IDS Tax-Free Money Fund
1995 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 American Express Financial Advisors
Inc.
(icon of) shield with piggy bank enclosed
Stability without taxes
Everyone needs to have a cash reserve to cover
unexpected expenses. But where it 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 the
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
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To our shareholders
(picture of)
William R. Pearce
President of the fund
(picture of)
Terry Fettig
Portfolio manager
From the president
IDS Tax-Free Money Fund is a good base from which
to make investments because it provides an easy
way to implement a dollar-cost averaging strategy.
With this strategy, you automatically transfer a
fixed amount of money on a regular basis into one
or more of the IDS equity or bond funds. This
allows you to average the cost of buying shares,
since your fixed periodic investment buys more
shares when the price per share is low and fewer
shares when the price per share is high. 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. Talk with your American Express
financial advisor about investment options that
will enable you to take advantage of dollar-cost
averaging to meet long-term goals.
William R. Pearce
From the portfolio manager
The yield for IDS Tax-Free Money Fund fell during
the first half of the fiscal year (January through
June 1995), tracking a decline in short-term
interest rates that began last spring. The $1 net
asset value was unchanged for the period,
providing shareholders with stability of principal
in addition to a tax-free return.
For the seven-day period ended June 30, 1995, the
fund provided shareholders with an annualized
simple yield of 3.51% and an annualized compound
yield of 3.57%. These are equal to 4.88% simple
and 4.96% compound taxable yields for an investor
in the 28-percent federal income-tax bracket.
(Investors should keep in mind that an investment
in the fund is not insured or guaranteed by the
U.S. government. Although the fund seeks to
maintain a $1 share price, there is no assurance
that it will be able to do so. Investors also
should note that under federal law, some notes
issued on the tax-free market are subject to the
alternative minimum tax, or AMT. To eliminate any
federal income-tax liabilities for investors who
may be subject to AMT requirements, we refrain
from purchasing these issues.)
Research pays off
Probably the biggest news in the tax-free market
during the past several months was generated by
the Orange County, Calif. bankruptcy. While the
situation created turmoil in the broad market,
because the fund owned none of those securities it
experienced no direct effect. The fact is
reflective of our emphasis on the highest-quality
issues, based on our extensive investment research
of issuers.
On an overall basis, however, credit quality
improved in recent months, as relatively strong
economic growth during 1994 added to
municipalities' tax revenues. That, in turn, led
to fewer securities being issued, while demand
remained strong. We should also point out that
yields on tax-free securities are seasonally
affected by supply and demand factors. Demand
typically picks up both at the outset and the
middle of the year, creating lower yields than
otherwise might be expected. (When the market is
heavy with buyers, municipalities can afford to
reduce the interest rate they must offer on bonds
to attract buyers.)
As for the rest of the year, we look for continued
economic growth, but at a slower pace. In such a
scenario, we would expect rates on short term tax-
exempt securities to either remain stable or
perhaps decline a bit.
Terry Fettig
6-month performance
(ALl figures per share)
Net asset value (NAV)
__________________________
June 30, 1995 $ 1.00
__________________________
Dec. 31, 1994 $ 1.00
__________________________
Increase $ --
__________________________
Distributions
Jan. 1, 1995-June 30, 1995
__________________________
From income $ .02
__________________________
From capital gains $ --
__________________________
Total distributions$ 0.02
__________________________
Total return* +1.6%
__________________________
*The total return is a
hypothetical investment in the
fund with all distributions
reinvested.
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Financial statements
Statement of assets and liabilities
IDS Tax-Free Money Fund, Inc.
June 30, 1995
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
(Unaudited)
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $135,750,940) $135,750,940
Cash in bank on demand deposit 5,598,996
Accrued interest receivable 981,229
_____________________________________________________________________________________________________________
Total assets 142,331,165
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Dividends payable to shareholders 50,708
Payable for investment securities purchased 9,065,662
Accrued investment management services fee 26,411
Accrued transfer agency fee 10,560
Accrued administrative services fee 2,556
Other accrued expenses 34,364
_____________________________________________________________________________________________________________
Total liabilities 9,190,261
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $133,140,904
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 133,155,028 shares $ 1,331,550
Additional paid-in capital 131,816,288
Undistributed net investment income 18
Accumulated net realized loss (6,952)
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $133,140,904
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 1.00
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
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Financial statements
Statement of operations
IDS Tax-Free Money Fund, Inc.
Six months ended June 30, 1995
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
(Unaudited)
Income:
Interest $2,549,618
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 216,855
Distribution fee 11,409
Transfer agency fee 80,177
Administrative services fee 11,379
Compensation of directors 649
Compensation of officers 671
Custodian fees 2,098
Postage 8,161
Registration fees 21,734
Reports to shareholders 18,770
Audit fees 9,000
Administrative 1,651
Other 860
_____________________________________________________________________________________________________________
Total expenses 383,414
_____________________________________________________________________________________________________________
Investment income -- net 2,166,204
_____________________________________________________________________________________________________________
Realized gain on investments -- net
_____________________________________________________________________________________________________________
Net realized gain on investments (Note 3) 6,171
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $2,172,375
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
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Financial statements
Statements of changes in net assets
IDS Tax-Free Money Fund, Inc.
_____________________________________________________________________________________________________________
Operations and distributions June 30, 1995 Dec. 31, 1994
_____________________________________________________________________________________________________________
Six months ended Year ended
(Unaudited)
<S> <C> <C>
Investment income -- net $ 2,166,204 $ 2,487,369
Net realized gain on investments 6,171 8,363
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations 2,172,375 2,495,732
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (2,168,138) (2,485,462)
_____________________________________________________________________________________________________________
Capital share transactions at constant $1 net asset value
_____________________________________________________________________________________________________________
Proceeds from sales of shares 126,758,234 246,600,213
Net asset value of shares
issued in reinvestment of distributions 2,084,544 2,400,582
Payments for redemptions of shares (128,342,559) (231,967,181)
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions 500,219 17,033,614
_____________________________________________________________________________________________________________
Total increase in net assets 504,456 17,043,884
Net assets at beginning of period 132,636,448 115,592,564
_____________________________________________________________________________________________________________
Net assets at end of period
(including undistributed net investment income of
$18 and $1,952) $133,140,904 $132,636,448
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
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Notes to financial statements
IDS Tax-Free Money Fund, Inc.
(Unaudited as to June 30, 1995)
___________________________________________________________________________
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.
___________________________________________________________________________
2. Expenses
Under terms of a prior agreement that ended March 19, 1995, the fund paid
American Express Financial Corporation 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 an annual asset charge in
reducing percentages from 0.34% to 0.26% annually.
Also under the terms of a prior agreement, the fund paid American Express
Financial Corporation 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 was reduced by earnings on
monies pending shareholder redemptions.
Effective March 20, 1995, the fund entered into agreements with American
Express Financial Corporation for managing its portfolio, providing
administrative services and serving as transfer agent as follows: Under its
Investment Management Services Agreement, American Express Financial
Corporation 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 0.31% to 0.24% annually. Under an
administrative Services Agreement, the fund pays American Express Financial
Corporation for administration and accounting services at a percentage of
the fund's average daily net assets in reducing percentages from 0.03% to
0.02% annually.
Under a separate Transfer Agency Agreement, American Express Financial
Corporation maintains shareholder accounts and records. The fund pays
American Express Financial Corporation an annual fee of $20 per shareholder
account for this service.
American Express Financial Corporation 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.
___________________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities aggregated
$175,411,229 and $170,180,000, respectively, for the six months ended June
30, 1995. Realized gains and losses are determined on an identified cost
basis.
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_______________________________________________________________________________
4. Financial highlights
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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*
1995** 1994 1993 1992 1991 1990
<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 .02 .02 .02 .02 .04 .05
Less distributions:
Dividends from net (.02) (.02) (.02) (.02) (.04) (.05)
investment income
Net asset value, $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
end of period
Ratios/supplemental data
1995** 1994 1993 1992 1991 1990
Net assets, end of period $133 $133 $116 $137 $144 $153
(in millions)
Ratio of expenses to .57%** .68% .68% .63% .70% .71%
average daily net assets
Ratio of net income to 3.23%*** 2.11% 1.63% 2.25% 3.78% 5.24%
average daily net assets
Total return 1.6%**** 2.1% 1.6% 2.2% 3.8% 5.2%
*For a share outstanding throughout the period.
Rounded to the nearest cent.
**Six months ended June 30, 1995 (Unaudited).
***Adjusted to an annual basis.
****For the fiscal period ended June 30, 1995, the
annualized total return is 3.2%.
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<CAPTION>
Investments in securities
IDS Tax-Free Money Fund, Inc. (Percentages represent value of
June 30, 1995 (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 Alaska Pipeline (Mobil)
4.00% 11-1-03 $1,000,000 (c,d) $ 1,000,000
____________________________________________________________________________________________________________________________
Arizona (4.7%)
Maricopa County Pollution Control Revenue Bonds T.E.C.P.
Series E (Southern California Edison)
3.25% 10-3-95 1,600,000 1,600,000
4.10% 7-19-95 1,120,000 1,120,000
4.15% 7-13-95 1,000,000 1,000,000
Maricopa County Pollution Control Revenue Bonds T.E.C.P.
Series F (Southern California Edison)
3.25% 10-3-95 500,000 500,000
Salt River Agricultural Improvement & Power District T.E.C.P.
4.00% 7-5-95 1,000,000 1,000,000
4.15% 7-17-95 1,000,000 1,000,000
____________
Total 6,220,000
_____________________________________________________________________________________________________________________________
California (1.5%)
Los Angeles County T.R.A.N.
4.50% 7-1-96 2,000,000 2,013,400
_____________________________________________________________________________________________________________________________
Colorado (6.6%)
Moffat County Pollution Control Revenue Bonds Series 1994 (Pacificorp)
4.20% 5-1-13 8,800,000 (c,d) 8,815,040
_____________________________________________________________________________________________________________________________
Connecticut (4.7%)
Development Authority Pollution Control Bonds Series 1993A
(Connecticut Power & Light)
4.10% 9-1-28 4,000,000 (c,d) 4,000,000
Development Authority Pollution Control Bonds Series 1993A
(Western Massachusetts Gas & Electric)
4.25% 9-1-28 2,200,000 (c,d) 2,200,000
____________
Total 6,200,000
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
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_____________________________________________________________________________________________________________________________
Florida (3.8%)
Jacksonville Electric Authority Electric System T.E.C.P. Series D-1
3.10% 8-7-95 2,000,000 2,000,000
3.60% 8-1-95 1,000,000 1,000,000
3.85% 8-1-95 1,000,000 1,000,000
4.15% 8-1-95 1,000,000 1,000,000
_____________
Total 5,000,000
_____________________________________________________________________________________________________________________________
Georgia (0.6%)
Burke County Pollution Control Revenue Bonds Series 1994
(Georgia Power & Light)
4.25% 7-1-24 800,000 (c,d) 800,000
_____________________________________________________________________________________________________________________________
Idaho (1.5%)
State T.A.N. Series 1994
4.50% 6-27-96 2,000,000 2,013,160
_____________________________________________________________________________________________________________________________
Indiana (5.0%)
Jasper County Pollution Control Refunding Revenue Bonds Series 1994A
(North Indiana Public Service)
4.20% 4-1-10 600,000 (c,d) 600,000
Jasper County Pollution Control Refunding Revenue Bonds Series 1994B
(North Indiana Public Service)
4.20% 4-1-13 2,600,000 (c,d) 2,600,000
4.20% 6-1-13 2,000,000 (c,d) 2,000,000
Jasper County Pollution Control Refunding Revenue Bonds Series 1994C
(North Indiana Public Service)
4.20% 4-1-19 1,500,000 (c,d) 1,500,000
_____________
Total 6,700,000
_____________________________________________________________________________________________________________________________
Kentucky (0.8%)
Jefferson County Pollution Control Revenue Bonds T.E.C.P. Series 1993
4.15% 7-6-95 1,000,000 1,000,000
_____________________________________________________________________________________________________________________________
Louisiana (1.2%)
East Baton Rouge Parish Pollution Control Revenue Bonds (Exxon)
4.35% 3-1-22 1,600,000 (c,d) 1,600,000
_____________________________________________________________________________________________________________________________
Massachusetts (1.5%)
State Option Revenue Bonds Harvard University Series I
3.55% 2-1-16 2,000,000 (c,d) 2,000,000
______________________________________________________________________________________________________________________________
Michigan (6.2%)
Regents of the University Hospital Refunding Revenue Bonds Series 1992A
4.20% 12-1-19 6,200,000 (c,d) 6,200,000
State General Obligation Bonds
5.00% 9-29-95 2,000,000 2,003,935
_____________
Total 8,203,935
______________________________________________________________________________________________________________________________
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______________________________________________________________________________________________________________________________
Minnesota (13.0%)
Becker T.E.C.P. Series 1993B (Northern States Power)
3.65% 9-5-95 1,000,000 1,000,000
4.10% 7-7-95 3,000,000 3,000,000
4.15% 7-11-95 1,000,000 1,000,000
Bloomington Port Authority Special Tax Refunding Revenue Bonds Mall of America
(FSA Insured)
4.15% 2-1-09 3,000,000 (c,d,e) 3,000,000
Regents of the University T.E.C.P. Series I
3.40% 9-15-95 1,000,000 1,000,000
4.15% 8-7-95 1,000,000 1,000,000
Regents of the University T.E.C.P. Series 1985H
3.70% 9-11-95 2,300,000 2,300,000
Regents of the University T.E.C.P. Series 1991A
3.90% 10-4-95 1,000,000 1,000,000
4.15% 7-17-95 1,000,000 1,000,000
Southern Minnesota Municipal Power T.E.C.P. Series B
4.00% 10-2-95 3,000,000 3,000,000
_____________
Total 17,300,000
_____________________________________________________________________________________________________________________________
Mississippi (5.1%)
Jackson County Port Bonds (Chevron)
4.00% 6-1-23 600,000 (c,d) 600,000
4.20% 6-1-23 6,200,000 (c,d) 6,200,000
_____________
Total 6,800,000
_____________________________________________________________________________________________________________________________
New York (5.9%)
New York City Municipal Water Financial Authority Series 1992C
(FGIC Insured)
4.25% 6-15-22 500,000 (c,d,e) 500,000
New York City Municipal Water Financial Authority Series 1994C
(FGIC Insured)
4.25% 6-15-23 6,400,000 (c,d,e) 6,400,000
Triborough Bridge & Tunnel Authority Special Obligation Bonds Series 1994
(FGIC Insured)
3.95% 1-1-24 1,000,000 (c,d,e) 1,000,000
____________
Total 7,900,000
_____________________________________________________________________________________________________________________________
North Carolina (4.5%)
Medical Care Community Hospital Revenue Bonds Duke University Hospital
Series 1985B
3.95% 6-1-15 3,000,000 (c,d) 3,000,000
Medical Care Community Hospital Revenue Bonds Duke University Hospital
Series 1985C
3.95% 6-1-15 2,000,000 (c,d) 2,000,000
Municipal Power Agency #1 Catawba T.E.C.P.
4.10% 7-12-95 1,000,000 1,000,000
____________
Total 6,000,000
_____________________________________________________________________________________________________________________________
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Pennsylvania (5.6%)
Delaware County Industrial Development Authority Airport Facility
Revenue Bonds Series 1985 (United Parcel Service)
4.25% 12-1-15 6,500,000 (c,d) 6,500,000
Montgomery County Industrial Development Authority Pollution Control
Refunding Revenue Bonds T.E.C.P. (PECO)
4.20% 9-6-95 1,000,000 1,000,000
_____________
Total 7,500,000
_____________________________________________________________________________________________________________________________
Texas (18.8%)
Gulf Coast (Amoco)
4.10% 10-12-17 5,800,000 (c,d) 5,800,000
Harris County Industrial Development Pollution Control Revenue Bonds
Series 1984A (Exxon)
4.25% 3-1-24 800,000 (c,d) 800,000
Harris County Industrial Development Pollution Control Revenue Bonds
Series 1984B (Exxon)
4.25% 3-1-24 1,000,000 (c,d) 1,000,000
Houston T.R.A.N
4.50% 6-27-96 1,000,000 1,008,010
San Antonio Electric & Gas System T.E.C.P. Series A
3.10% 10-10-95 3,000,000 3,000,000
4.10% 8-10-95 1,500,000 1,500,000
State Municipal Power Agency T.E.C.P.
3.25% 10-11-95 1,200,000 1,200,000
3.40% 10-5-95 650,000 650,000
4.15% 7-10-95 2,600,000 2,600,000
4.20% 8-3-95 1,500,000 1,500,000
State T.R.A.N.
5.00% 8-31-95 6,000,000 6,011,835
____________
Total 25,069,845
_____________________________________________________________________________________________________________________________
Virginia (4.8%)
Peninsula Port Authority Series 1987 (Shell Oil)
4.15% 12-1-05 6,400,000 (c,d) 6,400,000
_____________________________________________________________________________________________________________________________
Washington (1.4%)
Washington Public Power Supply System Electric Refunding Revenue Bonds
Project #3
3.80% 7-1-18 1,900,000 (c,d) 1,900,000
_____________________________________________________________________________________________________________________________
Wisconsin (1.5%)
State Operating Notes Series 1995
4.50% 6-17-96 2,000,000 2,015,560
_____________________________________________________________________________________________________________________________
Wyoming (2.5%)
Kemmerer Pollution Control Revenue Bonds Series 1984 (Exxon)
4.10% 11-1-14 500,000 (c,d) 500,000
Lincoln County Pollution Control Revenue Bonds Series 1984A (Exxon)
4.25% 11-1-14 100,000 (c,d) 100,000
Lincoln County Pollution Control Revenue Bonds Series 1984C (Exxon)
4.25% 11-1-14 100,000 (c,d) 100,000
4.50% 11-1-14 200,000 (c,d) 200,000
Lincoln County Pollution Control Revenue Bonds Series 1984D (Exxon)
4.25% 11-1-14 1,400,000 (c,d) 1,400,000
<PAGE>
Lincoln County Pollution Control Revenue Bonds Series 1985 (Exxon)
4.20% 8-1-15 1,000,000 (c,d) 1,000,000
_____________
Total 3,300,000
_____________________________________________________________________________________________________________________________
Total investments in securities (102.0%)
(Cost: $135,750,940)(f) $135,750,940
_____________________________________________________________________________________________________________________________
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, 1995.
(d) Holder entitled to receive principal amount from issuer or corporate guarantor, if indicated in parenthesis, 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 abbreviations are used in the portfolio descriptions to identify the insurer of the issue:
FGIC -- Financial Guarantee Insurance Corporation
FSA -- Financial Security Assurance
(f) At June 30, 1995, also represents the cost of securities for federal income tax purposes.
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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.
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.
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 directors who are officers and/or employees of American
Express Financial Corporation
William H. Dudley
Executive vice president, American Express Financial Corporation.
David R. Hubers
President and chief executive officer, American Express Financial
Corporation.
John R. Thomas
Senior vice president, American Express Financial Corporation.
_____________________________________________________________________
Officers who also are officers and or/employees of American Express
Financial Corporation
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.
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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
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 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.
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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.
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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.
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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.)
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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.
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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.
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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.
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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.
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IDS Equity Select Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of
capital and income.
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IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by our research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
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IDS Stock Fund
Invests in common stocks of companies representing many
sectors of the economy. Seeks current income and growth of capital.
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IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
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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.
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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.
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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.
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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.
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IDS Strategy Aggressive 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.
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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.
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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.
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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.
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IDS Progressive Fund
Invests primarily in undervalued common stocks. The fund holds
stocks for the long term with the goal of capital growth.
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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.
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For more complete information about any of these funds, including charges
and expenses, you can obtain a prospectus by contacting your financial
advisor or writing to American Express Shareholder Service, P.O. Box 534,
Minneapolis, MN 55440-0534. Read it carefully before you invest or send money.
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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
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 (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
AMERICAN EXPRESS FINANCIAL ADVISORS
IDS Tax-Free Money Fund
IDS Tower 10
Minneapolis, MN 55440-0010
