, Director and Senior Vice President--Information and Technology
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Information and
Technology
Melinda S. Urion, Director, Senior Vice President and Chief Financial Officer
American Enterprise Life IDS Tower 10 Vice President and
Insurance Company Minneapolis, MN 55440 Controller
American Express Financial Advisors Senior Vice President and
Chief Financial Officer
American Partners Life Insurance Co. Director and Vice President
IDS Life Insurance Company Director, Executive Vice
President and Controller
IDS Life Series Fund, Inc. Vice President and
Controller
<PAGE>
PAGE 17
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Wesley W. Wadman, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio Manager
IDS Advisory Group Inc. Executive Vice President
IDS Fund Management Limited Director and Vice Chairman
IDS International, Inc. Senior Vice President
Norman Weaver Jr., Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President--
Minneapolis, MN 55440 Field Management
American Express Insurance Agency of Nevada Inc. Vice President-Southeast
Region
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President-Pacific
Region
IDS Insurance Agency of Arkansas Inc. Vice President-Pacific
Region
IDS Insurance Agency of Massachusetts Inc. Vice President-Pacific
Region
IDS Insurance Agency of New Mexico Inc. Vice President-Pacific
Region
IDS Insurance Agency of North Carolina Inc. Vice President-Pacific
Region
IDS Insurance Agency of Ohio Inc. Vice President-Pacific
Region
IDS Insurance Agency of Wyoming Inc. Vice President-Pacific
Region
Michael L. Weiner, Vice President--Tax Research and Audit
American Express Financial Advisors IDS Tower 10 Vice President-Tax Research
Minneapolis, MN 55440 and Audit
IDS Capital Holdings Inc. Vice President
IDS Futures Brokerage Group Vice President
IDS Futures Corporation Vice President, Treasurer
and Secretary
IDS Futures III Corporation Vice President, Treasurer
and Secretary
James M. Weiss, Vice President and Senior Portfolio Manager
American Express Financial Advisors Inc. Vice President and Senior
Portfolio Manager
IDS Advisory Group Inc. Executive Vice President
Lawrence J. Welte, Vice President--Investment Administration
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Investment Administration
IDS Securities Corporation Director, Executive Vice
President and Chief
Operating Officer
<PAGE>
PAGE 18
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Jeffry F. Welter, Vice President--Equity and Fixed Income Trading
American Express Financial Advisors IDS Tower 10 Vice President-Equity
Minneapolis, MN 55440 and Fixed Income Trading
William N. Westhoff, Director, Senior Vice President and Global Chief Investment Officer
American Enterprise Life Insurance IDS Tower 10 Director
Company Minneapolis, MN 55440
American Express Financial Advisors Senior Vice President and
Global Chief Investment
Officer
IDS Fund Management Limited Director
IDS International, Inc. Director
IDS Partnership Services Corporation Director and Vice President
IDS Real Estate Services Inc. Director, Chairman of the
Board and President
IDS Realty Corporation Director and Vice President
Investors Syndicate Development Corp. Director
Edwin M. Wistrand, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
Michael R. Woodward, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Insurance Agency of Nevada Inc. Vice President-
North Region
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President-
North Region
IDS Insurance Agency of Arkansas Inc. Vice President-
North Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
North Region
IDS Insurance Agency of New Mexico Inc. Vice President-
North Region
IDS Insurance Agency of North Carolina Inc. Vice President-
North Region
IDS Insurance Agency of Ohio Inc. Vice President-
North Region
IDS Insurance Agency of Wyoming Inc. Vice President-
North Region
IDS Life Insurance Company Box 5144 Director
of New York Albany, NY 12205
</TABLE>
<PAGE>
PAGE 19
Item 29. Principal Underwriters.
(a) American Express Financial Advisors acts as principal
underwriter for the following investment companies:
IDS Bond Fund, Inc.; IDS California Tax-Exempt Trust; IDS
Discovery Fund, Inc.; IDS Equity Select Fund, Inc.; IDS Extra
Income Fund, Inc.; IDS Federal Income Fund, Inc.; IDS Global
Series, Inc.; IDS Growth Fund, Inc.; IDS High Yield Tax-
Exempt Fund, Inc.; IDS International Fund, Inc.; IDS
Investment Series, Inc.; IDS Managed Retirement Fund, Inc.;
IDS Market Advantage Series, Inc.; IDS Money Market Series,
Inc.; IDS New Dimensions Fund, Inc.; IDS Precious Metals
Fund, Inc.; IDS Progressive Fund, Inc.; IDS Selective Fund,
Inc.; IDS Special Tax-Exempt Series Trust; IDS Stock Fund,
Inc.; IDS Strategy Fund, Inc.; IDS Tax-Exempt Bond Fund,
Inc.; IDS Tax-Free Money Fund, Inc.; IDS Utilities Income
Fund, Inc. and IDS Certificate Company.
(b) As to each director, officer or partner of the principal
underwriter:
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Ronald G. Abrahamson Vice President- None
IDS Tower 10 Service Quality and
Minneapolis, MN 55440 Reengineering
Douglas A. Alger Vice President-Total None
IDS Tower 10 Compensation
Minneapolis, MN 55440
Peter J. Anderson Senior Vice President- Vice
IDS Tower 10 Investments President--
Minneapolis, MN 55440 Investments
Ward D. Armstrong Vice President- None
IDS Tower 10 Sales and Marketing,
Minneapolis, MN 55440 American Express
Institutional Retirement
Services
Alvan D. Arthur Group Vice President- None
Suite 105 Central California/
2710 S. Gateway Oaks Dr. Western Nevada
Sacramento, CA 95833
Joseph M. Barsky III Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
Robert C. Basten Vice President-Tax None
IDS Tower 10 and Business Services
Minneapolis, MN 55440
<PAGE>
PAGE 20
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Timothy V. Bechtold Vice President-Risk None
IDS Tower 10 Management Products
Minneapolis, MN 55440
John D. Begley Group Vice President- None
Suite 100 Ohio/Indiana
7760 Olentangy River Rd.
Columbus, OH 43235
Carl E. Beihl Vice President- None
IDS Tower 10 Strategic Technology
Minneapolis, MN 55440 Planning
Jack A. Benjamin Group Vice President- None
Suite 200 Greater Pennsylvania
3500 Market Street
Camp Hill, PA 17011
Alan F. Bignall Vice President- None
IDS Tower 10 Technology and
Minneapolis, MN 55440 Development
Brent L. Bisson Group Vice President- None
Ste 900 E. Westside Twr Los Angeles Metro
11835 West Olympic Blvd.
Los Angeles, CA 90064
John C. Boeder Vice President- None
IDS Tower 10 Mature Market Group
Minneapolis, MN 55440
Walter K. Booker Group Vice President- None
Suite 200 New Jersey
3500 Market Street
Camp Hill, NJ 17011
Bruce J. Bordelon Group Vice President- None
Galleria One Suite 1900 Gulf States
Galleria Blvd.
Metairie, LA 70001
Charles R. Branch Group Vice President- None
Suite 200 Northwest
West 111 North River Dr
Spokane, WA 99201
Karl J. Breyer Senior Vice President- None
IDS Tower 10 Corporate Affairs and
Minneapolis, MN 55440 Special Counsel
<PAGE>
PAGE 21
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Harold E. Burke Vice President None
IDS Tower 10 and Assistant
Minneapolis, MN 55440 General Counsel
Daniel J. Candura Vice President- None
IDS Tower 10 Marketing Support
Minneapolis, MN 55440
Cynthia M. Carlson Vice President- None
IDS Tower 10 American Express
Minneapolis, MN 55440 Securities Services
Orison Y. Chaffee III Vice President-Field None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
James E. Choat Senior Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440
Kenneth J. Ciak Vice President and None
IDS Property Casualty General Manager-
1400 Lombardi Avenue IDS Property Casualty
Green Bay, WI 54304
Roger C. Corea Group Vice President- None
290 Woodcliff Drive Upstate New York
Fairport, NY 14450
Henry J. Cormier Group Vice President- None
Commerce Center One Connecticut
333 East River Drive
East Hartford, CT 06108
John M. Crawford Group Vice President- None
Suite 200 Arkansas/Springfield/Memphis
10800 Financial Ctr Pkwy
Little Rock, AR 72211
Kevin F. Crowe Group Vice President- None
Suite 312 Carolinas/Eastern Georgia
7300 Carmel Executive Pk
Charlotte, NC 28226
Colleen Curran Vice President and None
IDS Tower 10 Assistant General Counsel
Minneapolis, MN 55440
Alan R. Dakay Vice President- None
IDS Tower 10 Institutional Products
Minneapolis, MN 55440 Group<PAGE>
PAGE 22
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Regenia David Vice President- None
IDS Tower 10 Systems Services
Minneapolis, MN 55440
Scott M. DiGiammarino Group Vice President- None
Suite 500 Washington/Baltimore
8045 Leesburg Pike
Vienna, VA 22182
Bradford L. Drew Group Vice President- None
Two Datran Center Eastern Florida
Penthouse One B
9130 S. Dadeland Blvd.
Miami, FL 33156
William H. Dudley Director and Executive Director
IDS Tower 10 Vice President-
Minneapolis MN 55440 Investment Operations
Roger S. Edgar Senior Vice President None
IDS Tower 10 and Technology Advisor
Minneapolis, MN 55440
Gordon L. Eid Senior Vice President None
IDS Tower 10 and General Counsel
Minneapolis, MN 55440
Robert M. Elconin Vice President- None
IDS Tower 10 Government Relations
Minneapolis, MN 55440
Mark A. Ernst Vice President- None
IDS Tower 10 Retail Services
Minneapolis, MN 55440
Joseph Evanovich Jr. Group Vice President- None
One Old Mill Nebraska/Iowa/Dakotas
101 South 108th Avenue
Omaha, NE 68154
Louise P. Evenson Group Vice President- None
Suite 200 San Francisco Bay Area
1333 N. California Blvd.
Walnut Creek, CA 94596
Gordon M. Fines Vice President- None
IDS Tower 10 Mutual Fund Equity
Minneapolis MN 55440 Investments
<PAGE>
PAGE 23
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Douglas L. Forsberg Group Vice President- None
Suite 100 Portland/Eugene
7931 N. E. Halsey
Portland, OR 97213
William P. Fritz Group Vice President- None
Suite 160 Northern Missouri
12855 Flushing Meadows Dr
St. Louis, MO 63131
Carl W. Gans Group Vice President- None
8500 Tower Suite 1770 Twin City Metro
8500 Normandale Lake Blvd.
Bloomington, MN 55437
Robert G. Gilbert Vice President- None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
John J. Golden Vice President- None
IDS Tower 10 Field Compensation
Minneapolis, MN 55440 Development
Morris Goodwin Jr. Vice President and None
IDS Tower 10 Corporate Treasurer
Minneapolis, MN 55440
Suzanne Graf Vice President- None
IDS Tower 10 Systems Services
Minneapolis, MN 55440
Bruce M. Guarino Group Vice President- None
Suite 1736 Hawaii
1585 Kapiolani Blvd.
Honolulu, HI 96814
David A. Hammer Vice President None
IDS Tower 10 and Marketing
Minneapolis, MN 55440 Controller
Teresa A. Hanratty Group Vice President- None
Suites 6&7 Northern New England
169 South River Road
Bedford, NH 03110
John R. Hantz Group Vice President- None
Suite 107 Detroit Metro
17177 N. Laurel Park
Livonia, MI 48154
<PAGE>
PAGE 24
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Robert L. Harden Group Vice President- None
Two Constitution Plaza Boston Metro
Boston, MA 02129
Lorraine R. Hart Vice President- None
IDS Tower 10 Insurance Investments
Minneapolis, MN 55440
Scott A. Hawkinson Vice President-Assured None
IDS Tower 10 Assets Product Development
Minneapolis, MN 55440 and Management
Brian M. Heath Group Vice President- None
Suite 150 North Texas
801 E. Campbell Road
Richardson, TX 75081
James G. Hirsh Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
David J. Hockenberry Group Vice President- None
30 Burton Hills Blvd. Eastern Tennessee
Suite 175
Nashville, TN 37215
Kevin P. Howe Vice President- None
IDS Tower 10 Government and
Minneapolis, MN 55440 Customer Relations and
Chief Compliance Officer
David R. Hubers Chairman, Chief Director
IDS Tower 10 Executive Officer and
Minneapolis, MN 55440 President
Marietta L. Johns Senior Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440
James E. Kaarre Vice President- None
IDS Tower 10 Marketing Information
Minneapolis, MN 55440
Linda B. Keene Vice President- None
IDS Tower 10 Market Development
Minneapolis, MN 55440
G. Michael Kennedy Vice President-Investment None
IDS Tower 10 Services and Investment
Minneapolis, MN 55440 Research
<PAGE>
PAGE 25
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Susan D. Kinder Senior Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440
Richard W. Kling Senior Vice President- None
IDS Tower 10 Risk Management Products
Minneapolis, MN 55440
Paul F. Kolkman Vice President- None
IDS Tower 10 Actuarial Finance
Minneapolis, MN 55440
Claire Kolmodin Vice President- None
IDS Tower 10 Service Quality
Minneapolis, MN 55440
David S. Kreager Group Vice President- None
Ste 108 Trestle Bridge V Greater Michigan
5136 Lovers Lane
Kalamazoo, MI 49002
Steven C. Kumagai Director and Senior None
IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management and Business
Systems
Mitre Kutanovski Group Vice President- None
Suite 680 Chicago Metro
8585 Broadway
Merrillville, IN 48410
Edward Labenski Jr. Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Kurt A. Larson Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Lori J. Larson Vice President- None
IDS Tower 10 Variable Assets Product
Minneapolis, MN 55440 Development
Ryan R. Larson Vice President- None
IDS Tower 10 IPG Product Development
Minneapolis, MN 55440
Daniel E. Laufenberg Vice President and None
IDS Tower 10 Chief U.S. Economist
Minneapolis, MN 55440
<PAGE>
PAGE 26
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Richard J. Lazarchic Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Peter A. Lefferts Senior Vice President- None
IDS Tower 10 Corporate Strategy and
Minneapolis, MN 55440 Development
Douglas A. Lennick Director and Executive None
IDS Tower 10 Vice President-Private
Minneapolis, MN 55440 Client Group
Mary J. Malevich Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Fred A. Mandell Vice President- None
IDS Tower 10 Field Marketing Readiness
Minneapolis, MN 55440
Daniel E. Martin Group Vice President- None
Suite 650 Pittsburgh Metro
5700 Corporate Drive
Pittsburgh, PA 15237
William J. McKinney Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440 Support
Thomas W. Medcalf Vice President- None
IDS Tower 10 Senior Portfolio Manager
Minneapolis, MN 55440
William C. Melton Vice President- None
IDS Tower 10 International Research
Minneapolis, MN 55440 and Chief International
Economist
Janis E. Miller Vice President- None
IDS Tower 10 Variable Assets
Minneapolis, MN 55440
James A. Mitchell Executive Vice President- None
IDS Tower 10 Marketing and Products
Minneapolis, MN 55440
John P. Moraites Group Vice President- None
Union Plaza Suite 900 Kansas/Oklahoma
3030 Northwest Expressway
Oklahoma City, OK 73112
<PAGE>
PAGE 27
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Pamela J. Moret Vice President- None
IDS Tower 10 Corporate Communications
Minneapolis, MN 55440
Alan D. Morgenstern Group Vice President- None
Suite 200 At Large
3500 Market Street
Camp Hill, NJ 17011
Barry J. Murphy Senior Vice President- None
IDS Tower 10 Client Service
Minneapolis, MN 55440
Mary Owens Neal Vice President- None
IDS Tower 10 Mature Market Segment
Minneapolis, MN 55440
Robert J. Neis Vice President- None
IDS Tower 10 Technology Services
Minneapolis, MN 55440
Ronald E. Newton Group Vice President- None
319 Southbridge St. Rhode Island/Central
Auburn, MA 01501 Massachusetts
Thomas V. Nicolosi Group Vice President- None
Suite 220 New York Metro Area
500 Mamaroneck Avenue
Harrison, NY 10528
James R. Palmer Vice President- None
IDS Tower 10 Taxes
Minneapolis, MN 55440
Carla P. Pavone Vice President- None
IDS Tower 10 Specialty Service Teams
Minneapolis, MN 55440 and Emerging Business
Susan B. Plimpton Vice President- None
IDS Tower 10 Segmentation Development
Minneapolis, MN 55440 and Support
Larry M. Post Group Vice President- None
One Tower Bridge Philadelphia Metro
100 Front Street 8th Fl
West Conshohocken, PA 19428
Ronald W. Powell Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
<PAGE>
PAGE 28
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
James M. Punch Vice President- None
IDS Tower 10 Geographical Service
Minneapolis, MN 55440 Teams
Frederick C. Quirsfeld Vice President-Taxable None
IDS Tower 10 Mutual Fund Investments
Minneapolis, MN 55440
R. Daniel Richardson Group Vice President- None
Suite 800 Southern Texas
Arboretum Plaza One
9442 Capital of Texas Hwy N.
Austin, TX 78759
Roger B. Rogos Group Vice President- None
One Sarasota Tower Western Florida
Suite 700
Two N. Tamiami Trail
Sarasota, FL 34236
ReBecca K. Roloff Vice President-1994 None
IDS Tower 10 Program Director
Minneapolis, MN 55440
Stephen W. Roszell Vice President- None
IDS Tower 10 Advisory Institutional
Minneapolis, MN 55440 Marketing
Max G. Roth Group Vice President- None
Suite 201 S IDS Ctr Wisconsin/Upper Michigan
1400 Lombardi Avenue
Green Bay, WI 54304
Robert A. Rudell Vice President- None
IDS Tower 10 American Express
Minneapolis, MN 55440 Institutional Retirement
Services
John P. Ryan Vice President and None
IDS Tower 10 General Auditor
Minneapolis, MN 55440
Erven Samsel Senior Vice President- None
45 Braintree Hill Park Field Management
Suite 402
Braintree, MA 02184
Russell L. Scalfano Group Vice President- None
Suite 201 Illinois/Indiana/Kentucky
101 Plaza East Blvd.
Evansville, IN 47715
<PAGE>
PAGE 29
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
William G. Scholz Group Vice President- None
Suite 205 Arizona/Las Vegas
7333 E Doubletree Ranch Rd
Scottsdale, AZ 85258
Stuart A. Sedlacek Vice President- None
IDS Tower 10 Assured Assets
Minneapolis, MN 55440
Donald K. Shanks Vice President- None
IDS Tower 10 Property Casualty
Minneapolis, MN 55440
F. Dale Simmons Vice President-Senior None
IDS Tower 10 Portfolio Manager,
Minneapolis, MN 55440 Insurance Investments
Judy P. Skoglund Vice President- None
IDS Tower 10 Human Resources and
Minneapolis, MN 55440 Organization Development
Julian W. Sloter Group Vice President- None
Ste 1700 Orlando FinCtr Orlando/Jacksonville
800 North Magnolia Ave.
Orlando, FL 32803
Ben C. Smith Vice President- None
IDS Tower 10 Workplace Marketing
Minneapolis, MN 55440
William A. Smith Vice President and None
IDS Tower 10 Controller-Private
Minneapolis, MN 55440 Client Group
James B. Solberg Group Vice President- None
466 Westdale Mall Eastern Iowa Area
Cedar Rapids, IA 52404
Bridget Sperl Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440 Management Services
Paul J. Stanislaw Group Vice President- None
Suite 1100 Southern California
Two Park Plaza
Irvine, CA 92714
Lois A. Stilwell Group Vice President- None
Suite 433 Outstate Minnesota Area/
9900 East Bren Road North Dakota/Western Wisconsin
Minnetonka, MN 55343
<PAGE>
PAGE 30
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
William A. Stoltzmann Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
James J. Strauss Vice President- None
IDS Tower 10 Corporate Planning
Minneapolis, MN 55440 and Analysis
Jeffrey J. Stremcha Vice President-Information None
IDS Tower 10 Resource Management/ISD
Minneapolis, MN 55440
Neil G. Taylor Group Vice President- None
Suite 425 Seattle/Tacoma
101 Elliott Avenue West
Seattle, WA 98119
John R. Thomas Senior Vice President- Director
IDS Tower 10 Information and
Minneapolis, MN 55440 Technology
Melinda S. Urion Senior Vice President Treasurer
IDS Tower 10 and Chief Financial
Minneapolis, MN 55440 Officer
Peter S. Velardi Group Vice President- None
Suite 180 Atlanta/Birmingham
1200 Ashwood Parkway
Atlanta, GA 30338
Charles F. Wachendorfer Group Vice President- None
Suite 100 Denver/Salt Lake City/
Stanford Plaza II Albuquerque
7979 East Tufts Ave Pkwy
Denver, CO 80237
Wesley W. Wadman Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Norman Weaver Jr. Senior Vice President- None
1010 Main St Suite 2B Field Management
Huntington Beach, CA 92648
Michael L. Weiner Vice President- None
IDS Tower 10 Tax Research and Audit
Minneapolis, MN 55440
James M. Weiss Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
<PAGE>
PAGE 31
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Lawrence J. Welte Vice President- None
IDS Tower 10 Investment Administration
Minneapolis, MN 55440
Jeffry M. Welter Vice President- None
IDS Tower 10 Equity and Fixed Income
Minneapolis, MN 55440 Trading
William N. Westhoff Senior Vice President and None
IDS Tower 10 Global Chief Investment
Minneapolis, MN 55440 Officer
Thomas L. White Group Vice President- None
Suite 200 Cleveland Metro
28601 Chagrin Blvd.
Woodmere, OH 44122
Eric S. Williams Group Vice President- None
Suite 250 Virginia
3951 Westerre Parkway
Richmond, VA 23233
Edwin M. Wistrand Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
Michael R. Woodward Senior Vice President- None
32 Ellicott St Ste 100 Field Management
Batavia, NY 14020
Item 29(c). Not applicable.
Item 30. Location of Accounts and Records
American Express Financial Corporation
IDS Tower 10
Minneapolis, MN 55440
Item 31. Management Services: Not Applicable.
Item 32. Undertakings
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders,
upon request and without charge.
<PAGE>
PAGE 111
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, IDS High Yield Tax-
Exempt Fund Inc., certifies that it meets the requirements for the
effectiveness of this Amendment to its Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Minneapolis and the State of Minnesota on the 25th
day of January, 1996.
IDS HIGH YIELD TAX-EXEMPT FUND, INC.
By /s/ Melinda S. Urion**
Melinda S. Urion, Treasurer
By /s/ William R. Pearce**
William R. Pearce, President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by
the following persons in the capacities indicated on the 25th day
of January, 1996.
Signature Capacity
/s/ William R. Pearce** President and Principal
William R. Pearce Executive Officer and
Director
/s/ Lynne V. Cheney* Director
Lynne V. Cheney
/s/ William H. Dudley* Director
William H. Dudley
/s/ Robert F. Froehlke* Director
Robert F. Froehlke
/s/ David R. Hubers* Director
David R. Hubers
/s/ Heinz F. Hutter* Director
Heinz F. Hutter
/s/ Anne P. Jones* Director
Anne P. Jones
/s/ Donald M. Kendall* Director
Donald M. Kendall
<PAGE>
PAGE 112
Signature Capacity
/s/ Melvin R. Laird* Director
Melvin R. Laird
/s/ Lewis W. Lehr* Director
Lewis W. Lehr
/s/ Edson W. Spencer* Director
Edson W. Spencer
/s/ John R. Thomas* Director
John R. Thomas
/s/ Wheelock Whitney* Director
Wheelock Whitney
/s/ C. Angus Wurtele* Director
C. Angus Wurtele
*Signed pursuant to Directors' Power of Attorney dated November 10,
1994, filed electronically as Exhibit 18(a) to Registrant's Post-
Effective Amendment No. 29, by:
______________________________
Leslie L. Ogg
**Signed pursuant to Officers' Power of Attorney dated November 1,
1995, filed electronically:
______________________________
Leslie L. Ogg
<PAGE>
PAGE 113
CONTENTS OF THIS
POST-EFFECTIVE AMENDMENT NO. 33
TO REGISTRATION STATEMENT NO. 2-63552
This post-effective amendment comprises the following papers and
documents:
The facing sheet.
Cross reference sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements.
Part C.
Other information.
Exhibits.
The signatures.
<PAGE>
PAGE 1
IDS High Yield Tax-Exempt Fund, Inc.
File No. 2-63552/811-2901
EXHIBIT INDEX
Exhibit 8: Form of Custodian Agreement between Registrant and
First National Bank of Minneapolis, dated August 16,
1979.
Exhibit 11: Independent Auditors' Consent.
Exhibit 17: Financial Data Schedule.
Exhibit 19(b): Officers' Power of Attorney dated November 1, 1995.
<PAGE>
PAGE 1
CUSTODIAN AGREEMENT
THIS CUSTODIAN AGREEMENT made this 16th day of August, 1979,
between IDS High Yield Tax-Exempt Fund, Inc. a Nevada Corporation
(hereinafter also called the "Corporation") and First National Bank
of Minneapolis, a corporation organized under the laws of the
United States of America with its principal place of business at
Minneapolis, Minnesota (hereinafter also calle the "Custodian").
WHEREAS, the Corporation desires that its securities and cash
be hereafter held and administered by Custodian pursuant to the
terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
herein made, the Corporation and the Custodian agree as follows:
Section 1. Definitions
The word "securities" as used herein shall be construed to
include, without being limited to, shares, stocks, treasury stocks,
including any stocks of this Corporation, notes, bonds, debentures,
evidences of indebtedness, options to buy or sell stocks,
certificates of interest or participation in any profit-sharing
agreements, collateral trust certificates, preorganization
certificates or subscriptions, transferable shares, investment
contracts, voting trust certificates, certificates of deposit for a
security, fractional or undivided interests in oil, gas, or other
mineral rights, or any certificates of interest or participation
in, temporary or interim certificates for, receipts for, guarantees
of, or warrants or rights to subscribe to or purchase any of the
foregoing, acceptances and other obligations and any evidence of
any right or interest in or to any cash, property or assets and any
interest or instrument commonly known as a security.
The words "custodian order" shall mean a request or direction,
including a computer printout, directed to the Custodian and signed
in the name of the Corporation by any two individuals designated in
the current certified list referred to in Section 2.
The word "facsimile" shall mean an exact copy or likeness
which is electronically transmitted for instant reproduction.
Section 2. Names, Titles and Signatures of Authorized Persons
The Corporation will certify to the Custodian the names and
signatures of its present officers and other designated persons
authorized on behalf of the Corporation to direct the Custodian by
custodian order as herein before defined. The Corporation agrees
that, whenever any change occurs in this list it will file with the
Custodian a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Corporation as having been duly adopted
by the Board of Directors or the Executive Committee of the Board
of Directors of the Corporation designating those persons currently
authorized on behalf of the Corporation to direct the Custodian by
custodian order, as hereinbefore defined, and upon such filing (to
be accompanied by the filing of specimen signatures of the
<PAGE>
PAGE 2
designated persons) the persons so designated in said resolution
shall constitute the current certified list. The Custodian is
authorized to rely and act upon the names and signatures of the
individuals as they appear in the most recent certified list from
the Corporation which has been delivered to the Custodian as
hereinabove provided.
Section 3. Use of Subcustodians
The Custodian may make arrangements, where appropriate, with
other banks having not less than two million dollars aggregate
capital, surplus and undivided profits for the custody of
securities. Any such bank selected by the Custodian to act as
subcustodian shall be deemed to be the agent of the Custodian.
Section 4. Receipt and Disbursement of Money
(1) The Custodian shall open and maintain a separate account
or accounts in the name of the Corporation or cause its agent to
open and maintain such account or accounts subject only to checks,
drafts or directives by the Custodian pursuant to the terms of this
Agreement. The Custodian or its agent shall hold in such account
or accounts, subject to the provisions hereof, all cash received by
it from or for the account of the Corporation. The Custodian or
its agent shall make payments of cash to or for the account of the
Corporation from such cash only:
(a) for the purchase of securities for the portfolio of the
Corporation upon the receipt of such securities by the Custodian
or its agent,
(b) for the purchase or redemption of shares of capital stock of the
Corporation,
(c) for the payment of interest, dividends, taxes, management fees,
or operating expenses (including, without limitation thereto,
fees for legal, accounting and auditing services),
(d) for payment of distribution fees, commissions, or redemption
fees, if any,
(e) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the
Corporation held by or to be delivered to the Custodian,
(f) for payments in connection with the return of securities loaned
by the Corporation upon receipt of such securities or the
reduction of collateral upon receipt of proper notice,
(g) for payments for other proper corporate purposes, or
(h) upon the termination of this Agreement.
<PAGE>
PAGE 3
Before making any such payment for the purposes permitted
under the terms of items (a), (b), (c), (d), (e), (f) or (g) of
paragraph (1) of the Section, the Custodian shall receive and may
rely upon a custodian order directing such payment and stating that
the payment is for such a purpose permitted under these items (a),
(b), (c), (d), (e), (f) or (g) and that in respect to item (g), a
copy of a resolution of the Board of Directors or of the Executive
Committee of the Board of Directors of the Corporation signed by an
officer of the Corporation and certified by its Secretary or an
Assistant Secretary, specifying the amount of such payment, setting
forth the purpose to be a proper corporate purpose, and naming the
person or persons to whom such payment is made. Notwithstanding
the above, for the purposes permitted under items (a) or (f) of
paragraph (1) of this Section, the Custodian may rely upon a
facsimile order.
(2) The Custodian is hereby appointed the attorney-in-fact of
the Corporation to endorse and collect all checks, drafts or other
orders for the payment of money received by the Custodian for the
account of the Corporation and drawn on or to the order of the
Corporation and to deposit same to the account of the Corporation
pursuant to this Agreement.
Section 5. Receipt of Securities
Except as permitted by the second paragraph of this section,
the Custodian or its agent shall hold in a separate account or
accounts, and physically segregated at all times from those of any
other persons, firms or corporations, pursuant to the provisions
hereof, all securities received by it for the account of the
Corporation. The Custodian shall record and maintain a record of
all certificate numbers. Securities so received shall be held in
the name of the Corporation, in the name of an exclusive nominee
duly appointed by the Custodian or in bearer form, as appropriate.
Subject to such rules, regulations or guidelines as the
Securities and Exchange Commission may adopt, the Custodian may
deposit all or any part of the securities owned by the Corporation
in a securities depository which includes any system for the
central handling of securities established by a national securities
exchange or a national securities association registered with the
Securities and Exchange Commission under the Securities Exchange
Act of 1934, or such other person as may be permitted by the
Commission, pursuant to which system all securities of any
particular class or series of any issuer deposited within the
system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities.
All securities are to be held or disposed of by the Custodian
for, and subject at all times to the instructions of, the
Corporation pursuant to the terms of this Agreement. The Custodian
shall have no power or authority to assign, hypothecate, pledge or
otherwise dispose of any such securities, except pursuant to the
directive of the Corporation and only for the account of the
Corporation as set forth in Section 6 of this Agreement.
<PAGE>
PAGE 4
Section 6. Transfer Exchange, Delivery, etc. of Securities
The Custodian shall have sole power to release or deliver any
securities of the Corporation held by it pursuant to this
Agreement. The Custodian agrees to transfer, exchange or deliver
securities held by it or its agent hereunder only:
(a) for sales of such securities for the account of the Corporation,
upon receipt of payment therefor;
(b) when such securities are called, redeemed, retired or otherwise
become payable;
(c) for examination upon the sale of any such securities in
accordance with "street delivery" custom which would include
delivery against interim receipts or other proper delivery
receipts;
(d) in exchange for or upon conversion into other securities alone
or other securities and cash whether pursuant to any plan of
merger, consolidation, reorganization, recapitalization or
readjustment, or otherwise;
(e) for the purpose of exchanging interim receipts or temporary
certificates for permanent certificates;
(f) upon conversion of such securities pursuant to their terms into
other securities;
(g) upon exercise of subscription, purchase or other similar rights
represented by such securities;
(h) for loans of such securities by the Corporation upon receipt of
collateral;
(i) for other proper corporate purposes.
As to any deliveries made by the Custodian pursuant to items
(a), (b), (c), (d), (e), (f), (g) and (h), securities or cash
received in exchange therefore shall be delivered to the Custodian,
its agent, or to a securities depository. Before making any such
transfer, exchange, or delivery, the Custodian shall receive a
custodian order or a facsimile from the Corporation requesting such
transfer, exchange or delivery and) stating that it is for a
purpose permitted under Section 6 (whenever a facsimile is
utilized, the Corporation will also deliver an original signed
custodian order) and, in respect to item (i), a copy of a
resolution of the Board of Directors or of the Executive Committee
of the Board of Directors of the Corporation signed by an officer
of the Corporation and certified by its Secretary or an Assistant
Secretary, specifying the securities, setting forth the purpose for
which such payment, transfer, exchange, or delivery is to be made,
declaring such purpose to be a proper corporate purpose, and naming
the person or persons to whom such transfer, exchange or delivery
of such securities shall be made.
<PAGE>
PAGE 5
Section 7. Custodian's Acts Without Instructions
Unless and until the Custodian receives a contrary custodian
order from the Corporation, the Custodian shall or shall cause its
agent to:
(a) present for payment all coupons and other income items held by
the Custodian or its agent for the account of the Corporation
which call for payment upon presentation and hold all cash
received by it upon such payment for the account of the
Corporation;
(b) present for payment all securities held by it or its agent which
mature or when called, redeemed, retired, or otherwise become
payable;
(c) ascertain all stock dividends, rights and similar securities to
be issued with respect to any securities held by the Custodian
or its agent hereunder, and to collect and hold for the account
of the Corporation all such securities;
(d) ascertain all interest and cash dividends to be paid to security
holders with respect to any securities held by the Custodian or
its agent, and to collect and hold such interest and cash
dividends for the account of the Corporation.
Section 8. Voting and Other Action
Neither the Custodian nor any nominee of the Custodian shall
vote any of the securities held hereunder by or for the account of
the Corporation. The Custodian shall promptly deliver to the
Corporation all notices, proxies and proxy soliciting materials
with relation to such securities, such proxies to be executed by
the registered holder of such securities (if registered otherwise
than in the name of the Corporation), but without indicating the
manner in which such proxies are to be voted.
Custodian shall transmit promptly to the Corporation all
written information (including, without limitation, pendency of
calls and maturities of securities and expirations of rights in
connection therewith) received by the Custodian from issuers of the
securities being held for the Corporation. With respect to tender
or exchange offers, the Custodian shall transmit promptly to the
Corporation all written information received by the Custodian from
issuers of the securities whose tender or exchange is sought and
from the party (or his agents) making the tender or exchange offer.
Section 9. Transfer Taxes
The Corporation shall pay or reimburse the Custodian for any
transfer taxes payable upon transfers of securities made hereunder,
including transfers resulting from the termination of this
Agreement. The Custodian shall execute such certificates in
connection with securities delivered to it under this Agreement as
<PAGE>
PAGE 6
may be required, under any applicable law or regulation, to exempt
from taxation any transfers and/or deliveries of any such
securities which may be entitled to such exemption.
Section 10. Custodian's Reports
The Custodian shall furnish the Corporation as of the close of
business each day a statement showing all transactions and entries
for the account of the Corporation. The books and records of the
Custodian pertaining to its actions as Custodian under this
agreement and securities held hereunder by the Custodian shall be
open to inspection and audit, at reasonable times, by officers of
the Corporation, internal auditors employed by the Corporation's
investment adviser, and independent auditors employed by the
Corporation. The Custodian shall furnish the Corporation in such
form as may reasonably be requested by the Corporation a list of
the securities held by it in custody for the account of the
Corporation as of the close of business on the last business day of
each month, which shall be certified by a duly authorized officer
of the Custodian. It is further understood that additional reports
may from time to time be requested by the Corporation. Should any
report ever be filed with any governmental authority pertaining to
lost or stolen securities, the Custodian will concurrently provide
the Corporation with a copy of that report.
The Custodian also shall furnish such reports on its systems
of internal accounting control as the Corporation may reasonably
request from time to time.
Section 11. Concerning Custodian
For its services hereunder the Custodian shall be paid such
compensation at such times as may from time to time be agreed on in
writing by the parties hereto in a Custodian Fee Agreement.
The Custodian shall not be liable for any action taken in good
faith upon any custodian order or facsimile herein described or
certified copy of any resolution of the Board of Directors or of
the Executive Committee of the Board of Directors of the
Corporation, and may rely on the genuineness of any such document
which it may in good faith believe to have been validly executed.
The Corporation agrees to indemnify and hold harmless
Custodian and its nominee from all taxes, charges, expenses,
assessments, claims and liabilities (including counsel fees)
incurred or assessed against it or its nominee in connection with
the performance of this Agreement, except such as may arise from
the Custodian's or its nominee's own negligent action, negligent
failure to act or willful misconduct. Custodian is authorized to
charge any account of the Corporation for such items. In the event
of any advance of cash for any purpose made by Custodian resulting
from orders or instructions of the Corporation, or in the event
that Custodian or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection
with the performance of this Agreement, except such as may arise
<PAGE>
PAGE 7
from its or its nominee's own negligent action, negligent failure
to act or willful misconduct, any property at any time held for the
account of the Corporation shall be security therefor.
The Custodian shall maintain a standard of care equivalent to
that which would be required of a bailee for hire and shall not be
liable for any loss or damage to the Corporation resulting from
participation in a securities depository unless such loss or damage
arises by reason of any negligence, misfeasance, or willful
misconduct of officers or employees of the Custodian, or from its
failure to enforce effectively such rights as it may have against
any securities depository or from use of an agent, unless such loss
or damage arises by reason of any negligence, misfeasance, or
willful misconduct of officers or employees of the Custodian, or
from its failure to enforce effectively such rights as it may have
against any agent.
Section 12. Termination and Amendment of Agreement
The Corporation and the Custodian mutually may agree from time
to time in writing to amend, to add to, or to delete from any
provision of this Agreement.
The Custodian may terminate this Agreement by giving the
Corporation ninety days' written notice of such termination by
registered mail addressed to the Corporation at its principal place
of business.
The Corporation may terminate this Agreement at any time by
written notice thereof delivered, together with a copy of the
resolution of the Board of Directors authorizing such termination
and certified by the Secretary of the Corporation, by registered
mail to the Custodian.
Upon such termination of this Agreement, assets of the
Corporation held by the Custodian shall be delivered by the
Custodian to a successor custodian, if one has been appointed by
the Corporation, upon receipt by the Custodian of a copy of the
resolution of the Board of Directors of the Corporation certified
by the Secretary, showing appointment of the successor custodian,
and provided that such successor custodian is a bank or trust
company, organized under the laws of the United States or of any
State of the United States, having not less than two million
dollars aggregate capital, surplus and undivided profits. Upon the
termination of this Agreement as a part of the transfer of assets,
either to a successor custodian or otherwise, the Custodian will
deliver securities held by it hereunder, when so authorized and
directed by resolution of the Board of Directors of the
Corporation, to a duly appointed agent of the successor custodian
or to the appropriate transfer agents for transfer of registration
and delivery as directed. Delivery of assets on termination of
this Agreement shall be effected in a reasonable, expeditious and
orderly manner; and in order to accomplish an orderly transition
from the Custodian to the successor custodian, the Custodian shall
continue to act as such under this Agreement as to assets in its
possession or control. Termination as to each security shall
become effective upon delivery to the successor custodian, its
<PAGE>
PAGE 8
agent, or to a transfer agent for a specific security for the
account of the successor custodian, and such delivery shall
constitute effective delivery by the Custodian to the successor
under this Agreement.
In addition to the means of termination hereinbefore
authorized, this Agreement may be terminated at any time by the
vote of a majority of the outstanding shares of the Corporation and
after written notice of such action to the Custodian.
Section 13. General
Nothing expressed or mentioned in or to be implied from any
provision of this Agreement is intended to, or shall be construed
to give any person or corporation other than the parties hereto,
any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any covenant, condition or provision herein
contained, this Agreement and all of the covenants, conditions and
provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective
successors and assigns.
IN WITNESS WHEREOF, the Corporation and the Custodian have caused
this Agreement to be executed and their respective corporate seals
to be affixed hereto as of the date first above written by their
respective officers thereunto duly authorized.
Attest: IDS HIGH YIELD TAX-EXEMPT FUND, INC.
/s/ Valeda A. Binford By /s/ Leslie L. Ogg
Assistant Secretary Vice President
Attest: FIRST NATIONAL BANK OF MINNEAPOLIS
/s/ Marianne Peterson By /s/ Robert Spies
Trust Officer Vice President
<PAGE>
PAGE 1
INDEPENDENT AUDITORS' CONSENT
___________________________________________________________________
The Board of Directors and Shareholders
IDS High Yield Tax-Exempt Fund, Inc.:
We consent to the use of our report incorporated herein by
reference and to the references to our Firm under the headings
"Financial Highlights" in Part A and "INDEPENDENT AUDITORS" in Part
B of the Registration Statement.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
January 25, 1996
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
(SERIES>
[NUMBER] 1
<NAME> IDS HIGH YIELD TAX-EXEMPT FUND CLASS A
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 5819390076
<INVESTMENTS-AT-VALUE> 6368385523
<RECEIVABLES> 141301049
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6509686572
<PAYABLE-FOR-SECURITIES> 85670999
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11818268
<TOTAL-LIABILITIES> 97489267
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5933522173
<SHARES-COMMON-STOCK> 1356375237
<SHARES-COMMON-PRIOR> 1380760792
<ACCUMULATED-NII-CURRENT> 6694
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (86902133)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 565570571
<NET-ASSETS> 6412197305
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 426651811
<OTHER-INCOME> 0
<EXPENSES-NET> (41551291)
<NET-INVESTMENT-INCOME> 385100520
<REALIZED-GAINS-CURRENT> 11853067
<APPREC-INCREASE-CURRENT> 641790089
<NET-CHANGE-FROM-OPS> 1038743676
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (383035556)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 205021043
<NUMBER-OF-SHARES-REDEEMED> (288309966)
<SHARES-REINVESTED> 58903368
<NET-CHANGE-IN-ASSETS> 643144040
<ACCUMULATED-NII-PRIOR> 416298236
<ACCUMULATED-GAINS-PRIOR> (76837611)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 27955627
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 41551291
<AVERAGE-NET-ASSETS> 6072962477
<PER-SHARE-NAV-BEGIN> 4.18
<PER-SHARE-NII> .28
<PER-SHARE-GAIN-APPREC> .48
<PER-SHARE-DIVIDEND> (.28)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 4.66
<EXPENSE-RATIO> .68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
<ARTICLE> 6
(SERIES>
[NUMBER] 2
<NAME> IDS HIGH YIELD TAX-EXEMPT FUND CLASS B
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
[INVESTMENTS-AT-COST] 5819390076
[INVESTMENTS-AT-VALUE] 6368385523
[RECEIVABLES] 141301049
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 6509686572
[PAYABLE-FOR-SECURITIES] 85670999
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 11818268
[TOTAL-LIABILITIES] 97489267
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 5933522173
[SHARES-COMMON-STOCK] 15336396
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 6694
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (86902133)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 565570571
[NET-ASSETS] 6412197305
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 426651811
[OTHER-INCOME] 0
[EXPENSES-NET] (41551291)
[NET-INVESTMENT-INCOME] 385100520
[REALIZED-GAINS-CURRENT] 11853067
[APPREC-INCREASE-CURRENT] 641790089
[NET-CHANGE-FROM-OPS] 1038743676
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (1365603)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 15737180
[NUMBER-OF-SHARES-REDEEMED] (647677)
[SHARES-REINVESTED] 246893
[NET-CHANGE-IN-ASSETS] 643144040
[ACCUMULATED-NII-PRIOR] 416298236
[ACCUMULATED-GAINS-PRIOR] (76837611)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 27955627
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 41551291
[AVERAGE-NET-ASSETS] 36237990
[PER-SHARE-NAV-BEGIN] 4.46
[PER-SHARE-NII] .19
[PER-SHARE-GAIN-APPREC] .20
[PER-SHARE-DIVIDEND] (.19)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 4.66
[EXPENSE-RATIO] 1.48
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
<ARTICLE> 6
(SERIES>
[NUMBER] 3
<NAME> IDS HIGH YIELD TAX-EXEMPT FUND CLASS Y
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
[INVESTMENTS-AT-COST] 5819390076
[INVESTMENTS-AT-VALUE] 6368385523
[RECEIVABLES] 141301049
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 6509686572
[PAYABLE-FOR-SECURITIES] 85670999
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 11818268
[TOTAL-LIABILITIES] 97489267
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 5933522173
[SHARES-COMMON-STOCK] 5343662
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 6694
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (86902133)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 565570571
[NET-ASSETS] 6412197305
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 426651811
[OTHER-INCOME] 0
[EXPENSES-NET] (41551291)
[NET-INVESTMENT-INCOME] 385100520
[REALIZED-GAINS-CURRENT] 11853067
[APPREC-INCREASE-CURRENT] 641790089
[NET-CHANGE-FROM-OPS] 1038743676
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (697056)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 27954933
[NUMBER-OF-SHARES-REDEEMED] (22611371)
[SHARES-REINVESTED] 100
[NET-CHANGE-IN-ASSETS] 643144040
[ACCUMULATED-NII-PRIOR] 416298236
[ACCUMULATED-GAINS-PRIOR] (76837611)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 27955627
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 41551291
[AVERAGE-NET-ASSETS] 15554995
[PER-SHARE-NAV-BEGIN] 4.46
[PER-SHARE-NII] .22
[PER-SHARE-GAIN-APPREC] .20
[PER-SHARE-DIVIDEND] (.22)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 4.66
[EXPENSE-RATIO] .54
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
<PAGE>
PAGE 1
OFFICERS POWER OF ATTORNEY
City of Minneapolis
State of Minnesota
Each of the undersigned, as officers of the below listed
open-end, diversified investment companies that previously have
filed registration statements and amendments thereto pursuant to
the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 with the Securities and Exchange Commission:
1933 Act 1940 Act
Reg. Number Reg. Number
IDS Bond Fund, Inc. 2-51586 811-2503
IDS California Tax-Exempt Trust 33-5103 811-4646
IDS Discovery Fund, Inc. 2-72174 811-3178
IDS Equity Select Fund, Inc. 2-13188 811-772
IDS Extra Income Fund, Inc. 2-86637 811-3848
IDS Federal Income Fund, Inc. 2-96512 811-4260
IDS Global Series, Inc. 33-25824 811-5696
IDS Growth Fund, Inc. 2-38355 811-2111
IDS High Yield Tax-Exempt Fund, Inc. 2-63552 811-2901
IDS International Fund, Inc. 2-92309 811-4075
IDS Investment Series, Inc. 2-11328 811-54
IDS Life Investment Series, Inc. 2-73115 811-3218
IDS Life Managed Fund, Inc. 2-96367 811-4252
IDS Life Moneyshare Fund, Inc. 2-72584 811-3190
IDS Life Special Income Fund, Inc. 2-73113 811-3219
IDS Managed Retirement Fund, Inc. 2-93801 811-4133
IDS Market Advantage Series, Inc. 33-30770 811-5897
IDS Money Market Series, Inc. 2-54516 811-2591
IDS New Dimensions Fund, Inc. 2-28529 811-1629
IDS Precious Metals Fund, Inc. 2-93745 811-4132
IDS Progressive Fund, Inc. 2-30059 811-1714
IDS Selective Fund, Inc. 2-10700 811-499
IDS Special Tax-Exempt Series Trust 33-5102 811-4647
IDS Stock Fund, Inc. 2-11358 811-498
IDS Strategy Fund, Inc. 2-89288 811-3956
IDS Tax-Exempt Bond Fund, Inc. 2-57328 811-2686
IDS Tax-Free Money Fund, Inc. 2-66868 811-3003
IDS Utilities Income Fund, Inc. 33-20872 811-5522
hereby constitutes and appoints William R. Pearce and Leslie L. Ogg
or either one of them, as her or his attorney-in-fact and agent, to
sign for her or him in her or his name, place and stead, as an
officer, any and all further amendments to said registration
statements filed pursuant to said Acts and any rules and
regulations thereunder, and to file such amendments with all
exhibits thereto and other documents in connection therewith with
<PAGE>
PAGE 2
the Securities and Exchange Commission, granting to either of them
the full power and authority to do and perform each and every act
required and necessary to be done in connection therewith.
Dated the 1st day of November, 1995.
/s/ William R. Pearce
William R. Pearce
/s/ Melinda S. Urion
Melinda S. Urion
