PAGE
IDS Tax-Free Money Fund
1994 semiannual report
(icon of) shield with piggy bank enclosed
The goal of IDS Tax-Free Money Fund, Inc. is to provide as high a
level of current income exempt from federal income tax as is
consistent with liquidity and stability of principal. The fund invests
primarily in short-term bonds and notes issued by or on behalf of
state or local governmental units.
Distributed by
IDS Financial Services Inc.
IDS
An American Express company
AMERICAN
EXPRESS
<PAGE>
PAGE
(icon of) shield with piggy bank enclosed
Stability without taxes
Everyone needs to have a cash reserve to cover unexpected expenses.
But where to keep it? It's easy to find an investment that provides
stability and ready access to your money, but there's usually a
drawback: You have to pay taxes on the interest the money earns. But
there is an alternative Tax-Free Money Fund. The interest it pays is
generally free from federal taxes. The result: A cash reserve that can
let you keep tax-exempt income it earns.
Contents
From the president 3
From the portfolio manager 3
Financial statements 5
Notes to financial statements 8
Investments in securities 12
Directors and officers 16
IDS mutual funds 17
<PAGE>
PAGE
To our shareholders
William R. Pearce
President of the fund
Terry Fettig
Portfolio manager
From the president
As you read this semiannual report, you'll find that it complements
the newly designed annual report you received six months ago. We hope
the substantial changes we've made to the design and organization will
help make information easier to find and understand.
A good place to begin is with the portfolio manager's letter, which
describes the events and investment strategies that most influenced
the fund's performance during the past period.
For a broader financial perspective, please consult your IDS planner,
who can help you make sure your investment and protection strategies
continue to meet the objectives in your financial plan.
William R. Pearce
From the portfolio manager
Despite considerable swings in interest rates, yields on short-term
tax-exempt securities changed little during the first half of IDS
Tax-Free Money Fund's fiscal period, ended June 30, 1994. Net asset
value remained at $1 during the period, providing shareholders with
stability of principal in addition to a tax-free return.
(Note: An investment in the fund is not insured or guaranteed by the
U.S. government. Although the fund seeks to maintain a stable $1 share
price, there is no assurance that it will be able to do so.)
For the seven-day period ended June 30, 1994, the fund provided an
annualized simple yield of 2.06% and an annualized compound yield of
2.08%. These are equal to 2.86% simple and 2.89% compound taxable
yields for someone in the 28-percent federal income-tax bracket.
<PAGE>
PAGE
To our shareholders
In recent months, we have continued to diversify our holdings in
variable-rate demand notes, commercial paper and longer-term notes.
Overall, however, the philosophy behind this fund remains unchanged:
We continue the fund's emphasis on high-quality, highly liquid
securities, which are easy to sell on the open market. This strategy
is designed to meet our primary goal of protecting investors'
principal.
Investors should know that, under federal law, some notes issued on
the tax-free market are subject to the alternative minimum tax (AMT).
To eliminate any federal income-tax liabilities for investors who may
be subject to AMT requirements, we will continue to refrain from
purchasing these issues.
Outlook remains positive
As for the market outlook, we think the economy will continue to grow
at a moderate pace during the rest of the year. This should benefit
the credit quality of issuers of tax-free securities. In a strong
economy, tax revenues increase, which helps improve the financial
conditions of the states and municipalities whose securities we buy
and, ultimately, reduces the chances of their failing to make timely
interest and principal payments on their securities. It's important to
note that this has not been a problem in the past, but a healthy
economy does provide a sound foundation for investment in such
securities.
After lagging behind the general interest-rate increase during the
first several months of the year, short-term tax-exempt rates have
room to rise somewhat in the months ahead. However, demand for such
securities remains healthy, which will tend to keep rates somewhat
lower than otherwise. Together, those factors could well result in a
modest increase in the fund's dividend, meaning that shareholders
would realize a higher return.
In the meantime, we have kept the average maturity of the portfolio
relatively short, which will allow us to take advantage of higher
interest rates, should they emerge. This strategy, however, does not
distract from our primary objective of maintaining a stable net asset
value.
Terry Fettig
<PAGE>
PAGE
Financial statements
<TABLE><CAPTION>
Statement of assets and liabilities
IDS Tax-Free Money Fund, Inc.
June 30, 1994
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
(Unaudited)
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $133,471,977) $133,471,977
Cash in bank on demand deposit 471,294
Accrued interest receivable 551,120
Receivable for investment securities sold 100,000
_____________________________________________________________________________________________________________
Total assets 134,594,391
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Dividends payable to shareholders 19,248
Payable for investment securities purchased 12,931,342
Accrued investment management and services fee 35,158
Accrued distribution fee 4,571
Accrued transfer agency fee 18,155
Other accrued expenses 68,835
_____________________________________________________________________________________________________________
Total liabilities 13,077,309
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $121,517,082
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 121,532,608 shares $ 1,215,326
Additional paid-in capital 120,318,116
Undistributed net investment income 18
Accumulated net realized loss (16,378)
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $121,517,082
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 1.00
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE
Financial statements
Statement of operations
IDS Tax-Free Money Fund, Inc.
Six months ended June 30, 1994
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
(Unaudited)
Income:
Interest $1,414,506
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 200,092
Distribution fee 27,317
Transfer agency fee 107,588
Compensation of directors 3,566
Custodian fees 794
Postage 13,158
Registration fees 38,832
Reports to shareholders 3,393
Audit fees 9,000
Administrative 2,102
Other 2,359
_____________________________________________________________________________________________________________
Total expenses 408,201
_____________________________________________________________________________________________________________
Investment income -- net 1,006,305
_____________________________________________________________________________________________________________
Realized gain on investments -- net
_____________________________________________________________________________________________________________
Net realized gain on investments (Note 3) 5,108
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $1,011,413
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE
Financial statements
<CAPTION>
Statements of changes in net assets
IDS Tax-Free Money Fund, Inc.
_____________________________________________________________________________________________________________
Operations and distributions June 30, 1994 Dec. 31, 1993
_____________________________________________________________________________________________________________
Six months ended Year ended
(Unaudited)
<S> <C> <C>
Investment income -- net $ 1,006,305 $ 2,038,716
Net realized gain (loss) on investments 5,108 (16,772)
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations 1,011,413 2,021,944
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (1,006,332) (2,038,709)
_____________________________________________________________________________________________________________
Capital share transactions at constant $1 net asset value
_____________________________________________________________________________________________________________
Proceeds from sales of shares 124,806,358 210,478,473
Net asset value of shares
issued in reinvestment of distributions 977,745 1,959,174
Payments for redemptions of shares (119,864,666) (233,790,673)
_____________________________________________________________________________________________________________
Increase (decrease) in net assets from capital share transactions 5,919,437 (21,353,026)
_____________________________________________________________________________________________________________
Total increase (decrease) in net assets 5,924,518 (21,369,791)
Net assets at beginning of period 115,592,564 136,962,355
_____________________________________________________________________________________________________________
Net assets at end of period
(including undistributed net investment income of
$18 and $45) $121,517,082 $115,592,564
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE
Notes to financial statements
IDS Tax-Free Money Fund, Inc.
(Unaudited as to June 30, 1994)
______________________________________________________________________
1. Summary of significant accounting policies
The fund is registered under the Investment
Company Act of 1940 (as amended) as a
diversified, open-end management investment
company. Significant accounting policies
followed by the fund are summarized below:
Valuation of securities
Pursuant to Rule 2a-7 of the 1940 Act, all
securities are valued daily at amortized
cost, which approximates market value, in
order to maintain a constant net asset value
of $1 per share.
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.
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.
Other
Security transactions are accounted for on
the date securities are purchased or sold.
Interest income including level-yield
amortization of premium and discount, is
accrued daily.
<PAGE>
PAGE
Notes to financial statements
IDS Tax-Free Money Fund, Inc.
______________________________________________________________________
2. Expenses
Under terms of an agreement dated Nov. 14,
1991, the fund pays IDS Financial Corporation
(IDS) a fee for managing its investments,
recordkeeping and other specified services.
The fee is a percentage of the fund's average
daily net assets consisting of an annual
asset charge in reducing percentages from
0.34% to 0.26% annually.
The fund also pays IDS a distribution fee at
an annual rate of $6 per shareholder account
and a transfer agency fee at an annual rate
of $24 per shareholder account. The transfer
agency fee is reduced by earnings on monies
pending shareholder redemptions.
IDS will assume and pay any expenses (except
taxes and brokerage commissions) that exceed
the most restrictive applicable state expense
limitation.
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 $2,422 for the six
months ended June 30, 1994.
______________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of
securities aggregated $183,555,377 and
$164,547,894, respectively, for the six
months ended June 30, 1994. Realized gains
and losses are determined on an identified
cost basis.
<PAGE>
PAGE
Notes to financial statements
<TABLE><CAPTION>
IDS Tax-Free Money Fund, Inc.
_______________________________________________________________________________
4. Financial highlights
The table below shows certain important financial information
for evaluating the fund's results.
Fiscal period ended Dec. 31,
Per share income and capital changes*
1994** 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
beginning of period
Income from investment operations:
Net investment income .01 .02 .02 .04 .05 .05
Less distributions:
Dividends from net (.01) (.02) (.02) (.04) (.05) (.05)
investment income
Net asset value, $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
end of period
Ratios/supplemental data
1994** 1993 1992 1991 1990 1989
Net assets, end of period $122 $116 $137 $144 $153 $117
(in millions)
Ratio of expenses to .69%*** .68% .63% .70% .71% .67%
average daily net assets
Ratio of net income to 1.71%*** 1.63% 2.25% 3.78% 5.24% 5.47%
average daily net assets
Total return 0.8%**** 1.6% 2.2% 3.8% 5.2% 5.6%
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended June 30, 1994 (Unaudited).
***Adjusted to an annual basis.
****For the fiscal period ended June 30, 1994, the annualized total return is
1.7%.
</TABLE>
<PAGE>
PAGE
Investments in securities
<TABLE><CAPTION>
IDS Tax-Free Money Fund, Inc. (Percentages represent value of
June 30, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)
____________________________________________________________________________________________________________________________
Issuer Principal Value(a)
amount
____________________________________________________________________________________________________________________________
<S> <C> <C>
Alaska (0.8%)
Valdez Marine Terminal Refunding Revenue Bonds Mobil Alaska Pipeline
2.55% 11-1-03 $1,000,000 (c,d) $ 1,000,000
_____________________________________________________________________________________________________________________________
Arizona (6.3%)
Maricopa County Pollution Control Revenue Bonds Southern California Edison T.E.C.P.
Series E
2.60% 7-12-94 1,000,000 1,000,000
3.10% 10-12-94 2,120,000 2,120,000
Salt River Agricultural Improvement & Power District T.E.C.P.
2.70% 7-14-94 1,000,000 1,000,000
3.25% 7-12-94 1,500,000 1,500,000
3.35% 10-6-94 2,000,000 2,000,000
____________
Total 7,620,000
_____________________________________________________________________________________________________________________________
California (4.8%)
Los Angeles County T.R.A.N. Series 1994-95
4.50% 6-30-95 2,840,000 2,857,722
Sacramento County T.R.A.N. Series 1993
3.00% 7-29-94 2,000,000 2,000,776
State Contra Costa Transportation Authority Series 1993A (FGIC Insured)
2.55% 3-1-09 1,000,000 (c,d,e) 1,000,000
____________
Total 5,858,498
_____________________________________________________________________________________________________________________________
Colorado (1.7%)
State General Fund T.R.A.N. Series 1994
4.50% 6-27-95 2,000,000 2,013,160
_____________________________________________________________________________________________________________________________
Connecticut (5.9%)
Development Authority Pollution Control Bonds Western Massachusetts
Series 1993A
2.10% 9-1-28 2,200,000 (c,d) 2,200,000
2.25% 9-1-28 5,000,000 (c,d) 5,000,000
____________
Total 7,200,000
_____________________________________________________________________________________________________________________________
Florida (4.5%)
State Municipal Power Agency Revenue Bonds T.E.C.P. Series A
2.65% 7-20-94 4,000,000 4,000,000
2.70% 7-13-94 1,500,000 1,500,000
____________
Total 5,500,000
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Free Money Fund, Inc. (Percentages represent value of
June 30, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)
____________________________________________________________________________________________________________________________
Issuer Principal Value(a)
amount
____________________________________________________________________________________________________________________________
Georgia (2.1%)
De Kalb County T.A.N.
3.25% 12-30-94 $2,500,000 $ 2,502,548
_____________________________________________________________________________________________________________________________
Idaho (1.7%)
State T.A.N. Series 1994
4.50% 6-29-95 2,000,000 2,012,880
_____________________________________________________________________________________________________________________________
Indiana (1.6%)
State Bond Bank Advancement Fund Program Series A-2
3.03% 1-17-95 2,000,000 2,002,978
_____________________________________________________________________________________________________________________________
Kentucky (0.8%)
Jefferson County Pollution Control Revenue Bonds Series 1993
3.20% 8-4-94 1,000,000 1,000,000
_____________________________________________________________________________________________________________________________
Maine (2.5%)
State General Obligation T.A.N.
4.50% 6-30-95 3,000,000 3,023,070
_____________________________________________________________________________________________________________________________
Massachusetts (1.6%)
State Option Revenue Bonds Harvard University Series I
2.10% 2-1-16 2,000,000 (c,d) 2,000,000
______________________________________________________________________________________________________________________________
Michigan (4.9%)
Regents of the University Hospital Refunding Revenue Bonds Series 1992A
2.85% 12-1-19 5,900,000 (c,d) 5,900,000
_____________________________________________________________________________________________________________________________
Minnesota (14.6%)
Becker Northern States Power T.E.C.P. Series 1993B
2.60% 7-21-94 3,500,000 3,500,000
2.90% 7-6-94 1,000,000 1,000,000
2.90% 7-7-94 500,000 500,000
Bloomington Port Authority Special Tax Refunding Revenue Bonds Mall of America
(FSA Insured)
2.75% 2-1-09 3,000,000 (c,d,e) 3,000,000
Rochester Mayo Adjustable Tender Health Care Facility Revenue Bonds T.E.C.P.
Series 1988E
2.55% 7-19-94 1,100,000 1,100,000
2.70% 8-10-94 1,300,000 1,300,000
Rochester Mayo Adjustable Tender Health Care Facility Revenue Bonds T.E.C.P.
Series 1988F
3.00% 7-9-94 1,350,000 1,350,000
Regents of the University Put Series F
2.40% 8-1-94 1,000,000 (d) 1,000,000
Regents of the University T.E.C.P. Series 1985H
2.90% 10-11-94 2,000,000 2,000,000
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Free Money Fund, Inc. (Percentages represent value of
June 30, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)
____________________________________________________________________________________________________________________________
Issuer Principal Value(a)
amount
____________________________________________________________________________________________________________________________
Regents of the University T.E.C.P. Series 1985I
3.05% 8-9-94 $1,000,000 $ 1,000,000
3.25% 7-19-94 1,000,000 1,000,000
Southern Minnesota Municipal Power T.E.C.P. Series 1994A
2.85% 9-27-94 1,000,000 1,000,000
____________
Total 17,750,000
_____________________________________________________________________________________________________________________________
Mississippi (4.1%)
Jackson County Port Chevron Bonds
2.90% 6-1-23 5,000,000 (c,d) 5,000,000
_____________________________________________________________________________________________________________________________
Nebraska (0.8%)
State Public Power District T.E.C.P.
2.85% 7-26-94 1,000,000 1,000,000
_____________________________________________________________________________________________________________________________
New Jersey (0.8%)
State Turnpike Authority Revenue Bonds Series 1991D (FGIC Insured)
2.00% 1-1-18 1,000,000 (c,d,e) 1,000,000
_____________________________________________________________________________________________________________________________
New York (7.4%)
New York City Municipal Water Financial Authority Series 1992C (FGIC Insured)
3.00% 6-15-22 4,100,000 (c,d,e) 4,100,000
New York City Municipal Water Financial Authority Series 1994C (FGIC Insured)
3.00% 6-15-23 1,900,000 (c,d,e) 1,900,000
Triborough Bridge & Tunnel Authority Special Obligation Bonds Series 1994
(FGIC Insured)
2.10% 1-1-24 3,000,000 (c,d,e) 3,000,000
____________
Total 9,000,000
_____________________________________________________________________________________________________________________________
North Carolina (6.6%)
Medical Care Community Hospital Revenue Bonds Duke University Hospital
Series 1985B
2.20% 6-1-15 3,000,000 (c,d) 3,000,000
Medical Care Community Hospital Revenue Bonds Duke University Hospital
Series 1985C
2.20% 6-1-15 2,000,000 (c,d) 2,000,000
Municipal Power Agency #1 Catawba T.E.C.P.
2.60% 7-7-94 1,000,000 1,000,000
2.90% 10-13-94 1,000,000 1,000,000
3.20% 7-14-94 1,000,000 1,000,000
____________
Total 8,000,000
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Free Money Fund, Inc. (Percentages represent value of
June 30, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)
____________________________________________________________________________________________________________________________
Issuer Principal Value(a)
amount
____________________________________________________________________________________________________________________________
Pennsylvania (4.5%)
Delaware County Industrial Development Authority Airport Facility
Revenue Bonds Series 1985
3.10% 12-1-05 $5,500,000 (c,d) $ 5,500,000
_____________________________________________________________________________________________________________________________
Texas (17.5%)
Gulf Coast Amoco
2.75% 10-12-17 4,900,000 (c,d) 4,900,000
Harris County Industrial Development Pollution Control Revenue Bonds Exxon
Series 1984A
3.00% 3-1-24 800,000 (c,d) 800,000
Harris County Industrial Development Pollution Control Revenue Bonds Exxon
Series 1984B
3.00% 3-1-24 5,200,000 (c,d) 5,200,000
Lower Colorado River Authority T.E.C.P. Series B
2.85% 7-28-94 1,000,000 1,000,000
San Antonio Electric & Gas System T.E.C.P. Series A
2.85% 7-18-94 2,000,000 2,000,000
State Municipal Power Agency T.E.C.P.
2.95% 10-6-94 2,600,000 2,600,000
State T.R.A.N.
3.25% 8-31-94 4,760,000 4,764,333
____________
Total 21,264,333
_____________________________________________________________________________________________________________________________
Virginia (3.7%)
Peninsula Port Authority Shell Oil Series 1987
2.80% 12-1-05 4,500,000 (c,d) 4,500,000
_____________________________________________________________________________________________________________________________
Washington (2.4%)
Washington Public Power Supply System Electric Refunding Revenue Bonds
Project #3
2.20% 7-1-18 2,900,000 (c,d) 2,900,000
_____________________________________________________________________________________________________________________________
Wisconsin (2.5%)
State Operating Notes Series 1994
4.50% 6-15-95 3,000,000 3,024,510
_____________________________________________________________________________________________________________________________
Wyoming (5.7%)
Kemmerer Pollution Control Revenue Bonds Exxon Series 1984
3.50% 11-1-14 2,300,000 (c,d) 2,300,000
Lincoln County Pollution Control Revenue Bonds Exxon Series 1984A
3.00% 11-1-14 500,000 (c,d) 500,000
See accompanying notes to investments in securities.<PAGE>
PAGE
Investments in securities
IDS Tax-Free Money Fund, Inc. (Percentages represent value of
June 30, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)
____________________________________________________________________________________________________________________________
Issuer Principal Value(a)
amount
____________________________________________________________________________________________________________________________
Lincoln County Pollution Control Revenue Bonds Exxon Series 1984C
3.00% 11-1-14 $ 200,000 (c,d) $ 200,000
Lincoln County Pollution Control Revenue Bonds Exxon Series 1984D
3.00% 11-1-14 1,100,000 (c,d) 1,100,000
Sublette County Exxon Series 1984
2.90% 11-1-14 2,100,000 (c,d) 2,100,000
Uinta County Pollution Control Refunding Revenue Bonds Chevron USA
Series 1992
2.75% 12-1-22 700,000 (c,d) 700,000
____________
Total 6,900,000
_____________________________________________________________________________________________________________________________
Total investments in securities (109.8%)
(Cost: $133,471,977)(f) $133,471,977
_____________________________________________________________________________________________________________________________
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) The following abbreviations are used in portfolio descriptions:
T.A.N. -- Tax Anticipation Note
T.E.C.P. -- Tax-Exempt Commercial Paper
T.R.A.N. -- Tax & Revenue Anticipation Note
(c) Interest rate varies to reflect current market conditions; rate shown is the effective rate on June 30, 1994.
(d) Holder entitled to receive principal amount from issuer after a day or a week's notice. The maturity date disclosed
represents the final maturity. However, for purposes of Rule 2a-7, maturity is the later of the next put or interest
rate reset date.
(e) The following abbreviation is used in the portfolio description to identify the insurer of the issue:
FGIC -- Financial Guarantee Insurance Corporation
FSA -- Financial Security Assurance
(f) At June 30, 1994, also represents the cost of securities for federal income tax purposes.
</TABLE>
<PAGE>
PAGE
Directors and officers
Directors and officers of the fund
_____________________________________________________________________
President and interested director
William R. Pearce
President of all funds in the IDS MUTUAL FUND GROUP.
_____________________________________________________________________
Independent directors
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for
Public Policy Research.
Robert F. Froehlke
Former president of all funds in the IDS MUTUAL FUND GROUP.
Donald M. Kendall
Former chairman and chief executive officer, PepsiCo, Inc.
Melvin R. Laird
Senior counsellor for national and international affairs,
The Reader's Digest Association, Inc.
Lewis W. Lehr
Former chairman and chief executive officer,
Minnesota Mining and Manufacturing Company (3M).
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
_____________________________________________________________________
Interested director who is a partner in a law firm that has
represented an IDS subsidiary
Anne P. Jones
Partner, law firm of Sutherland, Asbill & Brennan.
_____________________________________________________________________
Interested directors who are officers and/or employees of IDS
William H. Dudley
Executive vice president, IDS.
David R. Hubers
President and chief executive officer, IDS.
John R. Thomas
Senior vice president, IDS.
_____________________________________________________________________
Other officer
Leslie L. Ogg
Vice president of all funds in the IDS MUTUAL FUND GROUP and general
counsel and treasurer of the publicly offered funds.<PAGE>
PAGE
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conservation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposit (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income.
Secondary objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
seek high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed income
securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) cornucopia<PAGE>
PAGE
IDS mutual funds
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher rated,
lower risk bond categories, or the equivalent, and in government bonds.
(icon of) greek column
IDS Strategy, Income Fund
Invests primarily in corporate and government bonds to seek high
current income while conserving capital. Also may seek capital
appreciation when consistent with its primary goals.
(icon of) chess piece
IDS Selective Fund
Invests in high-quality corporate bonds and other highly rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests primarily in securities issued or guaranteed as to the timely
payment of principal and interest by the U.S. government, its agencies
and instrumentalities. Seeks a high level of current income and
safety of principal consistent with its type of investments.
(icon of) federal building
IDS Strategy, Short-Term Income Fund
Invests primarily in short-term and intermediate-term bonds and notes
to seek a high level of current income.
(icon of) chess piece
Tax-exempt income investments
These funds provide tax-free income by investing in municipal bonds.
The income is generally free from federal income tax. Risk varies
by bond quality.
IDS High Yield Tax-Exempt Fund
Invests primarily in medium- and lower-quality municipal bonds and
notes. Lower-quality securities generally involve greater risk of
principal and income.
(icon of) shield with basket of apples enclosed<PAGE>
PAGE
IDS mutual funds
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities
to provide income to residents of each respective state that is
exempt from federal, state and local income taxes. (New York
is the only state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government
units, with at least 75% in the four highest rated, lowest risk bond
categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the fund but does not guarantee
the market value of the fund's shares.
(icon of) shield with eagle head
Growth and income investments
These funds focus on securities of medium to large, well-established
companies that offer long-term growth of capital and reasonable income
from dividends and interest. Moderate risk.
IDS International Fund
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The fund may invest up to 20%
of its assets in the U.S. market.
(icon of) three flags
IDS Strategy, Worldwide Growth Fund
Invests primarily in common stocks of companies throughout the world
that offer potential for superior growth. Holdings may range from
small- to large-capitalization stocks, including those of companies
involved in areas of rapid economic growth.
(icon of) chess piece
<PAGE>
PAGE
IDS mutual funds
IDS Managed Retirement Fund
Invests in a combination of common stocks, fixed-income
investments and money market securities to seek a maximum total
return through a combination of growth of capital and current income.
(icon of) bird in a nest
IDS Equity Plus Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of
capital and income.
(icon of) three apple trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by IDS research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund
Invests in common stocks of companies representing many
sectors of the economy. Seeks current income and growth of capital.
(icon of) building with columns
IDS Strategy, Equity Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) chess piece
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek
high current income and growth of income and capital with reduced
volatility.
(icon of) electrical cord
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to seek high current
income and, secondarily, to benefit from the growth potential offered
by stock investments.
(icon of) four puzzle pieces
<PAGE>
PAGE
IDS mutual funds
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice
Growth investments
Funds in this group seek capital growth, primarily from common stocks.
They are high risk mutual funds with a potential for high reward.
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Strategy, Aggressive Equity Fund
Invests primarily in common stocks of companies that are selected
for their potential for above-average growth. Above-average means
that their growth potential is better, in the opinion of the
portfolio's investment manager, than the Standard & Poor's
Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS Growth Fund
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) flower
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy.
These companies offer above-average potential for long-term growth.
(icon of) world
IDS New Dimensions Fund
Invests primarily in companies with significant growth
potential due to superiority in technology, marketing or management.
The fund frequently changes its industry mix.
(icon of) dimension
IDS Progressive Fund
Invests primarily in undervalued common stocks. The fund holds
stocks for the long term with the goal of capital growth.
(icon of) shooting star
<PAGE>
PAGE
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against inflation.
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic companies
that explore for, mine and process or distribute gold and other
precious metals. This is the most aggressive and most speculative
IDS mutual fund.
(icon of) cart of precious gems
For more complete information about any of these funds, including charges
and expenses, you can obtain a prospectus by contacting your financial
planner or writing to IDS Shareholder Service, P.O. Box 534, Minneapolis,
MN 55440-0534. Read it carefully before you invest or send money.
<PAGE>
PAGE
Quick telephone reference
IDS Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota:
800-437-3133
Mpls./St. Paul area:
671-3800
IDS Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
IDS Infoline
Automated account information (TouchTone phones only), including current
fund prices and performance, account values and recent account
transactions
National/Minnesota:
800-272-4445
Mpls./St. Paul area:
671-1630
Your IDS financial planner
AN AMERICAN EXPRESS COMPANY
1894 IDS 1994
A CENTURY OF INVESTING IN THE FUTURE
IDS Tax-Free Money Fund
IDS Tower 10
Minneapolis, MN 55440-0010
