<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. _____
Post-Effective Amendment No. 23 (File No. 2-72584) X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
Amendment No. 25 (File No. 811-3190) X
IDS LIFE MONEYSHARE FUND, INC.
IDS Tower 10, Minneapolis, MN 55440-0010 (612) 330-9283
Leslie L. Ogg - 901 S. Marquette Ave., Suite 2810, Minneapolis, MN
55402-3268
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 October 28, 1994 pursuant to paragraph (b)
_____60 days after filing pursuant to paragraph (a)(i)
on (date) pursuant to paragraph (a)(i)
_____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 or amount of
securities under the Securities Act of 1933 pursuant to Section
24(f) of the Investment Company Act of 1940. Registrant has filed
its 24f-2 Notice for the fiscal year ended Aug. 31, 1994, on Oct.
19, 1994.
<PAGE>
PAGE 2
CROSS REFERENCE SHEET
Cross reference sheet showing the location in the prospectus and
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 PART B
Page Number in
Page Number Statement of
Item No. in Prospectus Item No. Additional Information
<C> <C> <C> <C>
1 3-4 10 29
2 6;6-7 11 30-31
3(a) 7-12 12 NA
(b) NA
(c) 7-12 13(a) 32-38;59-84
(d) 7-12 (b) 32-38
(c) 35-37
4(a) 6-7;16-21;23 (d) 42
(b) 16-21
(c) 16-21 14(a) 25-26*;54-57
(b) 25-26*;54-57
5(a) 23;25-26 (c) 25-26*;54-57
(b) 23;28
(b)(i) 23 15(a) NA
(b)(ii) 26 (b) NA
(b)(iii) 26 (c) 25-26*
(c) 24-25
(d) 6-7 16(a)(i) 23*;28*
(e) 23;26 (a)(ii) 52-53;NA
(f) NA (a)(iii) 52-53
(g) 23;26 (b) 52-53;NA
(c) NA
5A(a) * (d) None
(b) * (e) NA
(f) NA
6(a) 23 (g) NA
(b) NA (h) 57
(c) NA (i) NA;57
(d) NA
(e) 3 17(a) 38-42
(f) 22-23 (b) 42-45
(g) 22-23 (c) 38-42
(d) 42-45
7(a) NA (e) 34
(b) 15-16
(c) 21-22 18(a) 23*
(d) 21-22 (b) NA
(e) NA
(f) NA 19(a) 50-51
(b) 47-50;50-51
8(a) 21-22 (c) NA
(b) NA
(c) NA 20 51
(d) 22
21(a) NA
9 None (b) NA
(c) NA
22(a) NA
(b) 45-47
23 86-153
</TABLE>
*Designates information located in annual report.
**Designates page number in the prospectus, which is hereby
incorporated by reference in the Statement of Additional
Information.
<PAGE>
PAGE 3
Retirement Annuity Mutual Funds
Prospectus/Oct. 28, 1994
This prospectus describes six funds that receive payments from the
variable accounts of your variable annuity contract. Each of these
funds has different investment objectives and policies.
IDS Life Aggressive Growth Fund is a stock fund investing primarily
in common stocks of small and medium-size companies.
IDS Life International Equity Fund is an international stock fund.
IDS Life Capital Resource Fund is a stock fund.
IDS Life Managed Fund is a managed fund.
IDS Life Special Income Fund is a bond fund.
IDS Life Moneyshare Fund is a money market fund. An investment in
Moneyshare Fund is neither insured nor guaranteed by the U.S.
government and there can be no assurance that the fund will be able
to maintain a stable net asset value of $1 per share.
This prospectus contains facts that can help you decide if the
funds are the right investment for you. Read this along with your
variable annuity prospectus before you invest and keep both
prospectuses for future reference.
Additional facts about the funds are in a Statement of Additional
Information (SAI), filed with the Securities and Exchange
Commission. The SAI, dated Oct. 28, 1994, is incorporated here by
reference. For a free copy, contact IDS Life Insurance Company.
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.
IDS LIFE IS NOT A BANK, AND THE SECURITIES IT OFFERS ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK,
NOR ARE THEY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
IDS Life Capital Resource Fund, Inc.
IDS Life Aggressive Growth Fund
IDS Life International Equity Fund
IDS Life Capital Resource Fund
IDS Life Managed Fund, Inc.
IDS Life Special Income Fund, Inc.
IDS Life Moneyshare Fund, Inc.
<PAGE>
PAGE 4
Retirement Annuity Mutual Funds
IDS Tower 10
Minneapolis, MN 55440-0010
612-671-3733
TTY: 800-285-8846
<PAGE>
PAGE 5
Table of contents
The funds in brief
Goals and types of fund investments
Manager and distributor
Variable accounts
Sales charge and fund expenses
Sales charge
Expenses
Performance
Financial highlights
Total returns
Yield calculation
Key terms
Investment policies and risk
Facts about investments and their risks
Valuing assets
How to invest, transfer or redeem shares
How to invest
How to transfer among variable accounts
Redeeming shares
Distributions and taxes
Dividend and capital gain distributions
Taxes
How the funds are organized
Shares
Voting rights
Shareholder meetings
Portfolio managers
Directors and officers
Investment manager
Investment advisory agreements
About IDS
General information
<PAGE>
PAGE 6
The funds in brief
Goals and types of fund investments
Capital Resource Fund's goal is capital appreciation and it invests
primarily in U.S. common stocks.
International Equity Fund's goal is capital appreciation and it
invests primarily in common stocks of foreign issuers.
Aggressive Growth Fund's goal is capital appreciation and it
invests primarily in common stocks of small and medium-size
companies.
Special Income Fund's goal is to provide a high level of current
income while conserving the value of the investment for the longest
period of time. It invests primarily in investment-grade bonds.
Moneyshare Fund's goal is to provide maximum current income
consistent with liquidity and conservation of capital. It invests
in money market securities.
Managed Fund's goal is maximum total investment return through a
combination of capital growth and current income. It invests
primarily in stocks, convertible securities, bonds, and money
market instruments.
Because any investment involves risk, achieving these goals cannot
be guaranteed. Only the contract owners can change the goals. See
Voting rights.
Manager and distributor
The funds are managed by IDS Life, a subsidiary of IDS Financial
Corporation (IDS). IDS has an agreement with IDS Life to furnish
investment advice for the funds managed by IDS Life.
Variable accounts
You may not buy (nor will you own) shares of the fund directly.
You invest by buying a variable annuity and allocating your
purchase payments among the variable accounts that invest in the
funds.
Sales charge
There is no sales charge for the sale or redemption of fund shares,
but there may be charges associated with your redemption (surrender
or withdrawal) of your annuity contract. Any charges that apply to
the variable accounts and your annuity contract are described in
the variable annuity prospectus.
<PAGE>
PAGE 7
Expenses
The funds pay IDS Life a fee for managing their investment
portfolios and for certain administrative services. The funds also
pay certain nonadvisory expense. See "Investment manager" under
"How the funds are organized".
Performance
Financial highlights
<TABLE>
<CAPTION>
Capital Resouce Fund
Financial highlights
Fiscal year ended August 31,
Per share income and capital changes*
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year $24.58 $23.90 $23.15 $17.54 $20.17 $15.06 $17.71 $15.97 $14.71 $14.40
Income (loss) from investment operations:
Net investment income .29 .23 .21 .40 .52 .39 .31 .52 .61 .49
Net gains (losses) on securities (both realized
and unrealized) 1.56 1.89 1.75 6.61 (2.06) 5.38 (2.54) 4.23 2.87 1.11
Total from investment operations 1.85 2.12 1.96 7.01 (1.54) 5.77 (2.23) 4.75 3.48 1.60
Less distributions:
Dividends from net investment income (.29) (.23) (.21) (.40) (.52) (.39) (.31) (.52) (.61) (.49)
Distributions from realized gains (2.71) (1.21) (1.00) (1.00) (.57) (.27) (.11) (2.49) (1.61) (.80)
Total distributions (3.00) (1.44) (1.21) (1.40) (1.09) (.66) (.42) (3.01) (2.22) (1.29)
Net asset value, end of year $23.43 $24.58 $23.90 $23.15 $17.54 $20.17 $15.06 $17.71 $15.97 $14.71
Ratios/supplemental data
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
Net assets, end of year
(in millions) $2,899 $2,308 $1,681 $1,191 $ 702 $ 660 $ 454 $ 493 $ 301 $ 187
Ratio of expenses to average
daily net assets .68% .68% .70% .70% .70% .73% .69% .59% .54% .64%
Ratio of net income to average
daily net assets 1.20% 0.94% 0.91% 1.94% 2.69% 2.22% 2.01% 2.94% 3.74% 3.48%
Portfolio turnover rate
(excluding short-term
securities) 85% 65% 63% 74% 82% 42% 111% 171% 115% 136%
Total Return** 7.61% 8.87% 8.54% 40.68% (7.79)% 38.72% (12.59)% 30.32% 23.90% 11.26%
*For a share outstanding throughout the year. Rounded to the nearest cent.
**Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
<PAGE>
PAGE 8
<TABLE>
<CAPTION>
International Equity Fund
Financial highlights
Fiscal period ended August 31,
Per share income and capital changes*
1994 1993 1992**
<S> <C> <C> <C>
Net asset value, beginning of period $11.60 $10.01 $10.00
_____________________________________________________________________________________________
Income from investment operations:
Net investment income .14 .15 .05
Net gains on securities (both
realized and unrealized) 1.61 1.81 .01
_____________________________________________________________________________________________
Total from investment operations 1.75 1.96 .06
_____________________________________________________________________________________________
Less distributions:
Dividends from net investment income (.08) (.15) (.05)
Distributions from realized gains (.29) (.22) -
Excess distributions from realized gains (.07) - -
_____________________________________________________________________________________________
Total distributions (.44) (.37) (.05)
_____________________________________________________________________________________________
Net asset value, end of period $12.91 $11.60 $10.01
_____________________________________________________________________________________________
Ratios/supplemental data
1994 1993 1992**
Net assets, end of period (in millions) $1,111 $ 291 $ 39
_____________________________________________________________________________________________
Ratio of expenses to average
daily net assets .98% 1.10% 1.57%***
Ratio of net income to average
daily net assets 1.09% 1.37% 0.93%***
Portfolio turnover rate (excluding
short-term securities) 51% 62% 22%
_____________________________________________________________________________________________
Total Return## 15.11% 19.76% 0.55%#
_____________________________________________________________________________________________
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Commencement of operations. Period from Jan. 13, 1992 to Aug. 31, 1992.
***Adjusted to an annual basis.
#For the period from Jan. 13, 1992 to Aug. 31, 1992, the annualized total return is 0.87%.
##Total return does not reflect payment of the expenses that apply to the variable accounts
or any annuity charges.
</TABLE>
<PAGE>
PAGE 9
<TABLE>
<CAPTION>
Aggressive Growth Fund
Financial highlights
Fiscal period ended August 31,
Per share income and capital changes*
1994 1993 1992**
<S> <C> <C> <C>
Net asset value, beginning of period $11.68 $9.00 $10.00
_____________________________________________________________________________________________
Income (loss) from investment operations:
Net investment income .01 .02 .02
Net gains (losses) on securities (both
realized and unrealized) (.22) 2.68 (1.00)
_____________________________________________________________________________________________
Total from investment operations (.21) 2.70 (0.98)
_____________________________________________________________________________________________
Less distributions:
Dividends from net investment income (.01) (.02) (.02)
_____________________________________________________________________________________________
Net asset value, end of period $11.46 $11.68 $ 9.00
_____________________________________________________________________________________________
Ratios/supplemental data
1994 1993 1992**
Net assets, end of period (in millions) $ 763 $ 299 $ 57
_____________________________________________________________________________________________
Ratio of expenses to average
daily net assets .69% .75% .98%***
Ratio of net income to average
daily net assets 0.14% 0.28% 0.21%***
Portfolio turnover rate (excluding
short-term securities) 59% 55% 28%
_____________________________________________________________________________________________
Total Return## (1.77)% 29.98% (9.76)%#
_____________________________________________________________________________________________
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Commencement of operations. Period from Jan. 13, 1992 to Aug. 31, 1992.
***Adjusted to an annual basis.
#For the period from Jan. 13, 1992 to Aug. 31, 1992, the annualized total return is (14.98)%.
##Total return does not reflect payment of the expenses that apply to the variable accounts or
any annuity charges.
</TABLE>
<PAGE>
PAGE 10
<TABLE>
<CAPTION>
Special Income Fund
Financial highlights
Fiscal year ended August 31,
Per share income and capital changes*
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year $12.08 $11.26 $10.72 $10.10 $11.11 $10.88 $11.09 $11.91 $11.34 $10.51
______________________________________________________________________________________________________________________
Income (loss) from investment operations:
Net investment income .84 .85 .90 .97 .99 1.03 1.03 1.08 1.16 1.28
Net gains (losses) on securities (both
realized and unrealized) (.99) .82 .54 .62 (1.01) .23 (.21) (.56) 1.26 .96
______________________________________________________________________________________________________________________
Total from investment operations (.15) 1.67 1.44 1.59 (.02) 1.26 .82 .52 2.42 2.24
______________________________________________________________________________________________________________________
Less distributions:
Dividends from net investment income (.85) (.85) (.90) (.97) (.99) (1.03) (1.03) (1.08) (1.16) (1.28)
Distributions from realized gains (.02) - - - - - - (.26) (.69) (.13)
Excess distributions from net investment
income (.01) - - - - - - - - -
_______________________________________________________________________________________________________________________
Total distributions (.88) (.85) (.90) (.97) (.99) (1.03) (1.03) (1.34) (1.85) (1.41)
_______________________________________________________________________________________________________________________
Net asset value, end of period $11.05 $12.08 $11.26 $10.72 $10.10 $11.11 $10.88 $11.09 $11.91 $11.34
_______________________________________________________________________________________________________________________
Ratios/supplemental data
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
Net assets, end of year
(in millions) $1,559 $1,551 $1,136 $ 800 $ 641 $ 565 $ 428 $ 409 $ 307 $ 152
Ratio of expenses to
average daily net assets .67% .69% .71% .70% .71% .73% .69% .58% .55% .69%
Ratio of net income to
average daily net assets 7.20% 7.41% 8.22% 9.31% 9.42% 9.37% 9.45% 9.11% 10.27% 11.54%
Portfolio turnover rate
(excluding short-term
securities) 57% 77% 92% 97% 118% 132% 169% 101% 170% 86%
_______________________________________________________________________________________________________________________
Total Return** (1.30)% 15.47% 13.96% 16.54% (0.12)% 12.19% 7.76% 4.48% 23.17% 22.44%
_______________________________________________________________________________________________________________________
*For a share outstanding thourghout the period. Rounded to the nearest cent.
**Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
<PAGE>
PAGE 11
<TABLE>
<CAPTION>
Moneyshare Fund
Financial highlights
Fiscal year ended August 31,
Per share income and capital changes*
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_________________________________________________________________________________________________________________________
Income from investment operations:
Net investment income .03 .03 .04 .07 .08 .09 .07 .06 .07 .08
_________________________________________________________________________________________________________________________
Total from investment
operations .03 .03 .04 .07 .08 .09 .07 .06 .07 .08
_________________________________________________________________________________________________________________________
Less distributions:
Dividends from net investment
income (.03) (.03) (.04) (.07) (.08) (.09) (.07) (.06) (.07) (.08)
_________________________________________________________________________________________________________________________
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_________________________________________________________________________________________________________________________
Ratios/supplemental data
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
Net assets, end of year
(in millions) $ 179 $ 180 $ 246 $ 285 $ 274 $ 160 $ 102 $ 67 $ 61 $ 64
_________________________________________________________________________________________________________________________
Ratio of expenses to average
daily net assets .57% .60% .60% .57% .62% .54% .58% .54% .62% .63%
_________________________________________________________________________________________________________________________
Ratio of net income to average
daily net assets 3.12% 2.67% 3.93% 6.55% 7.85% 8.68% 6.77% 5.87% 7.00% 8.41%
_________________________________________________________________________________________________________________________
Total Return** 3.15% 2.73% 3.98% 6.77% 8.18% 8.99% 7.01% 6.01% 7.20% 8.77%
_________________________________________________________________________________________________________________________
*For a share outstanding throughout the year. Rounded to the nearest cent.
**Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
<PAGE>
PAGE 12
<TABLE>
<CAPTION>
Managed Fund
Financial highlights
Fiscal period ended August 31,
Per share income and capital changes*
1994 1993 1992 1991 1990 1989 1988 1987 1986**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.32 $13.08 $12.59 $10.93 $12.08 $9.87 $11.34 $10.10 $10.00
Income (loss) from investment operations:
Net investment income .47 .49 .56 .58 .65 .48 .42 .45 .16
Net gains(losses) on securities (both
realized and unrealized) (.26) 1.60 .95 2.11 (.67) 2.25 (1.47) 1.45 .10
Total from investment operations .21 2.09 1.51 2.69 (.02) 2.73 (1.05) 1.90 .26
Less distributions:
Dividends from net investment income (.47) (.49) (.56) (.58) (.65) (.48) (.42) (.45) (.16)
Distributions from net realized gains (.41) (.36) (.46) (.45) (.48) (.04) - (.21) -
Total distributions (.88) (.85) (1.02) (1.03) (1.13) (.52) (.42) (.66) (.16)
Net asset value, end of period $13.65 $14.32 $13.08 $12.59 $10.93 $12.08 $ 9.87 $11.34 $10.10
Ratios/supplemental data
1994 1993 1992 1991 1990 1989 1988 1987 1986**
Net assets, end of period (in millions) $2,499 $1,858 $1,169 $810 $545 $462 $381 $340 $48
Ratio of expenses to average daily net
assets .68% .69% .71% .70% .71% .73% .69% .67% .64%***
Ratio of net income to average
daily net assets 3.46% 3.70% 4.35% 4.86% 5.42% 5.06% 4.42% 4.10% 4.48%***
Portfolio turnover rate (excluding
short-term securities) 79% 58% 50% 52% 37% 69% 62% 48% 10%
Total Return++ 1.51%# 16.33% 12.14% 25.24% (0.23)% 28.47% (9.06)% 19.13% 2.55%+
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Commencement of operations. Period from April 30, 1986 to Aug. 31 31, 1986.
***Adjusted to an annual basis.
+For the period from April 30, 1986 to Aug. 31, 1986, the annualized total return is 7.57%.
++Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
The information in these tables has been audited by KPMG Peat
Marwick LLP, independent auditors. The independent auditors'
report and additional information about the performance of the
funds is contained in the fund's annual report which, if not
included with this prospectus, may be obtained without charge.
Total returns
Average annual total returns as of Aug. 31, 1994
Purchase 1 year 5 years 10 years
made ago ago ago
Capital Resource 7.61% 10.53% 13.65%
Fund
S&P 500 5.47% 9.62% 14.89%
<PAGE>
PAGE 13
Cumulative total returns as of Aug. 31, 1994
Purchase 1 year 5 years 10 years
made ago ago ago
Capital Resource 7.61% 64.97% 259.32%
Fund
S&P 500 5.47% 58.32% 300.54%
Average annual total returns as of Aug. 31, 1994
Since
Purchase 1 year inception
made ago Jan. 13, 1992
International 15.11% 13.20%
Equity Fund
Morgan Stanley 8.91% 10.73%
Capital International
World Index
Cumulative total returns as of Aug. 31, 1994
Since
Purchase 1 year inception
made ago Jan. 13, 1992
International 15.11% 38.61%
Equity Fund
Morgan Stanley 8.91% 30.78%
Capital International
World Index
Average annual total returns as of Aug. 31, 1994
Since
Purchase 1 year inception
made ago Jan. 13, 1992
Aggressive Growth -1.77% 5.53%
Fund
S&P 500 5.47% 8.20%
Cumulative total returns as of Aug. 31, 1994
Since
Purchase 1 year inception
made ago Jan. 13, 1992
Aggressive Growth -1.77% 15.22%
Fund
S&P 500 5.47% 23.07%
<PAGE>
PAGE 14
Average annual total returns as of Aug. 31, 1994
Purchase 1 year 5 years 10 years
made ago ago ago
Special Income Fund -1.30% 8.62% 11.16%
Lehman Aggregate -1.52% 8.79% 11.16%
Bond Index
Cumulative total returns as of Aug. 31, 1994
Purchase 1 year 5 years 10 years
made ago ago ago
Special Income Fund -1.30% 51.18% 187.94%
Lehman Aggregate -1.52% 52.40% 188.11%
Bond Index
Average annual total returns as of Aug. 31, 1994
Since
Purchase 1 year 5 Years inception
made ago ago April 30, 1986
Managed Fund 1.51% 10.59% 10.84%
S&P 500 5.47% 9.62% 12.37%
Cumulative total returns as of Aug. 31, 1994
Since
Purchase 1 year 5 Years inception
made ago ago April 30, 1986
Managed Fund 1.51% 65.46% 136.21%
S&P 500 5.47% 58.32% 164.52%
These examples show total returns from hypothetical investments in
each fund. These returns are compared to those of popular indexes
for the same periods. The results do not reflect the expenses that
apply to the variable accounts or the annuity contract. Inclusion
of these charges would reduce total return for all periods shown.
For purposes of calculation, information about each fund assumes
the deduction of applicable fund expenses, makes no adjustments for
taxes that may have been paid on the reinvested income and capital
gains, and covers a period of widely fluctuating securities prices.
Returns shown should not be considered a representation of the
fund's future performance.
Each fund's investments may be different from those in the indexes.
The indexes reflect reinvestment of all distributions and changes
in market prices, but exclude brokerage commissions or other fees.
<PAGE>
PAGE 15
Standard & Poor's 500 Stock Index (S&P 500), an unmanaged list of
common stocks, is frequently used as a general measure of market
performance.
The Morgan Stanley Capital International World Index, compiled from
a composite of securities listed on the markets of North America,
Europe, Australasia and the Far East is widely recognized by
investors as the measurement index for portfolios that invest in
the major markets of the world.
Lehman Aggregate Bond Index is made up of a representative list of
government and corporate bonds as well as asset-backed securities
and mortgage-backed securities. The index is frequently used as a
general measure of bond market performance. However, the
securities used to create the index may not be representative of
the bonds held in Special Income Fund.
Yield calculation
Special Income Fund may calculate a 30-day annualized yield by
dividing:
o net investment income per share deemed earned during a 30-day
period by
o the net asset value per share on the last day of the period,
and
o converting the result to a yearly equivalent figure.
This yield calculation does not include any annuity charges or
contingent deferred sales charges, which would reduce the yield
quoted.
A fund's yield varies from day to day, mainly because share values
and net asset values (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.
Moneyshare Fund calculates annualized simple and compound yields
based on a seven-day period.
Past yields should not be considered an indicator of future yields.
Key terms
Average annual total return - The annually compounded rate of
return over a given time period (usually two or more years) --
total return for the period converted to an equivalent annual
figure.
<PAGE>
PAGE 16
Capital gains or losses - Increase or decrease in value of the
securities the funds hold. Gains are realized when securities that
have increased in value are sold. A fund also may have unrealized
gains or losses when securities increase or decrease in value but
are not sold.
Close of business - Normally 3 p.m. Central time each business day
(any day the New York Stock Exchange is open).
Distributions - Payments to the variable accounts of two types:
investment income (dividends) and realized net long-term capital
gains (capital gains distributions).
Investment income - Dividends and interest earned on securities
held by the funds.
Net asset value (NAV) - Value of a single fund share. It is the
total market value of all of a fund's investments and other assets,
less any liabilities, divided by the number of shares outstanding.
The NAV is the price the variable account receives when it sells
shares. It usually changes from day to day, and is calculated at
the close of business. For Special Income Fund, NAV generally
declines as interest rates increase and rises as interest rates
decline.
Total return - Sum of all returns for a given period, assuming
reinvestment of all distributions. Calculated by taking the total
value of shares at the end of the period (including shares acquired
by reinvestment), less the price of shares purchased at the
beginning of the period.
Variable accounts - The separate accounts or subaccounts, each of
which invests in shares of one of the funds.
Yield - Net investment income earned per share for a specified time
period, divided by the net asset value at the end of the period.
Investment policies and risk
Capital Resource Fund - Under normal market conditions, Capital
Resource Fund invests in U.S. common stocks listed on national
securities exchanges and other securities convertible into common
stock. The portfolio manager selects investments believed to have
potential for capital growth.
The fund also may invest in preferred stocks, bonds, debt
securities, foreign securities, money market instruments and
derivative instruments. The fund does not have a minimum rating
requirement for corporate bonds.
International Equity Fund - Under normal market conditions,
International Equity Fund invests at least 80% of its total assets
in foreign equity securities having a potential for superior
growth. Superior means fund performance better than the Morgan
Stanley Capital International World Index.
<PAGE>
PAGE 17
The fund's investments will be primarily in common stocks and
securities convertible into common stocks of foreign issuers.
However, if the investment manager believes they have more
potential for capital growth, the fund may invest in bonds issued
or guaranteed either by countries that are members of the
Organization for Economic Cooperation and Development (OECD) or by
international agencies such as the World Bank or the European
Investment Bank. These bonds will not be purchased unless, in the
judgment of the investment manager, they are comparable in quality
to bonds rated AA by Standard & Poor's Corporation (S&P).
The percentage of fund assets invested in particular countries or
regions of the world will change according to their political
stability and economic condition. Ordinarily, the fund will invest
in companies domiciled in at least three foreign countries.
Normally, investments in U.S. issuers will constitute less than 20%
of the fund's portfolio. However, as a temporary measure, the fund
may invest any portion of its assets in securities of U.S. issuers
that appear to have greater potential for superior growth than
foreign securities. U.S. investments would include common stocks,
convertible securities and corporate and government bonds. The
bonds must bear one of the four highest ratings given by Moody's or
S&P or must be of comparable quality. The fund also may invest in
money market instruments and derivative instruments. No more than
5% of the fund's total assets may be invested in options on
individual securities.
Aggressive Growth Fund - Under normal market conditions, Aggressive
Growth Fund invests primarily in common stocks of U.S. and foreign
companies that are small and medium size growth companies. Many of
these companies emphasize technological innovation or productivity
improvements.
The fund invests in warrants to purchase common stock, debt
securities or in securities of large, well-established companies
when the portfolio manager believes those investments offer the
best opportunity for capital growth. The fund also may invest in
foreign securities, derivative instruments and money market
instruments.
Special Income Fund - Under normal market conditions, Special
Income Fund primarily invests in debt securities. At least 50% of
its net assets are invested in corporate bonds of the four highest
ratings, in other corporate bonds the investment manager believes
have the same investment qualities, and in government bonds.
The fund also may invest in corporate bonds with lower ratings,
convertible securities, preferred stocks, derivative instruments,
money market instruments and foreign bonds. The fund does not have
a minimum rating requirement for corporate bonds.
Moneyshare Fund - Under normal market conditions, Moneyshare Fund
invests primarily in high-quality, short-term, debt securities and
other money market instruments denominated in U.S. dollars. The
fund intends to maintain a constant net asset value of $1 per
<PAGE>
PAGE 18
share, although there is no assurance it will be able to do so.
The fund will not purchase any security with a remaining maturity
of more than 13 months and will maintain a dollar-weighted average
portfolio maturity of 90 days or less. The fund also may invest in
foreign securities. For a description of money market securities,
see Appendix C in the SAI.
Managed Fund - Under normal market conditions, Managed Fund invests
at least 50% of its total assets in common stocks. The fund also
invests in preferred stocks, convertible securities, warrants,
bonds and money market instruments. Ordinarily, investments other
than common stock would constitute 50% or less of the fund's
portfolio. However, the fund may invest any portion of its assets
in securities other than common stocks. This allows the investment
manager flexibility to best achieve the fund's goal.
The fund does not have a minimum rating requirement for corporate
bonds. The fund also may invest in derivative instruments and
foreign securities.
The various types of investments the portfolio managers use to
achieve investment performance are described in more detail in the
next section and in the SAI.
Facts about investments and their risks
Common stocks: Stock prices are subject to market fluctuations.
Stocks of smaller or foreign companies may be subject to abrupt or
erratic price movements. Also, small companies often have limited
product lines, smaller markets or fewer financial resources.
Therefore, some of the securities in which a fund invests involve
substantial risk and may be considered speculative.
Preferred stocks: If a company earns a profit, it generally must
pay its preferred stockholders a dividend at a pre-established
rate.
Convertible securities: These securities generally are preferred
stocks or bonds that can be exchanged for other securities, usually
common stock, at prestated prices. When the trading price of the
common stock makes the exchange likely, the convertible securities
trade more like common stock.
Investment grade bonds: The price of an investment grade bond
fluctuates as interest rates change or if its credit rating is
upgraded or downgraded.
Debt securities below investment grade: The price of these bonds
may react more to the ability of a company to pay interest and
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. In valuing bonds, a fund relies both on
independent rating agencies and the investment manager's credit
<PAGE>
PAGE 19
analysis. Securities that are subsequently downgraded in quality
may continue to be held and will be sold only when the fund's
investment manager believes it is advantageous to do so.
Bond ratings and holdings for fiscal year ended Aug. 31, 1994
For Special Income Fund
<TABLE><CAPTION>
IDS
S&P Rating Protection of Assessment
Percent of (or Moody's principal and of unrated
net assets equivalent) interest securities
<C> <C> <C> <C>
2.66% AAA Highest quality 0.29%
2.88 AA High quality 0.08
11.86 A Upper medium grade 0.25
24.56 BBB Medium grade 0.39
13.22 BB Moderately speculative 0.41
13.56 B Speculative 0.97
0.60 CCC Highly speculative 0.24
-- CC Poor quality --
-- C Lowest quality --
-- D In default 0.07
2.75 Unrated Unrated securities 0.05
</TABLE>
(See Appendix to the SAI for further information regarding
ratings.)
For the fiscal year ended Aug. 31, 1994, Capital Resource and
Managed Funds held less than 5% of their average daily net assets
in bonds rated below investment grade.
Debt securities 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 with tax laws, a 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, a fund may have to sell
securities to have sufficient cash to pay the dividends.
Mortgage-backed securities: All funds except Moneyshare may invest
in U.S. government securities representing part ownership of pools
of mortgage loans. A pool, or group, of mortgage loans issued by
such lenders as mortgage bankers, commercial banks and savings and
loan associations, is assembled and mortgage pass-through
certificates are offered to investors through securities dealers.
In pass-through certificates, both principal and interest payments,
including prepayments, are passed through to the holder of the
certificate. Prepayments on underlying mortgages result in a loss
of anticipated interest, and the actual yield (or total return) to
the fund, which is influenced by both stated interest rates and
market conditions, may be different than the quoted yield on the
certificates.
Foreign investments: Securities of foreign companies and
governments may be traded in the United States, but often they are
traded only on foreign markets. Frequently, there is less
information about foreign companies and less government supervision
of foreign markets. Foreign investments are subject to political
and economic risks of the countries in which the investments are
made including the possibility of seizure or nationalization of
<PAGE>
PAGE 20
companies, imposition of withholding taxes on income, establishment
of exchange controls or adoption of other restrictions that might
affect an investment adversely. If an investment is made in a
foreign market, the local currency must be purchased. This is done
by using a forward contract in which the price of the foreign
currency in U.S. dollars is established on the date the trade is
made, but delivery of the currency is not made until the securities
are received. As long as the fund holds foreign currencies or
securities valued in foreign currencies, the price of a fund share
will be affected by changes in the value of the currencies relative
to the U.S. dollar. Because of the limited trading volume in some
foreign markets, efforts to buy or sell a security may change the
price of the security, and it may be difficult to complete the
transaction.
Derivative instruments: The portfolio managers 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 a 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. A 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's custodian will maintain, in a segregated
account, cash or liquid high-grade debt securities that are marked
to market daily and are at least equal in value to the fund's
obligations to the extent such obligations are not covered. No
more than 5% of each 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. For
further information, see the options and futures appendixes in the
SAI.
Securities and derivative instruments that are illiquid: Illiquid
means the security or derivative instrument 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. Each
portfolio manager will follow guidelines established by the board
of directors and consider relevant factors such as the nature of
<PAGE>
PAGE 21
the security and the number of likely buyers when determining
whether a security is illiquid. No more than 10% of each fund's
net assets (15% for Capital Resource) will be held in securities
and derivative instruments that are illiquid.
Money market instruments: Short-term debt securities rated in the
top two grades are used to meet daily cash needs and at various
times to hold assets until better investment opportunities arise.
Generally, less than 25% of each of Capital Resource, International
Equity, Aggressive Growth, Special Income and Managed Fund's total
assets are in these money market instruments. However, for
temporary defensive purposes these investments could exceed that
amount for a limited period of time.
The investment policies described above may be changed by the board
of directors.
Lending portfolio securities: Each 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 shareholders approve otherwise, loans may not exceed 30% of
a fund's net assets.
Valuing assets
Moneyshare Fund's securities are valued at amortized cost. In
valuing assets of Capital Resource, International Equity,
Aggressive Growth, Special Income and Managed Funds:
o Securities 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 Securities and assets without readily available market values
are valued according to methods selected in good faith by the
board of directors.
o Assets and liabilities denominated in foreign currencies are
translated daily into U.S. dollars at a rate of exchange set
as near to the close of the day as practicable.
How to invest, transfer or redeem shares
How to invest
You may invest in the funds only by buying a variable annuity
contract. For further information concerning maximum and minimum
payments and submitting and acceptance of your application, see
your annuity prospectus.
<PAGE>
PAGE 22
How to transfer among variable accounts
You can transfer all or part of your value in a variable account to
one or more of the other variable accounts with different
investment objectives. Please refer to your variable annuity
prospectus for more information about transfers.
Redeeming shares
The funds will buy (redeem) any shares presented by the variable
accounts. Surrender or withdrawal details are described in your
variable annuity prospectus.
Payment generally will be mailed within seven days of the
redemption request. The amount may be more or less than the amount
invested. Shares will be redeemed at net asset value at the close
of business on the day the request is accepted at the Minneapolis
office. If the request arrives after the close of business, the
price per share will be the net asset value at the close of
business on the next business day.
Distributions and taxes
The funds distribute to shareholders (the variable accounts) net
investment income and net capital gains. They do so to qualify as
regulated investment companies and to avoid paying corporate income
and excise taxes.
Dividend and capital gain distributions
Capital Resource, International Equity, Aggressive Growth and
Managed Funds distribute their net investment income (dividends and
interest earned on securities held by the fund, less operating
expenses) to shareholders (the variable accounts) at the end of
each calendar quarter. For Special Income and Moneyshare Funds,
net investment income is distributed monthly. Short-term capital
gains distributed are included in net investment income. Net
realized capital gains, if any, from selling securities are
distributed at the end of the calendar year. Before they are
distributed, both net investment income and net capital gains are
included in the value of each share. After they are distributed,
the value of each share drops by the per-share amount of the
distribution. (Since the distributions are reinvested, the total
value of the holdings will not change.) The reinvestment price is
the net asset value at close of business on the day the
distribution is paid.
Taxes
The Internal Revenue Service has issued final regulations relating
to the diversification requirements under section 817(h) of the
Internal Revenue Code. Each fund intends to comply with these
requirements.
Federal income taxation of variable accounts, life insurance
companies and annuities is discussed in your annuity prospectus.
<PAGE>
PAGE 23
Income received by International Equity Fund may be subject to
foreign tax and withholding. Tax conventions between certain
countries and the United States may reduce or eliminate those
taxes.
How the funds are organized
IDS Life Capital Resource Fund, Inc. is a series mutual fund. It
has three series of stock representing three separate, diversified
funds - Capital Resource, International Equity and Aggressive
Growth. It was incorporated in Nevada on April 27, 1981, but
changed its state of incorporation to Minnesota on June 13, 1986.
International Equity and Aggressive Growth Funds began operations
on Jan. 13, 1992. IDS Life Special Income Fund, Inc. and IDS Life
Moneyshare Fund, Inc. were originally incorporated in Nevada on
April 27, 1981, but changed their state of incorporation to
Minnesota on June 13, 1986. IDS Life Managed Fund, Inc. was
incorporated in Minnesota on March 5, 1985.
All funds are open-end management investment companies as defined
in the Investment Company Act of 1940. The headquarters of the
Funds is IDS Tower 10, Minneapolis, MN 55440-0010. The funds are
part of the IDS MUTUAL FUND GROUP, a family of funds that began in
1940.
Shares
A fund is owned by the variable accounts, its shareholders. All
shares issued by each fund are of the same class -- capital stock.
Par value is 1 cent per share ($.001 for Managed Fund). Both full
and fractional shares can be issued.
Voting rights
For a discussion of the rights of annuity contract owners
concerning the voting of shares held by the variable accounts,
please see your annuity prospectus. All shares have equal voting
rights. In any matter requiring the vote of shareholders (the
fund's management and fundamental policies), IDS Life and its
affiliates will ask for instructions from the person with voting
rights. The number of votes you have is in proportion to the
amount you have allocated to each variable account. Your
instructions will be weighted in the same proportion and IDS Life
and its affiliates will vote them that way. If you do not give us
instructions, and for the shares for which we have voting rights,
we will vote your shares in the same proportion as those for which
we have received instructions.
Shareholder meetings
The funds do not hold annual shareholder meetings. However, the
directors may call meetings at their discretion, or on demand by
holders of 10% or more of the outstanding shares, to elect or
remove directors. Meetings of the shareholders also may be called
on demand by the holders of 3% or more of the outstanding shares of
each fund if no meeting has been held during the preceding 15
months.
<PAGE>
PAGE 24
Portfolio managers
Capital Resource
Curt Weaver joined IDS in 1979 and serves as senior portfolio
manager. He has managed this fund since 1987. He also serves IDS
Stock Fund as a member of the Growth Income team.
International Equity
Peter Lamaison joined IDS in 1981 and serves as president and chief
executive officer of IDS International, Inc. and senior portfolio
manager. He has managed this fund since 1992. He also serves as
portfolio manager of IDS International Fund and Strategy -
Worldwide Growth Fund.
Wes Wadman joined IDS in 1964 and serves as executive vice
president of IDS International, Inc. and as executive vice
president of IDS Advisory Group Inc. He has served as portfolio
manager of this fund since its inception.
Paul Hopkins joined IDS in 1992 and serves as chief investment
officer and executive vice president of IDS International, Inc. He
was appointed to the portfolio management team of this fund in
January 1994. He also serves as portfolio manager of IDS
International Fund and IDS Strategy-Worldwide Growth Fund. Prior
to joining IDS, he was director of international equities for
Bankers Trust.
Aggressive Growth
Ray Hirsch joined IDS in 1986 and serves as senior portfolio
manager. He has managed this fund since it's inception in 1992.
He also serves as portfolio manager for IDS Strategy - Aggressive
Equity Fund and IDS Discovery Fund. He also manages investments
for IDS Growth Spectrum Advisors, a division of IDS Advisory Group,
Inc.
Special Income
William Westhoff joined IDS in 1971 and serves as senior vice
president - fixed income management and senior portfolio manager.
He managed this fund from 1986 to 1989 and resumed management in
1993.
Moneyshare
Terry Fettig joined IDS in 1986. He serves as portfolio manager
for this fund, IDS Cash Management Fund, IDS Planned Investment
Account and IDS Tax-Free Money Fund. From 1986 to 1992 he was a
fixed income securities analyst. From 1992 to 1993 he was an
associate portfolio manager.
<PAGE>
PAGE 25
Managed
Mike Ducar joined IDS in 1974 and serves as senior portfolio
manager. He has managed the equity portfolio of this fund since
1991. He had served as director-investment research and vice
president of investment services. He also is a member of IDS
Growth Income team.
Deb Pederson joined IDS in 1986 and serves as portfolio manager.
She has managed the fixed income portfolio of this fund since
January 1994. She also manages the fixed income portfolio of IDS
Life Series Fund, Inc. - Managed Portfolio and the low grade
invested assets of IDS Life, IDS Life Insurance Company of New York
and American Enterprise Life Insurance Company.
Directors and officers
Shareholders elect a board of directors who oversee the operations
of the fund and choose 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 directors
also serve on the boards of all of the other funds in the IDS
MUTUAL FUND GROUP. On Aug. 31, 1994, the fund's directors and
officers did not own any shares of the funds.
Directors and officers of the funds
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,
Incorporated.
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).
<PAGE>
PAGE 26
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 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
David R. Hubers
President and chief executive officer, IDS.
James A. Mitchell
Executive Vice President, 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.
Refer to the SAI for the directors' and officers' biographies.
Investment manager
Each fund pays IDS Life for managing its portfolio, providing
administrative services and serving as transfer agent.
Under its Investment Management and Services Agreement, IDS Life
determines which securities will be purchased, held or sold
(subject to the direction and control of the fund's board of
directors). For these services, Aggressive Growth, International
Equity, Capital Resource, Managed and Special Income pay IDS Life a
two-part fee.
<PAGE>
PAGE 27
The first part is based on the combined average daily net assets of
all funds in the IDS MUTUAL FUND GROUP, as follows:
Net assets of IDS MUTUAL FUND GROUP* Annual fee
First $5 billion 0.46%
Each additional $5 billion Decreasing percentages
More than $50 billion 0.32%
*Includes all funds, except the money market funds.
The second part is equal to 0.25% of each fund's average daily net
assets during the fiscal year except for International Equity Fund
whose individual asset charge is equal to .50% of its average daily
net assets.
For the fiscal year ended Aug. 31, 1994, Aggressive Growth paid IDS
Life a total investment management fee of .64% of its average daily
net assets. International Equity paid .89%, Capital Resource paid
.64%, Managed paid .64%, and Special Income paid .65%. Under the
Agreement, each fund also pays taxes, brokerage commissions and
nonadvisory expenses. Total fees and expenses for fiscal year 1994
were .69% for Aggressive Growth, .98% for International Equity,
.68% for Capital Resource, .68% for Managed and .67% for Special
Income.
For its services, Moneyshare Fund pays IDS Life a fee based on an
annual rate of 0.54% on the first $1 billion of daily net assets,
decreasing thereafter in reduced percentages of each succeeding
$500 million to 0.46% on all net assets of more than $2.5 billion.
Under the agreement with IDS Life, Moneyshare Fund reimburses IDS
Life for nonadvisory expenses incurred by IDS Life in connection
with the fund's operations in an amount not to exceed 0.25% of the
fund's average daily net assets. For fiscal year 1994, Moneyshare
Fund's total fees and expenses were .57% of its average daily net
assets.
Investment advisory agreements
IDS Life and IDS have an Investment Advisory Agreement under which
IDS executes purchases and sales and negotiates brokerage as
directed by IDS Life. For its services, IDS Life pays IDS a fee
based on a percentage of each fund's average daily net assets for
the year. This fee is equal to 0.50% for International Equity Fund
and 0.25% for each remaining fund.
IDS has a Sub-investment Advisory Agreement with IDS International,
Inc. (International), a wholly owned subsidiary of IDS.
International's principal place of business is located at IDS Tower
10, Minneapolis, MN 55440-0010 while it also conducts investment
advisory business in London, England. International has had assets
under management since 1981. International determines the
securities which will be purchased, held or sold and executes
<PAGE>
PAGE 28
purchases and sales for International Equity Fund as directed by
IDS. For its services, IDS pays International a fee equal on an
annual basis to 0.50% of International Equity Fund's net assets.
General information
The IDS family of companies offers not only mutual funds but also
insurance, annuities, investment certificates and a broad range of
financial management services.
IDS has been providing financial services since 1894. Besides
managing investments for all publicly offered funds in the IDS
MUTUAL FUND GROUP, IDS also manages investments for itself and its
subsidiaries, IDS Certificate Company and IDS Life Insurance
Company. Total assets under management on Aug. 31, 1994 were more
than $105 billion.
IDS Life is a stock life insurance company organized in 1957 under
the laws of the State of Minnesota and located at IDS Tower 10,
Minneapolis, MN 55440-0010. IDS Life conducts a conventional life
insurance business in the District of Columbia and all states
except New York.
Other IDS subsidiaries provide investment management and related
services for pension, profit sharing, employee savings and
endowment funds of businesses and institutions.
IDS is located at IDS Tower 10, Minneapolis, MN 55440-0010. It is
a wholly owned subsidiary of American Express Company, 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
IDS.
Retirement Annuity Mutual Funds
IDS Tower 10
Minneapolis, MN
55440-0010
Managed by IDS Life Insurance Company
<PAGE>
PAGE 29
STATEMENT OF ADDITIONAL INFORMATION
FOR
IDS Life Capital Resource Fund, Inc.
IDS Life Capital Resource Fund
IDS Life International Equity Fund
IDS Life Aggressive Growth Fund
IDS Life Special Income Fund, Inc.
IDS Life Moneyshare Fund, Inc.
IDS Life Managed Fund, Inc.
Oct. 28, 1994
This Statement of Additional Information (SAI), is not a
prospectus. It should be read together with the funds' prospectus
and the financial statements contained in the funds' Annual Report
which, if not included with your prospectus, may be obtained
without charge.
This SAI is dated Oct. 28, 1994, and it is to be used with the
funds' prospectus dated Oct. 28, 1994. It is also to be used with
the funds' Annual Report for the fiscal year ended Aug. 31, 1994.
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN 55440-0010
(612) 671-3733
<PAGE>
PAGE 30
TABLE OF CONTENTS
Goals and Investment Policies........................See Prospectus
Additional Investment Policies................................p. 4
Portfolio Transactions........................................p. 10
Brokerage Commissions Paid to Brokers
Affiliated with IDS Life......................................p. 14
Performance Information.......................................p. 17
Valuing Each Fund's Shares....................................p. 19
Investing in the Funds........................................p. 22
Redeeming Shares..............................................p. 23
Capital Loss Carryover........................................p. 23
Taxes.........................................................p. 23
Agreements with IDS Life and IDS..............................p. 24
Directors and Officers........................................p. 26
Custodian.....................................................p. 29
Independent Auditors..........................................p. 29
Financial Statements....................See Annual Report and p. 30
Prospectus....................................................p. 30
Appendix A: Description of Corporate Bond Ratings and
Additional Information on Investment Policies
for Investments of Capital Resource and Special
Income Funds.....................................p. 31
Appendix B: Foreign Currency Transactions for Investments
of Capital Resource, International Equity,
Aggressive Growth, Special Income and Managed
Funds............................................p. 33
Appendix C: Description of Money Market Securities...........p. 38
Appendix D: Options and Stock Index Futures Contracts for
Investments of Capital Resource, International
Equity, Aggressive Growth and Managed Funds......p. 40
Appendix E: Options and Interest Rate Futures Contracts
for Investments of Special Income and Managed
Funds............................................p. 48
<PAGE>
PAGE 31
Appendix F: Mortgage-backed securities and Additional
Information on Investment Policies for all
funds except Moneyshare..........................p. 54
Appendix G: Dollar-Cost Averaging............................p. 57
<PAGE>
PAGE 32
ADDITIONAL INVESTMENT POLICIES
In addition to the investment goals and policies presented in the
prospectus, each fund has the investment policies stated below that
will not be changed unless holders of a majority of the outstanding
shares of the fund to which the policy applies agree to make the
change.
These policies state each fund will not:
'Invest more than 5 percent of its total assets, at market value,
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. Except for Moneyshare Fund, up to
25 percent of each fund's total assets may be invested without
regard to this 5 percent limitation.
'Buy on margin or sell short, but Capital Resource, International
Equity, Aggressive Growth and Managed Funds may make margin
payments in connection with transactions in stock index futures
contracts. Special Income and Managed Funds may make margin
payments in connection with transactions in financial futures
contracts.
'Invest in a company to control or manage it.
'Purchase securities of an issuer if the directors and officers of
the fund, IDS Financial Corporation (IDS) and IDS Life Insurance
Company (IDS Life) hold more than a certain percentage of the
issuer's outstanding securities. The holdings of all officers and
directors of the fund, IDS and IDS Life who own more than 0.5
percent of an issuer's securities are added together, and if in
total they own more than 5 percent, the fund will not purchase
securities of that issuer.
'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 the fund's total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing. The funds will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceeds 5 percent. The funds have not borrowed in the past and
have no present intention to borrow.
'Lend portfolio securities in excess of 30 percent of each fund's
net assets, at market value. The current policy of each fund's
Board of Directors 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 of Directors. 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
<PAGE>
PAGE 33
due. A loan will not be made unless the opportunity for additional
income outweighs the risks. During the existence of the loan, the
fund receives cash payments equivalent to all interest or other
distributions paid on the loaned securities.
'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. It may be considered an underwriter under
securities laws when it sells restricted securities.
Capital Resource, International Equity, Aggressive Growth, Special
Income and Moneyshare Funds will not:
'Invest in exploration or development programs, such as oil, gas or
mineral programs.
Capital Resource, International Equity, Aggressive Growth, Special
Income and Managed Funds will not:
'Concentrate in any one industry. According to the present
interpretation by the Securities and Exchange Commission (SEC),
this means no more than 25 percent of a fund's total assets, based
on current market value at time of purchase, can be invested in any
one industry.
'Purchase more than 10 percent of the outstanding voting securities
of an issuer.
Capital Resource, Aggressive Growth, Special Income and Managed
Funds will not:
'Invest in securities of investment companies except by purchase in
the open market where the dealer's or sponsor's profit is the
regular commission. The funds do not intend to invest in such
securities but may do so to the extent of not more than 5 percent
of Capital Resource and Special Income Funds' net assets and not
more than 10 percent of Aggressive Growth and Managed Funds' net
assets taken at market or other current value. The funds may
acquire limited amounts of securities of one or more investment
companies as permitted by the Investment Company Act of 1940, in
connection with the acquisition of or merger with such companies.
Except for these, the funds will not purchase securities of
investment companies.
'Engage in the purchase and sale of commodities or commodity
contracts, except to the extent that stock index futures contracts
may be considered such for Capital Resource, Aggressive Growth and
Managed Funds or financial futures contracts may be considered such
for Special Income Fund.
<PAGE>
PAGE 34
Capital Resource and Special Income Funds will not:
'Invest in securities that are not readily marketable (including
restricted securities and repurchase agreements with maturities
greater than seven days) whether or not registration or the filing
of a notification under the Securities Act of 1933, or the taking
of similar action under other securities laws relating to the sale
of securities is required, if immediately after the making of any
such investment more than 15 percent of the net assets of Capital
Resource Fund or more than 10 percent of the net assets of Special
Income Fund (taken at market or other current value) would be
invested in such securities. The current policy of the Board of
Directors is to not invest more than 10 percent of Capital Resource
Fund's assets in such securities.
'Invest more than 10 percent of the fund's assets, taken at cost,
in real properties, or do so as a principal activity.
'Make loans, except that (a) assets may be invested in debt
securities, whether or not publicly distributed, of a type
customarily purchased by institutional investors; and (b) to the
extent that loans are fully collateralized, and subject to the
applicable New York Stock Exchange rules, the funds may engage in
lending portfolio securities to qualified banks or broker-dealers.
The funds will try to vote loaned securities by asking for their
return if some major event affecting the investment is going to be
considered.
Moneyshare Fund will not:
'Purchase common stocks, preferred stocks, warrants, other equity
securities, corporate bonds or debentures, state bonds, municipal
bonds, or industrial revenue bonds.
'Make cash loans. However, the fund does make short-term
investments which it may have an agreement with the seller to
reacquire (See Appendix C).
'Invest in an investment company beyond 5 percent of its total
assets taken at market and then only on the open market where the
dealer's or sponsor's profit is limited to the regular commission.
However, the fund will not purchase or retain the securities of
other open-end investment companies.
'Buy or sell real estate, commodities or commodity contracts.
'Intentionally invest more than 25 percent of the fund's assets
taken at market value in any particular industry, except with
respect to investing in U.S. government or agency securities and
bank obligations. Investments are varied according to what is
judged advantageous under different economic conditions.
<PAGE>
PAGE 35
International Equity, Aggressive Growth and Managed Funds will not:
'Invest more than 5 percent of its total assets, at cost, in
securities of domestic or foreign companies, including any
predecessors, that have a record of less than three years
continuous operations.
'Buy or sell real estate, real estate mortgage loans, commodities,
or commodity contracts. However, the fund may enter into futures
contracts.
'Pledge or mortgage its assets beyond 15 percent of the cost of its
total assets. If the fund were ever to do so, valuation of its
assets would be based on market value. For the purpose of this
restriction, collateral arrangements with respect to margin for
futures contracts are not deemed to be a pledge of assets.
'Make cash loans. However, the fund does make investments in debt
securities whereby the sellers agree to repurchase the securities
at cost plus an agreed-upon interest rate within a specified period
of time.
'Make a loan of any part of its assets to IDS, to its directors and
officers or to its own directors and officers.
International Equity and Managed Funds will not:
'Issue senior securities, except to the extent that borrowing from
banks, lending its securities, or entering into repurchase
agreements or options or futures contracts may be deemed to
constitute issuing a senior security.
Unless these policies are changed by the Board of Directors,
'Each Fund may maintain a portion of its assets in cash and
cash-equivalent investments. Each Fund may purchase short-term
U.S. and Canadian government securities. International Equity Fund
may invest in short-term obligations or currencies of the U.S.
government (and its agencies and instrumentalities) and of the
Canadian and United Kingdom governments.
Each Fund may purchase short-term corporate notes and obligations
rated in the top two classifications by Moody's and S&P or the
equivalent. International Equity Fund also may purchase high grade
notes and obligations of U.S. banks (including their branches
located outside of the United States and U.S. branches of foreign
banks). On a day-to-day basis, International Equity Fund also may
maintain a portion of its assets in currencies of countries other
than the United States, Canada and the United Kingdom. As a
temporary investment, during periods of weak or declining market
values for the securities the Fund invests in, any portion of its
assets may be converted to cash (in foreign currencies or U.S.
dollars) or to short-term debt securities.
<PAGE>
PAGE 36
Each Fund may invest in bank obligations including negotiable
certificates of deposit (CDs), non-negotiable fixed-time deposits,
bankers' acceptances and letters of credit of banks or savings and
loan associations having 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. Any cash-equivalent investments in foreign securities
will be subject to that Fund's limitations on foreign investments.
Each Fund may use repurchase agreements with broker-dealers
registered under the Securities Exchange Act of 1934 and with
commercial U.S. banks. 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. The
security acquired by Moneyshare Fund in a repurchase agreement can
be any security the Fund can purchase directly and it may have a
maturity of more than 13 months.
'All funds except Moneyshare (separately, 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). A fund does not pay for the securities or receive
dividends or interest on them until the contractual settlement
date. The fund's custodian will maintain, in a segregated account,
cash or liquid high-grade debt securities that are marked to market
daily and are at least equal in value to the fund's 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.
Capital Resource, International Equity, Aggressive Growth, Special
Income and Managed Funds will not:
'Invest more than 5 percent of its net assets in warrants. Under
one state's law, no more than 2 percent of each Fund's net assets
may be invested in warrants not listed on an exchange.
International Equity, Aggressive Growth, Managed and Moneyshare
Funds will not:
'Invest in securities that are not readily marketable (whether or
not registration or the filing of a notification under the
Securities Act of 1933, or the taking of similar action under other
securities laws relating to the sale of securities is required), if
immediately after the making of any such investment more than 10
percent of International Equity Fund's or Aggressive Growth Fund's
or 5 percent of Managed Fund's net assets (taken at market) would
be invested in such securities.
Capital Resource, International Equity, Aggressive Growth, Special
Income and Managed Funds will not:
'Invest more than 10% of the Fund's net assets in securities and
derivative instruments that are illiquid. For purposes of this
policy, illiquid securities include some privately placed <PAGE>
PAGE 37
securities, public securities and Rule 144A securities that for one
reason or another may no longer have a readily available market,
repurchase agreements with maturities greater than seven days, non-
negotiable fixed-time deposits and over-the-counter options.
In determining the liquidity of Rule 144A securities, which are
unregistered securities offered to qualified institutional buyers,
and interest-only and principal-only fixed mortgage-backed
securities (IOs and POs) issued by the United States government or
its agencies and instrumentalities, the investment manager, under
guidelines established by the board of directors, will consider any
relevant factors including the frequency of trades, the number of
dealers willing to purchase or sell the security and the nature of
marketplace trades.
In determining the liquidity of commercial paper issued in
transactions not involving a public offering under Section 4(2) of
the Securities Act of 1933, the investment manager, under
guidelines established by the board of directors, 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.
International Equity Fund will not:
'Invest in securities of investment companies except by purchase in
the open market where the dealer's or sponsor's profit is the
regular commission. If any such investment is ever made, not more
than 10 percent of the fund's net assets, at market, will be so
invested. To the extent the fund were to make such investments,
the shareholders may be subject to duplicate advisory,
administrative and distribution fees.
Managed Fund will not:
'Invest in exploration or development programs, such as oil, gas or
mineral programs.
'Invest in a company if its investments would result in the total
holdings of all the funds in the IDS MUTUAL FUND GROUP being in
excess of 15 percent of that company's issued shares.
Moneyshare Fund may:
'Invest in commercial paper rated in the highest rating category by
at least two nationally recognized statistical rating organizations
(or by one, if only one rating is assigned) and in unrated paper
determined by the board of directors to be of comparable quality.
The fund also may invest up to 5% of its assets in commercial paper
receiving the second highest rating or in unrated paper determined
to be of comparable quality.
<PAGE>
PAGE 38
For a discussion on corporate bond ratings and additional
information on investment policies, see Appendix A. For a
discussion on foreign currency transactions, see Appendix B. For a
discussion on money market securities, see Appendix C. For a
discussion on options and stock index futures contracts, see
Appendix D. For a discussion on options and interest rate futures
contracts, see Appendix E. For a discussion on dollar-cost
averaging, see Appendix F.
PORTFOLIO TRANSACTIONS
Subject to policies set by the Board of Directors, IDS, IDS
International, Inc. (International) and IDS Life are authorized to
determine, consistent with the funds' investment goals and
policies, which securities will be purchased, held or sold. In
determining where buy and sell orders are to be placed,
IDS, International and IDS Life have been directed to use their
best efforts to obtain the best available price and the most
favorable execution except where otherwise authorized by the Board
of Directors. IDS Life intends to direct IDS and International to
execute trades and negotiate commissions on its behalf. These
services are covered by the Investment Advisory Agreement between
IDS and IDS Life and the Sub-Investment Advisory Agreement between
IDS and International. When IDS and International act on IDS
Life's behalf for the funds, they follow the rules described here
for IDS Life.
On occasion, it may be desirable for Capital Resource,
International Equity, Aggressive Growth, Special Income or Managed
Funds 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 Boards of Directors have adopted a policy authorizing
IDS Life to do so to the extent authorized by law, if IDS Life
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 IDS Life's, IDS' or International's overall
responsibilities to the funds in the IDS MUTUAL FUND GROUP.
Research provided by brokers supplements IDS' and International's
own research activities. Research services include economic data
on, and analysis of: the U.S. economy and specific industries
within the economy; information about specific companies, including
earning 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. IDS 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 includes
<PAGE>
PAGE 39
the research, portfolio management and trading functions and such
other services to the extent permitted under an interpretation by
the Securities and Exchange Commission.
When paying a commission that might not otherwise be charged or a
commission in excess of the amount another broker might charge, IDS
Life must follow procedures authorized by the Board of Directors.
To date, three procedures have been authorized. One procedure
permits IDS Life 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
IDS Life, 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 the
security. The commission paid generally includes compensation for
research services. The third procedure permits IDS Life, in order
to obtain research and brokerage services, to cause each fund to
pay a commission in excess of the amount another broker might have
charged.
IDS Life has advised the funds that it is necessary to do business
with a number of brokerage firms on a continuing basis to obtain
such services as: handling of large orders; willingness of a
broker to risk its own money by taking a position in a security;
and 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 IDS Life believes it may obtain better
overall execution. IDS Life has assured the funds 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 IDS Life, IDS and International in providing advice
to all the funds in the IDS MUTUAL FUND GROUP and other accounts
advised by IDS Life, IDS and International, even though it is not
possible to relate the benefits to any particular fund or account.
Normally, the securities of Special Income and Moneyshare Funds are
traded on a principal rather than an agency basis. In other words,
IDS 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. IDS 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.
Each investment decision made for each fund is made independently
from any decision made for another fund in the IDS MUTUAL FUND
GROUP or other account advised by IDS or any IDS subsidiary. When
<PAGE>
PAGE 40
a fund buys or sells the same security as another fund or account,
IDS or International 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 a fund, the fund hopes to gain an overall advantage in
execution. IDS and International have assured the funds they will
continue to seek ways to reduce brokerage costs.
On a periodic basis, IDS and International make a comprehensive
review of the broker-dealers and the overall reasonableness of
their commissions. The review evaluates execution, operational
efficiency and research services.
The funds have paid the following brokerage commissions:
<TABLE><CAPTION>
Fiscal year ended Capital International Aggressive Special
Aug. 31, Resource Equity Growth Income Managed
<C> <C> <C> <C> <C> <C>
1992 1,869,988 99,498 49,168 49,465 776,462
1993 2,957,827 820,299 225,254 14,954 1,487,314
1994 5,296,360 3,039,515 756,105 19,938 2,543,362
</TABLE>
Transactions amounting to $113,025,000, $11,572,000 and $15,570,000
with related commissions of $293,125, $27,406 and $62,614 were
directed to brokers by Capital Resource, Aggressive Growth and
Managed Funds, respectively, because of research services received
for the fiscal year ended Aug. 31, 1994.
No transactions were directed to brokers because of research
services they provided to International Equity for the fiscal year
ended Aug. 31, 1994.
Capital Resource Fund's acquisition during the fiscal year ended
Aug. 31, 1994, of securities of its regular brokers or dealers or
of the parents of those brokers or dealers that derived more than
15 percent of gross revenue from securities-related activities is
presented below:
Value of Securities
Owned at End of
Name of Issuer Fiscal Year
BankAmerica $27,156,250
First Chicago 23,589,475
International Equity Fund's acquisition during the fiscal year
ended Aug. 31, 1994, of securities of its regular brokers or
dealers or of the parents of those brokers or dealers that derived
more than 15 percent of gross revenue from securities-related
activities is presented below:
Value of Securities
Owned at End of
Name of Issuer Fiscal Year
Goldman Sachs $4,295,824
<PAGE>
PAGE 41
Special Income Fund's acquisition during the fiscal year ended
Aug. 31, 1994, of securities of its regular brokers or dealers or
of the parents of those brokers or dealers that derived more than
15 percent of gross revenue from securities-related activities is
presented below:
Value of Securities
Owned at End of
Name of Issuer Fiscal Year
Goldman Sachs $6,536,250
BankAmerica 7,350,000
Chase Manhattan 9,762,500
Moneyshare Fund's acquisition during the fiscal year ended
Aug. 31, 1994, of securities of its regular brokers or dealers or
of the parents of those brokers or dealers that derived more than
15 percent of gross revenue from securities-related activities is
presented below:
Value of Securities
Owned at End of
Name of Issuer Fiscal Year
Goldman Sachs $3,996,900
Managed Fund's acquisition during the fiscal year ended Aug. 31,
1994, of securities of its regular brokers or dealers or of the
parents of those brokers or dealers that derived more than 15
percent of gross revenue from securities-related activities is
presented below:
Value of Securities
Owned at End of
Name of Issuer Fiscal Year
BankAmerica $14,812,500
First Chicago 28,117,050
Goldman Sachs 13,688,068
Merrill Lynch 11,551,668
Aggressive Growth Fund did not acquire securities of its regular
brokers or dealers or of the parents of those brokers or dealers
that derived more than 15 percent of gross revenue from securities-
related activities during the fiscal year ended Aug. 31, 1994.
Because certain groups of bonds have different yields, Special
Income Fund may do some short-term trading. As a result, the
portfolio turnover rate may be greater than 100 percent annually
which may be higher than the rate of other funds with similar
goals. A turnover rate of 100 percent would occur, for example, if
all the securities in the fund's portfolio were replaced in the
period of one year. The fund's turnover rate was 77% in fiscal
year ended Aug. 31, 1993 and 57% in fiscal year ended Aug. 31,
1994.
<PAGE>
PAGE 42
The portfolio turnover rate for Capital Resource Fund was 65% in
fiscal year ended Aug. 31, 1993 and 85% in fiscal year ended Aug.
31, 1994. The portfolio turnover rate for Managed Fund was 58% in
fiscal year ended Aug. 31, 1993 and 79% in fiscal year ended Aug.
31, 1994.
The portfolio turnover rate for International Equity Fund was 62%
in fiscal year ended Aug. 31, 1993 and 51% in fiscal year ended
Aug. 31, 1994. The portfolio turnover rate for Aggressive Growth
Fund was 55% in fiscal year ended Aug. 31, 1993 and 59% in fiscal
year ended Aug. 31, 1994.
BROKERAGE COMMISSIONS PAID TO BROKERS AFFILIATED WITH IDS LIFE
Affiliates of American Express Company (American Express) (of which
IDS Life is a wholly owned indirect subsidiary) may engage in
brokerage and other securities transactions on behalf of Capital
Resource, International Equity, Aggressive Growth, Special Income
and Managed Funds in accordance with procedures adopted by the
funds' Boards of Directors and to the extent consistent with
applicable provisions of the federal securities laws. IDS Life
will use an American Express affiliate only if (i) IDS Life
determines that a 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 and Services Agreement.
No brokerage commissions were paid by Moneyshare Fund to brokers
affiliated with IDS Life for the fiscal year ended Aug. 31, 1994.
<PAGE>
PAGE 43
Information about brokerage commissions paid by Capital Resource
Fund for the last three fiscal years to brokers affiliated with IDS
Life is contained in the following table:
<TABLE><CAPTION>
For the Fiscal Year Ended Aug. 31,
1994 1993 1992
Aggregate Percent of Aggregate Aggregate
Dollar Aggregate Dollar Dollar Dollar
Amount of Percent of Amount of Amount of Amount of
Nature Commissions Aggregate Transactions Commissions Commissions
of Paid to Brokerage Involving Payment Paid to Paid to
Broker Affiliation Broker Commissions of Commissions Broker Broker
<S> <C> <C> <C> <C> <C> <C>
Lehman (1) $ 71,398 1.35% 2.22% $ 79,780 $205,105
Brothers,
Inc.
The Robinson (2) 6,300 .12 .26 None None
Humphrey
Company, Inc.
American (3) 412,316 7.78 12.67 245,330 173,665
Enterprise
Investment
Services, Inc.
</TABLE>
(1) Until May 31, 1994, under common control with IDS as a
subsidiary of American Express Company (American Express). As of
May 31, 1994, is no longer a subsidiary of American Express.
(2) Under common control with IDS as an indirect subsidiary of
American Express until July 30, 1993.
(3) Wholly owned subsidiary of IDS.
Information about brokerage commissions paid by Aggressive Growth
Fund for the last three fiscal periods to brokers affiliated with
IDS Life is contained in the following table:
<TABLE><CAPTION>
For the Fiscal Period Ended Aug. 31,
1994 1993 1992
Aggregate Percent of Aggregate Aggregate
Dollar Aggregate Dollar Dollar Dollar
Amount of Percent of Amount of Amount of Amount of
Nature Commissions Aggregate Transactions Commissions Commissions
of Paid to Brokerage Involving Payment Paid to Paid to
Broker Affiliation Broker Commissions of Commissions Broker Broker
<S> <C> <C> <C> <C> <C> <C>
Lehman (1) $15,342 2.03% 2.56% $ 7,748 $15,606
Brothers,
Inc.
The Robinson (2) 3,150 .42 .42 None None
Humphrey
Company, Inc.
American (3) 41,833 5.53 10.26 30,150 2,292
Enterprise
Investment
Services, Inc.
</TABLE>
(1) Until May 31, 1994, under common control with IDS as a
subsidiary of American Express Company (American Express). As of
May 31, 1994, is no longer a subsidiary of American Express.
(2) Under common control with IDS as an indirect subsidiary of
American Express until July 30, 1993.
(3) Wholly owned subsidiary of IDS.
<PAGE>
PAGE 44
Information about brokerage commissions paid by Managed Fund during
the last three fiscal years to brokers affiliated with IDS Life is
contained in the following table:
<TABLE><CAPTION>
For the Fiscal Year Ended Aug. 31,
1994 1993 1992
Aggregate Percent of Aggregate Aggregate
Dollar Aggregate Dollar Dollar Dollar
Amount of Percent of Amount of Amount of Amount of
Nature Commissions Aggregate Transactions Commissions Commissions
of Paid to Brokerage Involving Payment Paid to Paid to
Broker Affiliation Broker Commissions of Commissions Broker Broker
<S> <C> <C> <C> <C> <C> <C>
Lehman (1) $ 86,076 3.38% 2.98% $ 48,467 $ 33,352
Brothers,
Inc.
The Robinson (2) 24,338 .96 1.06 None 6,510
Humphrey
Company, Inc.
American (3) 127,304 5.01 10.21 177,107 110,913
Enterprise
Investment
Services, Inc.
</TABLE>
(1) Until May 31, 1994, under common control with IDS as a
subsidiary of American Express Company (American Express). As of
May 31, 1994, is no longer a subsidiary of American Express.
(2) Under common control with IDS as an indirect subsidiary of
American Express until July 30, 1993.
(3) Wholly owned subsidiary of IDS.
Information about brokerage commissions paid by Special Income Fund
during the last three fiscal years to brokers affiliated with IDS
Life is contained in the following table:
<TABLE><CAPTION>
For the Fiscal Year Ended Aug. 31,
1994 1993 1992
Aggregate Percent of Aggregate Aggregate
Dollar Aggregate Dollar Dollar Dollar
Amount of Percent of Amount of Amount of Amount of
Nature Commissions Aggregate Transactions Commissions Commissions
of Paid to Brokerage Involving Payment Paid to Paid to
Broker Affiliation Broker Commissions of Commissions Broker Broker
<S> <C> <C> <C> <C> <C> <C>
American (1) $666 3.34% 1.44% None None
Enterprise
Investment
Services, Inc.
</TABLE>
(1) Wholly owned subsidiary of IDS.
<PAGE>
PAGE 45
Information about brokerage commissions paid by International
Equity Fund during the last three fiscal periods to brokers
affiliated with IDS Life is contained in the following table:
<TABLE><CAPTION>
For the Fiscal Period Ended Aug. 31,
1994 1993 1992
Aggregate Percent of Aggregate Aggregate
Dollar Aggregate Dollar Dollar Dollar
Amount of Percent of Amount of Amount of Amount of
Nature Commissions Aggregate Transactions Commissions Commissions
of Paid to Brokerage Involving Payment Paid to Paid to
Broker Affiliation Broker Commissions of Commissions Broker Broker
<S> <C> <C> <C> <C> <C> <C>
American (1) $4,372 .14% .27% None None
Enterprise
Investment
Services, Inc.
</TABLE>
(1) Wholly owned subsidiary of IDS.
PERFORMANCE INFORMATION
Each fund may quote various performance figures to illustrate past
performance. Average annual total return and current yield
quotations used by a fund are based on standardized methods of
computing performance as required by the SEC. An explanation of
these and any other methods used by each fund to compute
performance follows below.
Average annual total return
Each fund may calculate average annual total return 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
Each fund may calculate aggregate total return for certain periods
representing the cumulative change in the value of an investment in
a 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)<PAGE>
PAGE 46
Annualized yield and Distribution yield
Special Income Fund may calculate an annualized yield by dividing
the net investment income per share deemed earned during a 31-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
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 9.84% for the 31-day period ended
Aug. 31, 1994.
The fund's yield, calculated as described above according to the
formula prescribed by the SEC, is a hypothetical return based on
market value yield to maturity for the fund's securities. It is
not necessarily indicative of the amount which was or may be paid
to the contract owners. Actual amounts paid to contract owners are
reflected in the distribution yield.
Distribution yield is calculated according to the following
formula:
D x F = DY
NAV 31
where: D = sum of dividends for 31 day period
NAV = beginning of period net asset value
F = annualizing factor
DY = distribution yield
The fund's distribution yield was 8.86% for the 31-day period ended
Aug. 31, 1994.
Moneyshare Fund calculates annualized simple and compound yields
based on a seven-day period.
The simple yield is calculated by determining the net change in the
value of a hypothetical account having a balance of one share at
the beginning of the seven-day period, dividing the net change in
account value by the value of the account at the beginning of the
period to obtain the return for the period, and multiplying that
<PAGE>
PAGE 47
return by 365/7 to obtain an annualized figure. The value of the
hypothetical account includes the amount of any declared dividends,
the value of any shares purchased with any dividend paid during the
period and any dividends declared for such shares. The fund's
yield does not include any realized or unrealized gains or losses.
Moneyshare Fund calculates its compound yield according to the
following formula:
Compound Yield = (return for seven day period + 1) 365/7 - 1
Moneyshare Fund's simple annualized yield was 4.17% and its
compound yield was 4.25% for the seven days ended Aug. 31, 1994,
the last business day of the fund's fiscal year. The fund's simple
yield was 4.35% and the compound yield was 4.44% for the seven days
ended Sept. 30, 1994.
Yield, or rate of return, on Moneyshare Fund shares may fluctuate
daily and does not provide a basis for determining future yields.
However, it may be used as one element in assessing how the fund is
meeting its goal. When comparing an investment in the fund with
savings accounts and similar investment alternatives, you must
consider that such alternatives often provide an agreed to or
guaranteed fixed yield for a stated period of time, whereas the
fund's yield fluctuates. In comparing the yield of one money
market fund to another, you should consider each fund's investment
policies, including the types of investments permitted.
REMEMBER THAT THESE YIELDS ARE THE RETURN TO THE SHAREHOLDER (THE
VARIABLE ACCOUNTS), NOT TO THE VARIABLE ANNUITY CONTRACT OWNER.
SEE YOUR ANNUITY PROSPECTUS FOR A DISCUSSION OF THE DIFFERENCES.
In sales material and other communications, the funds 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 EACH FUND'S SHARES
On Aug. 31, 1994, the computation of the value of an individual
share looked like this:
Capital Resource Fund
Net asset value
Net assets Shares outstanding of one share
$2,899,442,451 divided by 123,760,195 = $23.43
<PAGE>
PAGE 48
International Equity Fund
Net asset value
Net assets Shares outstanding of one share
$1,111,292,721 divided by 86,049,715 = $12.91
Aggressive Growth Fund
Net assets Shares outstanding of one share
$762,649,700 divided by 66,571,368 = $11.46
Special Income Fund
Net asset value
Net assets Shares outstanding of one share
$1,558,917,003 divided by 141,040,088 = $11.05
Managed Fund
Net asset value
Net assets Shares outstanding of one share
$2,499,355,003 divided by 183,064,969 = $13.65
Capital Resource, International Equity, Aggressive Growth, Special
Income and Managed Funds' portfolio securities are valued as
follows as of the close of business of the New York Stock 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 exists, 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 New York Stock Exchange. Foreign
securities quoted in foreign currencies are translated into U.S.
dollars at the current rate of exchange. Occasionally, events
<PAGE>
PAGE 49
affecting the value of such securities may occur between such times
and the close of the New York Stock Exchange that will not be
reflected in the computation of a 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
funds' Boards of Directors.
'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 Boards of Directors. The Boards of
Directors are responsible for selecting methods they believe
provide fair value. When possible, bonds are valued by a pricing
service independent from a 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.
Moneyshare Fund intends to use its best efforts to maintain a
constant net asset value of $1 per share although there is no
assurance it will be able to do so. Accordingly, the fund uses the
amortized cost method in valuing its portfolio.
Short-term securities maturing in 60 days or less 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. It does not take into
consideration unrealized capital gains or losses. All of the
securities in the fund's portfolio will be valued at their
amortized cost.
In addition, Moneyshare Fund must abide by certain conditions. It
must only invest in securities of high quality which present
minimal credit risks as determined by the Board of Directors. This
means that the rated commercial paper in the fund's portfolio will
be issues that have been rated in the highest rating category by at
least two nationally recognized statistical rating organizations
(or by one if only one rating is assigned) and in unrated paper
determined by the fund's Board of Directors to be comparable. The
fund must also purchase securities with original or remaining
<PAGE>
PAGE 50
maturities of 13 months or less, and maintain a dollar-weighted
average portfolio maturity of 90 days or less. In addition, the
Board of Directors must establish procedures designed to stabilize
the fund's price per share for purposes of sales and redemptions at
$1 to the extent that it is reasonably possible to do so. These
procedures include review of the fund's portfolio securities by the
Board, at intervals deemed appropriate by it, to determine whether
the fund's net asset value per share computed by using the
available market quotations deviates from a share value of $1 as
computed using the amortized cost method. The Board must consider
any deviation that appears, and if it exceeds 0.5 percent, it must
determine what action, if any, needs to be taken. If the Board
determines that a deviation exists that may result in a material
dilution of the holdings of the Separate Accounts or investors, or
in other unfair consequences for such people, it must undertake
remedial action that it deems necessary and appropriate. Such
action may include withholding dividends, calculating net asset
value per share for purposes of sales and redemptions in kind, and
selling portfolio securities before maturity in order to realize
capital gain or loss or to shorten average portfolio maturity.
In other words, while the amortized cost method provides certainty
and consistency in portfolio valuation, it may, from time to time,
result in valuations of portfolio securities that are either
somewhat higher or lower than the prices at which the securities
could be sold. This means that during times of declining interest
rates, the yield on Moneyshare Fund's shares may be higher than if
valuations of portfolio securities were made based on actual market
prices and estimates of market prices. Accordingly, if use of the
amortized cost method were to result in a lower portfolio value at
a given time, a prospective investor in the fund would be able to
obtain a somewhat higher yield than if portfolio valuation were
based on actual market values. The Variable Accounts, on the other
hand, would receive a somewhat lower yield than they would
otherwise receive. The opposite would happen during a period of
rising interest rates.
The New York Stock Exchange, IDS, IDS Life and the funds 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 FUNDS
You cannot buy shares of the funds directly. The only way you can
invest in the funds at the current time is by buying an annuity
contract and directing the allocation of part or all of your net
purchase payment to the variable accounts, which will invest in
shares of Capital Resource, International Equity, Aggressive
Growth, Special Income, Moneyshare or Managed Funds. Please read
the funds' prospectus along with your annuity prospectus for
further information.
<PAGE>
PAGE 51
Sales Charges and Surrender or Withdrawal Charges
The funds do not assess sales charges, either when they sell or
when they redeem securities. The surrender or withdrawal charges
that may be assessed under your annuity contract are described in
your annuity prospectus, as are the other charges that apply to
your annuity contract and to the variable accounts.
REDEEMING SHARES
The funds will redeem any shares presented by a shareholder
(Variable Account) for redemption. The Variable Accounts' policies
on when or whether to buy or redeem fund shares are described in
your annuity prospectus.
During an emergency, the Boards of Directors can suspend the
computation of net asset value, stop accepting payments for
purchase of shares or suspend the duty of the funds to redeem
shares for more than 7 days. Such emergency situations would occur
if:
'The New York Stock Exchange closes for reasons other than the
usual weekend and holiday closings or trading on the Exchange is
restricted,
'Disposal of a 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 Securities and Exchange Commission, under the provisions of
the Investment Company Act of 1940, as amended, declares a period
of emergency to exist.
Should a fund stop selling shares, the directors 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 contract owners.
CAPITAL LOSS CARRYOVER
For federal income tax purposes, Aggressive Growth Fund had capital
loss carryover of $34,506,813 at Aug. 31, 1994, which, if not
offset by subsequent capital gains, will expire in 2001 through
2003. It is unlikely the Board of Directors will authorize a
distribution of any net realized capital gain for these funds until
the capital loss carryover has been offset or expires except as
required by IRS rules.
TAXES
International Equity Fund may be subject to U.S. taxes resulting
from holdings in a passive foreign investment company (PFIC). A
foreign corporation is a PFIC when 75 percent or more of its gross
income for the taxable year is passive income or if 50 percent or
more of the average value of its assets consists of assets that
produce or could produce passive income.<PAGE>
PAGE 52
AGREEMENTS WITH IDS LIFE AND IDS
Investment Management and Services Agreement
Each fund has an Investment Management and Services Agreement with
IDS Life. For its services, IDS Life is paid a fee composed of an
asset charge. Except for Moneyshare Fund, the asset charge is in
two parts. The first part, the group asset charge, is based on the
combined daily net assets of all funds in the IDS MUTUAL FUND
GROUP, except the money market funds, including any new fund that
may be organized in the future. The daily rate of the group asset
charge is based upon the following schedule:
Group Asset Charge
Group assets Annual rate at Effective
(billions) each asset level annual rate
First $5 0.460% 0.460%
Next $5 0.440 0.450
Next $5 0.420 0.440
Next $5 0.400 0.430
Next $5 0.390 0.422
Next $5 0.380 0.415
Next $5 0.360 0.407
Next $5 0.350 0.400
Next $5 0.340 0.393
Next $5 0.330 0.387
Over $50 0.320
The aggregate net assets of all non-money market funds in the IDS
MUTUAL FUND GROUP were $45,620,696,755 on Aug. 31, 1994, and the
daily rate applied to each fund's assets was equal to approximately
0.39% on an annual basis.
The second part of the asset charge is based on the daily net
assets of each fund alone, and is equal to 0.25 percent per year of
Capital Resource, Aggressive Growth, Special Income and Managed
Funds' assets and 0.50 percent per year of International Equity
Fund's assets. The total 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 payable monthly.
Moneyshare Fund's fee is based on the following schedule:
On the first $1 billion of net assets
of the fund................................ 0.540%
On the next $500 million of net assets
of the fund................................ 0.520%
On the next $500 million of net assets
of the fund................................ 0.500%
On the next $500 million of net assets
of the fund................................ 0.480%
and all net assets of the fund in
excess thereof............................. 0.460%<PAGE>
PAGE 53
The funds have retained IDS Life to, among other things, counsel
and advise the funds and their directors in connection with the
formulation of investment programs designed to accomplish the
funds' investment objectives, and to determine, consistent with the
funds' investment objectives and policies, which securities in IDS
Life's discretion shall be purchased, held or sold, subject always
to the direction and control of the Boards of Directors. The funds
do not maintain their own research departments or record-keeping
services. These services are provided by IDS Life under the
Investment Management and Services Agreement.
The Agreement provides that, in addition to paying its own
management fee, brokerage costs and certain taxes, each fund pays
IDS Life an amount equal to the cost of certain expenses incurred
and paid by IDS Life in connection with the fund's operations. In
no event will such payments by Moneyshare Fund exceed 0.25 percent
of the fund's average daily net assets.
The expenses of IDS Life that each fund has agreed to reimburse
are: taxes, brokerage commissions, custodian fees and expenses,
audit expenses, cost of items sent to contract owners, postage,
fees and expenses paid to directors who are not officers or
employees of IDS Life or IDS, fees and expenses of attorneys, costs
of fidelity and surety bonds, SEC registration fees, expenses of
preparing prospectuses and of printing and distributing
prospectuses to existing contract owners, losses due to theft or
other wrong doing or due to liabilities not covered by bond or
agreement, expenses incurred in connection with lending portfolio
securities of the funds and expenses properly payable by the funds,
approved by the Boards of Directors. All other expenses are borne
by IDS Life.
Investment Advisory Agreements
IDS Life and IDS have an Investment Advisory Agreement under which
IDS executes purchases and sales and negotiates brokerage as
directed by IDS Life. For its services, IDS Life pays IDS a fee
based on a percentage of each fund's average daily net assets for
the year. This fee is equal to 0.50 percent for International
Equity Fund and 0.25 percent for each remaining fund.
IDS has a Sub-Investment Advisory Agreement with IDS International,
Inc. under which IDS pays IDS International, Inc. a fee equal on an
annual basis to 0.50 percent of International Equity Fund's daily
net assets for providing investment advice for the fund.
For the fiscal year ended Aug. 31, 1992, Capital Resource Fund paid
IDS Life $9,797,391 and IDS Life paid IDS $3,658,890 for its
services. For fiscal year 1993, the amounts were $13,224,140 and
$5,025,362 and for fiscal year 1994, they were $16,497,309 and
$6,382,698.
<PAGE>
PAGE 54
For the fiscal period ended Aug. 31, 1992, International Equity
Fund paid IDS Life $96,332 and IDS Life paid IDS $52,557 for its
services. For fiscal year 1993, the amounts were $1,032,426 and
$569,659 and for fiscal year 1994, they were $6,212,919 and
$3,468,822.
For the fiscal period ended Aug. 31, 1992, Aggressive Growth Fund
paid IDS Life $114,660 and IDS Life paid IDS $42,965 for its
services. For fiscal year 1993, the amounts were $1,091,156 and
$415,541 and for fiscal year 1994, they were $3,298,361 and
$1,276,540.
For the fiscal year ended Aug. 31, 1992, Special Income Fund paid
IDS Life $6,350,961 and IDS Life paid IDS $2,370,981 for its
services. For fiscal year 1993, the amounts were $8,479,379 and
$3,222,653 and for fiscal year 1994, they were $10,547,321 and
$4,080,208.
For the fiscal year ended Aug. 31, 1992, Moneyshare Fund paid IDS
Life $1,451,910 and IDS Life paid IDS $672,234 for its services.
For fiscal year 1993, the amounts were $1,141,272 and $879,494 and
for fiscal year 1994, they were $936,246 and $433,482.
For the fiscal year end Aug. 31, 1992, Managed Fund paid IDS Life
$6,587,986 and IDS Life paid IDS $2,459,603 for its services. For
fiscal year 1993, the amounts were $9,652,553 and $3,669,394 and
for fiscal year 1994, they were $14,142,061 and $5,471,820.
Information concerning other funds advised by IDS Life or IDS is
contained in the prospectus.
DIRECTORS AND OFFICERS
The following is a list of the fund's directors who also are
directors of all other funds in the IDS MUTUAL FUND GROUP. All
shares have cumulative voting rights when voting on the election of
directors.
Lynne V. Cheney'
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 Corp., and the Interpublic Group of Companies, Inc.
(advertising).
<PAGE>
PAGE 55
Robert F. Froehlke+
901 S. Marquette Ave.
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. (architectual
engineering) and Public Oversight Board of the American Institute
of Certified Public Accountants.
David R. Hubers**
2900 IDS Tower
Minneapolis, MN
President, chief executive officer and director of IDS.
Previously, senior vice president, finance and chief financial
officer of IDS.
Heinz F. Hutter
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***
Sutherland, Asbill & Brennan
1275 Pennsylvania Ave., N.W.
Washington, D.C.
Partner, law firm of Sutherland, Asbill & Brennan. Director,
Motorola, Inc. and C-Cor Electronics, Inc.
Donald M. Kendall'
PepsiCo, Inc.
Purchase, NY
Former chairman and chief executive officer, PepsiCo, Inc.
Melvin R. Laird
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).
<PAGE>
PAGE 56
Lewis W. Lehr'
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).
James A. Mitchell**
2900 IDS Tower
Minneapolis, MN
Executive Vice President, IDS. Director, Chairman of the Board and
Chief Executive Officer, IDS Life.
William R. Pearce+*
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+'
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**
2900 IDS Tower
Minneapolis, MN
Senior vice president and director of IDS.
Wheelock Whitney+
1900 Foshay Tower
821 Marquette Ave.
Minneapolis, MN
Chairman, Whitney Management Company (manages family assets).
<PAGE>
PAGE 57
C. Angus Wurtele
1101 S. 3rd St.
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, director,
employee and/or shareholder of IDS or American Express.
***Interested person by reason of being a partner in a law firm
that has represented IDS or its subsidiaries.
The board also has appointed officers who are responsible for day-
to-day business decisions based on policies it has established.
Besides Mr. Pearce, who is president, the fund's other officer is:
Leslie L. Ogg
901 S. Marquette Ave.
Minneapolis, MN
Vice president of all funds in the IDS MUTUAL FUND GROUP and
general counsel and treasurer of the publicly offered funds.
On Aug. 31, 1994, the fund's directors and officers as a group
owned less than 1% of the outstanding shares. During the fiscal
year ended Aug. 31, 1994, no director or officer earned more than
$60,000 from this fund. All directors and officers as a group
earned $353,137, including $66,769 of retirement plan expense, from
these funds.
CUSTODIAN
The funds' securities and cash are held by IDS Trust Company, 1200
Northstar Center West, 625 Marquette Ave., Minneapolis, MN, 55402-
2307, through a custodian agreement. The custodian is permitted to
deposit some or all of its securities with sub-custodians or in
central depository systems as allowed by federal law.
INDEPENDENT AUDITORS
The funds' financial statements contained in their Annual Report,
as of and for, the year ended Aug. 31, 1994, are audited by
independent auditors, KPMG Peat Marwick LLP, 4200 Norwest Center,
90 S. Seventh St., Minneapolis, MN 55402-3900. IDS Life has
agreed that it will send a copy of this report and the Semiannual
Report to every annuity contract owner having an interest in the
funds. The independent auditors also provide other accounting and
tax-related services as requested by the funds.
<PAGE>
PAGE 58
FINANCIAL STATEMENTS
The Independent Auditors' Report and Financial Statements,
including Notes to the Financial Statements and the Schedule of
Investments in Securities, contained in the 1994 Annual Report to
the shareholders of Capital Resource, International Equity,
Aggressive Growth, Special Income, Moneyshare and Managed Funds,
pursuant to Section 30(d) of the Investment Company Act of 1940, as
amended, are hereby incorporated in this Statement of Additional
Information by reference. No other portion of the Annual Report,
however, is incorporated by reference.
PROSPECTUS
The prospectus dated Oct. 28, 1994, is hereby incorporated in this
Statement of Additional Information by reference.
<PAGE>
PAGE 59
APPENDIX A
DESCRIPTION OF CORPORATE BOND RATINGS AND ADDITIONAL INFORMATION ON
INVESTMENT POLICIES FOR INVESTMENTS OF CAPITAL RESOURCE AND SPECIAL
INCOME FUNDS
Bond ratings concern the quality of the issuing corporation. 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, C and D. Ratings by Standard & Poor's
Corporation are AAA, AA, A, BBB, BB, B, CCC, CC, C and D.
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 the 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.
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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.
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APPENDIX B
FOREIGN CURRENCY TRANSACTIONS FOR INVESTMENTS OF CAPITAL RESOURCE,
INTERNATIONAL EQUITY, AGGRESSIVE GROWTH, SPECIAL INCOME AND MANAGED
FUNDS
Since investments in foreign companies usually involve currencies
of foreign countries, and since the fund may hold cash and cash-
equivalent investments in foreign currencies, the value of the
fund's assets as measured in U.S. dollars may be affected favorably
or unfavorably by changes in currency exchange rates and exchange
control regulations. Also, the fund may incur costs in connection
with conversions between various currencies.
Spot Rates and Forward Contracts. The fund conducts its foreign
currency exchange transactions either at the spot (cash) rate
prevailing in the foreign currency exchange market or by entering
into forward currency exchange contracts (forward contracts) as a
hedge against fluctuations in future foreign exchange rates. A
forward contract involves an obligation to buy or sell a specific
currency at a future date, which may be any fixed number of days
from the contract date, at a price set at the time of the contract.
These contracts are traded in the interbank market conducted
directly between currency traders (usually large commercial banks)
and their customers. A forward contract generally has no deposit
requirements. No commissions are charged at any stage for trades.
The fund may enter into forward contracts to settle a security
transaction or handle dividend and interest collection. When the
fund enters into a contract for the purchase or sale of a security
denominated in a foreign currency or has been notified of a
dividend or interest payment, it may desire to lock in the price of
the security or the amount of the payment in dollars. By entering
into a forward contract, the fund will be able to protect itself
against a possible loss resulting from an adverse change in the
relationship between different currencies from the date the
security is purchased or sold to the date on which payment is made
or received or when the dividend or interest is actually received.
The fund also may enter into forward contracts when management of
the fund believes the currency of a particular foreign country may
suffer a substantial decline against another currency. It may
enter into a forward contract to sell, for a fixed amount of
dollars, the amount of foreign currency approximating the value of
some or all of the fund's portfolio securities denominated in such
foreign currency. The precise matching of forward contract amounts
and the value of securities involved generally will not be possible
since the future value of such securities in foreign currencies
more than likely will change between the date the forward contract
is entered into and the date it matures. The projection of short-
term currency market movements is extremely difficult and
successful execution of a short-term hedging strategy is highly
uncertain. The fund will not enter into such forward contracts or
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maintain a net exposure to such contracts when consummating the
contracts would obligate the fund to deliver an amount of foreign
currency in excess of the value of the fund's portfolio securities
or other assets denominated in that currency.
The fund will designate cash or securities in an amount equal to
the value of the fund's total assets committed to consummating
forward contracts entered into under the second circumstance set
forth above. If the value of the securities declines, additional
cash or securities will be designated on a daily basis so that the
value of the cash or securities will equal the amount of the fund's
commitments on such contracts.
At maturity of a forward contract, the fund may either sell the
portfolio security and make delivery of the foreign currency or
retain the security and terminate its contractual obligation to
deliver the foreign currency by purchasing an offsetting contract
with the same currency trader obligating it to buy, on the same
maturity date, the same amount of foreign currency.
If the fund retains the portfolio security and engages in an
offsetting transaction, the fund will incur a gain or a loss (as
described below) to the extent there has been movement in forward
contract prices. If the fund engages in an offsetting transaction,
it may subsequently enter into a new forward contract to sell the
foreign currency. Should forward prices decline between the date
the fund enters into a forward contract for selling foreign
currency and the date it enters into an offsetting contract for
purchasing the foreign currency, the fund will realize a gain to
the extent the price of the currency it has agreed to sell exceeds
the price of the currency it has agreed to buy. Should forward
prices increase, the fund will suffer a loss to the extent the
price of the currency it has agreed to buy exceeds the price of the
currency it has agreed to sell.
It is impossible to forecast what the market value of portfolio
securities will be at the expiration of a contract. Accordingly,
it may be necessary for the fund to buy additional foreign currency
on the spot market (and bear the expense of such purchase) if the
market value of the security is less than the amount of foreign
currency the fund is obligated to deliver and a decision is made to
sell the security and make delivery of the foreign currency.
Conversely, it may be necessary to sell on the spot market some of
the foreign currency received on the sale of the portfolio security
if its market value exceeds the amount of foreign currency the fund
is obligated to deliver.
The fund's dealing in forward contracts will be limited to the
transactions described above. This method of protecting the value
of the fund's portfolio securities against a decline in the value
of a currency does not eliminate fluctuations in the underlying
prices of the securities. It simply establishes a rate of exchange
that can be achieved at some point in time. Although such forward
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contracts tend to minimize the risk of loss due to a decline in
value of hedged currency, they tend to limit any potential gain
that might result should the value of such currency increase.
Although the fund values its assets each business day in terms of
U.S. dollars, it does not intend to convert its foreign currencies
into U.S. dollars on a daily basis. It will do so from time to
time, and shareholders should be aware of currency conversion
costs. Although foreign exchange dealers do not charge a fee for
conversion, they do realize a profit based on the difference
(spread) between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency to the fund at one rate, while offering a lesser rate of
exchange should the fund desire to resell that currency to the
dealer.
Options on Foreign Currencies. The fund may buy put and write
covered call options on foreign currencies for hedging purposes.
For example, a decline in the dollar value of a foreign currency in
which portfolio securities are denominated will reduce the dollar
value of such securities, even if their value in the foreign
currency remains constant. In order to protect against such
diminutions in the value of portfolio securities, the fund may buy
put options on the foreign currency. If the value of the currency
does decline, the fund will have the right to sell such currency
for a fixed amount in dollars and will thereby offset, in whole or
in part, the adverse effect on its portfolio which otherwise would
have resulted.
As in the case of other types of options, however, the benefit to
the fund derived from purchases of foreign currency options will be
reduced by the amount of the premium and related transaction costs.
In addition, where currency exchange rates do not move in the
direction or to the extent anticipated, the fund could sustain
losses on transactions in foreign currency options which would
require it to forego a portion or all of the benefits of
advantageous changes in such rates.
The fund may write options on foreign currencies for the same types
of hedging purposes. For example, when the fund anticipates a
decline in the dollar value of foreign-denominated securities due
to adverse fluctuations in exchange rates, it could, instead of
purchasing a put option, write a call option on the relevant
currency. If the expected decline occurs, the option will most
likely not be exercised and the diminution in value of portfolio
securities will be fully or partially offset by the amount of the
premium received.
As in the case of other types of options, however, the writing of a
foreign currency option will constitute only a partial hedge up to
the amount of the premium, and only if rates move in the expected
direction. If this does not occur, the option may be exercised and
the fund would be required to buy or sell the underlying currency
at a loss which may not be offset by the amount of the premium.
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Through the writing of options on foreign currencies, the fund also
may be required to forego all or a portion of the benefits which
might otherwise have been obtained from favorable movements on
exchange rates.
All options written on foreign currencies will be covered. An
option written on foreign currencies is covered if the fund holds
currency sufficient to cover the option or has an absolute and
immediate right to acquire that currency without additional cash
consideration upon conversion of assets denominated in that
currency or exchange of other currency held in its portfolio. An
option writer could lose amounts substantially in excess of its
initial investments, due to the margin and collateral requirements
associated with such positions.
Options on foreign currencies are traded through financial
institutions acting as market-makers, although foreign currency
options also are traded on certain national securities exchanges,
such as the Philadelphia Stock Exchange and the Chicago Board
Options Exchange, subject to SEC regulation. In an over-the-
counter trading environment, many of the protections afforded to
exchange participants will not be available. For example, there are
no daily price fluctuation limits, and adverse market movements
could therefore continue to an unlimited extent over a period of
time. Although the purchaser of an option cannot lose more than
the amount of the premium plus related transaction costs, this
entire amount could be lost.
Foreign currency option positions entered into on a national
securities exchange are cleared and guaranteed by the OCC, thereby
reducing the risk of counterparty default. Further, a liquid
secondary market in options traded on a national securities
exchange may be more readily available than in the over-the-counter
market, potentially permitting the fund to liquidate open positions
at a profit prior to exercise or expiration, or to limit losses in
the event of adverse market movements.
The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of availability of a liquid
secondary market described above, as well as the risks regarding
adverse market movements, margining of options written, the nature
of the foreign currency market, possible intervention by
governmental authorities and the effects of other political and
economic events. In addition, exchange-traded options on foreign
currencies involve certain risks not presented by the over-the-
counter market. For example, exercise and settlement of such
options must be made exclusively through the OCC, which has
established banking relationships in certain foreign countries for
the purpose. As a result, the OCC may, if it determines that
foreign governmental restrictions or taxes would prevent the
orderly settlement of foreign currency option exercises, or would
result in undue burdens on OCC or its clearing member, impose
special procedures on exercise and settlement, such as technical
changes in the mechanics of delivery of currency, the fixing of
dollar settlement prices or prohibitions on exercise.
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Foreign Currency Futures and Related Options
The fund may enter into currency futures contracts to sell
currencies. It also may buy put and write covered call options on
currency futures. Currency futures contracts are similar to
currency forward contracts, except that they are traded on
exchanges (and have margin requirements) and are standardized as to
contract size and delivery date. Most currency futures call for
payment of delivery in U.S. dollars. The fund may use currency
futures for the same purposes as currency forward contracts,
subject to CFTC limitations, including the limitation on the
percentage of assets that may be used, described in the prospectus.
All futures contracts are aggregated for purposes of the percentage
limitations.
Currency futures and options on futures values can be expected to
correlate with exchange rates, but will not reflect other factors
that may affect the values of the fund's investments. A currency
hedge, for example, should protect a Yen-denominated bond against a
decline in the Yen, but will not protect the fund against price
decline if the issuer's creditworthiness deteriorates. Because the
value of the fund's investments denominated in foreign currency
will change in response to many factors other than exchange rates,
it may not be possible to match the amount of a forward contract to
the value of the fund's investments denominated in that currency
over time.
The fund will not use leverage in its options and futures
strategies. The fund will hold securities or other options or
futures positions whose values are expected to offset its
obligations. The fund will not enter into an option or futures
position that exposes the fund to an obligation to another party
unless it owns either (i) an offsetting position in securities or
(ii) cash, receivables and short-term debt securities with a value
sufficient to cover its potential obligations.
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APPENDIX C
DESCRIPTION OF MONEY MARKET SECURITIES
Certificates of Deposit -- A certificate of deposit is a negotiable
receipt issued by a bank or savings and loan association in
exchange for the deposit of funds. The issuer agrees to pay the
amount deposited, plus interest, on the date specified on the
certificate.
Time Deposit -- A time deposit is a non-negotiable deposit in a
bank for a fixed period of time.
Bankers' Acceptances -- A bankers' acceptance arises from a short-
term credit arrangement designed to enable businesses to obtain
funds to finance commercial transactions. It is a time draft drawn
on a bank by an exporter or an importer to obtain a stated amount
of funds to pay for specific merchandise. The draft is then
"accepted" by a bank that, in effect, unconditionally guarantees to
pay the face value of the instrument on its maturity date.
Commercial Paper -- Commercial paper is generally defined as
unsecured short-term notes issued in bearer form by large well-
known corporations and finance companies. Maturities on commercial
paper range from one day to nine months.
Commercial paper rated A by Standard & Poor's Corporation has the
following characteristics: Liquidity ratios are better than the
industry average. Long-term senior debt rating is "A" or better.
The issuer has access to at least two additional channels of
borrowing. Basic earnings and cash flow have an upward trend with
allowances made for unusual circumstances. Typically, the issuer's
industry is well established, the issuer has a strong position
within its industry and the reliability and quality of management
is unquestioned. Issuers rated A are further rated by use of
numbers 1, 2 and 3 to denote relative strength within this highest
classification.
A Prime rating is the highest commercial paper rating assigned by
Moody's Investors Services Inc. Issuers rated Prime are further
rated by use of numbers 1, 2 and 3 to denote relative strength
within this highest classification. Among the factors considered
by Moody's in assigning ratings for an issuer are the following:
(1) management; (2) economic evaluation of the industry and an
appraisal of speculative type risks which may be inherent in
certain areas; (3) competition and customer acceptance of products;
(4) liquidity; (5) amount and quality of long-term debt; (6) ten
year earnings trends; (7) financial strength of a parent company
and the relationships which exist with the issuer; and (8)
recognition by management of obligations which may be present or
may arise as a result of public interest questions and preparations
to meet such obligations.
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Letters of Credit -- A letter of credit is a short-term note issued
in bearer form with a bank letter of credit which provides that the
bank pay to the bearer the amount of the note upon presentation.
U.S. Treasury Bills -- Treasury bills are issued with maturities of
any period up to one year. Three-month and six-month bills are
currently offered by the Treasury on 13-week and 26-week cycles
respectively and are auctioned each week by the Treasury. Treasury
bills are issued in book entry form and are sold only on a discount
basis, i.e. the difference between the purchase price and the
maturity value constitutes interest income for the investor. If
they are sold before maturity, a portion of the income received may
be a short-term capital gain.
U.S. Government Agency Securities -- Federal agency securities are
debt obligations which principally result from lending programs of
the U.S. government. Housing and agriculture have traditionally
been the principal beneficiaries of Federal credit programs, and
agencies involved in providing credit to agriculture and housing
account for the bulk of the outstanding agency securities.
Repurchase Agreements -- A repurchase agreement involves the
acquisition of securities by the Portfolio, with the concurrent
agreement by a bank (or securities dealer if permitted by law or
regulation), to reacquire the securities at the portfolio's cost,
plus interest, within a specified time. The Portfolio thereby
receives a fixed rate of return on this investment, one that is
insulated from market and rate fluctuations during the holding
period. In these transactions, the securities acquired by the
Portfolio have a total value equal to or in excess of the value of
the repurchase agreement and are held by the Portfolio's custodian
until required. Pursuant to guidelines established by the Fund's
Board of Directors, the creditworthiness of the other party to the
transaction is considered and the value of those securities held as
collateral is monitored to ensure that such value is maintained at
the required level.
If IDS becomes aware that a security owned by a Fund is downgraded
below the second highest rating, IDS will either sell the security
or recommend to the Fund's Board of Directors why it should not be
sold.
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APPENDIX D
OPTIONS AND STOCK INDEX FUTURES CONTRACTS FOR INVESTMENTS OF
CAPITAL RESOURCE, INTERNATIONAL EQUITY, AGGRESSIVE GROWTH AND
MANAGED FUNDS
Capital Resource, International Equity, Aggressive Growth and
Managed Funds 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 stock index futures contracts traded on any U.S. or
foreign exchange. The fund also may buy or write put and call
options on these futures and on stock indexes. 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. Managed Fund also may enter into interest rate futures
contracts - see Appendix E.
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 or securities of equivalent value (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 another 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. The risk of
the writer is potentially unlimited, unless the option is covered.
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 a
fund and its shareholders by improving the fund's liquidity and by
helping to stabilize the value of its net assets.
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Buying options. Put and call options may be used as a trading
technique to facilitate buying and selling securities for
investment reasons. They also may be used for investment. 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 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, a 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 a fund for investment
purposes. Options permit a fund to experience the change in the
value of a security with a relatively small initial cash
investment. The risk a fund assumes when it buys an option is the
loss of the premium. To be beneficial to a 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. Each 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 each fund's
goal.
'All options written by a fund will be covered. For covered call
options, if a decision is made to sell the security, each fund will
attempt to terminate the option contract through a closing purchase
transaction.
'Each fund will deal only in standard option contracts traded on
national securities exchanges or those that may be quoted on NASDAQ
(a system of price quotations developed by the National Association
of Securities Dealers, Inc.)
'Each 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 funds, each will conform to the requirements of those
states. For example, California limits the writing of options to
50 percent of the assets of a fund. Some regulations also affect
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the Custodian. When a covered option is written, the Custodian
segregates the underlying securities, and issues a receipt. There
are certain rules regarding banks issuing such receipts that may
restrict the amount of covered call options written. Furthermore,
each fund is limited to pledging not more than 15 percent of the
cost of its total assets.
Net premiums on call options closed or premiums on expired call
options are treated as short-term capital gains. Since each 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 percent of its
annual gross income.
If a covered call option is exercised, the security is sold by the
fund. The premium received upon writing the option is added to the
proceeds received from the sale of the security. The fund will
recognize a capital gain or loss based upon the difference between
the proceeds and the security's basis. Premiums received from
writing outstanding options are included as a deferred credit in
the Statement of Assets and Liabilities and adjusted daily to the
current market value.
Options on many securities are listed on options exchanges. If a
fund writes listed options, it will follow the rules of the options
exchange. The Custodian will segregate the underlying securities
and issue a receipt. There are certain rules regarding issuing
such receipts that may restrict the amount of covered call options
written. Further the funds are limited to pledging not more than
15 percent of the cost of their total assets. Options are valued
at the close of the New York Stock Exchange. An option listed on a
national exchange 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.
STOCK INDEX FUTURES CONTRACTS. Stock index futures contracts are
commodity contracts listed on commodity exchanges. They currently
include contracts on the Standard & Poor's 500 Stock Index (S&P 500
Index) and other broad stock market indexes such as the New York
Stock Exchange Composite Stock Index and the Value Line Composite
Stock Index, as well as narrower sub-indexes such as the S&P 100
Energy Stock Index and the New York Stock Exchange Utilities Stock
Index. A stock index assigns relative values to common stocks
included in the index and the index fluctuates with the value of
the common stocks so included.
A futures contract is a legal agreement between a buyer or seller
and the clearinghouse of a futures exchange in which the parties
agree to make a cash settlement on a specified future date in an
amount determined by the stock index on the last trading day of the
contract. The amount is a specified dollar amount (usually $100 or
$500) multiplied by the difference between the index value on the
last trading day and the value on the day the contract was struck.
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For example, the S&P 500 Index consists of 500 selected common
stocks, most of which are listed on the New York Stock Exchange.
The S&P 500 Index assigns relative weightings to the common stocks
included in the Index, and the Index fluctuates with changes in the
market values of those stocks. In the case of S&P 500 Index
futures contracts, the specified multiple is $500. Thus, if the
value of the S&P 500 Index were 150, the value of one contract
would be $75,000 (150 x $500). Unlike other futures contracts, a
stock index futures contract specifies that no delivery of the
actual stocks making up the index will take place. Instead,
settlement in cash must occur upon the termination of the contract.
For example, excluding any transaction costs, if a fund enters into
one futures contract to buy the S&P 500 Index at a specified future
date at a contract value of 150 and the S&P 500 Index is at 154 on
that future date, the fund will gain $500 x (154-150) or $2,000.
If the fund enters into one futures contract to sell the S&P 500
Index at a specified future date at a contract value of 150 and the
S&P 500 Index is at 152 on that future date, the fund will lose
$500 x (152-150) or $1,000.
Unlike the purchase or sale of an equity security, no price would
be paid or received by the fund upon entering into stock index
futures contracts. However, the fund would be required to deposit
with its custodian, in a segregated account in the name of the
futures broker, an amount of cash or U.S. Treasury bills equal to
approximately 5 percent of the contract value. This amount is
known as initial margin. The nature of initial margin in futures
transactions is different from that of margin in security
transactions in that futures contract margin does not involve
borrowing funds by the fund to finance the transactions. Rather,
the initial margin is in the nature of a performance bond or good-
faith deposit on the contract that is returned to the fund upon
termination of the contract, assuming all contractual obligations
have been satisfied.
Subsequent payments, called variation margin, to and from the
broker would be made on a daily basis as the price of the
underlying stock index fluctuates, making the long and short
positions in the contract more or less valuable, a process known as
marking to market. For example, when a fund enters into a contract
in which it benefits from a rise in the value of an index and the
price of the underlying stock index has risen, the fund will
receive from the broker a variation margin payment equal to that
increase in value. Conversely, if the price of the underlying
stock index declines, the fund would be required to make a
variation margin payment to the broker equal to the decline in
value.
How These Funds Would Use Stock Index Futures Contracts. The funds
intend to use stock index futures contracts and related options for
hedging and not for speculation. Hedging permits a fund to gain
rapid exposure to or protect itself from changes in the market.
For example, a fund may find itself with a high cash position at
the beginning of a market rally. Conventional procedures of
purchasing a number of individual issues entail the lapse of time
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and the possibility of missing a significant market movement. By
using futures contracts, the fund can obtain immediate exposure to
the market and benefit from the beginning stages of a rally. The
buying program can then proceed and once it is completed (or as it
proceeds), the contracts can be closed. Conversely, in the early
stages of a market decline, market exposure can be promptly offset
by entering into stock index futures contracts to sell units of an
index and individual stocks can be sold over a longer period under
cover of the resulting short contract position.
A fund may enter into contracts with respect to any stock index or
sub-index. To hedge the fund's portfolio successfully, however,
the fund must enter into contracts with respect to indexes or sub-
indexes whose movements will have a significant correlation with
movements in the prices of the fund's individual portfolio
securities.
Special Risks of Transactions in Stock Index Futures Contracts.
1. Liquidity. Each fund may elect to close some or all of its
contracts prior to expiration. The purpose of making such a move
would be to reduce or eliminate the hedge position held by the
fund. The fund may close its positions by taking opposite
positions. Final determinations of variation margin are then made,
additional cash as required is paid by or to the fund, and the fund
realizes a gain or a loss.
Positions in stock index futures contracts may be closed only on an
exchange or board of trade providing a secondary market for such
futures contracts. For example, futures contracts transactions can
currently be entered into with respect to the S&P 500 Stock Index
on the Chicago Mercantile Exchange, the New York Stock Exchange
Composite Stock Index on the New York Futures Exchange and the
Value Line Composite Stock Index on the Kansas City Board of Trade.
Although the funds intend to enter into futures contracts only on
exchanges or boards of trade where there appears to be an active
secondary market, there is no assurance that a liquid secondary
market will exist for any particular contract at any particular
time. In such event, it may not be possible to close a futures
contract position, and in the event of adverse price movements, the
fund would have to make daily cash payments of variation margin.
Such price movements, however, will be offset all or in part by the
price movements of the securities subject to the hedge. Of course,
there is no guarantee the price of the securities will correlate
with the price movements in the futures contract and thus provide
an offset to losses on a futures contract.
2. Hedging Risks. There are several risks in using stock index
futures contracts as a hedging device. One risk arises because the
prices of futures contracts may not correlate perfectly with
movements in the underlying stock index due to certain market
distortions. First, all participants in the futures market are
subject to initial margin and variation margin requirements.
Rather than making additional variation margin payments, investors
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may close the contracts through offsetting transactions which could
distort the normal relationship between the index and futures
markets. Second, the margin requirements in the futures market are
lower than margin requirements in the securities market, and as a
result the futures market may attract more speculators than does
the securities market. Increased participation by speculators in
the futures market also may cause temporary price distortions.
Because of price distortion in the futures market and because of
imperfect correlation between movements in stock indexes and
movements in prices of futures contracts, even a correct forecast
of general market trends may not result in a successful hedging
transaction over a short period.
Another risk arises because of imperfect correlation between
movements in the value of the stock index futures contracts and
movements in the value of securities subject to the hedge. If this
occurred, a fund could lose money on the contracts and also
experience a decline in the value of its portfolio securities.
While this could occur, IDS believes that over time the value of
the fund's portfolio will tend to move in the same direction as the
market indexes and will attempt to reduce this risk, to the extent
possible, by entering into futures contracts on indexes whose
movements it believes will have a significant correlation with
movements in the value of the fund's portfolio securities sought to
be hedged. It is also possible that if the fund has hedged against
a decline in the value of the stocks held in its portfolio and
stock prices increase instead, the fund will lose part or all of
the benefit of the increased value of its stock which it has hedged
because it will have offsetting losses in its futures positions.
In addition, in such situations, if the fund has insufficient cash,
it may have to sell securities to meet daily variation margin
requirements. Such sales of securities may be, but will not
necessarily be, at increased prices which reflect the rising
market. The fund may have to sell securities at a time when it may
be disadvantageous to do so.
OPTIONS ON STOCK INDEX FUTURES CONTRACTS. Options on stock index
futures contracts are similar to options on stock except that
options on futures contracts give the purchaser the right, in
return for the premium paid, to assume a position in a stock index
futures contract (a long position if the option is a call and a
short position if the option is a put) at a specified exercise
price at any time during the period of the option. If the option
is closed instead of exercised, the holder of the option receives
an amount that represents the amount by which the market price of
the contract exceeds (in the case of a call) or is less than (in
the case of a put) the exercise price of the option on the futures
contract. If the option does not appreciate in value prior to the
exercise date, the fund will suffer a loss of the premium paid.
OPTIONS ON STOCK INDEXES. Options on stock indexes are securities
traded on national securities exchanges. An option on a stock
index is similar to an option on a futures contract except all
settlements are in cash. A fund exercising a put, for example,
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would receive the difference between the exercise price and the
current index level. Such options would be used in the same manner
as options on futures contracts.
SPECIAL RISKS OF TRANSACTIONS IN OPTIONS ON STOCK INDEX FUTURES
CONTRACTS AND OPTIONS ON STOCK INDEXES. As with options on stocks,
the holder of an option on a stock index futures contract or on a
stock index may terminate a position by selling an option covering
the same contract or index and having the same exercise price and
expiration date. The ability to establish and close out positions
on such options will be subject to the development and maintenance
of a liquid secondary market. The funds will not purchase options
unless the market for such options has developed sufficiently, so
that the risks in connection with options are not greater than the
risks in connection with stock index futures contracts transactions
themselves. Compared to using futures contracts, purchasing
options involves less risk to the funds because the maximum amount
at risk is the premium paid for the options (plus transaction
costs). There may be circumstances, however, when using an option
would result in a greater loss to a fund than using a futures
contract, such as when there is no movement in the level of the
stock index.
TAX TREATMENT. As permitted under federal income tax laws, each
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 stock indexes is currently
unclear, although the funds' tax advisers currently believe marking
to market is not required. Depending on developments, a fund may
seek Internal Revenue Service (IRS) rulings clarifying questions
concerning such treatment. Certain provisions of the Internal
Revenue Code may also limit a fund's ability to engage in futures
contracts and related options transactions. For example, at the
close of each quarter of the fund's taxable year, at least 50
percent of the value of its assets must consist of cash, government
securities and other securities, subject to certain diversification
requirements. Less than 30 percent 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-percent-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, a
fund may be required to defer closing out a contract beyond the
time when it might otherwise be advantageous to do so. The fund
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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.
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APPENDIX E
OPTIONS AND INTEREST RATE FUTURES CONTRACTS FOR INVESTMENTS OF
SPECIAL INCOME AND MANAGED FUNDS
The funds 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. Managed Fund also may enter into
stock index futures contracts - see Appendix D.
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 stock
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
value 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 another 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 a
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. They also may be used for investment. Options
are used as a trading technique to take advantage of any disparity
between the price of the underlying security in the securities
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market and its price on the options market. It is anticipated the
trading technique will be utilized 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 a 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 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. A 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 percent
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 a 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 percent of its annual
gross income.
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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.
Options on many securities are listed on options exchanges. If a
fund writes listed options, it will follow the rules of the options
exchange. Options are valued at the close of the New York Stock
Exchange. An option listed on a national exchange 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 contract 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
percent 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 a fund owned long-term bonds
and interest rates were expected to increase, it might enter into
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futures contracts to sell securities which would have much the same
effect as selling some of the long-term bonds it owned. 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 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.
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Risks. There are risks in engaging in each of the management tools
described above. The risk a 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 portfolio 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, each
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 is currently unclear,
although the funds' tax advisers currently believe marking to
market is not required. Depending on developments, a fund may seek
Internal Revenue Service (IRS) rulings clarifying questions
concerning such treatment. Certain provisions of the Internal
Revenue Code may also limit a fund's ability to engage in futures
contracts and related options transactions. For example, at the
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close of each quarter of the fund's taxable year, at least 50
percent of the value of its assets must consist of cash, government
securities and other securities, subject to certain diversification
requirements. Less than 30 percent 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-percent-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, a
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.
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APPENDIX F
MORTGAGE-BACKED SECURITIES AND ADDITIONAL INFORMATION ON INVESTMENT
POLICIES FOR ALL FUNDS EXCEPT MONEYSHARE
GNMA Certificates
The Government National Mortgage Association (GNMA) is a wholly
owned corporate instrumentality of the United States within the
Department of Housing and Urban Development. GNMA certificates are
mortgage-backed securities of the modified pass-through type, which
means that both interest and principal payments (including
prepayments) are passed through monthly to the holder of the
certificate. Each certificate evidences an interest in a specific
pool of mortgage loans insured by the Federal Housing
Administration or the Farmers Home Administration or guaranteed by
the Veterans Administration. The National Housing Act provides
that the full faith and credit of the United States is pledged to
the timely payment of principal and interest by GNMA of amounts due
on these certificates. GNMA is empowered to borrow without
limitation from the U.S. Treasury, if necessary, to make such
payments.
Underlying Mortgages of the Pool. Pools consist of whole mortgage
loans or participations in loans. The majority of these loans are
made to purchasers of 1-4 member family homes. The terms and
characteristics of the mortgage instruments generally are uniform
within a pool but may vary among pools. For example, in addition
to fixed-rate fixed-term mortgages, the fund may purchase pools of
variable rate mortgages, growing equity mortgages, graduated
payment mortgages and other types.
All servicers apply standards for qualification to local lending
institutions which originate mortgages for the pools. Servicers
also establish credit standards and underwriting criteria for
individual mortgages included in the pools. In addition, many
mortgages included in pools are insured through private mortgage
insurance companies.
Average Life of GNMA Certificates. The average life of GNMA
certificates varies with the maturities of the underlying mortgage
instruments which have maximum maturities of 30 years. The average
life is likely to be substantially less than the original maturity
of the mortgage pools underlying the securities as the result of
prepayments or refinancing of such mortgages. Such prepayments are
passed through to the registered holder with the regular monthly
payments of principal and interest.
As prepayment rates vary widely, it is not possible to accurately
predict the average life of a particular pool. It is customary in
the mortgage industry in quoting yields on a pool of 30-year
mortgages to compute the yield as if the pool were a single loan
that is amortized according to a 30-year schedule and that is
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prepaid in full at the end of the 12th year. For this reason, it
is standard practice to treat GNMA certificates as 30-year
mortgage-backed securities which prepay fully in the 12th year.
Calculation of Yields. Yields on pass-through securities are
typically quoted based on the maturity of the underlying
instruments and the associated average life assumption.
Actual pre-payment experience may cause the yield to differ from
the assumed average life yield. When mortgage rates drop, pre-
payments will increase, thus reducing the yield. Reinvestment of
pre-payments may occur at higher or lower interest rates than the
original investment, thus affecting the yield of a fund. The
compounding effect from reinvestments of monthly payments received
by the fund will increase the yield to shareholders compared to
bonds that pay interest semi-annually. The yield also may be
affected if the certificate was issued at a premium or discount,
rather than at par. This also applies after issuance to
certificates trading in the secondary market at a premium or
discount.
"When-Issued" GNMA Certificates. Some U.S. government securities
may be purchased on a "when-issued" basis, which means that it may
take as long as 45 days after the purchase before the securities
are delivered to the fund. Payment and interest terms, however,
are fixed at the time the purchaser enters into the commitment.
However, the yield on a comparable GNMA certificate when the
transaction is consummated may vary from the yield on the GNMA
certificate at the time that the when-issued transaction was made.
A fund does not pay for the securities or start earning interest on
them until the contractual settlement date. When-issued securities
are subject to market fluctuations and they may affect the fund's
gross assets the same as owned securities.
Market for GNMA Certificates. Since the inception of the GNMA
mortgage-backed securities program in 1970, the amount of GNMA
certificates outstanding has grown rapidly. The size of the market
and the active participation in the secondary market by securities
dealers and many types of investors make the GNMA certificates a
highly liquid instrument. Prices of GNMA certificates are readily
available from securities dealers and depend on, among other
things, the level of market interest rates, the certificate's
coupon rate and the prepayment experience of the pool of mortgages
underlying each certificate.
Stripped mortgage-backed securities. Generally, there are two
classes of stripped mortgage-backed securities: Interest Only (IO)
and Principal Only (PO). IOs entitle the holder to receive
distributions consisting of all or a portion of the interest on the
underlying pool of mortgage loans or mortgage-backed securities.
POs entitle the holder to receive distributions consisting of all
or a portion of the principal of the underlying pool of mortgage
loans or mortgage-backed securities. The cash flows and yields on
IOs and POs are extremely sensitive to the rate of principal
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payments (including prepayments) on the underlying mortgage loans
or mortgage-backed securities. A rapid rate of principal payments
may adversely affect the yield to maturity of IOs. A slow rate of
principal payments may adversely affect the yield to maturity of
POs. If prepayments of principal are greater than anticipated, an
investor may incur substantial losses. If prepayments of principal
are slower than anticipated, the yield on a PO will be affected
more severely than would be the case with a traditional mortgage-
backed security.
Managed and Special Income Funds may invest in securities called
"inverse floaters". Inverse floaters are created by underwriters
using the interest payments on securities. A portion of the
interest received is paid to holders of instruments based on
current interest rates for short-term securities. What is left
over, less a servicing fee, is paid to holders of the 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.
Managed and Special Income Funds may purchase some securities in
advance of when they are issued. Price and rate of interest are
set on the date the commitments are given but no payment is made or
interest earned until the date the securities are issued, usually
within two months, but other terms may be negotiated. The
commitment requires the portfolio to buy the security when it is
issued so the commitment is valued daily the same way as owning a
security would be valued. The Portfolio's custodian will maintain,
in a segregated account, cash or liquid high-grade debt securities
that are marked to market daily and are at least equal in value to
the Portfolio's commitments to purchase the securities. The
portfolio may sell the commitment just like it can sell a security.
Frequently, the portfolio has the opportunity to sell the
commitment back to the institution that plans to issue the security
and at the same time enter into a new commitment to purchase a
when-issued security in the future. For rolling its commitment
forward, the portfolio realizes a gain or loss on the sale of the
current commitment or receives a fee for entering into the new
commitment.
Managed and Special Income Funds may purchase mortgage-backed
security (MBS) put spread options and write covered MBS call spread
options. MBS spread options are based upon the changes in the
price spread between a specified mortgage-backed security and a
like-duration Treasury security. MBS spread options are traded in
the OTC market and are of short duration, typically one to two
months. The portfolio would buy or sell covered MBS call spread
options in situations where mortgage-backed securities are expected
to under perform like-duration Treasury securities.
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APPENDIX G
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 unit value 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
units 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 units lower
than the average price of units 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
contract owners who can continue investing through changing market
conditions to acquire units to meet long term goals.
Dollar-cost averaging
Regular Market Value of an Accumulation
Investment Accumulation Unit Units Acquired
$100 $ 6 16.7
100 4 25.0
100 4 25.0
100 6 16.7
100 5 20.0
$500 $25 103.4
Average market price of an accumulation unit over 5 periods: $5
($25 divided by 5).
The average price you paid for each accumulation unit: $4.84
($500 divided by 103.4).
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The board of directors and shareholders
IDS Life Capital Resource Fund, Inc.
IDS Life Capital Resource Fund
IDS Life International Equity Fund
IDS Life Aggressive Growth Fund
IDS Life Special Income Fund, Inc.
IDS Life Moneyshare Fund, Inc. and
IDS Life Managed Fund, Inc.:
We have audited the accompanying statements of assets and
liabilities, including the schedules of investments in securities,
of IDS Life Capital Resource Fund, IDS Life International Equity
Fund, IDS Life Aggressive Growth Fund, IDS Life Special Income
Fund, Inc., IDS Life Moneyshare Fund, Inc. and IDS Life Managed
Fund, Inc. as of August 31, 1994, and the related statements 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
August 31, 1994. We have also audited the financial highlights for
each of the years in the ten-year period ended August 31, 1994 for
IDS Life Capital Resource Fund, IDS Life Special Income Fund, Inc.,
and IDS Life Moneyshare Fund, Inc., each of the years in the eight-
year period ended August 31, 1994 and the period from April 30,
1986 (commencement of operations) to August 31, 1986 for IDS Life
Managed Fund, Inc., and for each of the years in the two year
period ended August 31, 1994 and the period from January 13, 1992
(commencement of operations) to August 31, 1992 for IDS Life
International Equity Fund and IDS Life Aggressive Growth Fund.
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, and securities on loan, 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.
<PAGE>
PAGE 87
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of IDS Life Capital Resource Fund, IDS Life
International Equity Fund, IDS Life Aggressive Growth Fund, IDS
Life Special Income Fund, Inc., IDS Life Moneyshare Fund, Inc., and
IDS Life Managed Fund, Inc. at August 31, 1994 and the results of
their operations for the year then ended, the changes in their net
assets for each of the years in the two-year period ended August
31, 1994, 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
October 7, 1994
<PAGE>
PAGE 88
<TABLE>
<CAPTION>
Statements of assets and liabilities
IDS Retirement Annuity Mutual Funds
August 31, 1994
Capital International Aggressive
Resource Equity Growth
Assets Fund Fund Fund
_______________________________________________________________________________________________________________
<S> <C> <C> <C>
Investments in securities, at value (Note 1):
Investments in securities of unaffiliated
issuers (identified cost, $2,604,258,441;
$1,028,599,769 and $692,773,878, respectively) $2,838,605,236 $1,117,944,570 $751,958,797
Investments in securities of affiliated issuers
(identified cost, $133,848,767 and $11,409,422 for
Capital Resource Fund and International Equity Fund) 119,216,250 11,164,270 --
Cash in bank on demand deposit -- 92,817 --
Receivable for investment securities sold 19,240,791 6,901,468 17,299,402
Dividends and accrued interest receivable 4,389,139 2,244,657 138,197
Receivable for forward foreign currency contracts
held, at value (Notes 1 and 4) -- 204,324,117 40,207
U.S. Government Securities held as collateral for
securities loaned (Note 6) -- 25,972,821 --
Receivable (for capital stock sold) from:
IDS Life Accounts 287,097,514 26,001,377 --
IDS Life of New York Accounts 13,057,060 1,495,744 133,407
_______________________________________________________________________________________________________________
Total assets 3,281,605,990 1,396,141,841 769,570,010
_______________________________________________________________________________________________________________
Liabilities
_______________________________________________________________________________________________________________
Cash overdraft 11,352,432 -- 560,997
Dividends payable to separate accounts (Note 1) 307,235,414 29,335,649 441,418
Payable for investment securities purchased 37,313,238 6,174,019 4,637,025
Accrued investment management and services fee 1,619,721 864,931 411,076
Payable for forward foreign currency contracts
held, at value (Notes 1 and 4) -- 207,657,272 40,210
Payable for securities loaned (Note 6) 24,360,900 40,373,021 --
Payable (for capital stock redeemed) to:
IDS Life Accounts -- -- 719,669
IDS Life of New York Accounts -- -- --
Other accrued expenses 281,834 444,228 109,915
_______________________________________________________________________________________________________________
Total liabilities 382,163,539 284,849,120 6,920,310
_______________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $2,899,442,451 $1,111,292,721 $762,649,700
_______________________________________________________________________________________________________________
Represented by
_______________________________________________________________________________________________________________
Capital stock - authorized 10,000,000,000
shares for each fund of $.01 par value; outstanding,
123,760,195; 86,049,715 and 66,571,368 shares,
respectively $ 1,237,602 $ 860,497 $ 665,714
Additional paid-in capital 2,678,638,133 1,020,105,251 739,501,080
Undistributed (excess of distributions over) net
investment income (90,532) 1,561,858 (7,868)
Accumulated net realized loss on investments
in securities (57,028) -- (36,694,170)
Unrealized appreciation of investments (Note 4) 219,714,276 88,765,115 59,184,944
_______________________________________________________________________________________________________________
Total - representing net assets applicable to
outstanding capital stock $2,899,442,451 $1,111,292,721 $762,649,700
_______________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 23.43 $ 12.91 $ 11.46
_______________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 89
<TABLE>
<CAPTION>
Statements of assets and liabilities (continued)
IDS Retirement Annuity Mutual Funds
August 31, 1994
Special Moneyshare Managed
Income Fund Fund
Assets Fund
_______________________________________________________________________________________________________________
<S> <C> <C> <C>
Investments in securities, at value (Note 1):
Investments in securities of unaffiliated
issuers (identified cost, $1,587,372,733;
$179,326,203 and $2,437,261,148, respectively) $1,549,555,411 $179,326,203 $2,567,426,079
Investments in securities of affiliated issuers
(iIdentified cost, $7,346,560) -- -- 11,687,500
Cash in bank on demand deposit 7,256,786 273,645 --
Receivable for investment securities sold 7,126,274 -- 15,659,385
Dividends and accrued interest receivable 28,197,338 -- 17,486,773
Receivable for forward foreign currency contracts
held, at value (Notes 1 and 4) -- -- 5,120,714
U.S. Government Securities held as collateral for
securities loaned (Note 6) 31,276,684 -- 88,397,723
Receivable (for capital stock sold) from:
IDS Life Accounts 12,911,649 564,916 82,188,753
IDS Life of New York Accounts 583,712 22,507 4,881,323
_______________________________________________________________________________________________________________
Total assets 1,636,907,854 180,187,271 2,792,848,250
_______________________________________________________________________________________________________________
Liabilities
_______________________________________________________________________________________________________________
Cash overdraft -- -- 484,833
Dividends payable to separate accounts (Note 1) 14,916,083 667,673 93,194,699
Payable for investment securities purchased 17,496,750 -- 68,849,197
Accrued investment management and services fee 907,683 102,853 1,420,667
Payable for forward foreign currency contracts
held, at value (Notes 1 and 4) -- -- 5,119,013
Payable for securities loaned (Note 6) 43,670,434 -- 123,993,723
Payable (for capital stock redeemed) to:
IDS Life Accounts 663,401 -- --
IDS Life of New York Accounts 122,417 102,875 177,666
Other accrued expenses 214,083 71,099 253,449
_______________________________________________________________________________________________________________
Total liabilities 77,990,851 944,500 293,493,247
_______________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $1,558,917,003 $179,242,771 $2,499,355,003
_______________________________________________________________________________________________________________
Represented by
_______________________________________________________________________________________________________________
Capital stock - authorized 10,000,000,000
shares for each fund of $.01 par value ($.001 for
Managed Fund); outstanding, 141,040,088;
179,257,043 and 183,064,969 shares, respectively $ 1,410,401 $ 1,792,570 $ 183,065
Additional paid-in capital 1,596,567,631 177,450,882 2,364,315,577
Undistributed (excess of distributions over) net
investment income (1,399,857) -- 859,703
Accumulated net realized loss on investments
in securities (51,822) (681) (390,944)
Unrealized appreciation (depreciation) of investments
(Notes 4 and 7) (37,609,350) -- 134,387,602
_______________________________________________________________________________________________________________
Total - representing net assets applicable to
outstanding capital stock $1,558,917,003 $179,242,771 $2,499,355,003
_______________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 11.05 $ 1.00 $ 13.65
_______________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 90
<TABLE>
<CAPTION>
Statements of operations
IDS Retirement Annuity Mutual Funds
Year ended August 31, 1994
Capital International Aggressive
Resource Equity Growth
Fund Fund Fund
_______________________________________________________________________________________________________________
<S> <C> <C> <C>
Income:
Investment income
Dividends (net of foreign taxes withheld of $213,010;
$2,135,666 and $11,792, respectively) $ 33,895,154 $11,304,669 $ 1,306,036
Interest 14,231,526 3,192,544 2,920,022
_______________________________________________________________________________________________________________
Total income 48,126,680 14,497,213 4,226,058
_______________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 16,497,309 6,212,919 3,298,361
Custodial fees and expenses 321,840 418,682 83,221
Directors and officers compensation 136,293 19,404 13,507
Printing & postage 204,989 118,632 48,735
Audit fees 19,804 19,202 14,151
Registration fees 183,944 70,947 63,502
Other 31,974 6,943 5,209
_______________________________________________________________________________________________________________
Total expenses 17,396,153 6,866,729 3,526,686
_______________________________________________________________________________________________________________
Investment income - net 30,730,527 7,630,484 699,372
_______________________________________________________________________________________________________________
Realized and unrealized gain (loss) on investments - net
_______________________________________________________________________________________________________________
Net realized gain on security transactions (including $2,751,665
and $158,504 realized loss on investments of affiliated issuers
for Capital Resource Fund and International Equity
Fund, respectively) (Note 3) 300,809,352 29,864,892 (31,675,665)
Net realized loss on foreign currency transactions -- (5,215,991) --
Net realized gain on closed option contracts written -- -- 113,854
_______________________________________________________________________________________________________________
Net realized gain (loss) on investments 300,809,352 24,648,901 (31,561,811)
Net change in unrealized appreciation or depreciation
of investments (including $(20,297,388) and $528,764
net unrealized appreciation (depreciation) of affiliated
issuers for Capital Resource Fund and International
Equity Fund, respectively) (135,555,243) 63,468,345 16,989,673
_______________________________________________________________________________________________________________
Net gain (loss) on investments 165,254,109 88,117,246 (14,572,138)
_______________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting
from operations 195,984,636 95,747,730 (13,872,766)
_______________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 91
<TABLE>
<CAPTION>
Statements of operations
IDS Retirement Annuity Mutual Funds
Year ended August 31, 1994
Special Moneyshare Managed
Income Fund Fund
Fund
_______________________________________________________________________________________________________________
<S> <C> <C> <C>
Income:
Investment income
Dividends (net of foreign taxes withheld of
$2,091 and $470,454 for Special Income Fund and
Managed Fund) $ 1,212,744 $ -- $ 21,459,800
Interest 127,269,011 6,399,834 69,399,879
_______________________________________________________________________________________________________________
Total income 128,481,755 6,399,834 90,859,679
_______________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 10,547,321 936,246 14,142,061
Custodial fees and expenses 134,936 20,724 276,033
Directors and officers compensation 82,084 6,378 95,471
Printing & postage 115,584 13,189 165,820
Audit fees 15,000 8,050 18,686
Registration fees 99,693 250 175,369
Other 4,938 1,318 6,567
_______________________________________________________________________________________________________________
Total expenses 10,999,556 986,155 14,880,007
_______________________________________________________________________________________________________________
Investment income - net 117,482,199 5,413,679 75,979,672
_______________________________________________________________________________________________________________
Realized and unrealized gain (loss) on investments - net
_______________________________________________________________________________________________________________
Net realized gain (loss) on security transactions
(including $6,289,370 realized gain on investments of
affiliated issuers for Managed Fund) (Note 3) 15,699,716 (681) 72,428,276
Net realized gain on closed options contracts written 1,260,549 -- --
Net realized gain on closed interest rate futures contracts 3,235,237 -- 105,287
_______________________________________________________________________________________________________________
Net realized gain (loss) on investments 20,195,502 (681) 72,533,563
Net change in unrealized appreciation or
depreciation of investments (including $4,340,940 net
unrealized appreciation of affiliated issuers for
Managed Fund) (163,872,465) -- (113,344,204)
_______________________________________________________________________________________________________________
Net loss on investments (143,676,963) (681) (40,810,641)
_______________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting
from operations $ (26,194,764) $ 5,412,998 $ 35,169,031
_______________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 92
<TABLE>
<CAPTION>
Statements of changes in net assets
IDS Retirement Annuity Mutual Funds
Year ended August 31,
1994 1993 1994 1993
Operations and distributions Capital Resource Fund International Equity Fund
_________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Investment income - net $ 30,730,527 $ 18,923,276 $ 7,630,484 $ 1,585,568
Net realized gain on investments 300,809,352 108,358,686 24,648,901 5,410,841
Net change in unrealized appreciation or
depreciation of investments (135,555,243) 39,507,165 63,468,345 24,540,228
_________________________________________________________________________________________________________________
Net increase in net assets
resulting from operations 195,984,636 166,789,127 95,747,730 31,536,637
_________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (30,730,527) (18,926,975) (2,495,587) (1,591,006)
Net realized gain on investments (300,690,606) (108,355,686) (24,648,901) (5,282,378)
Excess distributions of net
investment income (Note 1) (14,735) -- -- --
Excess distributions of net realized
gain (Note 1) -- -- (5,473,905) __
_________________________________________________________________________________________________________________
Total distributions (331,435,868) (127,282,661) (32,618,393) (6,873,384)
_________________________________________________________________________________________________________________
Capital share transactions (Note 8)
_________________________________________________________________________________________________________________
Proceeds from sales 426,174,442 488,472,812 731,788,058 221,527,461
Reinvested distributions at net asset value 331,435,868 127,282,661 32,618,393 6,873,384
Payments for redemptions (31,015,165) (27,734,257) (7,151,829) (1,370,426)
_________________________________________________________________________________________________________________
Increase in net assets from capital
share transactions 726,595,145 588,021,216 757,254,622 227,030,419
_________________________________________________________________________________________________________________
Total increase in net assets 591,143,913 627,527,682 820,383,959 251,693,672
_________________________________________________________________________________________________________________
Net assets at beginning of year 2,308,298,538 1,680,770,856 290,908,762 39,215,090
_________________________________________________________________________________________________________________
Net assets at end of year $2,899,442,451 $2,308,298,538 $1,111,292,721 $290,908,762
_________________________________________________________________________________________________________________
Undistributed (excess of distributions over)
net investment income $ (90,532) $ -- $ 1,561,858 $ 22,955
_________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 93
<TABLE>
<CAPTION>
Statements of changes in net assets
IDS Retirement Annuity Mutual Funds
Year ended August 31,
1994 1993 1994 1993
Aggressive Growth Fund Special Income Fund
___________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Operations and distributions
Investment income - net $ 699,372 $ 462,778 $ 117,482,199 $ 95,483,128
Net realized gain (loss) on investments (31,561,811) (3,520,916) 20,195,502 34,001,630
Net change in unrealized appreciation or
depreciation of investments 16,989,673 42,628,385 (163,872,465) 63,473,308
___________________________________________________________________________________________________________________
Net increase (decrease) in net assets
resulting from operations (13,872,766) 39,570,247 (26,194,764) 192,958,066
___________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (707,260) (454,869) (119,630,572) (95,482,717)
Net realized gain on investments -- -- (2,399,451) --
Excess distributions of net investment
income (Note 1) (7,868) -- (1,451,679) --
___________________________________________________________________________________________________________________
Total distributions (715,128) (454,869) (123,481,702) (95,482,717)
___________________________________________________________________________________________________________________
Capital share transactions (Note 8)
___________________________________________________________________________________________________________________
Proceeds from sales 482,655,450 204,517,754 200,309,350 276,289,300
Reinvested distributions at net asset value 715,128 454,869 123,481,702 95,482,717
Payments for redemptions (5,228,787) (1,867,146) (166,515,324) (53,554,925)
___________________________________________________________________________________________________________________
Increase in net assets from capital
share transactions 478,141,791 203,105,477 157,275,728 318,217,092
___________________________________________________________________________________________________________________
Total increase in net assets 463,553,897 242,220,855 7,599,262 415,692,441
___________________________________________________________________________________________________________________
Net assets at beginning of year 299,095,803 56,874,948 1,551,317,741 1,135,625,300
___________________________________________________________________________________________________________________
Net assets at end of year $762,649,700 $229,095,803 $1,558,917,003 $1,551,317,741
___________________________________________________________________________________________________________________
Undistributed (excess of distributions over)
net investment income $ (7,868) $ 7,888 $ (1,399,857) $ 2,148,373
___________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 94
<TABLE>
<CAPTION>
Statements of changes in net assets
IDS Retirement Annuity Mutual Funds
Year ended August 31,
1994 1993 1994 1993
Moneyshare Fund Managed Fund
__________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Operations and distributions
Investment income - net $ 5,413,679 $ 5,667,964 $ 75,979,672 $ 54,326,631
Net realized gain (loss) on investments (681) 1,739 72,533,563 45,526,006
Net change in unrealized appreciation or
depreciation of investments -- -- (113,344,204) 128,277,837
__________________________________________________________________________________________________________________
Net increase in net assets resulting from
operations 5,412,998 5,669,703 35,169,031 228,130,474
__________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (5,413,679) (5,667,964) (75,894,536) (54,377,963)
Net realized gain on investments -- (1,739) (71,974,644) (45,526,006)
__________________________________________________________________________________________________________________
Total distributions (5,413,679) (5,669,703) (147,869,180) (99,903,969)
__________________________________________________________________________________________________________________
Capital share transactions (Note 8)
__________________________________________________________________________________________________________________
Proceeds from sales 54,005,120 19,671,690 629,387,611 476,037,560
Reinvested distributions at net asset value 5,413,679 5,669,703 147,869,180 99,903,969
Payments for redemptions (59,822,520) (91,893,900) (23,003,414) (15,561,672)
__________________________________________________________________________________________________________________
Increase (decrease) in net assets from
capital share transactions (403,721) (66,552,507) 754,253,377 560,379,857
__________________________________________________________________________________________________________________
Total increase (decrease) in net assets (404,402) (66,552,507) 641,553,228 688,606,362
__________________________________________________________________________________________________________________
Net assets at beginning of year 179,647,173 246,199,680 1,857,801,775 1,169,195,413
__________________________________________________________________________________________________________________
Net assets at end of year $179,242,771 $179,647,173 $2,499,355,003 $1,857,801,775
__________________________________________________________________________________________________________________
Undistributed (excess of distributions over)
net investment income $ -- $ -- $ 859,703 $ (91,496)
__________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 95
__________________________________________________________________
1. Summary of significant accounting policies
Each fund is registered under the Investment Company Act of 1940
as amended (the 1940 Act), as a diversified, open-end management
investment company. Shares of each fund are sold through the
purchase of an annuity contract offered by IDS Life Insurance
Company (IDS Life) or its affiliates.
The significant accounting policies followed by the funds are
summarized as follows:
Valuation of securities
Securities traded on national securities exchanges or included in
the NASDAQ National Market System are valued at the last quoted
sales price at the close of each business day; securities traded
over-the-counter but not included in the NASDAQ National Market
System and securities for which a last quoted sales price is not
readily available are valued at the mean of the bid and asked
prices. Bonds and other securities are valued at fair value as
determined by the board of directors when market quotations are
not readily available. Determination of fair value involves,
among other things, references to market indexes, matrixes and
data from independent brokers. Short-term securities in Capital
Resource Fund, International Equity Fund, Aggressive Growth Fund,
Special Income Fund and Managed Fund maturing in more than 60
days from the valuation date are valued at the market price or
approximate market value based on the current interest rates;
those maturing in 60 days or less are valued at amortized cost.
Pursuant to Rule 2a-7 of the 1940 Act, all securities in
Moneyshare Fund are valued at amortized cost which approximates
market value in order to maintain a constant net asset value of
$1 per share.
Option transactions
In order to produce incremental earnings, protect gains, and
facilitate buying and selling of securities for investment
purposes, the funds may buy and sell put and call options and
write covered call options on portfolio securities and write
cash-secured puts. The risk in writing a call option is that the
funds give up the opportunity for profit if the market price of
the security increases. The risk in writing a put option is that
the funds 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 funds pay a premium whether or not the option
is exercised. The funds also have the additional risk of not
being able to enter into a closing transaction if a liquid
secondary market does not exist. The funds also may write over-
the-counter options where the completion of the obligation is
dependent upon the credit standing of the other party.
Option contracts are valued daily and unrealized appreciation or
depreciation is recorded. The funds will realize a gain or loss
upon expiration or closing of the option transaction. When an
option is exercised the proceeds on sales for a written call
<PAGE>
PAGE 96
__________________________________________________________________
1. Summary of significant accounting policies (continued)
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 funds may buy and sell stock index and interest
rate futures contracts. Risks of entering into futures contracts
and related options include the possibility that there may be an
illiquid market and 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 funds may be 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 funds each
day. The variation margin payments are equal to the daily changes
in the contract value and recorded as unrealized gains and losses.
The funds recognize a realized gain or loss when the contract is
closed or expires.
Foreign currency translations and forward foreign currency
contracts
Securities and other assets and liabilities denominated in
foreign currencies are translated daily into U.S. dollars at the
closing rate of exchange. Foreign currency amounts related to
the purchase or sale of securities, income and expenses are
translated at the exchange rate on the transaction date. It is
not practicable to identify that portion of realized and
unrealized gain (loss) arising from changes in the exchange rates
from the portion arising from changes in the market value of
investments.
The funds also may enter into forward foreign currency exchange
contracts for operational purposes. The net U.S. dollar value of
foreign currency underlying all contractual commitments held by
the funds and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates
from an independent pricing service. The funds are subject to
the credit risk that the other party will not complete the
obligations of the contract.
Illiquid securities
At Aug. 31, 1994, investments in securities for Capital Resource
Fund and Special Income Fund included issues that are illiquid.
The Funds currently limit investments in illiquid securities to
10% (15% for Capital Resource Fund), of the net assets, at market
value, at the time of purchase. The aggregate value of such
securities at Aug. 31, 1994, was $7,205,000 and $6,850,672, which
represents 0.2 percent and 0.4 percent of net assets for Capital
Resource Fund and Special Income Fund, respectively. Pursuant to
<PAGE>
PAGE 97
__________________________________________________________________
1. Summary of significant accounting policies (continued)
guidelines adopted by the board of directors, certain
unregistered securities are determined to be liquid and are not
included within the limitations specified above.
Federal income taxes
Since each fund intends to comply with the requirements of the
Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to the
Variable Accounts, no provision for income or excise taxes is
required. Each fund is treated as a separate entity for federal
income tax purposes.
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, the timing and amount of
market discount recognized as ordinary income, foreign tax
credits 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. The
effect on dividend distributions of certain book-to-tax
differences is presented as "excess distributions" in the
statement of changes in net assets. 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) are recorded by the funds.
On the Statements of Assets and Liabilities, due to permanent
book-to-tax differences, undistributed net investment income and
accumulated net realized gain (loss) have been increased
(decreased), resulting in net reclassification adjustments to
additional paid-in capital as follows:
<TABLE>
<CAPTION>
Capital International Special
Resource Equity Income Managed
________________________________________________________________________________________
<S> <C> <C> <C> <C>
Undistributed net investment income $(75,797) $(3,595,994) $51,822 $866,063
Accumulated net realized gain (loss) 75,797 5,473,905 (51,822) (866,063)
________________________________________________________________________________________
Additional paid-in capital reduction
(increase) -- $ 1,877,911 -- --
________________________________________________________________________________________
</TABLE>
Dividends
At Aug. 31, 1994, dividends were declared of $2.769 per share for
Capital Resource Fund, $.359 for International Equity Fund, $.007
for Aggressive Growth Fund, $.106 for Special Income Fund, $.004
for Moneyshare Fund and $.527 for Managed Fund payable Sept. 1,
1994. Distributions to the Variable Accounts are recorded as
of the close of business on the record date and are payable on the
<PAGE>
PAGE 98
__________________________________________________________________
1. Summary of significant accounting policies (continued)
first business day following the record date. Dividends from net
investment income are declared daily and paid monthly for Special
Income Fund and Moneyshare Fund and declared and paid quarterly for
Capital Resource Fund, International Equity Fund, Aggressive Growth
Fund, and Managed Fund. Capital gain distributions (if any) will
be made annually. However, an additional capital gain distribution
may be made during the fiscal year in order to comply with the
Internal Revenue Code, as applicable to regulated investment
companies.
Other
Security transactions are accounted for on the date the securities
are purchased or sold. Dividend income is recognized on the
ex-dividend date and interest income, including amortization of
premium and discount on a level yield basis, is accrued daily.
__________________________________________________________________
2. Investment management and services agreement
Under the terms of an agreement effective Nov. 13, 1991, (Jan. 9,
1992 for International Equity Fund and Aggressive Growth Fund), the
fee paid to IDS Life for investment management and services for
Capital Resource Fund, International Equity Fund, Aggressive Growth
Fund, Special Income Fund and Managed Fund is computed in two
parts. The first part is a graduated group asset charge based on
the combined net assets of all non-money market funds in the IDS
MUTUAL FUND GROUP. It is equal on an annual basis to 0.46 percent
on the first $5 billion of daily net assets and scaling down
thereafter in reduced percentages of each succeeding billion to
0.32 percent on all net assets in excess of $50 billion. The daily
group asset charge equals the daily rate multiplied by that Fund's
net assets for that day. The second part is based on the average
daily net assets of each Fund and is equal to 0.25 percent of its
daily net assets on an annual basis, except International Equity
Fund. International Equity Fund's individual asset charge is equal
to 0.50 percent annually of its daily net assets. Both parts of
the fee are payable monthly.
Under the terms of an agreement effective Oct. 14, 1988, the
investment management and services fee for Moneyshare Fund will be
paid to IDS Life monthly. The fee is computed on a graduated fee
scale equal on an annual basis to 0.54 percent of the first $1
billion of average daily net assets and scaling down thereafter in
reduced percentages of each succeeding $500 million to 0.46 percent
of all average daily net assets in excess of $2.5 billion.
IDS Life, in turn, pays to IDS Financial Corporation a fee based on
a percentage of each Fund's average daily net assets for the year.
This fee is equal to 0.50 percent for International Equity Fund and
0.25 percent for each remaining fund. In addition to paying its
own management fee, brokerage commissions, taxes, and costs of
certain legal services, each fund will reimburse IDS Life an amount
equal to the cost of certain expenses incurred and paid by IDS Life
<PAGE>
PAGE 99
__________________________________________________________________
2. Investment management and services agreement (continued)
in connection with each fund's operations. The reimbursement paid
by Moneyshare Fund will be limited to 0.25 percent of the fund's
average daily net assets.
The funds have 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 a
director 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 for the year ended Aug. 31, 1994 amounted to $27,344 for
Capital Resource Fund, $3,010 for International Equity Fund, $825
for Aggressive Growth Fund, $16,735 for Special Income Fund, $109
for Moneyshare Fund and $18,746 for Managed Fund.
__________________________________________________________________
3. Securities transactions
For the year ended Aug. 31, 1994, cost of purchases and proceeds
from sales of securities aggregated, respectively, $1,247,035,599
and $1,247,689,373 for Moneyshare Fund; cost of purchases and
proceeds from sales of securities (other than short-term
obligations) aggregated, respectively, $2,669,038,596 and
$1,938,239,960 for Capital Resource Fund; $939,042,753 and
$321,789,560 for International Equity Fund; $700,724,799 and
$262,860,744 for Aggressive Growth Fund; $1,072,069,174 and
$874,675,968 for Special Income Fund; $2,008,330,837 and
$1,554,727,782 for Managed Fund. Net realized gains (losses) on
investment sales are determined on the basis of identified costs.
Brokerage commissions paid to brokers affiliated with IDS Life were
$490,014 for Capital Resource Fund, $4,372 for International Equity
Fund, $60,325 for Aggressive Growth Fund, $666 for Special Income
Fund and $237,717 for Managed Fund for the year ended Aug. 31,
1994.
__________________________________________________________________
4. Forward foreign currency contracts
At Aug. 31, 1994, International Equity Fund, Aggressive Growth Fund
and Managed Fund had entered into forward foreign currency exchange
contracts that obligate the funds to deliver currencies at
specified future dates. The unrealized appreciation or
depreciation of the contracts is reflected in the accompanying
financial statements. The terms of the open contracts are as
follows:
<PAGE>
PAGE 100
<TABLE>
<CAPTION>
International Equity Fund
___________________________________________________________________________________________
U.S. dollar value U.S. dollar value
Currency to as of Currency to as of
Exchange date be delivered Aug. 31, 1994 be received Aug. 31, 1994
___________________________________________________________________________________________
<S> <C> <C> <C> <C>
Sept. 1, 1994 837,399 1,286,622 1,290,515 1,290,515
British Pound U.S. Dollar
Sept. 2, 1994 366,511 366,511 2,832,033 366,478
U.S. Dollar Hong Kong Dollar
Sept. 2, 1994 189,818 189,818 484,320 189,261
U.S. Dollar Malaysian Dollar
Sept. 8 1994 5,980,788 5,980,788 3,858,468 5,928,344
U.S. Dollar British Pound
Sept. 30, 1994 49,749,519 49,749,519 4,807,296,000 49,749,519
U.S. Dollar Japanese Yen
Sept. 30, 1994 4,807,296,000 49,749,519 46,800,000 46,800,000
Japanese Yen U.S. Dollar
Dec. 30, 1994 9,952,000,000 100,334,495 100,000,000 100,000,000
Japanese Yen U.S. Dollar
___________ ___________
$207,657,272 $204,324,117
___________________________________________________________________________________________
Aggressive Growth Fund
___________________________________________________________________________________________
U.S. dollar value U.S. dollar value
Currency to as of Currency to as of
Exchange date be delivered Aug. 31, 1994 be received Aug. 31, 1994
___________________________________________________________________________________________
September 2, 1994 40,210 $40,210 310,707 $40,207
U.S. Dollar Hong Kong Dollar
___________________________________________________________________________________________
Managed Fund
___________________________________________________________________________________________
U.S. dollar value U.S. dollar value
Currency to as of Currency to as of
Exchange date be delivered Aug. 31, 1994 be received Aug. 31, 1994
___________________________________________________________________________________________
September 7, 1994 5,119,013 $5,119,013 8,086,888 $5,120,714
U.S. Dollar Deutschemark
___________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 101
___________________________________________________________________
5. Options contracts written
The number of contracts and premium amounts associated with call
option contracts written by Aggressive Growth Fund during the year
ended Aug. 31, 1994 is as follows:
Calls
Contracts Premium
___________________________________________________________________
Balance Aug. 31, 1993 400 $116,956
___________________________________________________________________
Opened 400 63,798
Closed or expired (800) (180,754)
___________________________________________________________________
Balance Aug. 31, 1994 -- --
___________________________________________________________________
The number of contracts and premium amounts associated with option
contracts written by Special Income Fund during the year ended Aug.
31, 1994 is as follows:
Puts Calls
Contracts Premiums Contracts Premium
___________________________________________________________________
Balance Aug. 31, 1993 -- $ -- -- $ --
___________________________________________________________________
Opened 250 174,032 2,150 1,086,516
Closed or expired (250) (174,032) (1,500) (743,408)
Exercised -- -- (650) (343,108)
___________________________________________________________________
Balance Aug. 31, 1994 -- $ -- -- $ --
___________________________________________________________________
___________________________________________________________________
6. Lending of portfolio securities
Presented below is information regarding securities on loan at Aug.
31,1994.
<TABLE>
<CAPTION>
Capital International Special
Resource Equity Income Managed
____________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Value of securities on loan to brokers $24,117,887 $39,524,083 $42,756,900 $120,249,463
____________________________________________________________________________________________________
Collateral received for securities loaned:
Cash $24,360,900 $14,400,200 $12,393,750 $ 35,596,000
U.S. Government Securities, at value - 25,972,821 31,276,684 88,397,723
____________________________________________________________________________________________________
Total collateral received for securities
loaned $24,360,900 $40,373,021 $43,670,434 $123,993,723
____________________________________________________________________________________________________
</TABLE>
For the year ended Aug. 31, 1994, income from security lending
transactions amounted to $101,606, $220,281, $144,847 and $432,444
for Capital Resource Fund, International Equity Fund, Special
Income Fund and Managed Fund, respectively, and has been included
with interest income in the statement of operations.
<PAGE>
PAGE 102
___________________________________________________________________
6. Lending of portfolio securities (continued)
The risks related to security lending transactions are the borrower
may not provide additional collateral when required or return the
securities when due.
__________________________________________________________________
7. Interest rate futures contracts
The funds pledge securities or cash as collateral when making
initial deposits on future contracts. On Aug. 31, 1994,
information about the funds' open futures contracts is as follows:
<TABLE>
<CAPTION>
Collateral
pledged to Market
Long (L) Type of cover initial value Net
or contract and Number of margin of open unrealized
Short (S) maturity contracts deposit contracts gain (loss)
______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Special Income S U.S. Treasury
Fund September 1994
T-Bond
S U.S. Treasury 735 $3,097,702 $76,233,281 $206,719
December 1994
T-Bond 15 63,218 1,543,594 (7,969)
______________________________________________________________________________________________________
Managed Fund S U.S. Treasury
December 1994
T-Bond 250 984,140 25,726,563 (132,813)
______________________________________________________________________________________________________
</TABLE>
__________________________________________________________________
8. Capital share transactions
Transactions in shares of each Fund for the years ended Aug. 31,
1994 and 1993 were as follows:
<TABLE>
<CAPTION>
Number of shares: Year ended Aug. 31, 1994
____________________________________________________________________________________________________________________
Capital International Aggressive Special
Resource Equity Growth Income Moneyshare Managed
____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Shares at beginning of year 93,921,903 25,082,644 25,614,230 128,401,403 179,660,778 129,702,882
Sold 17,017,814 58,988,542 41,343,092 16,667,636 54,009,530 44,299,470
Issued for reinvested
distributions 14,130,743 2,534,743 61,199 10,704,857 5,414,112 10,732,030
Redeemed (1,310,265) (556,214) (447,153) (14,733,808) (59,827,377) (1,669,413)
____________________________________________________________________________________________________________________
Net increase (decrease) 29,838,292 60,967,071 40,957,138 12,638,685 (403,735) 53,362,087
____________________________________________________________________________________________________________________
Shares at end of year 123,760,195 86,049,715 66,571,368 141,040,088 179,257,043 183,064,969
____________________________________________________________________________________________________________________
<PAGE>
PAGE 103
___________________________________________________________________
8. Capital share transactions (continued)
Number of shares: Year ended Aug. 31, 1993
____________________________________________________________________________________________________________________
Capital International Aggressive Special
Resource Equity Growth Income Moneyshare Managed
____________________________________________________________________________________________________________________
Shares at beginning of year 70,326,867 3,918,115 6,317,009 100,862,698 246,218,236 89,413,058
Sold 19,540,273 20,687,061 19,426,351 23,925,544 19,673,158 34,320,745
Issued for reinvested
distributions 5,182,272 600,004 40,959 8,314,028 5,670,122 7,071,464
Redeemed (1,127,509) (122,536) (170,089) (4,700,867) (91,900,738) (1,102,385)
____________________________________________________________________________________________________________________
Net increase (decrease) 23,595,036 21,164,529 19,297,221 27,538,705 (66,557,458) 40,289,824
____________________________________________________________________________________________________________________
Shares at end of year 93,921,903 25,082,644 25,614,230 128,401,403 179,660,778 129,702,882
____________________________________________________________________________________________________________________
</TABLE>
___________________________________________________________________
9. Tax loss carryforward
For federal income tax purposes, Aggressive Growth Fund had a
capital loss carryover at Aug. 31, 1994 of $34,506,813, which, if
not offset by subsequent capital gains, will expire in 2001 through
2003. It is unlikely the board of directors will authorize a
distribution of any net realized gain for a Fund until its capital
loss carryover has been offset or expires.
___________________________________________________________________
10. Financial highlights
"Financial Highlights" showing per share data and selected ratio
information is presented on pages 5-10 of the prospectus.
<PAGE>
PAGE 104
<TABLE>
<CAPTION>
Retirement Annuity Mutual Funds (Percentages represent value of
August 31, 1994 investments compared to total net assets)
Capital Resource Fund
__________________________________________________________________________________
Investment in securities of unaffiliated issuers
Bonds (3.3%)
Issuer Principal Value(a)
Amount
__________________________________________________________________________________
<S> <C> <C>
Foreign (0.8%)
Henderson Land (U.S. Dollar)
4.00% 1996 12,000,000(e) 11,430,000
Rogers Communication (U.S. Dollar)
Zero Coupon Cv with attached put
5.49% 2013 30,000,000(h) 11,025,000
Total 22,455,000
Health care services (0.8%)
Medaphis
6.50% Cv 2000 5,500,000 (f) 7,205,000
Service Corp Int'l
6.50% Cv 2001 12,000,000 15,960,000
Total 23,165,000
Insurance (0.4%)
USF&G
Zero Coupon Cv
4.55% 2009 21,200,000(h) 10,494,000
Media (0.5%)
Comcast
1.125% Cv 2007 29,800,000 12,776,750
Viacom Int'l
Zero Coupon with interest certificate
8.00% 2006 2,837,000(b,h) 2,333,433
Total 15,110,183
Retail (0.8%)
Waban
6.50% Cv 2002 25,000,000 24,125,000
Total bonds
(Cost: $98,494,167) 95,349,183
__________________________________________________________________________________
Common & preferred stocks & warrants (89.0%)
Issuer Shares Value(a)
__________________________________________________________________________________
Aerospace & defense (0.9%)
Northrop Grumman 300,000 13,500,000
Sundstrand 250,000 12,437,500
Total 25,937,500
Airlines (0.5%)
AMR
$3 Cv Pfd 200,000 (e) 9,125,000
Northwest Airlines 300,000 (b) 5,700,000
Total 14,825,000
Automotive & related (0.6%)
Goodyear 540,000 18,900,000
Banks and savings & loans (2.5%)
BankAmerica 550,000 27,156,250
Continental Bank 300,000 11,475,000
First Chicago 286,300 14,887,600
First Chicago
$5.50 Cv Pfd 315,000 8,701,875
NationsBank 200,000 (g) 11,150,000
Total 73,370,725
Beverages & tobacco (6.0%)
Coca-Cola 490,000 22,540,000
Pepsico 250,000 8,281,250
Philip Morris 795,000 48,495,000
RJR Nabisco 2,300,000 (b) 16,100,000
<PAGE>
PAGE 105
Common & preferred stocks & warrants (89.0%)
Issuer Shares Value(a)
__________________________________________________________________________________
RJR Nabisco
$.835 Cv Pfd 2,000,000 14,000,000
UST 2,100,000 65,625,000
Total 175,041,250
Building materials (0.6%)
MagneTek 200,000 (b) 2,750,000
Martin Marietta 225,000 4,387,500
Sherwin Williams 300,000 9,937,500
Total 17,075,000
Chemicals (0.9%)
A. Schulman 390,000 10,335,000
Sigma-Aldrich 450,000 15,637,500
Total 25,972,500
Computers & office equipment (7.1%)
Automatic Data Processing 510,000 27,603,750
BISYS Group 490,000 (b) 10,657,500
Banyan Systems 750,000 (b) 12,562,500
Ceridian 400,000 10,700,000
Ceridian
$3.025 Cv Pfd 238,500 15,562,125
Cisco Systems 400,000 (b) 9,925,000
Compaq Computer 415,000 (b) 15,510,625
Fiserv 500,000 (b) 11,375,000
Lotus Development 760,800 (b) 31,097,700
Pitney Bowes 1,000,000 38,500,000
Reynolds & Reynolds 500,000 13,187,500
VMARK Software 200,000 (b) 4,050,000
Wellfleet Communications 220,000 (b) 4,977,500
Total 205,709,200
Electronics (1.6%)
Intel 350,000 23,012,500
Premier Industrial 318,800 7,173,000
Vishay Intertechnology 350,000 (b) 15,050,000
Total 45,235,500
Energy (1.4%)
Atlantic Richfield
$9.00 Cv Pfd 550,000 17,050,000
Snyder Oil
$6.00 Cv Pfd 350,000 8,968,750
Exxon 250,000 14,875,000
Total 40,893,750
Financial services (8.3%)
Countrywide Credit 475,000 7,065,625
Envoy 245,000 (b) 4,961,250
Federal National Mortgage 350,000 31,106,250
Fleet Mortgage Group 250,000 (b) 4,500,000
Insurance Auto Auctions 150,000 (b,g) 5,456,250
MGIC Investment 935,000 28,751,250
North American Mortgage 400,000 13,000,000
Northern Trust 1,350,000 51,637,500
RFS Hotel Investors 200,000 3,400,000
Salomon Elk
$7.25 Cv Pfd 100,000 3,662,500
SBH/AM
$3.185 Cv Pfd 210,000 10,578,750
State Street Boston 1,800,000 72,000,000
Student Loan 300,000 5,775,000
Total 241,894,375
Food (3.4%)
CPC Int'l 200,000 10,700,000
General Mills 400,000 21,600,000
Pet 240,000 4,860,000
Pioneer Hi-Bred 650,000 20,312,500
Quaker Oats 150,000 12,056,250
Sara Lee 625,000 14,453,125
Tootsie Roll 216,659 13,649,517
Total 97,631,392
<PAGE>
PAGE 106
Common & preferred stocks & warrants (89.0%)
Issuer Shares Value(a)
__________________________________________________________________________________
Foreign (8.3%)
A Guiness 900,000 6,885,900
Ace Limited 800,000 18,500,000
Archer Resource 300,000 (b) 4,321,830
Arjo 800,000 (b,e) 13,051,200
Arnoldo Mondadori 415,000 4,089,410
Astra 850,000 (b) 19,370,650
Banca Pop Bergano 222,000 2,725,716
Celsius Industries 500,000 (b) 11,718,000
Danka Business Systems 13,000 266,500
Ericsson 8,645,000 16,209,375
Femsa Coke 450,000 (b) 15,693,750
Kimberly/Mex 250,000 5,187,425
Loewen Group 200,000 5,025,000
Loewen Group Private 100,000 (b) 2,507,390
Mutual Risk Management 500,000 12,812,500
New Zealand Telephone 275,000 (g) 13,784,375
Nokia Pref Free 225,000 24,422,175
Paribas 150,000 10,287,450
Petroleum Geo Serv 800,000 (b) 15,200,000
Renaissance Energy 100,000 (b) 2,015,030
Rogers Communications 1,000,000 (b) 16,776,700
Tamro Yhtymae 1,500,000 (b) 6,288,000
Vaisala 94,500 4,591,661
YPF 375,000 9,703,125
Total 241,433,162
Health care (6.3%)
Amgen 600,000 (b) 31,650,000
Boston Scientific 350,000 (b) 5,818,750
Chiron 110,000 (b) 7,672,500
Genentech 250,000 (b) 12,843,750
Haemonetics 500,000 (b) 9,375,000
Medtronic 170,000 16,787,500
Merck 450,000 15,356,250
Pfizer 275,000 18,768,750
STERIS 400,000 (b) 9,000,000
Stryker 1,575,000 (g) 55,912,500
Xoma Warrants 4,142 (b) 456
Total 183,185,456
Health care services (5.4%)
Beverly Enterprises 925,000 (b) 12,603,125
Cardinal Health 1,000,000 38,750,000
Caremark Int'l 500,000 12,125,000
Charter Medical 250,000 (b) 7,062,500
Community Psych Centers 800,000 11,200,000
Coram Healthcare 325,000 (b) 5,037,500
Express Script 100,000 (b) 3,450,000
Gulf South Medical 200,000 (b) 5,950,000
Health Management Systems 70,000 (b) 1,785,000
Medaphis 200,000 (b) 7,050,000
MEDSTAT Group 415,000 (b) 5,706,250
Regency Health 600,000 (b) 6,525,000
Service Corp Int'l 470,000 12,455,000
Shared Medical Systems 400,000 10,000,000
Stewart Enterprises 625,000 15,625,000
Total 155,324,375
Household products (2.0%)
Gillette 250,000 18,093,750
International Flavors & Fragrances 700,000 30,712,500
Newell 200,000 9,525,000
Total 58,331,250
Industrial machines & services (3.8%)
Deere & Company 350,000 25,987,500
Fastenal 215,000 8,438,750
Flair 250,000 4,812,500
General Signal 615,000 22,140,000
Giddings & Lewis 650,000 12,187,500
Greenfields 200,000 4,350,000
Illinois Tool Works 325,000 14,056,250
Nordson 300,000 17,700,000
Total 109,672,500
<PAGE>
PAGE 107
Common & preferred stocks & warrants (89.0%)
Issuer Shares Value(a)
__________________________________________________________________________________
Industrial transportation (1.0%)
Arnold Industries 45,000 911,250
Union Pacific 500,000 28,812,500
Total 29,723,750
Insurance (4.1%)
Aetna Life & Casualty 300,000 14,812,500
Horace Mann Educators 350,000 9,406,250
Travelers 940,000 34,780,000
Unum 1,200,000 58,950,000
Total 117,948,750
Leisure time & entertainment (2.0%)
3Do Company 260,000 (b,g) 5,005,000
Blockbuster Entertainment 1,000,000 25,875,000
Walt Disney 625,000 25,703,125
Total 56,583,125
Media (7.0%)
CBS 25,000 (g) 8,034,375
Comcast 1,250,000 20,000,000
Information Resource 650,000 (b) 9,262,500
Merrill Corporation 350,000 7,350,000
Reader's Digest 1,150,000 48,875,000
Scholastic 400,000 (b) 18,000,000
Tele-Communications 'A' 2,300,000 (b) 51,893,750
Turner Broadcasting'B' 1,050,000 19,031,250
Viacom 'B' 552,461 (b) 18,231,213
Viacom 'R' 302,461 (b) 1,550,113
Viacom Wts C 162,500 (b) 253,906
Viacom Wts E 97,500 (b) 316,875
Total 202,798,982
Metals (0.9%)
Bethlehem Steel
$3.50 Cv Pfd 200,000 (e) 12,325,000
Cyprus Amax Minerals 250,000 8,125,000
Nat'l Steel 302,000 (b) 6,568,500
Total 27,018,500
Multi-Industry (2.5%)
Emerson Electric 265,000 16,463,125
General Electric 525,000 26,118,750
Interim Services 300,000 (b) 6,825,000
Minnesota Mining & Manufacturing 400,000 22,050,000
Total 71,456,875
Natural gas (0.6%)
Enron 275,000 8,387,500
Tenneco 200,000 9,850,000
Total 18,237,500
Paper & packaging (1.6%)
Bowater
$1.75 Cv Pfd 172,700 4,554,962
Crown Cork & Seal 650,000 (b) 24,212,500
Kimberly Clark 274,600 16,304,375
Total 45,071,837
Restaurants & lodging (0.9%)
McDonalds 900,000 25,425,000
Retail (3.9%)
CML Group 500,000 5,687,500
Funco 85,000 (b) 1,466,250
General Nutrition 250,000 (b) 5,640,625
Home Shopping Network 900,000 (b) 10,575,000
Viking Office Products 200,000 (b) 5,750,000
Walgreens 1,600,000 60,200,000
Wal-Mart Stores 1,000,000 24,625,000
Total 113,944,375
Telecommunication equipment & services (1.8%)
DSC Communications 250,000 (b) 7,156,250
MFS Communications 925,000 (b) 32,606,250
NEXTEL Communications 500,000 (b) 13,062,500
Total 52,825,000
<PAGE>
PAGE 108
Common & preferred stocks & warrants (89.0%)
Issuer Shares Value(a)
__________________________________________________________________________________
Textiles & apparel (0.5%)
Donn-Kenny 250,000 (b) 5,687,500
Norton & McNaughton 395,000 (b) 8,245,625
Total 13,933,125
Utilities - telephone (2.6%)
AirTouch Communications 600,000 (b) 16,950,000
LCI Int'l 250,000 (b) 5,000,000
LCI Int'l
$1.25 Cv Pfd 400,000 11,000,000
MCI Communications 850,000 20,665,625
U.S. West 525,000 21,196,875
Total 74,812,500
Total common & preferred stocks & warrants
(Cost: $2,342,704,815) $2,580,212,254
__________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (5.6%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (0.4%)
FHLMC Disc Nts
09-01-94 4.31% $ 4,700,000 $ 4,700,000
09-01-94 4.57 6,400,000 6,400,000
Total 11,100,000
________________________________________________________________________________________
Commercial paper (5.0%)
Aerospace & defense (0.4%)
Toyota Motor
09-07-94 4.44 4,800,000 4,796,456
09-15-94 4.63 6,002,000 5,991,216
Total 10,787,672
Automotive & related (0.1%)
Ford Motor
09-20-94 4.53 4,000,000 3,989,750
Banks and savings & loans (0.7%)
Commerzbank 4.63 5,500,000 5,465,347
10-17-94
Kredietbank 4.38 1,000,000 1,000,000
09-01-94
Paribas
09-02-94 4.38 15,000,000 14,998,179
Total 21,463,526
Building materials (0.1%)
Ciesco L P
09-13-94 4.58 2,000,000 1,996,967
Energy equipment (0.5%)
ABB Treasury
09-21-94 4.48 6,500,000 (c) 6,482,282
09-21-94 4.49 1,900,000 (c) 1,894,821
09-21-94 4.52 5,100,000 (c) 5,086,098
Total 13,463,201
Financial services (1.6%)
Beneficial
09-20-94 4.51 6,000,000 5,985,813
09-27-94 4.77 2,100,000 2,092,796
10-07-94 4.77 7,500,000 7,464,375
Commercial Credit
09-28-94 4.75 4,300,000 4,284,746
Household Finance
10-24-94 4.81 6,800,000 6,751,349
Merrill Lynch
09-16-94 4.53 7,400,000 7,386,125
<PAGE>
PAGE 109
Short-term securities (5.6%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
________________________________________________________________________________________
USAA Capital
09-02-94 4.44 1,500,000 1,499,816
09-20-94 4.48 9,850,000 9,822,929
Total 45,287,949
Food (0.1%)
Cargill
09-19-94 4.53 4,500,000 (c) 4,489,212
Health care (0.2%)
American Cyanamid
09-14-94 4.56 3,200,000 3,194,742
09-16-94 4.50 2,300,000 2,295,716
Total 5,490,458
Insurance (0.1%)
Aon
09-22-94 4.76 4,200,000 4,188,387
Media (0.2%)
Dun & Bradstreet
10-11-94 4.58 4,500,000 4,476,566
Reed Elsevier
09-13-94 4.48 800,000 (c) 798,813
Total 5,275,379
Natural gas (0.2%)
Columbia Fuel
09-26-94 4.53 5,000,000 4,983,035
Utilities - electric (0.1%)
Bayshore Fuel
09-14-94 4.71 2,900,000 2,894,923
Utilities - telephone (0.1%)
AT&T Capital
09-23-94 4.73 4,600,000 4,586,732
Miscellaneous (0.6%)
American General
09-23-94 4.53 6,800,000 (c) 6,780,054
Colgate-Palmolive
09-22-94 4.64 8,600,000 (c) 8,576,823
Pepsico
09-27-94 4.74 1,200,000 1,195,909
Total 16,552,786
Total commercial paper
(Cost: $145,465,637) $ 145,449,977
Bankers acceptance (0.1%)
First Bank
09-06-94 4.38 4,000,000 3,997,572
Letter of credit (0.1%)
Bank of America - Hyundai
09-13-94 4.53 2,500,000 2,496,250
Total short-term securities
(Cost: $163,059,459) $ 163,043,799
Total investments in securities of unaffiliated issuers
(Cost: $2,604,258,441) $2,838,605,236
________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 110
<TABLE>
<CAPTION>
Investments in securities of affiliated issuers (d)
Common stocks (4.1%)
Issuer Shares Value(a)
_____________________________________________________________________________________
<S> <C> <C>
Career Horizon 350,000 (b) $ 6,125,000
Ciber 350,000 (b) 2,996,875
Cima Labs 225,000 (b) 1,996,875
Concord Holdings 500,000 (b) 3,187,500
Damark Int'l 750,000 (b) 7,406,250
Digital Link 525,000 (b) 5,906,250
HCC Insurance 660,000 (b) 13,695,000
Homecare Management 500,000 (b) 7,125,000
Nature's Bounty 1,575,000 (b) 12,600,000
Park Place 465,000 (b) 9,997,500
Saber Software 435,000 (b) 3,480,000
Summa Four 550,000 (b) 8,250,000
Wall Data 800,000 (b) 31,200,000
Webco Metals 600,000 (b) 5,250,000
Total 119,216,250
Total investments in securities of affiliated issuers
(Cost: $133,848,767) $ 119,216,250
Total investments in securities
(Cost: $2,738,107,208)(i) $2,957,821,486
_____________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing. For long-term debt securities, items identified are in default as to payment of interest or
principal.
(c) Commercial paper sold within terms of a private placement memorandum, exempt from registration under section 4(2) of the
Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors." These
securities have been determined to be liquid under guidelines established by the board of directors.
(d) Investments representing 5 percent or more of the outstanding voting securities of the issuer.
(e) Represents securities sold under Rule 144A which are exempt from registration under the Securities Act of 1933, as amended.
These securities have been determined to be liquid under guidelines established by the board of directors.
(f) Identifies issue considered to be illiquid as to its marketability (see Note 1 to the financial statements). Information
concerning such security holding at Aug. 31, 1994, is as follows:
Acquisition Purchase
Security Date Cost
__________________________________________________________________________________
Medaphis Cv
6.50%, 2000 12-22-92 $10,000,000
__________________________________________________________________________________
(g) Security is partially or fully on loan. See Note 6 to the financial statements.
(h) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition.
(i) At Aug. 31, 1994, the cost of securities for federal income tax purposes was $2,739,140,795 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . . .$290,904,962
Unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . . (72,224,271)
___________________________________________________________________________________
Net unrealized appreciation . . . . . . . . . . . . . . . . . . . . . .$218,680,691
___________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 111
<TABLE>
<CAPTION>
Retirement Annuity Mutual Funds (Percentages represent value of
August 31, 1994 investments compared to total net assets)
International Equity Fund
Investments in securities of unaffiliated issuers
Bonds (0.4%)
Issuer Principal Value(a)
Amount
__________________________________________________________________________________
<S> <C> <C>
Banco de Galicia, 7.00% 2002 $ 4,000,000 $ 4,180,000
(Cost: $4,000,000)
__________________________________________________________________________________
Common & preferred stocks & warrants (87.5%)
Issuer Shares Value(a)
__________________________________________________________________________________
Argentina (2.4%)
Energy (0.6%)
YPF Sociedad Anonima Ads 244,600 6,329,025
Multi-industry (1.2%)
Perez Companc 'B' Shares 2,450,000 (b) 13,869,450
Telecommunications (0.6%)
Telefonica de Argentina 90,000 (d) 6,558,750
Australia (6.9%)
Banking (0.9%)
Westpac Banking 3,139,000 10,399,507
Energy (1.2%)
Broken Hill Proprietary 575,000 8,776,225
Broken Hill Proprietary
Warrants 06-29-95 2,376,000 (b) 4,067,712
Total 12,843,937
Industrial transportation (1.2%)
Brambles 1,183,616 13,183,115
Metals (2.6%)
CRA 858,800 12,634,666
Pasminco 10,154,600 (b) 16,399,679
Total 29,034,345
Merchandising (1.0%)
Woolworth 5,113,219 11,571,215
Belgium (0.3%)
Industrial equipment & services
Bekaert 3,400 2,806,850
Canada (0.4%)
Telecommunications
BCE Mobile Telecom 150,300 (b) 4,166,015
Chile (0.6%)
Telecommunications
Chile Telephone 76,000 6,935,000
Denmark (1.1%)
Telecommunications
TeleDanmark 'B' 220,000 11,832,040
Finland (0.3%)
Banking
Kansallis-Osake-Pankki 1,712,000 (b) 3,622,592
France (5.5%)
Banking (0.5%)
Credit Commercial de France 142,563 5,863,759
Building materials (0.7%)
Lafarge-Coppee 92,614 7,663,253
Electronics (0.3%)
Alcatel Alsthom Electricite 30,000 3,326,400
<PAGE>
PAGE 112
Common & preferred stocks & warrants (87.5%)
Issuer Shares Value(a)
__________________________________________________________________________________
Energy (1.8%)
Societe Nationale Elf Aquitaine 173,500 13,360,368
Total Petroleum 'B' 114,750 (d) 6,850,231
Total 20,210,599
Financial services (0.8%)
Cie de Suez 180,000 9,189,540
Multi-industry (1.4%)
Lyonnaise des Eaux Dumez 154,500 15,786,810
Germany (1.6%)
Chemicals (0.5%)
Henkel Pfd Shares 13,250 (b) 5,197,630
Construction (0.1%)
Hochtief 1,715 1,077,270
Merchandising (0.4%)
Karstadt 11,401 4,533,687
Multi-industry (0.6%)
Preussag 21,000 6,489,147
Hong Kong (5.0%)
Banking (0.6%)
Hang Seng Bank 997,000 7,159,457
Business & public service (0.9%)
Wharf (Holdings) 2,201,000 (d) 9,455,496
Merchandising (0.8%)
Dairy Farm Int'l 5,500,000 8,327,000
Multi-industry (1.9%)
Hutchison Whampoa 2,260,000 11,315,820
Swire Pacific 'A' 1,200,000 10,093,200
Total 21,409,020
Real estate (0.5%)
Great Eagle Holdings 8,689,000 5,335,046
Shipping (0.3%)
Shun Tak Enterprise 4,342,000 3,929,510
Italy (0.3%)
Automobiles
Fiat Priv 1,500,000 3,711,000
Japan (25.3%)
Appliances & durables (1.1%)
Matsushita Kotobuki Electronics 73,000 2,202,994
Sony 172,100 10,507,910
Total 12,710,904
Banking (2.6%)
Fuji Bank 499,000 11,269,416
Sumitomo Bank 425,000 8,451,550
Sumitomo Trust & Banking 669,0000 9,158,610
Total 28,879,576
Building materials (0.3%)
Nihon Cement 401,000 3,125,394
Broadcast publishing (0.3%)
Tokyo Broadcasting Systems 200,000 3,257,600
Chemicals (0.3%)
Konica 530,000 3,739,150
Construction (0.8%)
Maeda Road 510,000 9,326,370
Data processing (0.2%)
Fujitsu Warrants 6Dec98 11,000 (b) 1,942,222
<PAGE>
PAGE 113
Common & preferred stocks & warrants (87.5%)
Issuer Shares Value(a)
__________________________________________________________________________________
Electrical (0.9%)
Hitachi 1,022,000 10,131,086
Electrical & electronic (1.8%)
Matsushita Communications 125,000 3,609,875
Toshiba 1,409,000 10,685,856
Yokogawa Electric Corp 520,000 5,299,840
Total 19,595,571
Electronic component (1.4%)
Kyocera 145,000 10,751,460
Rohm 110,000 (d) 4,737,590
Total 15,489,050
Financial services (1.7%)
Daiwa Securities 261,000 4,094,829
Nomura Securities 471,000 10,401,564
Yamaichi Securities 500,000 4,301,500
Total 18,797,893
Food (0.3%)
Nichirei 423,000 3,055,752
Industrial component (1.5%)
Sumitomo Electric Industries 1,083,000 (d) 16,233,087
Insurance (1.6%)
Tokio Marine & Fire 1,400,000 17,347,400
Machinery & engineering (3.0%)
Chiyoda 64,000 1,611,648
Fanuc 239,000 11,010,013
Fuji Machine Mfg Co Ltd. 162,000 5,439,312
Ishikawajima-Harima 1,015,000 4,949,140
Mitsubishi Heavy Industries 1,340,000 10,510,960
Total 33,521,073
Merchandising (3.0%)
Amway 60,000 1,978,560
Aoyama Trading 74,000 2,883,928
Family Mart 75,500 4,896,477
Ito-Yokado 250,000 13,240,500
Joshin Denki 108,000 1,726,704
Keiyo 500 10,392
Marui 472,000 8,772,592
Total 33,509,153
Metals - steel (1.0%)
Nippon Steel 2,806,000 10,514,082
Miscellaneous materials & commodities (0.8%)
Asahi Glass 720,000 (d) 8,993,520
Real estate (1.1%)
Mitsui Fudosan 1,050,000 12,695,550
Recreation & goods (0.5%)
Nintendo 79,000 4,973,445
Telecommunications (0.3%)
Kokusai Denshin Denwa 29,000 3,361,622
Transportation (0.5%)
Nippon Express 536,000 5,730,912
Wholesale, int'l trade (0.3%)
Itochu 535,000 3,827,390
Malaysia (2.3%)
Banking (0.4%)
Malayan Banking 603,500 3,867,228
Leisure (0.4%)
Resorts World 656,000 4,306,640
Multi-industry (0.9%)
Sime Darby 3,100,000 9,690,600
<PAGE>
PAGE 114
Common & preferred stocks & warrants (87.5%)
Issuer Shares Value(a)
__________________________________________________________________________________
Utilities (0.6%)
Tenaga Nasional 1,261,000 7,095,647
Mexico (3.9%)
Building materials (2.0%)
Cemex ADR Series 'B' 1,051,975 19,067,047
Cemex ADR Series 'A' 202,500 (b) 3,543,750
Total 22,610,797
Construction housing (1.7%)
Empresas Ica Sociedad Controladora 530,000 (d) 15,635,000
Grupo Mexicano de Desarollo Series 'B' 144,500 2,691,312
Total 18,326,312
Merchandising (0.2%)
Benavides 'B' Shares 586,900 2,518,740
Netherlands (3.5%)
Broadcast publishing (1.2%)
Elsevier 140,000 13,514,480
Chemicals (0.9%)
Akzo Nobel N.V. 84,200 10,425,812
Financial services (0.3%)
International Nederlanden Groep 70,000 3,197,040
Household products (0.8%)
Unilever NV 75,000 8,605,800
Machinery, engineering (0.3%)
Stork VMF 116,035 3,114,263
New Zealand (1.0%)
Forest products
Carter Holt Harvey 4,570,000 10,977,140
Norway (1.0%)
Energy (0.7%)
Saga Petroleum 'A' 599,080 7,181,172
Shipping (0.3%)
First Olsen Tankers 408,000 (b) 3,358,656
Singapore (5.3%)
Automobiles (0.9%)
Cycle & Carriage 1,306,000 10,360,498
Banking (1.6%)
Development Bank of Singapore 791,500 8,178,570
Overseas Union Bank 1,714,350 9,027,767
Total 17,206,337
Beverages & tobacco (0.9%)
Fraser & Neave 916,600 10,571,148
Machinery & engineering (1.9%)
Keppel 1,467,000 10,855,800
Sembawang Shipyard 1,243,000 10,026,038
Total 20,881,838
Spain (4.2%)
Banking (1.4%)
Banco de Galicia 232,500 (d) 7,440,000
Banco Popular 70,000 8,232,420
Total 15,672,420
Energy (0.7%)
Repsol 240,000 7,702,800
Telecommunications (2.1%)
Telefonica 1,663,000 23,064,147
Sweden (1.9%)
Electronics (0.6%)
Asea 'B' Free Shares 94,500 7,231,518
<PAGE>
PAGE 115
Common & preferred stocks & warrants (87.5%)
Issuer Shares Value(a)
__________________________________________________________________________________
Health care (0.8%)
Astra 'A' Shares 400,000 9,115,600
Metals (0.5%)
Trelleborg 'B' Free 400,000 5,179,200
Switzerland (0.9%)
Banking (0.7%)
Swiss Bank Corp. (Rgd) 55,000 (b) 7,727,555
Insurance (0.2%)
Swiss Re (Rgd) 6,495 2,679,103
Thailand (0.4%)
Banking
Siam Commercial Bank 426,000 4,423,158
United Kingdom (13.4%)
Airline (1.2%)
British Airways 2,133,700 13,702,621
Appliances & durables (0.5%)
Thorn 335,000 5,265,195
Banking (0.5%)
National Westminster 802,000 6,124,072
Building materials (1.4%)
CRH 500,000 2,949,500
Tarmac 5,000,000 12,330,000
Total 15,279,500
Business & public service (0.3%)
WPP 2,000,000 3,656,000
Data processing (1.3%)
Rank Organisation 2,200,000 14,313,200
Energy (0.6%)
Shell Transport Trading 569,600 6,563,501
Health care (0.7%)
Wellcome 728,900 8,052,158
Industrial component (0.7%)
T & N 2,110,000 7,714,160
Insurance (0.6%)
Sun Alliance Group 1,150,000 6,077,750
Machinery & engineering (1.4%)
Siebe 1,750,000 15,513,750
Merchandising (0.9%)
Next 2,500,000 10,332,500
Metals (0.8%)
RTZ 650,000 8,817,900
Multi-industry (2.0%)
Ampolex 3,128,000 (b) 9,896,992
BTR 2,000,000 11,846,000
Total 21,742,992
Real estate (0.5%)
MEPC 857,000 6,188,397
Total common & preferred stocks & warrants
(Cost: $883,358,621) $972,523,612
__________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 116
<TABLE>
<CAPTION>
Short-term securities (12.7%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (0.5%)
FNMA Disc Nts
09-19-94 4.49% 5,900,000 5,886,784
Commercial paper (11.9%)
American Cyanamid
09-16-94 4.50 3,900,000 3,892,736
Ameritech
09-07-94 4.37 5,000,000 (c) 4,996,367
BBV Delaware
09-23-94 4.44 5,100,000 5,086,224
Bell
09-02-94 4.37 6,700,000 6,699,189
Bell South Telecom
09-27-94 4.74 3,800,000 3,787,046
CPC Int'l
10-13-94 4.80 2,200,000 (c) 2,187,757
Chevron
09-07-94 4.39 3,900,000 (c) 3,897,153
Colgate-Palmolive
09-26-94 4.72 6,050,000 (c) 6,030,211
Consolidated Railway
10-04-94 4.75 5,000,000 (c) 4,978,321
10-07-94 4.81 1,900,000 (c) 1,890,908
Dresdner U.S. Financial
09-16-94 4.59 4,000,000 3,992,367
Eiger Capital
09-15-94 4.51 3,100,000 (c) 3,094,575
09-23-94 4.71 4,832,000 (c) 4,818,121
General Mills
09-13-94 4.49 2,700,000 2,695,968
Goldman Sachs
09-09-94 4.39 4,300,000 4,295,824
J.C. Penney
09-08-94 4.44 900,000 899,225
09-21-94 4.64 4,700,000 4,687,937
10-03-94 4.72 3,200,000 3,186,631
Kellogg
09-29-94 4.72 4,500,000 4,483,550
Melville
09-06-94 4.36 4,600,000 4,597,221
Merrill Lynch
10-13-94 4.79 3,400,000 3,381,079
Metlife Funding
09-27-94 4.74 6,500,000 6,477,842
10-04-94 4.75 5,000,000 4,978,321
Motorola
09-08-94 4.36 3,000,000 2,997,462
Reed Elsevier
09-22-94 4.77 9,100,000 (c) 9,074,785
09-22-94 4.75 3,300,000 (c) 3,290,895
SBT Funding
09-19-94 4.64 3,609,000 (c) 3,600,663
St. Paul Companies
09-02-94 4.41 1,100,000 (c) 1,099,866
09-12-94 4.47 5,700,000 (c) 5,692,232
10-05-94 4.76 3,800,000 (c) 3,782,989
Sandoz
09-14-94 4.56 3,900,000 3,893,592
U.S.A.A. Capital
09-20-94 4.57 1,000,000 997,599
U.S. West
09-14-94 4.44 2,300,000 2,296,329
Total 131,760,985
Letters of credit (0.3%)
Bank of America
09-13-94 4.68 3,000,000 2,995,160
09-26-94 4.75 600,000 598,029
Total 3,593,189
<PAGE>
PAGE 117
Short-term securities (12.7%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
Total short-term securities
(Cost: $141,241,148) $ 141,240,958
Total investments in securities of unaffiliated issuers
(Cost: $1,028,599,769) $1,117,944,570
__________________________________________________________________________________
Investments in securities of affiliated issuers (e)
Common stock (1.0%)
Issuer Shares Value(a)
__________________________________________________________________________________
United Kingdom (1.0%)
Multi-industry
Hanson Trust 2,844,400 (b) $ 11,164,270
Total investments in securities of affiliated issuers
(Cost: $11,409,422) $ 11,164,270
Total investments in securities
(Cost: $1,040,009,191)(f) $1,129,108,840
__________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing.
(c) Commercial paper sold within terms of a private placement memorandum, exempt from registration under section 4(2) of the
Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors." These
securities have been determined to be liquid under guidelines established by the board of directors.
(d) Security is partially or fully on loan. See Note 6 to the financial statements.
(e) Investments representing 5 percent or more of the outstanding voting securities of the issuer.
(f) At Aug. 31, 1994, the cost of securities for federal income tax purposes was $1,040,061,190 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . $ 106,111,279
Unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . .(17,063,629)
__________________________________________________________________________________
Net unrealized appreciation . . . . . . . . . . . . . . . . . . . . $ 89,047,650
__________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 118
<TABLE>
<CAPTION>
Retirement Annuity Mutual Funds (Percentages represent value of
August 31, 1994 investments compared to total net assets)
International Equity Fund
Investments in securities of unaffiliated issuers
Bonds (0.4%)
Issuer Principal Value(a)
Amount
__________________________________________________________________________________
<S> <C> <C>
Banco de Galicia, 7.00% 2002 $ 4,000,000 $ 4,180,000
(Cost: $4,000,000)
__________________________________________________________________________________
Common & preferred stocks & warrants (87.5%)
Issuer Shares Value(a)
__________________________________________________________________________________
Argentina (2.4%)
Energy (0.6%)
YPF Sociedad Anonima Ads 244,600 6,329,025
Multi-industry (1.2%)
Perez Companc 'B' Shares 2,450,000 (b) 13,869,450
Telecommunications (0.6%)
Telefonica de Argentina 90,000 (d) 6,558,750
Australia (6.9%)
Banking (0.9%)
Westpac Banking 3,139,000 10,399,507
Energy (1.2%)
Broken Hill Proprietary 575,000 8,776,225
Broken Hill Proprietary
Warrants 06-29-95 2,376,000 (b) 4,067,712
Total 12,843,937
Industrial transportation (1.2%)
Brambles 1,183,616 13,183,115
Metals (2.6%)
CRA 858,800 12,634,666
Pasminco 10,154,600 (b) 16,399,679
Total 29,034,345
Merchandising (1.0%)
Woolworth 5,113,219 11,571,215
Belgium (0.3%)
Industrial equipment & services
Bekaert 3,400 2,806,850
Canada (0.4%)
Telecommunications
BCE Mobile Telecom 150,300 (b) 4,166,015
Chile (0.6%)
Telecommunications
Chile Telephone 76,000 6,935,000
Denmark (1.1%)
Telecommunications
TeleDanmark 'B' 220,000 11,832,040
Finland (0.3%)
Banking
Kansallis-Osake-Pankki 1,712,000 (b) 3,622,592
France (5.5%)
Banking (0.5%)
Credit Commercial de France 142,563 5,863,759
Building materials (0.7%)
Lafarge-Coppee 92,614 7,663,253
Electronics (0.3%)
Alcatel Alsthom Electricite 30,000 3,326,400
<PAGE>
PAGE 119
Common & preferred stocks & warrants (87.5%)
Issuer Shares Value(a)
__________________________________________________________________________________
Energy (1.8%)
Societe Nationale Elf Aquitaine 173,500 13,360,368
Total Petroleum 'B' 114,750 (d) 6,850,231
Total 20,210,599
Financial services (0.8%)
Cie de Suez 180,000 9,189,540
Multi-industry (1.4%)
Lyonnaise des Eaux Dumez 154,500 15,786,810
Germany (1.6%)
Chemicals (0.5%)
Henkel Pfd Shares 13,250 (b) 5,197,630
Construction (0.1%)
Hochtief 1,715 1,077,270
Merchandising (0.4%)
Karstadt 11,401 4,533,687
Multi-industry (0.6%)
Preussag 21,000 6,489,147
Hong Kong (5.0%)
Banking (0.6%)
Hang Seng Bank 997,000 7,159,457
Business & public service (0.9%)
Wharf (Holdings) 2,201,000 (d) 9,455,496
Merchandising (0.8%)
Dairy Farm Int'l 5,500,000 8,327,000
Multi-industry (1.9%)
Hutchison Whampoa 2,260,000 11,315,820
Swire Pacific 'A' 1,200,000 10,093,200
Total 21,409,020
Real estate (0.5%)
Great Eagle Holdings 8,689,000 5,335,046
Shipping (0.3%)
Shun Tak Enterprise 4,342,000 3,929,510
Italy (0.3%)
Automobiles
Fiat Priv 1,500,000 3,711,000
Japan (25.3%)
Appliances & durables (1.1%)
Matsushita Kotobuki Electronics 73,000 2,202,994
Sony 172,100 10,507,910
Total 12,710,904
Banking (2.6%)
Fuji Bank 499,000 11,269,416
Sumitomo Bank 425,000 8,451,550
Sumitomo Trust & Banking 669,0000 9,158,610
Total 28,879,576
Building materials (0.3%)
Nihon Cement 401,000 3,125,394
Broadcast publishing (0.3%)
Tokyo Broadcasting Systems 200,000 3,257,600
Chemicals (0.3%)
Konica 530,000 3,739,150
Construction (0.8%)
Maeda Road 510,000 9,326,370
Data processing (0.2%)
Fujitsu Warrants 6Dec98 11,000 (b) 1,942,222
<PAGE>
PAGE 120
Common & preferred stocks & warrants (87.5%)
Issuer Shares Value(a)
__________________________________________________________________________________
Electrical (0.9%)
Hitachi 1,022,000 10,131,086
Electrical & electronic (1.8%)
Matsushita Communications 125,000 3,609,875
Toshiba 1,409,000 10,685,856
Yokogawa Electric Corp 520,000 5,299,840
Total 19,595,571
Electronic component (1.4%)
Kyocera 145,000 10,751,460
Rohm 110,000 (d) 4,737,590
Total 15,489,050
Financial services (1.7%)
Daiwa Securities 261,000 4,094,829
Nomura Securities 471,000 10,401,564
Yamaichi Securities 500,000 4,301,500
Total 18,797,893
Food (0.3%)
Nichirei 423,000 3,055,752
Industrial component (1.5%)
Sumitomo Electric Industries 1,083,000 (d) 16,233,087
Insurance (1.6%)
Tokio Marine & Fire 1,400,000 17,347,400
Machinery & engineering (3.0%)
Chiyoda 64,000 1,611,648
Fanuc 239,000 11,010,013
Fuji Machine Mfg Co Ltd. 162,000 5,439,312
Ishikawajima-Harima 1,015,000 4,949,140
Mitsubishi Heavy Industries 1,340,000 10,510,960
Total 33,521,073
Merchandising (3.0%)
Amway 60,000 1,978,560
Aoyama Trading 74,000 2,883,928
Family Mart 75,500 4,896,477
Ito-Yokado 250,000 13,240,500
Joshin Denki 108,000 1,726,704
Keiyo 500 10,392
Marui 472,000 8,772,592
Total 33,509,153
Metals - steel (1.0%)
Nippon Steel 2,806,000 10,514,082
Miscellaneous materials & commodities (0.8%)
Asahi Glass 720,000 (d) 8,993,520
Real estate (1.1%)
Mitsui Fudosan 1,050,000 12,695,550
Recreation & goods (0.5%)
Nintendo 79,000 4,973,445
Telecommunications (0.3%)
Kokusai Denshin Denwa 29,000 3,361,622
Transportation (0.5%)
Nippon Express 536,000 5,730,912
Wholesale, int'l trade (0.3%)
Itochu 535,000 3,827,390
Malaysia (2.3%)
Banking (0.4%)
Malayan Banking 603,500 3,867,228
Leisure (0.4%)
Resorts World 656,000 4,306,640
Multi-industry (0.9%)
Sime Darby 3,100,000 9,690,600
<PAGE>
PAGE 121
Common & preferred stocks & warrants (87.5%)
Issuer Shares Value(a)
__________________________________________________________________________________
Utilities (0.6%)
Tenaga Nasional 1,261,000 7,095,647
Mexico (3.9%)
Building materials (2.0%)
Cemex ADR Series 'B' 1,051,975 19,067,047
Cemex ADR Series 'A' 202,500 (b) 3,543,750
Total 22,610,797
Construction housing (1.7%)
Empresas Ica Sociedad Controladora 530,000 (d) 15,635,000
Grupo Mexicano de Desarollo Series 'B' 144,500 2,691,312
Total 18,326,312
Merchandising (0.2%)
Benavides 'B' Shares 586,900 2,518,740
Netherlands (3.5%)
Broadcast publishing (1.2%)
Elsevier 140,000 13,514,480
Chemicals (0.9%)
Akzo Nobel N.V. 84,200 10,425,812
Financial services (0.3%)
International Nederlanden Groep 70,000 3,197,040
Household products (0.8%)
Unilever NV 75,000 8,605,800
Machinery, engineering (0.3%)
Stork VMF 116,035 3,114,263
New Zealand (1.0%)
Forest products
Carter Holt Harvey 4,570,000 10,977,140
Norway (1.0%)
Energy (0.7%)
Saga Petroleum 'A' 599,080 7,181,172
Shipping (0.3%)
First Olsen Tankers 408,000 (b) 3,358,656
Singapore (5.3%)
Automobiles (0.9%)
Cycle & Carriage 1,306,000 10,360,498
Banking (1.6%)
Development Bank of Singapore 791,500 8,178,570
Overseas Union Bank 1,714,350 9,027,767
Total 17,206,337
Beverages & tobacco (0.9%)
Fraser & Neave 916,600 10,571,148
Machinery & engineering (1.9%)
Keppel 1,467,000 10,855,800
Sembawang Shipyard 1,243,000 10,026,038
Total 20,881,838
Spain (4.2%)
Banking (1.4%)
Banco de Galicia 232,500 (d) 7,440,000
Banco Popular 70,000 8,232,420
Total 15,672,420
Energy (0.7%)
Repsol 240,000 7,702,800
Telecommunications (2.1%)
Telefonica 1,663,000 23,064,147
Sweden (1.9%)
Electronics (0.6%)
Asea 'B' Free Shares 94,500 7,231,518
<PAGE>
PAGE 122
Common & preferred stocks & warrants (87.5%)
Issuer Shares Value(a)
__________________________________________________________________________________
Health care (0.8%)
Astra 'A' Shares 400,000 9,115,600
Metals (0.5%)
Trelleborg 'B' Free 400,000 5,179,200
Switzerland (0.9%)
Banking (0.7%)
Swiss Bank Corp. (Rgd) 55,000 (b) 7,727,555
Insurance (0.2%)
Swiss Re (Rgd) 6,495 2,679,103
Thailand (0.4%)
Banking
Siam Commercial Bank 426,000 4,423,158
United Kingdom (13.4%)
Airline (1.2%)
British Airways 2,133,700 13,702,621
Appliances & durables (0.5%)
Thorn 335,000 5,265,195
Banking (0.5%)
National Westminster 802,000 6,124,072
Building materials (1.4%)
CRH 500,000 2,949,500
Tarmac 5,000,000 12,330,000
Total 15,279,500
Business & public service (0.3%)
WPP 2,000,000 3,656,000
Data processing (1.3%)
Rank Organisation 2,200,000 14,313,200
Energy (0.6%)
Shell Transport Trading 569,600 6,563,501
Health care (0.7%)
Wellcome 728,900 8,052,158
Industrial component (0.7%)
T & N 2,110,000 7,714,160
Insurance (0.6%)
Sun Alliance Group 1,150,000 6,077,750
Machinery & engineering (1.4%)
Siebe 1,750,000 15,513,750
Merchandising (0.9%)
Next 2,500,000 10,332,500
Metals (0.8%)
RTZ 650,000 8,817,900
Multi-industry (2.0%)
Ampolex 3,128,000 (b) 9,896,992
BTR 2,000,000 11,846,000
Total 21,742,992
Real estate (0.5%)
MEPC 857,000 6,188,397
Total common & preferred stocks & warrants
(Cost: $883,358,621) $972,523,612
__________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 123
<TABLE>
<CAPTION>
Short-term securities (12.7%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (0.5%)
FNMA Disc Nts
09-19-94 4.49% 5,900,000 5,886,784
Commercial paper (11.9%)
American Cyanamid
09-16-94 4.50 3,900,000 3,892,736
Ameritech
09-07-94 4.37 5,000,000 (c) 4,996,367
BBV Delaware
09-23-94 4.44 5,100,000 5,086,224
Bell
09-02-94 4.37 6,700,000 6,699,189
Bell South Telecom
09-27-94 4.74 3,800,000 3,787,046
CPC Int'l
10-13-94 4.80 2,200,000 (c) 2,187,757
Chevron
09-07-94 4.39 3,900,000 (c) 3,897,153
Colgate-Palmolive
09-26-94 4.72 6,050,000 (c) 6,030,211
Consolidated Railway
10-04-94 4.75 5,000,000 (c) 4,978,321
10-07-94 4.81 1,900,000 (c) 1,890,908
Dresdner U.S. Financial
09-16-94 4.59 4,000,000 3,992,367
Eiger Capital
09-15-94 4.51 3,100,000 (c) 3,094,575
09-23-94 4.71 4,832,000 (c) 4,818,121
General Mills
09-13-94 4.49 2,700,000 2,695,968
Goldman Sachs
09-09-94 4.39 4,300,000 4,295,824
J.C. Penney
09-08-94 4.44 900,000 899,225
09-21-94 4.64 4,700,000 4,687,937
10-03-94 4.72 3,200,000 3,186,631
Kellogg
09-29-94 4.72 4,500,000 4,483,550
Melville
09-06-94 4.36 4,600,000 4,597,221
Merrill Lynch
10-13-94 4.79 3,400,000 3,381,079
Metlife Funding
09-27-94 4.74 6,500,000 6,477,842
10-04-94 4.75 5,000,000 4,978,321
Motorola
09-08-94 4.36 3,000,000 2,997,462
Reed Elsevier
09-22-94 4.77 9,100,000 (c) 9,074,785
09-22-94 4.75 3,300,000 (c) 3,290,895
SBT Funding
09-19-94 4.64 3,609,000 (c) 3,600,663
St. Paul Companies
09-02-94 4.41 1,100,000 (c) 1,099,866
09-12-94 4.47 5,700,000 (c) 5,692,232
10-05-94 4.76 3,800,000 (c) 3,782,989
Sandoz
09-14-94 4.56 3,900,000 3,893,592
U.S.A.A. Capital
09-20-94 4.57 1,000,000 997,599
U.S. West
09-14-94 4.44 2,300,000 2,296,329
Total 131,760,985
Letters of credit (0.3%)
Bank of America
09-13-94 4.68 3,000,000 2,995,160
09-26-94 4.75 600,000 598,029
Total 3,593,189
<PAGE>
PAGE 124
Short-term securities (12.7%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
Total short-term securities
(Cost: $141,241,148) $ 141,240,958
Total investments in securities of unaffiliated issuers
(Cost: $1,028,599,769) $1,117,944,570
__________________________________________________________________________________
Investments in securities of affiliated issuers (e)
Common stock (1.0%)
Issuer Shares Value(a)
__________________________________________________________________________________
United Kingdom (1.0%)
Multi-industry
Hanson Trust 2,844,400 (b) $ 11,164,270
Total investments in securities of affiliated issuers
(Cost: $11,409,422) $ 11,164,270
Total investments in securities
(Cost: $1,040,009,191)(f) $1,129,108,840
__________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing.
(c) Commercial paper sold within terms of a private placement memorandum, exempt from registration under section 4(2) of the
Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors." These
securities have been determined to be liquid under guidelines established by the board of directors.
(d) Security is partially or fully on loan. See Note 6 to the financial statements.
(e) Investments representing 5 percent or more of the outstanding voting securities of the issuer.
(f) At Aug. 31, 1994, the cost of securities for federal income tax purposes was $1,040,061,190 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . $ 106,111,279
Unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . .(17,063,629)
__________________________________________________________________________________
Net unrealized appreciation . . . . . . . . . . . . . . . . . . . . $ 89,047,650
__________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 125
<TABLE>
<CAPTION>
Retirement Annuity Mutual Funds (Percentages represent value of
August 31, 1994 investments compared to total net assets)
Aggressive Growth Fund
_________________________________________________________________________________
Common & preferred stocks (86.8%)
Issuer Shares Value(a)
_________________________________________________________________________________
<S> <C> <C>
Airlines (0.8%)
Mesa Airlines 144,000 (b) $ 1,098,000
Southwest Airlines 200,000 5,300,000
Total 6,398,000
_________________________________________________________________________________
Automotive & related (0.5%)
Ek Chor China Motorcycle 110,000 2,653,750
Gentex 60,000 (b) 1,320,000
Total 3,973,750
_________________________________________________________________________________
Banks and savings & loans (5.8%)
Amsouth Bancorporation 135,000 4,471,875
B&T Financial 103,000 3,064,250
First Fidelity Bancorporation 150,000 6,881,250
First Tennesee National 35,000 1,662,500
Mercantile Bancorporation 190,000 7,267,500
Meridian Bancorporporation 55,000 1,766,875
PNC Financial 205,000 5,740,000
Premier Bancorporation 224,400 (b) 3,814,800
Roosevelt Financial Chesterfield MO 100,000 1,606,250
Signet Banking 200,000 7,825,000
Total 44,100,300
_________________________________________________________________________________
Beverages & tobacco (0.4%)
Celestial Seasonings 155,000 (b) 2,790,000
_________________________________________________________________________________
Building materials (0.3%)
Granite Construction 100,000 2,025,000
_________________________________________________________________________________
Chemicals (0.6%)
Airgas 180,000 (b) 4,455,000
_________________________________________________________________________________
Communications equipment (3.5%)
ADC Telecommunications 65,000 (b) 3,022,500
CommNet Cellular 160,000 (b) 3,900,000
ECI Telecom 225,000 4,064,062
Newbridge Networks 125,000 (b) 4,000,000
Tellabs 270,000 (b) 11,373,750
Total 26,360,312
_________________________________________________________________________________
Computers & office equipment (17.8%)
Adobe Systems 225,000 7,143,750
American Management Systems 168,300 (b) 4,417,875
Broderbund Software 50,000 (b) 2,775,000
Cabletron Systems 80,000 (b) 8,470,000
Cisco Systems 410,000 (b) 10,173,125
Compuware 107,700 (b) 4,469,550
Danka Business Systems 300,000 6,150,000
FORE Systems 30,000 (b) 1,140,000
Informix 240,000 (b) 5,670,000
Intuit 85,000 (b) 3,633,750
Lotus Development 69,000 (b) 2,820,375
Microsoft 70,000 (b) 4,068,750
NetFRAME Systems 180,000 (b) 1,710,000
Octus 35,000 (b) 87,500
Oracle Systems 475,000 (b) 20,276,563
Parametric Technology 610,000 (b) 17,613,750
Powersoft 150,000 (b) 6,562,500
Read-Rite 220,000 (b) 3,877,500
Sanmina 175,000 (b) 3,543,750
Silicon Graphics 305,000 (b) 8,006,250
Storage Technology 34,800 1,248,450
<PAGE>
PAGE 126
Common & preferred stocks (86.8%)
Issuer Shares Value(a)
_________________________________________________________________________________
Sun Microsystems 9,300 (b) 246,450
Sybase Software 112,500 (b) 4,893,750
Synopsys 170,000 (b) 7,055,000
Total 136,053,638
_________________________________________________________________________________
Electronics (7.6%)
Amtech 130,000 1,267,500
Applied Materials 220,000 (b) 11,110,000
Atmel 225,000 (b) 6,187,500
California Micro Devices 100,000 (b) 1,487,500
Cypress Semiconductor 100,000 (b) 1,975,000
Electroglas 13,900 (b) 611,600
LAM Research 107,500 (b) 3,816,250
Lattice Semiconductor 95,000 (b) 1,793,125
Linear Technology 170,000 7,565,000
Maxim Integrated Products 70,000 (b) 4,252,500
Medar 126,000 (b) 1,417,500
Microchip Technologies 187,500 (b) 6,890,625
Noise Cancellation Technologies 700,000 (b) 831,250
Sensormatic Electronics 155,000 5,366,875
Zilog 115,000 (b) 3,737,500
Total 58,309,725
_________________________________________________________________________________
Energy (0.4%)
Enron Oil & Gas 50,200 966,350
HS Resources 97,000 (b) 1,891,500
Total 2,857,850
_________________________________________________________________________________
Energy equipment and services (0.3%)
Corrpro 180,000 (b) 2,565,000
_________________________________________________________________________________
Financial services (3.9%)
ADVANTA B 260,000 7,670,000
First Financial Management 125,000 7,593,750
MBNA 135,000 3,408,750
Paychex 235,000 7,696,250
RFS Hotel 100,000 1,700,000
Tanger Factory 65,000 1,820,000
Total 29,888,750
_________________________________________________________________________________
Food (0.4%)
Performance Food Group 146,000 (b) 3,321,500
_________________________________________________________________________________
Foreign (5.0%)
Cifra ADR Series B 1,250,000 3,586,125
First Pacific 5,149,100 3,743,396
Grupo Insacell, Class D 2,700 (b) 79,987
Grupo Insacell, Class L 6,300 (b) 198,450
Grupo Sidek ADR 398,000 (b) 8,407,750
Grupo Situr 10,000(b,c) 330,000
Grupo Situr ADR 25,000 (b) 825,000
Grupo Televisa 33,000 1,934,625
Nokia Pref Free 23,000 2,496,489
Nokia 74,200 4,062,450
Renaissance Energy 110,300 (b) 2,222,578
Renaissance Energy 27,700(b, c) 558,163
SAP Preferred 7,500 3,419,340
Tarragon Oil & Gas 200,000 (b) 2,589,440
Television Broadcast 700,000 3,306,100
Total 37,759,893
_________________________________________________________________________________
Health care (8.9%)
Advanced Tissue Science 150,000 (b) 862,500
Affymax N.V. 105,000 (b) 1,732,500
Amgen 75,000 (b) 3,956,250
Amylin Pharmaceuticals 150,000 (b) 1,200,000
Anesta 90,000 (b) 725,625
Biogen 40,000 (b) 2,015,000
Cephalon 76,000 (b) 950,000
Chiron 73,000 (b) 5,091,750
Forest Labs 136,800 (b) 6,429,600
<PAGE>
PAGE 127
Common & preferred stocks (86.8%)
Issuer Shares Value(a)
_________________________________________________________________________________
Genentech 137,600 (b) 7,069,200
Gensia 70,000 (b) 787,500
Heart Technology 235,000 (b) 5,640,000
I-Stat 130,000 (b) 1,836,250
IDEXX Laboratories 385,400 (b) 12,429,150
Interpore 176,000 (b) 1,672,000
Molecular Dynamics 110,000 (b) 742,500
PLC Systems 430,000 (b) 2,472,500
ProCyte 85,000 (b) 913,750
STERIS 215,000 (b) 4,837,500
Target Therapeutics 8,500 (b) 210,375
Ventritex 195,000 (b) 4,875,000
Viagene 65,000 (b) 247,813
Viratek 131,250 1,410,937
Total 68,107,700
_________________________________________________________________________________
Health care services (10.4%)
Advocat 250,000 (b) 2,812,500
American Medical Resp 160,000 (b) 3,540,000
Beverly Enterprises 165,000 (b) 2,248,125
Cardinal Health 250,000 9,687,500
Coastal Healthcare 54,000 (b) 1,863,000
HBO & Company 529,000 17,324,750
HEALTHSOUTH Rehabilitation 22,600 (b) 813,600
Healthsource 128,900 (b) 4,221,475
Horizon Healthcare 120,000 (b) 3,045,000
Medaphis 60,000 (b) 2,115,000
Medicus Systems 80,000 980,000
Mid Atlantic Medical 280,000 (b) 7,420,000
PhyCor 260,000 (b) 8,027,500
Quantum Health Resources 100,000 (b) 3,587,500
Sun Healthcare 87,240 (b) 1,962,900
US Healthcare 60,000 2,595,000
United Healthcare 140,300 7,330,675
Total 79,574,525
_________________________________________________________________________________
Household products (0.5%)
AER Energy Resources 200,000 (b) 1,700,000
Duracraft 40,000 (b) 1,430,000
Valence Technology 190,000 (b) 570,000
Total 3,700,000
_________________________________________________________________________________
Industrial equipment & services (1.3%)
Calgon Carbon 200,000 2,550,000
Energy Biosystems 100,000 (b) 750,000
Ensys Environmental Products 45,000 (b) 213,750
Sanifill 260,000 (b) 6,240,000
Total 9,753,750
_________________________________________________________________________________
Industrial transportation (1.2%)
American Freightways 250,000 (b) 6,000,000
Heartland Express 91,800 (b) 2,937,600
Total 8,937,600
_________________________________________________________________________________
Insurance (0.9%)
Equitable of Iowa 180,000 7,020,000
_________________________________________________________________________________
Leisure time & entertainment (1.5%)
Imax 55,000 (b) 508,750
Int'l Game Technology 245,000 5,726,875
Iwerks Entertainment 20,000 (b) 102,500
Rio Hotel & Casino 220,000 (b) 3,162,500
Savoy Pictures Entertainment 52,400 (b) 615,700
Scientific Games 45,000 (b) 1,586,250
Total 11,702,575
_________________________________________________________________________________
Media (2.0%)
Catalina Marketing 75,000 (b) 3,862,500
Comcast 150,000 2,400,000
Comcast, Class A 65,000 1,040,000
Infinity Broadcasting, Class A 28,125 (b) 885,938
<PAGE>
PAGE 128
Common & preferred stocks (86.8%)
Issuer Shares Value(a)
_________________________________________________________________________________
Information Resources 150,000 (b) 2,137,500
Multimedia 75,500 (b) 2,359,375
Westcott Communications 158,000 (b) 2,251,500
Total 14,936,813
_________________________________________________________________________________
Multi-industry conglomorates(0.1%)
Career Horizon 40,000 (b) 700,000
_________________________________________________________________________________
Restaurants & lodging (5.1%)
Boston Chicken 90,500 (b) 3,665,250
Brinker Int'l 475,000 11,518,750
Buffets 325,000 (b) 6,418,750
Charter House Enterprises 215,000 (b) 1,639,375
Cracker Barrel Old Country 230,000 5,865,000
Hospitality Franchis 130,000 (b) 3,818,750
Outback Steakhouse 140,000 (b) 4,252,500
Starbucks 49,200 (b) 1,389,900
Total 38,568,275
_________________________________________________________________________________
Retail (6.2%)
Bed Bath & Beyond 150,000 (b) 4,406,250
Best Buy 180,000 (b) 6,412,500
CUC Int'l 205,000 7,021,250
Kohl's 200,000 (b) 9,725,000
Men's Wearhouse 62,000 (b) 1,379,500
PETsMART 255,000 (b) 8,861,250
Price/Costco 200,000 (b) 3,137,500
Tiffany & Co 50,000 1,893,750
Viking Office Products 160,000 (b) 4,600,000
Total 47,437,000
_________________________________________________________________________________
Textiles & apparel (0.5%)
Donnkenny 175,000 (b) 3,981,250
_________________________________________________________________________________
Utilities - gas (0.4%)
Enron 110,000 3,355,000
_________________________________________________________________________________
Utilities - telephone (0.5%)
ALC Communications 101,500 (b) 3,628,625
_________________________________________________________________________________
Total common & preferred stocks
(Cost: $603,076,122) $662,261,831
_________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (11.8%)
Annualized Amount Value(a)
yield on payable at
date of maturity
Issuer purchase
______________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (1.0%)
FHL Bank Disc Nts
09-01-94 4.31 $1,000,000 $ 1,000,000
FHLMC Disc Nts
09-21-94 4.65 2,000,000 1,994,855
FNMA Disc Nts
09-23-94 4.67 2,000,000 1,994,317
10-04-94 4.72 2,800,000 2,787,937
Total 7,777,109
______________________________________________________________________________________
Commercial paper (10.5%)
American General
09-02-94 4.39 2,200,000 (d) 2,199,732
Ameritech Capital Funding
09-07-94 4.37 6,300,000 (d) 6,295,422
Aon
09-08-94 4.38 2,400,000 2,397,961
Associates North America
09-08-94 4.38 4,100,000 4,096,516
<PAGE>
PAGE 129
Annualized Amount Value(a)
yield on payable at
date of maturity
Issuer purchase
______________________________________________________________________________________
Bellsouth Telecommunications
09-27-94 4.74 6,100,000 6,079,206
Beneficial
10-07-94 4.77 1,700,000 1,691,925
Consolidated Rail
10-07-94 4.81 6,200,000 (d) 6,170,333
Dresdner US Finance
09-16-94 4.59 4,000,000 3,992,367
Eiger Capital
09-15-94 4.58 3,800,000 (d) 3,793,247
Gateway Fuel
09-12-94 4.44 2,600,000 2,596,488
General Electric Capital
09-13-94 4.58 1,100,000 1,098,332
Hewlett-Packard
10-05-94 4.74 500,000 497,771
Lincoln National
09-23-94 4.77 4,900,000 (d) 4,885,776
Metlife Funding
09-02-94 4.41 2,300,000 2,299,719
09-15-94 4.47 1,700,000 1,696,714
10-04-94 4.75 4,100,000 4,082,223
Motorola
09-09-94 4.46 3,200,000 3,196,836
Nestle Capital
09-29-94 4.72 1,100,000 1,095,979
Paribas Finance
09-13-94 4.44 3,000,000 2,995,570
PepsiCo
09-29-94 4.72 3,100,000 3,088,667
Pfizer
09-12-94 4.46 3,200,000 3,195,649
Reed Publishing
09-13-94 4.58 4,000,000 (d) 3,993,933
Southwestern Bell
09-14-94 4.66 3,400,000 (d) 3,393,883
Toyota Motor Credit
09-16-94 4.63 3,000,000 2,994,225
09-28-94 4.72 2,100,000 2,092,597
______________________________________________________________________________________
Total commercial paper 79,921,071
______________________________________________________________________________________
Banker's Acceptance (0.3%)
First Bank
09-06-94 4.38 2,000,000 1,998,786
______________________________________________________________________________________
Total short-term securities
(Cost: $89,697,756) $ 89,696,966
______________________________________________________________________________________
Total investments in securities
(Cost: $692,773,878)(e) $751,958,797
______________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing.
(c) Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended.
These securities have been determined to be liquid under guidelines established by the board of directors.
(d) Commerical paper sold within terms of a private placement memorandum, exempt from registration under section 4(2) of the
Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors." These
securities have been determined to be liquid under guidelines established by the board of directors.
(e) At Aug. 31, 1994, the cost of securities for federal income tax purposes was $694,961,236 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation. . . . . . . . . . . . . . . . . . . . . . . . . .$ 91,901,778
Unrealized depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . (34,904,217)
______________________________________________________________________________________
Net unrealized appreciation. . . . . . . . . . . . . . . . . . . . . . . .$ 56,997,561
______________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 130
<TABLE>
<CAPTION>
Retirement Annuity Mutual Funds (Percentages represent value of
August 31, 1994 investments compared to total net assets)
Special Income Fund
Bonds (94.3%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
______________________________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. government obligations (8.2%)
Federal Home Loan Bank
Stepup Notes 8.00% 2014 $10,000,000 $ 9,962,500
Resolution Financial Trust Company Strips
Zero Coupon 8.18 2015 70,000,000 (h,k) 14,188,300
U.S. Treasury Bond 8.125 2019 50,000,000 (m) 52,682,000
U.S. Treasury Note 7.50 2001 50,000,000 (h) 51,302,995
_____________
Total 128,135,795
______________________________________________________________________________________________________
Mortgage backed securities (18.3%)
FHLMC
Collateralized Mtge Obligation 9.00 2007 18,169,719 18,964,645
Collateralized Mtge Obligation 7.00 2022 10,455,000 9,076,247
Collateralized Mtge Obligation 8.50 2022 10,000,000 10,171,900
Collateralized Mtge Obligation 7.00 2022 12,940,000 11,664,375
Inverse Floater 5.176 2023 5,200,000 (g) 2,063,750
FNMA
Inverse Floater
Collateralized Mtge Obligation 5.297 1999 4,347,681 (g) 3,380,322
9.00 2005 38,712,611 40,490,972
Inverse Floater 3.188 2007 10,000,000 (g) 387,500
8.50 2007 18,311,983 18,952,902
Inverse Floater 4.256 2023 450,569 (g) 180,228
8.50 2023 14,224,449 14,495,602
6.50 2023 73,829,991 67,785,160
6.00 2024 10,100,000 8,976,375
9.00 2024 15,000,000 15,574,200
GNMA
6.00 2023 20,136,765 17,481,229
6.00 2024 24,418,327 21,198,160
Adjustable Rate Mortgage 6.00 2024 24,906,783 (i) 24,486,481
____________
Total 285,330,048
______________________________________________________________________________________________________
Aerospace & defense (0.6%)
AEC Acquisition 10.00 2003 3,700,000 3,542,750
Fairchild Industries 12.25 1999 2,000,000 1,942,500
Rohr
Cv 7.75 2004 1,750,000 2,082,500
Sequa
Sr Sub Nt 9.375 2003 2,000,000 1,832,500
____________
Total 9,400,250
______________________________________________________________________________________________________
Airlines (2.1%)
AMR 9.50 2001 10,000,000 10,425,000
9.80 2021 5,000,000 4,887,500
Delta Air Lines
Sr Deb 10.375 2011 12,500,000 12,796,875
United Air Lines 10.67 2004 5,000,000 5,131,250
____________
Total 33,240,625
______________________________________________________________________________________________________
Automotive & related (4.1%)
Auburn Hills Trust
Gtd Exchangeable Certs 12.375 2020 12,500,000 (j) 17,125,000
Ford Motor Company 9.50 2011 7,500,000 8,371,875
Ford Motor Credit 7.50 2003 5,000,000 4,918,750
GMAC 6.375 1996 20,000,000 19,925,000
5.95 1998 10,000,000 9,487,500
6.00 2011 5,000,000 3,931,250
____________
Total 63,759,375
<PAGE>
PAGE 131
Bonds (94.3%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
______________________________________________________________________________________________________
Banks and savings & loans (3.1%)
BankAmerica 7.50 2002 7,500,000 7,350,000
Chase Manhatten 7.50 2003 10,000,000 (h) 9,762,500
Continental Bank 12.50 2001 7,700,000 9,557,625
Fleet Norstar Finl 9.90 2001 5,000,000 5,537,500
9.00 2001 5,000,000 5,343,750
H.F. Ahmanson 8.25 2002 5,000,000 5,081,250
Southbury Finance 7.75 1999 5,000,000 5,050,000
_____________
Total 47,682,625
______________________________________________________________________________________________________
Beverages & tobacco (0.6%)
RJR Nabisco
with attached put 8.375 2017 5,500,000 4,991,250
Royal Crown
Sr Nts 9.75 2000 5,000,000 4,731,250
_____________
Total 9,722,500
______________________________________________________________________________________________________
Building materials (1.4%)
Bacnotan Construction Industry
Cv 5.50 2004 1,750,000 (d) 1,706,250
Building Materials
Zero Coupon Cv 12.09 1999 6,400,000 (d,l) 3,384,000
Centex 9.05 1996 5,000,000 5,100,000
Masco 9.00 2001 5,000,000 5,318,750
Nortek 9.875 2004 2,500,000 2,284,375
Southdown
Sub Nts 14.00 2001 3,000,000 3,397,500
Toll
Cv 4.75 2004 1,750,000 1,382,500
_____________
Total 22,573,375
______________________________________________________________________________________________________
Chemicals (0.7%)
General Chemical 9.25 2003 5,000,000 4,656,250
G-I Holdings
Zero Coupon
Sub Nts 11.69 1998 4,000,000 (k) 2,415,000
Huntsman 11.00 2004 3,500,000 3,648,750
_____________
Total 10,720,000
______________________________________________________________________________________________________
Computers & office equipment (0.3%)
Conner Peripherals
Cv 6.50 2002 3,000,000 2,452,500
Convex Computer
Cv 6.00 2012 4,000,000 2,430,000
_____________
Total 4,882,500
______________________________________________________________________________________________________
Electronics (0.4%)
ADT Operations 9.25 2003 3,500,000 3,342,500
Berg Electronics 11.375 2003 3,000,000 (d) 3,015,000
_____________
Total 6,357,500
______________________________________________________________________________________________________
Energy (4.0%)
Atlantic Richfield 8.75 2032 10,000,000 10,450,000
Clark Oil 10.50 2001 2,500,000 2,581,250
Cross Timbers Oil
Cv Sub Nts 5.25 2003 750,000 630,000
Occidental Petroleum 10.98 2000 5,000,000 5,718,750
with attached put 9.25 2019 8,725,000 9,444,813
Oryx Energy 10.00 2001 5,000,000 5,225,000
PDV America 7.875 2003 7,500,000 6,225,000
Triton Energy
Zero Coupon Cv 9.98 1996 5,000,000 (l) 3,781,250
USX 9.125 2013 10,000,000 10,112,500
9.375 2022 7,500,000 7,715,625
_____________
Total 61,884,188
<PAGE>
PAGE 132
Bonds (94.3%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
______________________________________________________________________________________________________
Energy equipment & services (0.4%)
Global Marine
Sr Secured Nts 12.75 1999 2,500,000 2,734,375
McDermott 9.375 2002 3,000,000 3,243,750
_____________
Total 5,978,125
______________________________________________________________________________________________________
Financial services (2.4%)
American General Financial
with attached put 8.125 2009 4,500,000 4,725,000
Corporate Property Investors 7.05 2003 5,000,000 (d) 4,662,500
Developers Div Realty 7.00 1999 1,500,000 1,479,375
First Union 8.875 2003 4,000,000 3,425,000
GPA Delaware 8.75 1998 4,000,000 (b) 3,320,000
Goldman Sachs 7.125 2003 7,000,000 (d) 6,536,250
Household Finance
Sr Sub Nts 9.55 2000 6,500,000 7,117,500
Liberty Property Trust
Cv 8.00 2001 1,250,000 1,260,937
Malon Realty
Cv 9.50 2004 2,750,000 2,640,000
Taubman Realty
Cv 7.00 2003 2,000,000 1,750,000
_____________
Total 36,916,562
______________________________________________________________________________________________________
Food (0.2%)
Specialty Foods
Zero Coupon Cv 13.42 1999 1,000,000 (d,l) 360,000
10.25 2001 2,500,000 (d) 2,225,000
11.25 2003 1,000,000 (d) 840,000
_____________
Total 3,425,000
______________________________________________________________________________________________________
Foreign (15.5%)(c)
ABN Amro
(U.S. Dollar) 7.75 2023 5,000,000 4,700,000
Agnico Eagle Mines
(U.S. Dollar) Cv 3.50 2004 2,000,000 1,690,000
Alcan Aluminum
(U.S. Dollar) 8.875 2022 6,750,000 6,901,875
Argentina Euro
(U.S. Dollar) 5.00 2005 5,000,000 3,787,500
Argentina Republic
(U.S. Dollar) 4.25 2023 13,000,000 6,825,000
Avenor
(U.S. Dollar) 9.375 2004 4,000,000 3,785,000
Banca Italy N.Y.
(U.S. Dollar) 8.25 2007 5,000,000 4,993,750
Banco De Galicia
(U.S. Dollar) Cv 7.00 2002 1,500,000 1,567,500
BNCE
(U.S. Dollar) 7.25 2004 5,000,000 4,306,250
Brazil C Bonds
(U.S. Dollar) 4.00 2014 12,250,000 6,584,375
Brazil Idu
(U.S. Dollar) 4.313 2001 4,900,000 3,913,875
Doman Industries
(U.S. Dollar) 8.75 2004 5,000,000 4,425,000
Ford Capital BV
(U.S. Dollar) 9.875 2002 5,000,000 5,587,500
Govt of Canada
(Canadian Dollar) 7.659 2001 27,000,000 21,482,550
Govt of Sweden
(Swedish Krona) 1.327 2003 37,000,000 4,524,360
Guang Dong Enterprise
(U.S. Dollar) 8.75 2003 7,500,000 (d) 7,200,000
Gulf Canada Resources
(U.S. Dollar) 9.00 1999 5,000,000 4,806,250
Hanson Ind
(British Pound) Cv 14.582 2006 2,000,000 3,405,160
Henderson Land
(U.S. Dollar) Cv 4.00 1996 1,750,000 (d) 1,666,875
Hydro Quebec
(U.S. Dollar) 8.50 2029 20,000,000 19,700,000
<PAGE>
PAGE 133
Bonds (94.3%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
______________________________________________________________________________________________________
Korean Electric Power
(U.S. Dollar) 6.375 2003 3,100,000 2,712,500
Lend Lease Euro
(Australian Dollar) Cv 4.75 2003 1,200,000 (d) 1,368,000
MacMillan Bloedel
(U.S. Dollar) 8.50 2004 7,500,000 7,490,625
Methanex
(U.S. Dollar) 8.875 2001 5,000,000 4,931,250
Mexican/United States Govt Euro
(U.S. Dollar) 5.188 2019 2,000,000 1,732,500
(U.S. Dollar) 6.063 2019 6,500,000 5,630,625
(U.S. Dollar) 6.25 2019 11,500,000 7,705,000
Noranda Forest
(U.S. Dollar) 7.50 2003 5,000,000 4,818,750
Ogden
(U.S. Dollar) Cv 6.00 2002 2,200,000 1,925,000
Petroleos Mexicanos
(U.S. Dollar) 8.625 2023 5,000,000 4,275,000
Philip Long Distance Telephone
(U.S. Dollar) 10.625 2004 2,500,000 2,509,375
Province of Quebec
(U.S. Dollar) 11.00 2015 2,500,000 2,937,500
PT Indah Kiat Euro
(U.S. Dollar) 11.875 2002 5,000,000 5,037,500
Pueblo Extra Int'l
(U.S. Dollar) Sr Nts 9.50 2003 4,000,000 3,390,000
Qantas Air
(U.S. Dollar) 7.50 2003 7,500,000 (d) 7,031,250
Republic of Columbia
(U.S. Dollar) 7.25 2004 5,300,000 4,723,625
Republic of Italy
(U.S. Dollar) 6.875 2023 7,500,000 6,178,125
Republic of Venezuela
(U.S. Dollar) 6.75 2020 2,500,000 1,218,750
Roche Holding
(U.S. Dollar) 2.75 2000 5,000,000 3,965,600
Rogers Cable Systems
(Canadian Dollar) 7.039 2014 2,700,000 1,693,710
Rogers Communications
(U.S. Dollar) Cv 2.00 2005 4,000,000 2,580,000
Rogers Cantel Mobile
(U.S. Dollar) 10.75 2001 3,000,000 3,146,250
Tarkett
(U.S. Dollar) 9.00 2002 4,000,000 (d) 3,700,000
Telecom Argentina
(U.S. Dollar) 8.375 2000 5,000,000 (d) 4,631,250
Tolmex
(U.S. Dollar) 8.375 2003 5,000,000 4,587,500
United Engineers Malaysia
(U.S. Dollar) Cv with attached put 2.00 1999 1,500,000 (d) 1,436,250
United Kingdom Treasury
(British Pound) 12.292 2003 6,300,000 9,328,725
WMC Finance USA
(U.S. Dollar) 7.25 2013 10,000,000 8,800,000
______________
Total 241,337,480
______________________________________________________________________________________________________
Furniture & appliances (0.6%)
Black & Decker 6.625 2000 10,000,000 9,412,500
______________________________________________________________________________________________________
Health care (1.0%)
Alco Health Distribution
Pay-in-kind 11.25 2005 3,780,050 (k) 3,827,301
Alza
Zero Coupon Cv with attached put 5.04 1999 4,750,000 1,769,375
Chiron
Cv 1.90 2000 1,750,000 1,356,250
Healthtrust
10.75 2002 3,000,000 3,127,500
8.75 2005 5,500,000 5,060,000
_____________
Total 15,140,426
<PAGE>
PAGE 134
Bonds (94.3%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
______________________________________________________________________________________________________
Health care services (1.0%)
American Medical Int'l 11.00 2000 1,600,000 1,698,000
9.50 2006 1,400,000 1,358,000
Charter Medical
Sr Sub Nt 11.25 2004 5,000,000 (d) 5,175,000
Foundation Health 7.75 2003 3,250,000 3,124,063
Hillhaven 10.125 2001 5,000,000 5,018,750
_____________
Total 16,373,813
______________________________________________________________________________________________________
Household products (0.5%)
Mary Kay Cosmetics
Sr Sub Nts 12.75 2000 2,000,000 (e) 2,165,000
Revlon Consumer Products 10.50 2003 2,500,000 2,056,250
Sweetheart Cup
Sr Sub Nt 9.625 2000 4,000,000 3,835,000
_____________
Total 8,056,250
______________________________________________________________________________________________________
Industrial machines & services (0.9%)
American Standard
Zero Coupon Cv 10.56 1998 5,000,000 (l) 3,300,000
Clark Equipment 9.75 2001 5,000,000 5,406,250
IDEX 9.75 2002 3,000,000 3,018,750
Mascotech
Cv 4.50 2003 3,500,000 2,559,375
_____________
Total 14,284,375
______________________________________________________________________________________________________
Industrial transportation (0.4%)
CSX 9.23 1998 5,000,000 5,337,500
Interpool
Cv 5.25 2018 300,000 228,750
_____________
Total 5,566,250
______________________________________________________________________________________________________
Insurance (0.9%)
Americo Life 9.25 2005 2,500,000 2,209,375
NAC Re
Cv 5.25 2002 2,000,000 (e) 1,712,500
Nationwide Mutual 7.50 2024 4,000,000 (d) 3,495,000
New England Mutual
Credit Sensitive Nts 7.875 2024 5,000,000 (d) 4,262,500
USF&G
Zero Coupon Cv Sub Nts 4.55 2009 2,700,000 (k) 1,336,500
Uslico
Cv 8.50 2014 600,000 616,500
____________
Total 13,632,375
______________________________________________________________________________________________________
Leisure time & entertainment (1.3%)
Bally's Grand
1st Mtge 10.375 2003 3,500,000 3,027,500
Bally's Park Place 9.25 2004 3,500,000 2,940,000
Bell Sports 4.25 2000 1,500,000 1,087,500
GB Property
1st Mtge 10.875 2004 2,500,000 1,937,500
GNF Bally 10.625 2003 3,500,000 2,222,500
Kloster Cruise 13.00 2003 3,000,000 3,045,000
MGM Grand Hotel 12.00 2002 3,000,000 3,281,250
Showboat 9.25 2008 3,000,000 2,550,000
____________
Total 20,091,250
______________________________________________________________________________________________________
Media (4.2%)
Ackerley Communications
Sr Secured Nts 10.75 2003 2,500,000 (d) 2,400,000
Adelphia Communications 12.50 2002 3,000,000 2,996,250
Cablevision Systems 10.75 2004 2,000,000 2,047,500
Cablevision Industries
Sr Nts 10.75 2002 3,000,000 2,962,500
Comcast
Cv 1.125 2007 3,500,000 1,500,625
Continental Cablevision
Sr Deb 8.875 2005 5,000,000 4,600,000
<PAGE>
PAGE 135
Bonds (94.3%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
______________________________________________________________________________________________________
News America Holdings 7.50 2000 7,000,000 6,825,000
12.00 2001 5,000,000 5,725,000
8.875 2023 7,000,000 6,755,000
Panamsat
Sr Nts 9.75 2000 3,000,000 3,003,750
Robin Media Group 11.125 1997 3,000,000 2,906,250
Time Warner Entertainment 8.375 2033 7,500,000 6,637,500
Zero Coupon Cv with attached put 7.71 1995 10,000,000 (l) 9,350,000
Zero Coupon Cv 6.71 2012 4,750,000 (k) 1,466,562
Turner Broadcasting System
Sr Nts 8.375 2013 7,500,000 6,450,000
____________
Total 65,625,937
______________________________________________________________________________________________________
Metals (1.1%)
A.K. Steel 10.75 2004 2,000,000 2,045,000
Armco 11.375 1999 3,500,000 3,640,000
Inco Limited
Cv 5.75 2004 1,750,000 1,944,688
Kaiser Aluminum
Sr Nts 9.875 2002 3,000,000 2,797,500
Magma Copper 12.00 2001 5,000,000 5,525,000
Rep Engineered Steel 9.875 2001 2,000,000 1,950,000
____________
Total 17,902,188
______________________________________________________________________________________________________
Multi-industry (1.2%)
Albany Int'l
Cv 5.25 2002 4,250,000 3,750,625
Coltec Industries 9.75 2000 3,000,000 3,030,000
Mark IV Industries 8.75 2003 3,500,000 3,268,125
Tally
Zero Coupon Cv 12.62 1998 1,750,000 (l) 947,188
Tally Mfg & Tech 10.75 2003 2,500,000 2,340,625
Westinghouse Electric 8.375 2002 5,000,000 4,975,000
____________
Total 18,311,563
______________________________________________________________________________________________________
Natural gas (2.1%)
Coastal 9.75 2003 7,500,000 8,043,750
Tenneco Credit 9.625 2001 10,000,000 10,987,500
Transco Energy 11.25 1999 5,000,000 5,368,750
9.875 2020 6,000,000 5,925,000
Transcontinental Gas Pipeline 8.875 2002 2,400,000 2,418,000
____________
Total 32,743,000
______________________________________________________________________________________________________
Paper & packaging (4.3%)
Bowater 9.50 2012 10,000,000 10,487,500
Chesapeake 9.875 2003 5,000,000 5,400,000
Container Corp America
Sr Nts 10.75 2002 2,500,000 2,562,500
9.75 2003 3,000,000 2,895,000
Crown Cork & Seal 8.00 2023 5,000,000 4,781,250
Federal Paperboard 10.00 2011 6,000,000 6,637,500
Fort Howard 9.00 2006 5,000,000 4,337,500
Gaylord Container
Zero Coupon Cv 12.97 1996 3,000,000 (l) 2,490,000
Owens Illinois 11.00 2003 5,000,000 5,350,000
Plastic Container 10.75 2001 2,000,000 2,012,500
Pope & Talbot 8.375 2013 4,000,000 3,775,000
Repap Wisconsin
Sr Secured Nts 9.25 2002 3,000,000 2,613,750
Riverwood Int'l
Cv 6.75 2003 1,500,000 (d) 1,670,625
Scotia Pacific 7.95 2015 7,087,226 6,759,442
Silgan 11.75 2002 2,000,000 2,065,000
Zero Coupon Cv Sr Sub Nt 15.81 1995 2,000,000 (l) 1,602,500
Stone Container 12.625 1998 1,500,000 1,571,250
_____________
Total 67,011,317
______________________________________________________________________________________________________
Restaurants & lodging (0.8%)
Family Restaurant
Sr Nts 9.75 2002 2,000,000 1,790,000
Hammons (John Q) Hotel 8.875 2004 3,400,000 3,021,750
<PAGE>
PAGE 136
Bonds (94.3%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
______________________________________________________________________________________________________
Host Marriott 10.875 2001 4,589,411 4,658,252
Trump Taj Mahal
Pay-in-kind 11.35 1999 3,556,938 2,525,426
_____________
Total 11,995,428
______________________________________________________________________________________________________
Retail (2.9%)
Eye Care Center 12.00 2003 3,000,000 2,610,000
Food 4 Less Supermarket
Zero Coupon Cv 9.30 1997 5,000,000 (l) 3,593,750
General Host
Sr Nts 11.50 2002 1,100,000 1,018,875
Grand Union
Sr Sub Nt 11.25 2000 2,500,000 2,325,000
Sr Sub Nt 12.25 2002 4,000,000 3,210,000
J.C. Penney 9.05 2001 5,000,000 5,400,000
Kroger 9.25 2005 3,000,000 3,011,250
Pathmark Stores 9.625 2003 5,000,000 4,500,000
Penn Traffic
Sr Nts 10.25 2002 3,000,000 3,048,750
8.625 2003 2,500,000 2,300,000
9.625 2005 3,000,000 2,775,000
Purity Supreme 11.75 1999 2,500,000 2,300,000
Revco 9.125 2000 2,000,000 2,085,006
Specialty Retailers 10.00 2000 2,600,000 2,567,500
Stop & Shop 9.75 2002 3,000,000 3,153,750
Super-Rite Foods
Sr Sub Nts 10.625 2002 2,000,000 1,995,000
____________
Total 45,893,881
______________________________________________________________________________________________________
Telecommunications equipment & services (0.5%)
Celcaribe
Unit 13.50 2004 17,000 (d) 1,415,250
CenCall Communications
Zero Coupon Cv 10.38 1999 2,750,000 (l) 1,512,500
Comcast Cell
Zero Coupon with attached put 9.76 2000 4,000,000 (k) 2,435,000
Nextel Communications
Zero Coupon Cv 9.98 1999 5,000,000 (l) 2,675,000
____________
Total 8,037,750
______________________________________________________________________________________________________
Textiles & apparel (1.1%)
Dominion Textiles 8.875 2003 4,000,000 3,710,000
Synthetic Industries 12.75 2002 3,500,000 3,784,375
VF 9.50 2001 5,000,000 5,437,500
WestPoint Stevens
Sr Sub Nt 8.75 2001 2,500,000 2,315,625
9.375 2005 2,000,000 1,802,500
____________
Total 17,050,000
______________________________________________________________________________________________________
Utilities - electric (5.4%)
Arizona Public Service 8.75 2024 2,500,000 2,453,125
Boston Edison 9.875 2020 5,000,000 5,412,500
Cincinnati Gas & Electric 9.70 2019 5,000,000 5,381,250
EUA Power Series-C
Pay-in-kind 17.50 1992 1,106,700 (b,e) 110,670
EUA Power Series-B with interest certificate
Pay-in-kind 17.50 1993 2,000,000 (b,e) 200,000
Long Island Lighting 9.625 2024 9,000,000 8,583,750
Louisiana Power & Light
Sale Lease-Backed Obligation 10.30 2005 2,999,000 3,160,196
Sale Lease-Backed Obligation 10.67 2017 4,000,000 4,155,000
Midland Cogeneration Venture 10.33 2002 2,197,932 2,142,983
10.33 2002 1,893,357 (d) 1,846,023
11.75 2005 5,000,000 5,093,750
North Atlantic Energy 9.05 2002 5,000,000 4,887,500
Pacific Gas & Electric 8.25 2022 6,000,000 5,842,500
RGS Funding AEGCO
Sale Lease-Backed Obligation 9.82 2022 2,485,617 2,675,145
RGS Funding IME
Sale Lease-Backed Obligation 9.82 2022 2,485,617 2,675,145
Sithe Independent Funding 9.00 2013 7,500,000 (d) 7,462,500
Texas-New Mexico Power 11.25 1997 5,000,000 5,262,500
<PAGE>
PAGE 137
Bonds (94.3%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
______________________________________________________________________________________________________
1st Mtge 9.25 2000 3,500,000 3,504,375
Texas Utilities
1st Mtge 9.70 2002 6,000,000 6,607,500
1st Mtge 9.75 2021 6,350,000 6,770,688
_____________
Total 84,227,100
______________________________________________________________________________________________________
Utilities - telephone (1.6%)
Bell Telephone Company of Pennsylvania 7.375 2033 10,000,000 8,950,000
GTE 10.25 2020 7,000,000 8,155,000
New England Tel & Tel 9.00 2031 7,500,000 7,846,875
_____________
Total 24,951,875
______________________________________________________________________________________________________
Miscellaneous (0.2%)
KinderKare Learning Center 10.375 2001 3,000,000 3,007,500
______________________________________________________________________________________________________
Total bonds
(Cost: $1,507,357,776) $1,470,660,726
______________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Common & preferred stocks & warrants (1.8%)
__________________________________________________________________________________
Issuer Shares Value(a)
__________________________________________________________________________________
<S> <C> <C>
ABN Amro Holdings
6% Cv Pfd 41,100 1,378,864
ATL Richfield
9.00% Cv Pfd 120,000 3,720,000
Envirodyne Industries 90,890 (b) 454,450
Eye Care Center 3,000 (b) 30,000
Federated Department Stores
Warrants Exp 02-15-96 6,000 (b) 15,000
First Chicago
2.875% Cm Cv Pfd 42,500 2,231,250
First Madison Bank
$11.00 Pfd 25,000 (b) 2,590,625
Merry Land & Investment
1.75% Cm Cv Pfd 42,500 1,120,938
Nat'l Health Investors
8.50% Cv Pfd 40,000 1,005,000
Occidental Petroleum
3.875% Cv Pfd 31,000 (d) 1,674,000
Pittston Mineral
6.25% Cv Pfd 25,000 1,087,500
Property Trust America
1.75% Cv Pfd 52,745 1,279,066
Public Service of New Hampshire
10.60% Pfd 182,000 4,671,940
Purity Supreme
Warrants Exp 08-06-97 8,664 (b,e) 173
Sonoco Products
$2.25 Cv Pfd 49,600 2,492,400
Southdown, Warrants, Exp 10-15-96 30,000 (b,e) 165,000
Specialty Foods 15,000 (b) 11,250
Synder Oil
6% Cv Pfd 100,000 2,562,500
Triangle Wire Cable 84,444 (b,e) 823,329
_____________
Total 27,313,285
__________________________________________________________________________________
Total common & preferred stocks & warrants
(Cost: $28,433,027) $27,313,285
__________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 138
<TABLE>
<CAPTION>
Short-term securities (3.3%)
___________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
___________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (0.5%)
FHLMC Disc Nts
09-21-94 4.65 $1,100,000 $ 1,097,170
FNMA Disc Nts
09-23-94 4.67 2,000,000 1,994,317
09-29-94 4.65 4,700,000 4,683,075
____________
Total 7,774,562
___________________________________________________________________________________
Commercial paper (2.8%)
American Cyanamid
09-16-94 4.50 1,800,000 1,796,648
BBV Delaware
09-19-94 4.47 2,200,000 2,194,931
Bell South Telecom
09-27-94 4.74 3,500,000 3,488,069
Cafco
09-12-94 4.47 2,100,000 2,096,812
Ciesco
09-07-94 4.43 6,900,000 6,894,917
CPC Int'l
09-27-94 4.72 2,800,000 (f) 2,790,475
Eiger Capital
09-06-94 4.44 500,000 (f) 499,692
09-22-94 4.75 3,800,000 (f) 3,789,493
Fleet Funding
10-12-94 4.77 500,000 (f) 497,295
J.C. Penney
10-03-94 4.72 4,900,000 4,879,529
Lincoln Nat'l
09-27-94 4.74 3,200,000 (f) 3,189,092
Mobil Australia
09-27-94 4.75 1,400,000 (f) 1,395,217
St. Paul Companies
09-02-94 4.41 5,600,000 (f) 5,599,316
Southern California Gas
09-09-94 4.46 4,700,000 (f) 4,695,352
_____________
Total 43,806,838
___________________________________________________________________________________
Total short-term securities
(Cost: $51,581,930) $ 51,581,400
___________________________________________________________________________________
Total investments in securities
(Cost: $1,587,372,733)(n) $1,549,555,411
___________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing. For long-term debt securities, items identified are in default as to payment of interest or
principal.
(c) Foreign securities values are stated in U.S. dollars; principal amounts are denominated in the currency indicated.
(d) Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended.
These securities have been determined to be liquid under guidelines established by the board of directors.
(e) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). Information
concerning such security holdings at Aug. 31 1994, is as follows:
<PAGE>
PAGE 139
Security Acquisition Purchase
date cost
_________________________________________________________________________________________
<S> <C> <C>
EUA Power Series-C, Pay-in-kind 05-16-88 to 10-25-89 $ 712,153
17.50% 1992
EUA Power Series-B with interest certificate
17.50% 1993, Pay-in-kind 05-03-88 2,000,000
Mary Kay Cosmetics
12.75% 2000 12-05-90 2,000,000
NAC Re Cv
5.25% 2002 01-20-94 1,870,000
Purity Supreme Warrants
Exp 08-06-97 07-29-92 -
Southdown Warrants
Exp 10-15-96 10-31-91 90,000
Triangle Wire Cable
13.50% 2002 01-13-92 2,000,018
_________________________________________________________________________________________
(f) Commercial paper sold within terms of a private placement memorandum, exempt from registration under section 4(2) of the
Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors." These
securities have been determined to be liquid under guidelines established by the board of directors.
(g) Inverse floaters represent securitites that pay interest at a rate that increases (decreases) with a decline (increase) in the
LIBOR (London InterBank Offered Rate) Index. The rate shown is the rate in effect at Aug. 31, 1994.
(h) Security is partially or fully on loan. See Note 6 to the financial statements.
(i) Adjustable rate mortgage; interest rate varies to reflect current market conditions; shown is the effective rate on Aug. 31,
1994.
(j) Interest rate varies, rate shown is the effective rate on Aug. 31, 1994.
(k) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition.
(l) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield from the date of acquisition to
interest reset date shown in the maturity year column.
(m) Partially pledged as initial deposit on the following open interest rate futures purchase contracts (see Note 7 to the
financial statements).
Type of security Par value
_______________________________________________________________
U.S. Treasury Sept 94 T-Bond 73,500,000
U.S. Treasury Dec 94 T-Bond 1,500,000
_______________________________________________________________
(n) At Aug. 31, 1994, the cost of securities for federal income tax purposes was $1,586,926,032 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation . . . . . . . . . . . . . . .$ 25,568,839
Unrealized depreciation . . . . . . . . . . . . . . . (62,939,460)
_________________________________________________________________
Net unrealized depreciation . . . . . . . . . . . . .$(37,370,621)
_________________________________________________________________
</TABLE>
<PAGE>
PAGE 140
<TABLE>
<CAPTION>
Retirement Annuity Mutual Funds (Percentages represent value of
August 31, 1994 investments compared to total net assets)
Moneyshare Fund
______________________________________________________________________________________
Short-term securities
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
______________________________________________________________________________________
<S> <C> <C> <C>
Commercial paper (79.2%)
Banks and savings & loans (3.5%)
BBV Finance Deleware
09-19-94 4.47 $4,200,000 $ 4,190,676
Commerzbank US Finance
09-09-94 4.49 2,100,000 2,097,923
Total 6,288,599
______________________________________________________________________________________
Communications equipment (2.7%)
US West Communications
10-05-94 4.53 4,900,000 4,879,175
______________________________________________________________________________________
Energy (3.1%)
Chevron Transport
10-04-94 4.77 5,500,000 (b) 5,476,052
______________________________________________________________________________________
Energy equipment & services (4.4%)
ABB Treasury Center
10-06-94 4.63 3,000,000 (b) 2,986,583
10-21-94 4.73 5,000,000 (b) 4,967,500
Total 7,954,083
______________________________________________________________________________________
Financial services (23.8%)
A.I. Credit
10-27-94 4.66 2,100,000 2,084,941
Associates North America
09-08-94 4.38 1,500,000 1,498,725
09-12-94 4.49 5,000,000 4,993,155
CIT Group Holdings
09-23-94 4.58 5,200,000 5,185,541
Corporate Asset Funding
10-19-94 4.83 3,600,000 3,576,960
Eiger Capital
09-15-94 4.58 2,900,000 (b) 2,894,846
09-29-94 4.75 4,700,000 (b) 4,682,673
Fleet Funding
09-20-94 4.67 2,000,000 (b) 1,995,092
09-27-94 4.75 1,007,000 (b) 1,003,560
General Electric Capital
10-06-94 4.76 6,000,000 5,972,350
Goldman Sachs Group LP
09-07-94 4.68 4,000,000 3,996,900
Merrill Lynch
10-03-94 4.83 4,700,000 4,679,947
Total 42,564,690
______________________________________________________________________________________
Food (9%)
CPC Int'l
10-27-94 4.84 4,800,000 (b) 4,764,160
Cargill
09-27-94 4.74 5,100,000 5,082,615
General Mills
09-07-94 4.46 700,000 699,481
09-13-94 4.49 5,600,000 5,591,637
Total 16,137,893
______________________________________________________________________________________
Health care (3.1%)
Amgen
10-21-94 4.78 5,500,000 5,463,715
<PAGE>
PAGE 141
______________________________________________________________________________________
Short-term securities
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
______________________________________________________________________________________
Insurance (12.1%)
American General
09-22-94 4.50 5,800,000 5,784,877
Aon
09-26-94 4.77 4,700,000 4,684,497
Lincoln National
09-14-94 4.47 3,400,000 (b) 3,394,536
St. Paul Companies
09-21-94 4.58 3,300,000 (b) 3,291,640
USAA Capital
09-16-94 4.57 4,500,000 4,491,469
Total 21,647,019
______________________________________________________________________________________
Media (2.2%)
Gannett Company
10-06-94 4.78 4,000,000 3,981,528
______________________________________________________________________________________
Retail (5.1%)
Colgate Palmolive
09-22-94 4.64 700,000 (b) 698,113
Penney (JC) Funding
09-08-94 4.44 2,500,000 2,497,846
09-21-94 4.64 6,000,000 5,984,600
Total 9,180,559
______________________________________________________________________________________
Utilities - electric (2.7%)
Bayshore Fuel
10-04-94 4.77 4,900,000 4,878,665
______________________________________________________________________________________
Utilities - gas (4.4%)
Columbia Fuels
09-01-94 4.61 3,000,000 3,000,000
09-26-94 4.53 3,000,000 2,990,625
Southern California Gas
11-17-94 4.90 2,000,000 (b) 1,979,253
Total 7,969,878
______________________________________________________________________________________
Utilities - telephone (3.1%)
Southwestern Bell Capital
09-07-94 4.47 5,589,000 (b) 5,584,845
______________________________________________________________________________________
Total commercial paper
(Cost: $142,006,701) $142,006,701
______________________________________________________________________________________
Letters of credit (20.8%)
Domestic (4.3%)
Bank of America
Hyundai Motor Finance
09-19-94 4.53 4,000,000 3,991,000
First Bank
Builders Finance
10-06-94 4.80 2,200,000 2,189,840
First Chicago
Commed Fuel
09-14-94 4.73 1,500,000 1,497,454
Total 7,678,294
______________________________________________________________________________________
International (16.5%)(c)
Banque Paribas
Cogentrix of Richmond
09-15-94 4.68 2,000,000 1,996,360
Barclays Bank
Centerior Fuel
09-22-94 4.78 5,000,000 4,986,088
09-28-94 4.72 3,500,000 3,487,610
Canadian Imperial Bank
Commed Fuel
09-02-94 4.62 2,700,000 2,699,653
<PAGE>
PAGE 142
______________________________________________________________________________________
Short-term securities
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
______________________________________________________________________________________
Canadian Imperial Bank
Hahn Issuing
09-08-94 4.48 5,000,000 4,995,644
Credit Suisse
Pemex Capital
09-12-94 4.50 900,000 898,763
Credit Suisse
Commed Fuel
10-18-94 4.82 1,100,000 1,093,078
National Australia
Woodside Finance
09-13-94 4.73 2,100,000 (b) 2,096,689
09-14-94 4.52 4,000,000 (b) 3,993,471
Toronto Dominion
Franciscan Services
09-15-94 4.65 3,400,000 3,393,852
Total 29,641,208
______________________________________________________________________________________
Total letters of credit
(Cost: $37,319,502) $ 37,319,502
______________________________________________________________________________________
Total investments in securities
(Cost: $179,326,203)(d) $179,326,203
______________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Commercial paper sold within terms of a private placement memorandum, exempt from registration under Section
4(2) of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited
investors." These securities have been determined to be liquid under guidelines established by the board of directors.
(c) Foreign securities values are stated in U.S. dollars; principal amounts are denominated in U.S. dollars.
(d) At Aug. 31, 1994, this cost also represents the cost of securities for federal income tax purposes.
</TABLE>
<PAGE>
PAGE 143
<TABLE>
<CAPTION>
Investments in securities
Retirement Annuity Mutual Funds (Percentages represent value of
August 31, 1994 investments compared to total net assets)
Managed Fund
Investments in securities of unaffiliated issuers
Bonds (33.5%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. government obligations (7.9%)
Federal Home Loan Bank
Stepup Notes 8.00% 2014 $ 7,000,000 $ 6,973,750
Resolution Financial Trust
Company Strips 6.36 1999 26,000,000 (f) 19,367,660
U.S. Treasury Bonds 5.50 1996 5,000,000 (h) 4,964,400
5.625 1997 15,000,000 14,671,200
6.875 1997 5,000,000 5,064,000
5.125 1998 7,500,000 7,156,124
5.375 1998 50,000,000 (h) 47,956,495
6.375 1999 15,000,000 (l) 14,762,098
6.25 2003 13,500,000 12,738,194
U.S. Treasury Notes 6.75 1997 33,500,000 33,849,737
8.00 1999 28,000,000 29,440,037
Total 196,943,695
_____________________________________________________________________________________________
Mortgage-backed securities (5.4%)
FHLMC 10.00 2005 13,250,272 14,099,118
Inverse Floater
Collateralized Mtge Obligation 6.01 2000 1,350,401 (g) 1,074,834
Collateralized Mtge Obligation 8.50 2022 7,000,000 7,120,330
6.00 2023 10,459,105 7,218,247
6.50 2023 4,879,819 3,409,920
FNMA 7.40 2004 10,000,000 9,991,599
6.50 2023 2,869,004 2,634,104
8.50 2023 9,483,293 9,664,068
6.50 2024 19,693,507 18,081,101
6.00 2024 6,182,265 3,778,044
6.00 2024 17,170,000 15,259,837
Collateralized Mtge Obligation 4.50 2007 4,500,000 3,527,190
7.50 2014 5,937,510 5,330,519
7.00 2016 4,626,053 4,137,079
6.50 2019 7,431,008 6,625,486
7.00 2019 5,551,859 4,928,108
7.00 2022 12,079,705 9,844,114
6.50 2023 5,771,508 4,206,044
6.50 2023 4,176,655 2,881,266
Total 133,811,008
_____________________________________________________________________________________________
Aerospace & defense (0.2%)
United Technologies 8.875 2019 4,000,000 4,255,000
_____________________________________________________________________________________________
Airlines (0.4%)
Delta 9.75 2021 5,000,000 4,800,000
United 10.67 2004 4,750,000 4,874,688
Total 9,674,688
_____________________________________________________________________________________________
Automotive & related (1.1%)
Auburn Hills Trust
Gtd Exchangable Certs 12.375 2020 6,450,000 8,836,500
GMAC 6.05 1996 10,000,000 9,925,000
8.375 1997 1,400,000 1,445,500
5.95 1998 7,000,000 6,685,000
Total 26,892,000
_____________________________________________________________________________________________
Banks and savings & loans (1.4%)
Chrysler Building NY 9.125 1999 1,460,000 1,574,975
Citicorp 7.75 2006 9,500,000 9,321,875
First USA Bank 6.88 1996 6,700,000 6,758,625
<PAGE>
PAGE 144
Investments in securities of unaffiliated issuers
Bonds (33.5%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________
Midatlantic Bank 9.20 2001 10,980,000 11,693,700
Riggs Natl
Sub Nts 8.50 2006 4,900,000 4,679,500
Total 34,028,675
_____________________________________________________________________________________________
Beverages & tobacco (0.7%)
American Brands 7.875 2023 5,500,000 5,211,250
Coca-Cola 7.375 2093 3,000,000 2,752,500
RJR Nabisco
attached put 8.375 2017 5,000,000 4,537,500
RJR Nabisco Capital 10.50 1998 4,850,000 5,171,313
Total 17,672,563
_____________________________________________________________________________________________
Building materials (0.6%)
Building Material 12.09 2004 6,400,000 (d,f) 3,384,000
Kaufman & Broad Home 9.375 2003 2,500,000 2,321,875
NVR
Sr Nts 11.00 2003 5,000,000 4,775,000
Nortek 9.875 2004 3,100,000 2,832,625
Owens Corning Fiberglass 9.375 2012 1,500,000 1,556,250
Total 14,869,750
_____________________________________________________________________________________________
Chemicals (0.1%)
Praxair 8.70 2022 3,000,000 3,056,250
_____________________________________________________________________________________________
Communications equipment (0.4%)
Celcaribe
Unit 13.50 2004 17,000 (d) 1,415,250
Comcast Cellular
attached put 11.73 2000 5,000,000 (f) 3,043,750
Dial Call 12.62 2004 5,000,000 (f) 3,075,000
Nextel Communications
Sr Nts 11.36 2004 3,000,000 (j) 1,605,000
Total 9,139,000
_____________________________________________________________________________________________
Computers & office equipment (0.7%)
Conner Peripherals
Cv 6.75 2001 10,000,000 8,062,500
Silicon Graphics
Cv 3.45 2013 20,000,000 (d,f) 9,400,000
Total 17,462,500
_____________________________________________________________________________________________
Energy (0.5%)
BP North America 9.50 1998 2,000,000 2,147,500
Standard Oil 9.00 2019 4,000,000 4,140,000
USX 9.375 2012 5,000,000 5,168,750
Total 11,456,250
_____________________________________________________________________________________________
Financial services (1.2%)
American General Financial
attached put 8.125 2009 2,000,000 2,100,000
Associates Corp NA 7.25 1998 10,000,000 10,062,500
AVCO Financial 7.25 1999 4,750,000 4,744,063
Camden Property Trust 7.33 2001 2,000,000 1,985,000
Corporate Property Investors 7.05 2003 2,000,000 (d) 1,865,000
7.18 2013 2,200,000 (d) 2,024,000
General Electric Capital 8.65 2018 1,000,000 1,037,500
Int'l Lease Finance 9.82 1995 2,000,000 2,092,500
Liberty Property Trust
Cv 8.00 2001 1,250,000 1,260,937
Salomon Brothers 6.75 2006 4,000,000 3,530,000
Total 30,701,500
_____________________________________________________________________________________________
Foreign (3.6%)(c)
ABN Amro
(U.S. Dollar) 7.75 2023 3,500,000 3,290,000
Doman Inds
(U.S. Dollar) 8.75 2004 5,000,000 4,425,000
<PAGE>
PAGE 145
Investments in securities of unaffiliated issuers
Bonds (33.5%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________
Government of Canada
(Canadian Dollar) 7.757 2001 5,500,000 4,376,075
Gov't Certificates of Israel
(U.S. Dollar) 9.25 2001 3,000,000 3,277,500
Guang Dong Enterprise
(U.S. Dollar) 8.75 2003 5,000,000 (d) 4,800,000
Henderson Capital Int'l Euro
(U.S. Dollar) Cv 4.00 1996 3,000,000 (d) 2,857,500
Hydro Quebec
(Canadian Dollar) 10.875 2001 5,000,000 3,947,600
(U.S. Dollar) 9.375 2030 2,550,000 2,754,000
(U.S. Dollar) 9.50 2030 10,000,000 10,937,500
KFW Int'l Finance
(U.S. Dollar) 8.20 2006 4,000,000 4,160,000
Methanex
(U.S. Dollar) 8.875 2001 5,000,000 4,931,250
Mexican U.S. Series D
(Euro Dollar) 5.813 2019 3,500,000 3,031,875
Philippines Long Distance Telephone
(U.S. Dollar) 10.625 2004 1,400,000 1,405,250
PT Indah Kiat Pulp&Paper
(U.S. Dollar) 11.875 2002 2,500,000 2,518,750
Republic of Argentina
(U.S. Dollar) 4.25 2023 5,000,000 2,625,000
(U.S. Dollar) 5.00 2005 3,500,000 2,651,250
Republic of Brazil
(U.S. Dollar) 4.00 2014 2,000,000 1,075,000
Republic of Colombia
(U.S. Dollar) 7.25 2004 5,000,000 4,456,250
Republic of Italy
(U.S. Dollar) 6.875 2023 5,000,000 4,118,750
Roche Holding
(U.S. Dollar) 2.75 2000 7,000,000 5,551,840
Rogers Cable System
(Canadian Dollar) 9.65 2014 5,000,000 3,136,500
Swedish Govt
(Swedish Krona) 10.25 2003 22,000,000 2,690,160
TJIWI Kimia
(U.S. Dollar) 13.25 2001 2,400,000 (h) 2,514,000
U. K. Treasury
(U.S. Dollar) 8.00 2003 3,700,000 5,478,775
Total 91,009,825
_____________________________________________________________________________________________
Health care (0.8%)
Johnson & Johnson 8.00 1998 15,000,000 15,450,000
Schering-Plough 7.44 1996 5,000,000 (d,f) 4,331,250
Total 19,781,250
_____________________________________________________________________________________________
Health care services (0.6%)
Charter Medical
Sr Sub 11.25 2004 5,000,000 (d) 5,175,000
Foundation Health
Sr Nts 7.75 2003 9,600,000 9,228,000
Total 14,403,000
_____________________________________________________________________________________________
Household products (0.3%)
Sweetheart Cup 9.625 2000 7,000,000 6,711,250
_____________________________________________________________________________________________
Industrial equipment & services (--%)
Ingersoll-Rand 8.25 1996 1,010,000 1,040,300
_____________________________________________________________________________________________
Insurance (0.5%)
Nationwide Mutual 7.50 2024 4,000,000 (d) 3,495,000
New England Mutual
Credit Sensitive Nts 7.875 2024 5,000,000 (d) 4,262,500
Principal Mutual 8.00 2044 5,000,000 (d) 4,443,750
Total 12,201,250
_____________________________________________________________________________________________
Media (1.6%)
Aldelphia Communications 9.875 2005 3,000,000 2,647,500
<PAGE>
PAGE 146
Investments in securities of unaffiliated issuers
Bonds (33.5%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________
Continental Cablevision
Sr Deb 8.875 2005 5,000,000 4,600,000
News America Holdings 7.75 2024 5,000,000 4,256,250
Newscorp 7.75 2024 3,750,000 3,192,187
Rogers Communications
Cv Zero Coupon attached put 5.49 2013 25,000,000 (f) 9,187,500
Time Warner
Zero Coupon Cv 6.68 2012 36,900,000 (f) 11,392,875
Time Warner Entertainment 8.375 2033 5,000,000 4,425,000
Total 39,701,312
_____________________________________________________________________________________________
Metals (0.2%)
A.K. Steel 10.75 2004 2,000,000 2,045,000
Wheeling Pitts 9.375 2003 4,500,000 4,128,750
Total 6,173,750
_____________________________________________________________________________________________
Multi-industry conglomerates (0.3%)
Crane 7.25 1999 4,650,000 4,586,062
Tally Inds 11.49 2005 5,000,000 (j) 2,706,250
Total 7,292,312
_____________________________________________________________________________________________
Paper & packaging (1.1%)
Container 10.75 2002 2,500,000 2,562,500
Crown Cork & Seal 8.00 2023 4,000,000 3,825,000
Federal Paperboard 10.00 2011 3,000,000 3,318,750
Fort Howard
Sr Sub Nts 9.00 2006 7,000,000 6,072,500
Int'l Paper 5.125 2012 4,325,000 3,135,625
Pope and Talbot 8.375 2013 3,800,000 3,586,250
Repap Wisconsin
Sr Sec Nts 9.25 2002 5,000,000 4,356,250
Scott Paper 8.875 1998 200,000 210,750
Total 27,067,625
_____________________________________________________________________________________________
Restaurant & lodging (0.1%)
Flagstar 11.25 2004 2,000,000 1,735,000
_____________________________________________________________________________________________
Retail (0.6%)
Broadway Stores
Cv 6.25 2000 10,000,000 (d) 11,400,000
J.C. Penney 9.05 2001 2,500,000 2,700,000
Total 14,100,000
_____________________________________________________________________________________________
Utilities - electric (0.8%)
Arizona Public Service
Sale Lease-Backed Obligation 8.00 2015 3,600,000 3,402,000
Carolina Power & Light 8.125 2003 407,027 414,150
Long Island Lighting 8.20 2023 5,000,000 3,925,000
Pennsylvania Power & Light 9.25 2019 2,130,000 2,284,425
Potomac Electric 5.125 2001 1,000,000 883,750
RGS Funding AEGCO
Sale Lease-Backed Obligation 9.82 2022 1,491,370 1,605,087
RGS Funding IME
Sale Lease-Backed Obligation 9.82 2022 1,491,370 1,605,087
Sithe Independent Funding 9.00 2013 1,500,000 (d) 1,492,500
Texas Utilities 7.375 2025 5,000,000 4,775,000
Total 20,386,999
_____________________________________________________________________________________________
Utilities-gas (1.0%)
ARKLA 9.875 1997 10,000,000 10,525,000
Coastal 10.25 2004 5,000,000 5,587,500
Transcontinental Energy 9.375 2001 10,000,000 10,037,500
Total 26,150,000
_____________________________________________________________________________________________
Utilities - telephone (1.2%)
AT & T
Zero Coupon Cv 0.00 1999 5,000,000 (d,f) 4,850,000
<PAGE>
PAGE 147
Investments in securities of unaffiliated issuers
Bonds (33.5%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________
GTE 9.375 2000 5,000,000 5,468,750
GTE South 9.00 2029 2,000,000 2,100,000
Mountain States Tel & Tel 5.50 2005 1,210,000 1,031,525
New England Tel & Tel 4.625 1999 1,500,000 1,361,250
6.375 2008 1,165,000 1,023,744
New Jersey Bell 5.875 2006 2,513,000 2,180,027
New York Telephone 4.875 2006 3,200,000 2,532,000
Pacific Northwest Bell 4.375 2002 912,000 739,860
U.S. WEST Communications 6.875 2033 10,000,000 8,137,500
Wisconsin Bell 4.375 2002 1,000,000 818,750
Total 30,243,406
_____________________________________________________________________________________________
Miscellaneous (0.3%)
KinderKare Learning Center 10.375 2001 2,750,000 2,756,875
Carco Auto
Asset-Backed Obligation 7.875 1998 3,325,000 3,387,045
Standard Credit Card Trust 5.95 2004 3,000,000 2,684,550
Total 8,828,470
_____________________________________________________________________________________________
Total bonds
(Cost: $860,935,086) $836,788,628
_____________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Common & preferred stocks (54.3%)
Issuer Shares Value(a)
__________________________________________________________________________________
<S> <C> <C>
Aerospace & defense (2.0%)
Allied Signal 260,000 $ 9,717,500
Northrop 350,000 15,750,000
Raytheon 120,000 8,115,000
United Technologies 260,000 (h) 16,542,500
Total 50,125,000
__________________________________________________________________________________
Airlines (0.8%)
AMR
Cv Pfd, $3.00 200,000 (d) 9,125,000
British Airways 50,000 3,200,000
Mesa Airlines 600,000 (b) 4,575,000
Southwest Airlines 110,000 2,915,000
Total 19,815,000
__________________________________________________________________________________
Automotive & related (1.4%)
Chrysler 160,000 (h) 7,700,000
General Motors 120,000 6,030,000
General Motors
Class H 500,000 18,750,000
Goodyear 50,000 (h) 1,750,000
Total 34,230,000
__________________________________________________________________________________
Banks and savings & loans (2.2%)
BankAmerica 300,000 (h) 14,812,500
Citicorp
Cv Pfd, $1.22, 11-30-95 600,000 11,700,000
First Chicago 450,400 (h) 23,420,800
First Chicago NEXTELL
Cv Pfd, $5.50 170,000 4,696,250
Total 54,629,550
__________________________________________________________________________________
Beverages & tobacco (0.7%)
Coca-Cola 365,000 16,790,000
__________________________________________________________________________________
Building materials (0.2%)
Tyco Int'l 100,000 4,400,000
<PAGE>
PAGE 148
Common & preferred stocks (54.3%)
Issuer Shares Value(a)
__________________________________________________________________________________
Chemicals (1.2%)
Dow Chemical 200,000 15,025,000
Henkel
Pfd Shares ORD 13,000 (b) 5,099,562
Rohm & Haas 150,000 9,337,500
Total 29,462,062
__________________________________________________________________________________
Communications equipment (2.4%)
LIN Broadcasting 180,000 (b) 24,120,000
Motorola 350,000 18,900,000
Northern Telcom 300,000 10,612,500
Scientific Atlanta 160,000 7,160,000
Total 60,792,500
__________________________________________________________________________________
Computers & office equipment (3.1%)
Computer Associates 404,000 16,210,500
Hewlett Packard 90,000 8,088,750
Oracle Systems 250,000 (b) 10,671,875
Pitney Bowes 410,000 15,785,000
Xerox 250,000 26,781,250
Total 77,537,375
__________________________________________________________________________________
Electronics (1.4%)
Intel 260,000 17,095,000
Vishay Intertechnology 390,000 16,770,000
Total 33,865,000
__________________________________________________________________________________
Energy (2.1%)
Amoco 310,000 17,941,250
Atlantic Richfield
9% Cv Pfd 280,000 8,680,000
Mobil 200,000 16,850,000
Ultramar 100,000 2,612,500
Vastar 230,000 6,296,250
Total 52,380,000
__________________________________________________________________________________
Financial services (5.2%)
Aimco 100,000 1,837,500
Bay Apartment 100,000 2,037,500
Dean Witter 305,700 (h) 13,030,462
Duke Realty 170,000 4,335,000
Equity Residential 100,000 3,300,000
Federal National Mortgage 220,000 19,552,500
First Financial Management 230,000 (h) 13,972,500
First Industrial 170,000 3,761,250
First Madison Bank
11.50% Pfd 20,000 (b) 2,072,500
Merry Land & Investment 110,000 2,158,750
National Golf 155,000 (b) 3,332,500
Oasis 120,000 3,015,000
Paragon 200,000 4,225,000
Post Properties 80,000 2,380,000
RFS Hotel 170,000 2,890,000
ROC Communities 190,000 3,942,500
SBH-Hewlett ELK
5.25% Cv Pfd 75,000 (b,k) 6,337,500
Southwestern Property Trust 100,000 1,225,000
Summit Properties 140,000 2,782,500
Travelers 850,000 (h) 31,450,000
Weeks 170,000 (b) 3,421,250
Total 131,059,212
__________________________________________________________________________________
Foreign (4.8%)
BBC Brown Boveri 5,000 4,534,355
British Gas ADR 100,000 4,637,500
Cable & Wireless 140,000 2,992,500
Cemex ADR 160,000 2,900,000
Empressa ICA 100,000 2,950,000
Ericsson 90,000 4,871,250
Grupo Carso ADR 200,000 (b) 4,586,780
Grupo Televisa 200,000 (d) 11,725,000
<PAGE>
PAGE 149
Common & preferred stocks (54.3%)
Issuer Shares Value(a)
__________________________________________________________________________________
Grupo Tribasa 100,000 (b) 3,412,500
New Zealand Telecom 2,000,000 6,262,000
News Corp Ltd ADR 170,000 (h) 9,222,500
Royal Dutch Petroleum 240,000 (h) 27,030,000
RTZ 600,000 8,139,600
Telefonos de Mexico ADR 210,000 13,177,500
Tsudakoma 119,000 1,224,748
YPF 500,000 12,937,500
Total 120,603,733
__________________________________________________________________________________
Food (0.2%)
Pet 200,000 4,050,000
__________________________________________________________________________________
Furniture & appliances (0.7%)
Black & Decker 150,000 3,468,750
Mohawk Inds 200,000 (b) 3,550,000
Singer 300,000 9,637,500
Total 16,656,250
__________________________________________________________________________________
Health care (1.4%)
Abbott Labs 210,000 6,300,000
Genetech Red Comm 340,000 (b,h) 17,467,500
Johnson & Johnson 40,000 2,005,000
Pfizer 70,000 4,777,500
Schering-Plough 80,000 5,590,000
Total 36,140,000
__________________________________________________________________________________
Health care services (2.7%)
Beverly Enterprises 600,000 (b) 8,175,000
Columbia Healthcare 340,000 14,450,000
FHP Int'l
Series A Pfd 208,000 (b) 5,356,000
Hillhaven 100,000 (b) 2,075,000
Humana 600,000 (b) 12,750,000
Quorum Health 120,000 (b) 2,205,000
United Healthcare 200,000 10,450,000
U.S. HealthCare 265,000 11,461,250
Total 66,922,250
__________________________________________________________________________________
Household products (1.4%)
Gillette 250,000 18,093,750
Proctor & Gamble 270,000 16,436,250
Total 34,530,000
__________________________________________________________________________________
Industrial equipment & services (1.0%)
Caterpillar 50,000 (h) 5,775,000
Illinois Tool Works 230,000 9,947,500
York Int'l 200,000 8,250,000
Total 23,972,500
__________________________________________________________________________________
Industrial transportation (1.7%)
CSX 220,000 16,995,000
Norfolk Southern 160,000 10,280,000
Union Pacific 290,000 16,711,250
Total 43,986,250
__________________________________________________________________________________
Leisure time & entertainment (0.3%)
Walt Disney 210,000 8,636,250
__________________________________________________________________________________
Media (3.8%)
CBS 46,269 14,869,700
Comcast 500,000 8,000,000
Comcast
Class SPL 250,000 4,000,000
Gannett 270,000 13,500,000
McGraw-Hill 150,000 10,443,750
Tele-Communications Class A 750,000 (b) 16,921,875
<PAGE>
PAGE 150
Common & preferred stocks (54.3%)
Issuer Shares Value(a)
__________________________________________________________________________________
Time Warner 470,000 17,918,750
Turner Broadcasting Class B 500,000 9,062,500
Viacom Class B 30,000 (b) 990,000
Total 95,706,575
__________________________________________________________________________________
Metals (1.5%)
Bethelem Steel
$3.50 Cv Pfd 100,000 (d) 6,162,500
Cyprus Amax Minerals 140,000 (h) 4,550,000
Inco Ltd 125,000 3,593,750
Kaiser Aluminum
$.65 Cv Pfd 200,000 1,725,000
LTV 400,000 (b) 7,650,000
Nucor 100,000 6,900,000
Phelps Dodge 100,000 6,350,000
Total 36,931,250
__________________________________________________________________________________
Multi-industry conglomerates (3.3%)
ALCO Standard
2.375% Cv Pfd 100,000 7,525,000
Emerson Electric 300,000 18,637,500
General Electric 700,000 34,825,000
MN Mining & Manufacturing 195,000 10,749,375
Olsten 330,000 11,880,000
Total 83,616,875
__________________________________________________________________________________
Paper & packaging (0.6%)
International Paper 210,000 16,196,250
__________________________________________________________________________________
Restaurants & lodging (0.8%)
McDonalds 500,000 14,125,000
Wendy's Int'l 400,000 6,350,000
Total 20,475,000
__________________________________________________________________________________
Retail (3.1%)
CUC Int'l 370,000 (b) 12,672,500
Dayton Hudson 30,000 2,542,500
Home Depot 251,000 (h) 11,357,750
Home Shopping Network 580,000 (b) 6,815,000
Penney (JC) 190,000 9,998,750
Sears Roebuck
Cv Pfd $3.75 260,000 14,397,500
Sysco 250,000 6,406,250
Wal-Mart Stores 500,000 12,312,500
Total 76,502,750
__________________________________________________________________________________
Textiles & apparel (0.4%)
Burlington Industry 420,000 (b) 5,617,500
Unifi 150,000 3,600,000
Total 9,217,500
__________________________________________________________________________________
Utilities-gas (1.0%)
Enron 400,000 12,200,000
Tenneco
$2.80 Cv Pfd 300,000 12,412,500
Total 24,612,500
__________________________________________________________________________________
Utilities - telephone (2.9%)
Airtouch Communications 630,000 (b) 17,797,500
Century Telephone 230,000 6,928,750
Comsat 220,000 5,527,500
MCI Communications 450,000 10,940,625
McCaw Cellular Communications 270,000 (b) 14,613,750
Pacific Telesis 400,000 13,200,000
US WEST 100,000 4,037,500
Total 73,045,625
Total common & preferred stocks
(Cost: $1,202,547,864) $1,356,887,257
</TABLE>
<PAGE>
PAGE 151
<TABLE>
<CAPTION>
__________________________________________________________________________________
Short-term securities (15.0%)
__________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (0.4%)
FHLMC
09-01-94 4.31% $ 8,800,000 $ 8,800,000
Total U.S. government agency
(Cost: $8,800,000) $ 8,800,000
__________________________________________________________________________________
Certificate of deposit (0.4%)
Nat'l Detroit
09-22-94 4.70 10,000,000 $ 10,000,140
Total Certificate of deposit
(Cost:$10,000,116) $ 10,000,140
__________________________________________________________________________________
Commercial paper (14.2%)
American Cyanamid
09-08-94 4.47 10,000,000 9,991,328
ABB Treasury
09-21-94 4.48 10,000,000 (e) 9,972,741
American General
09-22-94 4.50 2,900,000 2,892,012
09-23-94 4.53 6,200,000 (e) 6,181,814
Amgen
09-09-94 4.60 6,300,000 6,293,602
09-23-94 4.53 5,000,000 4,985,052
10-21-94 4.78 9,600,000 9,536,667
Associates
09-22-94 4.53 8,000,000 7,977,531
Bayshore Fuel
09-14-94 4.71 5,003,000 4,994,242
BBV Delaware
09-19-94 4.47 8,700,000 8,679,955
Beneficial
09-20-94 4.51 4,000,000 3,990,542
Campbell Soup
09-23-94 4.71 4,200,000 (e) 4,187,937
Chevron Trans
09-07-94 4.39 7,600,000 (e) 7,594,452
10-04-94 4.77 4,800,000 (e) 4,779,100
Ciesco (LP)
09-13-94 4.58 6,000,000 5,990,900
10-03-94 4.60 3,700,000 3,685,120
11-02-94 4.68 5,000,000 4,957,300
CIT Group
10-04-94 4.55 7,400,000 7,367,370
11-02-94 4.81 7,300,000 7,237,658
Colgate-Palmolive
09-06-94 4.48 6,600,000 (e) 6,595,903
Columbia Fuel
09-26-94 4.53 4,500,000 4,484,732
Commercial Credit
09-28-94 4.75 5,700,000 5,679,779
Commerzbank
09-12-94 4.71 9,400,000 9,385,731
Consolidated Railway
10-05-94 4.78 600,000 (e) 597,308
10-28-94 4.81 5,000,000 (e) 4,962,158
CPC Int'l
09-27-94 4.72 4,600,000 (e) 4,584,352
10-03-94 4.67 4,000,000 (e) 3,983,467
Duke Power
09-12-94 4.56 6,800,000 6,790,546
Eiger Capital
09-29-94 4.75 8,300,000 (e) 8,269,401
Fleet Funding
09-15-94 4.42 3,900,000 (e) 3,893,327
10-12-94 4.77 5,000,000 (e) 4,972,951
<PAGE>
PAGE 152
__________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
GE Capital
09-16-94 4.44 7,600,000 7,586,003
10-06-94 4.76 2,100,000 2,090,322
General Mills
09-06-94 4.36 5,200,000 5,196,858
Goldman Sachs
09-07-94 4.68 7,000,000 6,994,575
09-09-94 4.39 6,700,000 6,693,493
Intel
09-30-94 4.53 4,700,000 4,681,399
Kellogg
09-29-94 4.72 8,000,000 7,970,755
Kredietbank
09-12-94 4.48 10,000,000 9,986,342
09-12-94 4.56 5,500,000 5,492,353
Lincoln Nat'l
09-15-94 4.49 5,000,000 (e) 4,991,289
Merrill Lynch
09-27-94 4.77 7,600,000 7,573,928
10-13-94 4.79 4,000,000 3,977,740
Metlife Funding
11-03-94 4.68 2,700,000 2,676,576
Mobil Aust
09-20-94 4.75 6,800,000 (e) 6,783,025
Motorola
09-09-94 4.46 5,600,000 5,594,462
Nat'l Australia
09-26-94 4.75 5,700,000 5,681,277
10-17-94 4.65 4,000,000 3,974,798
Nat'l Detroit Bank
10-17-94 4.61 5,000,000 5,001,471
Norfolk Southern
09-06-94 4.36 2,100,000 2,098,731
09-15-94 4.55 4,300,000 (e) 4,292,408
PACCAR Financial
09-15-94 4.51 5,000,000 4,990,335
Paribas Financial
09-13-94 4.44 5,600,000 5,591,731
Penney (JC)
09-21-94 4.64 5,500,000 5,485,883
Reed Elsevier
10-24-94 4.72 5,300,000 (e) 5,261,129
Southwest Bell Capital
09-14-94 4.66 6,000,000 (e) 5,989,205
09-22-94 4.74 1,300,000 (e) 1,296,413
Southern California Gas
09-07-94 4.46 1,470,000 (e) 1,468,910
09-08-94 4.47 7,438,000 (e) 7,431,550
USAA Capital
09-20-94 4.57 7,000,000 6,983,190
10-03-94 4.75 5,400,000 5,377,296
US WEST Communications
10-05-94 4.53 5,800,000 5,773,098
10-24-94 4.78 4,500,000 4,468,531
__________________________________________________________________________________
Total commercial paper
(Cost: $354,978,082) $ 354,950,054
__________________________________________________________________________________
Total short-term securities
(Cost: $373,778,198) $ 373,750,194
__________________________________________________________________________________
Total investments in securities of unaffiliated issuers
(Cost: $2,437,261,148) $2,567,426,079
__________________________________________________________________________________
<PAGE>
PAGE 153
Investments in securities of affiliated issuer (i)
Common stock (0.5%)
Issuer Shares Value(a)
_____________________________________________________________________________________
PacifiCare Health
Systems Class B 170,000 (b,h) $ 11,687,500
_____________________________________________________________________________________
Total investments in securities of affiliated issuer
(Cost: $7,346,560) $ 11,687,500
_____________________________________________________________________________________
Total investments in securities
(Cost: $2,444,607,708)(m) $2,579,113,579
_____________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing.
(c) Foreign securities values are stated in U.S. dollars; principal amounts are denominated in the currency indicated.
(d) Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as
amended. These securities have been determined to be liquid under guidelines established by the board of directors.
(e) Commercial paper sold within terms of a private placement memorandum, exempt from registration under Section 4(2) of the
Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors." These
securities have been determined to be liquid under guidelines established by the board of directors.
(f) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquistion.
(g) Inverse floaters represent securities that pay interest at a rate that increases (decreases) with a decrease (increase) in the
LIBOR (London InterBank Offered Rate) Index. The rate shown is the rate in effect at Aug. 31, 1994.
(h) Security is partially or fully on loan. See Note 6 to the financial statements.
(i) Investments representing 5% of more of the outstanding voting securities of the issuer.
(j) For these securities, the interest rate disclosed represents the annualized effective yield on the date of acquistion to
interest reset date shown in the maturity year column.
(k) ELKS are equity-linked securities that are structured as an interest-bearing debt security of a brokerage firm and linked to
the common stock of another company. The terms of ELKS differ from those of ordinary debt securities in that the principal
amount received at maturity is not fixed, but is based on the price of the common stock the ELK is linked to.
(l) Partially pledged as initial deposit on the following open interest rate futures purchase contracts (see Note to the
financial statements):
Type of security Par Value
_________________________________________________
U. S. Treasury Dec 94 T-Bond $25,000,000
_________________________________________________
(m) Aug. 31, 1994, the cost of securities for federal income tax purposes was $2,443,378,214 and the aggregate gross
unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . . .$187,350,207
Unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . . (51,614,842)
___________________________________________________________________________________
Unrealized appreciation. . . . . . . . . . . . . . . . . . . . . . . . $135,735,365
___________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 154
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) List of Financial Statements filed as part of this Post-
Effective Amendment to the Registration Statement:
Independent Auditors' Report dated October 7, 1994.
Statements:
Statements of Assets and Liabilities, Aug. 31, 1994.
Statements of Operations for the year ended Aug. 31, 1994.
Statements of Changes in Net Assets for the year ended Aug.
31, 1994 and the year ended Aug. 31, 1993.
Notes to Financial Statements.
Schedules:
1. Investments in Securities, Aug. 31, 1994.
Notes to Investments in Securities.
(b) Exhibits:
(1) Articles of Incorporation as amended October 13, 1989, filed
electronically as Exhibit No. 1 to Registrant's Post-Effective
Amendment No. 21 to Registration Statement No. 2-72584, is
incorporated herein by reference.
(2) By-Laws as amended January 12, 1989, filed electronically as
Exhibit No. 2 to Registrant's Post-Effective Amendment No. 21 to
Registration Statement No. 2-72584, is incorporated herein by
reference.
(3) Not Applicable.
(4) Form of stock certificate for common shares, is on file at the
Registrant's headquarters.
(5)(a) Investment Management and Services Agreement between
Registrant and IDS Life Insurance Company ("IDS Life") for IDS Life
Moneyshare Fund, dated October 14, 1988, filed electronically as
Exhibit No. 5(a) to Registrant's Post-Effective Amendment No. 21 to
Registration Statement No. 2-72584, is incorporated herein by
reference.
(5)(b) Investment Advisory Agreement between IDS Life and
IDS/American Express Inc. (IDS) dated July 11, 1984, and copy of
Addendum to the Investment Advisory Agreement for IDS Life
International Equity Fund, dated Jan. 8, 1992, filed electronically
as Exhibit No. 5(b) to Registrant's Post-Effective Amendment No. 21
to Registration Statement No. 2-72584, is incorporated herein by
reference.
<PAGE>
PAGE 155
(6) Not Applicable.
(7) All employees who have attained age 21 and completed one year
of service are eligible to participate in a thrift plan. Entry
into the plan is Jan. 1 or July 2 following completion of the age
and service requirements. The Fund contributes each year an amount
equal to l5 percent of their annual salaries, the maximum amount
permitted under Section 404 (a) of the Internal Revenue Code, or up
to a maximum of 0.08 of 1 percent of the Fund's net income before
income taxes and other adjustments. Employees of the Registrant
become eligible to participate in a retirement plan on Jan. 1 or
July 1 following completion one year employment and attainment of
age 21. Contributions to the retirement plan cease no later than
the time at which the participant reaches the normal retirement age
of 65.
(8) Custodian Agreement between Registrant and IDS Trust Company,
dated January 3, 1983, filed electronically as Exhibit No. 8 to
Registrant's Post-Effective Amendment No. 21 to Registration
Statement No. 2-72584, is incorporated herein by reference.
(9)(a) Plan and Agreement of Merger, dated April 10, 1986, filed
electronically as Exhibit No. 9(a) to Registrant's Post-Effective
Amendment No. 21 to Registration Statement No. 2-72584, is
incorporated herein by reference.
(9)(b) License Agreement between Registrant and IDS Financial
Corporation, dated January 25, 1988, filed electronically as
Exhibit No. 9(b) to Registrant's Post-Effective Amendment No. 21 to
Registration Statement No. 2-72584, is incorporated herein by
reference.
(10) Opinion of Richard J. O'Brien dated October 13, 1981, filed
electronically as Exhibit No. 10 to Registrant's Post-Effective
Amendment No. 21 to Registration Statement No. 2-72584, is
incorporated herein by reference.
(11) Independent Auditors' Consent, filed electronically herewith.
(12) None.
(13) Investment Letter of IDS Life Insurance Company, dated October
13, 1981, filed electronically as Exhibit No. 13 to Registrant's
Post-Effective Amendment No. 21 to Registration Statement No. 2-
72584, is incorporated herein by reference.
(14) Not Applicable.
(15) Not Applicable.
(16) Schedule for computation of each performance quotation
provided in the Registration Statement in response to Item 22 filed
as Exhibit 16 to Post-Effective Amendment No. 17 to Registration
Statement No. 2-72584 is incorporated herein by reference.
Addendum to the schedule for computation of each performance
quotation filed as Exhibit 16 to Post-Effective Amendment No. 20 to
Registration Statement No. 2-72584 is incorporated herein by
reference.
<PAGE>
PAGE 156
(17) Financial Data Schedule, filed electronically herewith.
(18)(a) Directors' Power of Attorney, dated October 14, 1993, to
sign Amendments to this Registration Statement, filed
electronically as Exhibit No. 17(a) to Registrant's Post-Effective
Amendment No. 22 is incorporated herein by reference.
(18)(b) Officers' Power of Attorney, dated June 1, 1993, to sign
Amendments to this Registration Statement, filed electronically
as Exhibit No. 17(b) to Registrant's Post-Effective Amendment No.
22 is incorporated herein by reference.
Item 25. Persons Controlled by or under Common Control with
Registrant
IDS Life and IDS Life of New York are the record holder of all
outstanding shares of IDS Life Capital Resource Fund, Inc., IDS
Life Special Income Fund, Inc., IDS Life Moneyshare Fund, Inc. and
IDS Life Managed Fund, Inc. All of such shares were purchased and
are held by IDS Life and IDS Life of New York pursuant to
instructions from owners of Variable or Combination Retirement
Annuity Contracts or Flexible Annuity Contracts issued by IDS Life
and IDS Life of New York. Accordingly, IDS Life disclaims
beneficial ownership of all shares of each fund.
Item 26. Number of Holders of Securities
(1) (2)
Number of Record
Holders as of
Title of Class Oct. 21, 1994
Capital Stock Two
($.01 par)
<PAGE>
PAGE 157
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.
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
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 158
<TABLE>
<CAPTION>
Item 28b. Business and Other Connections of Investment Adviser (IDS Life Insurance Company)
(IDS Life).
Directors and officers of IDS Life who are directors and/or officers of one or more other
companies:
<S> <C> <C>
Timothy V. Bechtold, Vice President--Insurance Product Development
IDS Financial Corporation IDS Tower 10 Vice President-Insurance
Minneapolis, MN 55440 Product Development
IDS Financial Services Inc. Vice President-Insurance
Product Development
Alan R. Dakay, Vice President--Institutional Insurance Marketing
American Enterprise Life Insurance Co. IDS Tower 10 Director and President
Minneapolis, MN 55440
American Partners Life Insurance Co. Director and President
IDS Financial Corporation Vice President -
Institutional Insurance
Marketing
IDS Financial Services Inc. Vice President -
Institutional Insurance
Marketing
Robert M. Elconin, Vice President
IDS Financial Corporation IDS Tower 10 Vice President-
Minneapolis, MN 55440 Government Relations
IDS Financial Services Inc. Vice President-
Government Relations
Louis C. Fornetti, Director
American Enterprise Investment IDS Tower 10 Vice President
Services Inc. Minneapolis, MN 55440
IDS Cable Corporation Director
IDS Cable II Corporation Director
IDS Capital Holdings Inc. Senior Vice President
IDS Certificate Company Vice President
IDS Financial Corporation Director, Senior Vice
President and Chief
Financial Officer
IDS Financial Services Inc. Senior Vice President and
Chief Financial Officer
IDS Insurance Agency of Alabama Inc. Vice President
IDS Insurance Agency of Arkansas Inc. Vice President
IDS Insurance Agency of Massachusetts Inc. Vice President
IDS Insurance Agency of Nevada Inc. Vice President
IDS Insurance Agency of New Mexico Inc. Vice President
IDS Insurance Agency of North Carolina Inc. Vice President
IDS Insurance Agency of Ohio Inc. Vice President
IDS Insurance Agency of Wyoming Inc. Vice President
<PAGE>
PAGE 159
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
IDS Life Series Fund, Inc. Vice President
IDS Life Variable Annuity Funds A&B Vice President
IDS Property Casualty Insurance Co. Director and Vice President
IDS Real Estate Services, Inc. Vice President
IDS Sales Support Inc. Director
IDS Securities Corporation Vice President
IDS Trust Company Director
Investors Syndicate Development Corp. Vice President
Morris Goodwin Jr., Vice President and Treasurer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Treasurer
American Enterprise Life Insurance Co. Vice President and
Treasurer
American Express Minnesota Foundation Director, Vice President
and Treasurer
American Express Service Corporation Vice President and
Treasurer
IDS Advisory Group Inc. Vice President and
Treasurer
IDS Aircraft Services Corporation Vice President and
Treasurer
IDS Cable Corporation Vice President and
Treasurer
IDS Cable II Corporation 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 Financial Corporation Vice President and
Treasurer
IDS Financial Services Inc. Vice President and
Corporate Treasurer
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 Nevada 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
<PAGE>
PAGE 160
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
IDS International, Inc. 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 Vice President and
Treasurer
IDS Partnership Services Corporation 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 Vice President and
Treasurer
IDS Sales Support Inc. Director, Vice President
and Treasurer
IDS Securities Corporation Vice President and
Treasurer
Investors Syndicate Development Corp. Vice President and
Treasurer
NCM Capital Management Group, Inc. 2 Mutual Plaza Director
501 Willard Street
Durham, NC 27701
Sloan Financial Group, Inc. Director
Lorraine R. Hart, Vice President--Investments
American Enterprise Life IDS Tower 10 Vice President-Investments
Insurance Company Minneapolis, MN 55440
American Partners Life Insurance Co. Director and Vice
President-Investments
IDS Certificate Company Vice President-Investments
IDS Financial Corporation Vice President-Insurance
Investments
IDS Financial Services Inc. Vice President-Insurance
Investments
Investors Syndicate Development Corp. Vice President-Investments
David R. Hubers, Director
American Express Service Corporation IDS Tower 10 Director and President
Minneapolis, MN 55440
IDS Aircraft Services Corporation Director
IDS Certificate Company Director
IDS Financial Corporation Director, President and
Chief Executive Officer
IDS Financial Services Inc. Chairman, Chief Executive
Officer and President
IDS Plan Services of California, Inc. Director and President
IDS Property Casualty Insurance Co. Director
<PAGE>
PAGE 161
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Richard W. Kling, Director and President
American Enterprise Life Insurance Co. IDS Tower 10 Director and Chairman of
Minneapolis, MN 55440 the Board
American Partners Life Insurance Co. Director and Chairman of
the Board
IDS Financial Corporation Director and Senior Vice
President-Risk Management
Products
IDS Financial Services Inc. Senior Vice President-
Risk Management Products
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 Nevada 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 Series Fund, Inc. Director and President
IDS Life Variable Annuity Funds A&B Member of Board of
Managers, 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, Director and Executive Vice President
IDS Financial Corporation IDS Tower 10 Vice President-
Minneapolis, MN 55440 Actuarial Finance
IDS Financial Services Inc. Vice President-
Actuarial Finance
IDS Life Series Fund, Inc. Vice President and Chief
Actuary
Ryan R. Larson, Vice President--Annuity Product Development
IDS Financial Corporation IDS Tower 10 Vice President-
Minneapolis, MN 55440 IPG Product Development
IDS Financial Services Inc. Vice President-
IPG Product Development
Peter A. Lefferts, Director and Executive Vice President--Marketing
IDS Financial Corporation IDS Tower 10 Director, Senior Vice
Minneapolis, MN 55440 President and Chief
Marketing Officer
IDS Financial Services Inc. Senior Vice President and
Chief Marketing Officer
IDS Plan Services of California, Inc. Director
IDS Trust Company Director and Chairman of
the Board
Investors Syndicate Development Corp. Director
<PAGE>
PAGE 162
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Janis E. Miller, Director and Executive Vice President--Variable Assets
IDS Cable Corporation IDS Tower 10 Director and President
Minneapolis, MN 55440
IDS Cable II Corporation Director and President
IDS Financial Corporation Vice President-
Variable Assets
IDS Financial Services Inc. Vice President-
Variable Assets
IDS Futures Corporation Director and President
IDS Futures III Corporation Director and President
IDS Life Variable Annuity Funds A&B Director
IDS Life Series Fund, Inc. 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, Chairman of the Board and Chief Executive Officer
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
IDS Certificate Company Director and Chairman of
the Board
IDS Financial Corporation Director and Executive
Vice President-Marketing
and Products
IDS Financial Services Inc. Executive Vice President-
Marketing and Products
IDS Plan Services of California, Inc. Director
IDS Property Casualty Insurance Co. Director
Barry J. Murphy, Director and Executive Vice President--Client Service
IDS Financial Corporation IDS Tower 10 Director and Senior Vice
Minneapolis, MN 55440 President-Client Service
IDS Financial Services Inc. Senior Vice President-
Client Service
James R. Palmer, Vice President--Taxes
IDS Financial Corporation IDS Tower 10 Vice President-
Minneapolis, MN 55440 Insurance Operations
IDS Financial Services Inc. Vice President-
Insurance Operations
<PAGE>
PAGE 163
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Stuart A. Sedlacek, Director and Executive Vice President--Assured Assets
American Enterprise Life Insurance Co. IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President, Assured
Assets
IDS Certificate Company Director and President
IDS Financial Corporation Vice President-
Assured Assets
IDS Financial Services Inc. Vice President-
Assured Assets
Investors Syndicate Development Corp. Chairman of the Board
and President
F. Dale Simmons, Vice President--Real Estate Loan Management
American Enterprise Life Insurance Co. IDS Tower 10 Vice President-Real
Minneapolis, MN 55440 Estate Loan Management
American Partners Life Insurance Co. Vice President-Real
Estate Loan Management
IDS Certificate Company Vice President-Real
Estate Loan Management
IDS Financial Corporation Vice President-Senior
Portfolio Manager
Insurance Investments
IDS Financial Services Inc. Vice President-Senior
Portfolio Manager
Insurance Investments
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
William A. Stoltzmann, Vice President, General Counsel and Secretary
American Partners Life Insurance Co. IDS Tower 10 Director, Vice President,
Minneapolis, MN 55440 General Counsel and
Secretary
IDS Financial Corporation Vice President and
Assistant General Counsel
IDS Financial Services Inc. Vice President and
Assistant General Counsel
IDS Life Series Fund, Inc. General Counsel and
Assistant Secretary
IDS Life Variable Annuity Funds A&B General Counsel and
Assistant Secretary
American Enterprise Life Insurance P.O. Box 534 Director, Vice President,
Company Minneapolis, MN 55440 General Counsel
and Secretary
<PAGE>
PAGE 164
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Melinda S. Urion, Director, Executive Vice President and Controller
American Enterprise Life IDS Tower 10 Vice President and
Insurance Company Minneapolis, MN 55440 Controller
American Partners Life Insurance Co. Director, Vice President,
Controller and Treasurer
IDS Financial Corporation Vice President and
Corporate Controller
IDS Financial Services Inc. Vice President and
Corporate Controller
IDS Life Series Fund, Inc. Vice President and
Controller
</TABLE>
Item 29. The Fund has no principal underwriter.
Item 30. Location of Accounts and Records
IDS Financial Corporation
IDS Tower 10
Minneapolis, MN 55440-0010
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 165
<PAGE>
PAGE 1
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
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 2
<TABLE><CAPTION>
Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)
Directors and officers of IDS Financial Corporation who are directors and/or officers of one
or more other companies:
<S> <C> <C>
Ronald G. Abrahamson, Vice President--Field Administration
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-Field
Administration
Douglas A. Alger, Vice President--Total Compensation
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Total Compensation
Jerome R. Amundson, Vice President and Controller--Mutual Funds Operations
IDS Financial Services Inc. IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller-Mutual Funds
Operations
Peter J. Anderson, Director and Senior Vice President--Investments
IDS Advisory Group Inc. IDS Tower 10 Director and Chairman
Minneapolis, MN 55440 of the Board
IDS Capital Holdings Inc. Director and President
IDS Financial Services Inc. Senior Vice President-
Investments
IDS Fund Management Limited Director
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, IDS Institutional Retirement Services
IDS Financial Services Inc. IDS Tower 10 Vice President-Sales and
Minneapolis, MN 55440 Marketing, IDS
Institutional Retirement
Services
Alvan D. Arthur, Region Vice President--Pacific Northwest Region
American Express Service Corporation IDS Tower 10 Vice President
IDS Financial Services Inc. Minneapolis, MN 55440 Region Vice President-
Pacific Northwest Region
<PAGE>
PAGE 3
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Kent L. Ashton, Vice President--Financial Education Services
IDS Financial Services Inc. IDS Tower 10 Vice President-Financial
Minneapolis, MN 55440 Education Services
Joseph M. Barsky III, Vice President--Senior Portfolio Manager
IDS Advisory Group Inc. IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-Senior
Portfolio Manager
Robert C. Basten, Vice President--Tax and Business Services
IDS Financial Services Inc. IDS Tower 10 Vice President-Tax
Minneapolis, MN 55440 and Business Services
Timothy V. Bechtold, Vice President--Insurance Product Development
IDS Financial Services Inc. IDS Tower 10 Vice President-Insurance
Minneapolis, MN 55440 Product Development
IDS Life Insurance Company Vice President-Insurance
Product Development
John D. Begley, Region Vice President--Mid-Central Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Mid-Central Region
IDS Insurance Agency of Alabama Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of Arkansas Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of Massachusetts Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of Nevada Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of New Mexico Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of North Carolina Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of Ohio Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of Wyoming Inc. Vice President-Mid-Central
Region
Carl E. Beihl, Vice President--Strategic Technology Planning
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Strategic Technology
Planning
<PAGE>
PAGE 4
Item 28a. Business and Other Connections of Investment Adviser (IDS Financial
Corporation)(cont'd)
Alan F. Bignall, Vice President--Financial Planning Systems
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-
Financial Planning
Systems
Brent L. Bisson, Region Vice President--Northwest Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Northwest Region
IDS Insurance Agency of Alabama Inc. Vice President-
Northwest Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Northwest Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Northwest Region
IDS Insurance Agency of Nevada, Inc. Vice President-
Northwest Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Northwest Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Northwest Region
IDS Insurance Agency of Ohio Inc. Vice President-
Northwest Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Northwest Region
John C. Boeder, Vice President--Mature Market Group
IDS Financial Services Inc. 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 Minnesota Foundation IDS Tower 10 Director
Minneapolis, MN 55440
IDS Aircraft Services Corporation Director and President
IDS Financial Services Inc. Senior Vice President-
Corporate Affairs and
Special Counsel
Harold E. Burke, Vice President and Assistant General Counsel
American Express Service Corporation IDS Tower 10 Vice President
IDS Financial Services Inc. Minneapolis, MN 55440 Vice President and
Assistant General Counsel
<PAGE>
PAGE 5
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Daniel J. Candura, Vice President--Marketing Support
IDS Financial Services Inc. IDS Tower 10 Vice President-Marketing
Minneapolis, MN 55440 Support
Cynthia M. Carlson, Vice President--IDS Securities Services
American Enterprise Investment IDS Tower 10 Director, President and
Services Inc. Minneapolis, MN 55440 Chief Executive Officer
IDS Financial Services Inc. Vice President-IDS
Securities Services
Orison Y. Chaffee III, Vice President--Field Real Estate
IDS Financial Services Inc. IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Real Estate
James E. Choat, Director and Senior Vice President--Field Management
American Express Minnesota Foundation IDS Tower 10 Director
American Express Service Corporation Minneapolis, MN 55440 Vice President
IDS Financial Services Inc. Senior Vice President-
Field Management
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 Nevada 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
IDS Property Casualty Insurance Co. Director
Kenneth J. Ciak, Vice President and General Manager--IDS Property Casualty
IDS Financial Services Inc. 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
<PAGE>
PAGE 6
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Roger C. Corea, Region Vice President--Northeast Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Northeast Region
IDS Insurance Agency of Alabama Inc. Vice President -
Northeast Region
IDS Insurance Agency of Arkansas Inc. Vice President -
Northeast Region
IDS Insurance Agency of Massachusetts Inc. Vice President -
Northeast Region
IDS Insurance Agency of Nevada Inc. Vice President -
Northeast Region
IDS Insurance Agency of New Mexico Inc. Vice President -
Northeast Region
IDS Insurance Agency of North Carolina Inc. Vice President -
Northeast Region
IDS Insurance Agency of Ohio, Inc. Vice President -
Northeast Region
IDS Insurance Agency of Wyoming Inc. Vice President -
Northeast Region
IDS Life Insurance Co. of New York Box 5144 Director
Albany, NY 12205
Kevin F. Crowe, Region Vice President--Atlantic Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President -
Atlantic Region
Alan R. Dakay, Vice President--Institutional Insurance Marketing
American Enterprise Life Insurance Co. IDS Tower 10 Director and President
Minneapolis, MN 55440
American Partners Life Insurance Co. Director and President
IDS Financial Services Inc. Vice President -
Institutional Insurance
Marketing
IDS Life Insurance Company Vice President -
Institutional Insurance
Marketing
William F. Darland, Region Vice President--South Central Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
South Central Region
IDS Insurance Agency of Alabama Inc. Vice President-
South Central Region
IDS Insurance Agency of Arkansas Inc. Vice President -
South Central Region
<PAGE>
PAGE 7
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
IDS Insurance Agency of Massachusetts Inc. Vice President-
South Central Region
IDS Insurance Agency of Nevada Inc. Vice President-
South Central Region
IDS Insurance Agency of New Mexico Inc. Vice President-
South Central Region
IDS Insurance Agency of North Carolina Inc. Vice President-
South Central Region
IDS Insurance Agency of Ohio Inc. Vice President-
South Central Region
IDS Insurance Agency of Wyoming Inc. Vice President-
South Central Region
William H. Dudley, Director and Executive Vice President--Investment Operations
IDS Advisory Group Inc. IDS Tower 10 Director
Minneapolis, MN 55440
IDS Capital Holdings Inc. Director
IDS Financial Services Inc. Director and Executive
Vice President-
Investment Operations
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 and Senior Vice President--Information Systems
IDS Financial Services Inc. IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Information Systems
Gordon L. Eid, Director, Senior Vice President and Deputy General Counsel
IDS Financial Services Inc. IDS Tower 10 Senior Vice President and
General Counsel
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 Nevada 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
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Government Relations
IDS Life Insurance Company Vice President
<PAGE>
PAGE 8
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Mark A. Ernst, Vice President--Retail Services
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-
Retail Services
Gordon M. Fines, Vice President--Mutual Fund Equity Investments
IDS Advisory Group Inc. IDS Tower 10 Executive Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-
Mutual Fund Equity
Investments
IDS International Inc. Vice President and
Portfolio Manager
Louis C. Fornetti, Director, Senior Vice President and Chief Financial Officer
American Enterprise Investment IDS Tower 10 Vice President
Services Inc. Minneapolis, MN 55440
IDS Cable Corporation Director
IDS Cable II Corporation Director
IDS Capital Holdings Inc. Senior Vice President
IDS Certificate Company Vice President
IDS Financial Services Inc. Senior Vice President and
Chief Financial Officer
IDS Insurance Agency of Alabama Inc. Vice President
IDS Insurance Agency of Arkansas Inc. Vice President
IDS Insurance Agency of Massachusetts Inc. Vice President
IDS Insurance Agency of Nevada Inc. Vice President
IDS Insurance Agency of New Mexico Inc. Vice President
IDS Insurance Agency of North Carolina Inc. Vice President
IDS Insurance Agency of Ohio Inc. Vice President
IDS Insurance Agency of Wyoming Inc. Vice President
IDS Life Insurance Company Director
IDS Life Series Fund, Inc. Vice President
IDS Life Variable Annuity Funds A&B Vice President
IDS Property Casualty Insurance Co. Director and Vice President
IDS Real Estate Services, Inc. Vice President
IDS Sales Support Inc. Director
IDS Securities Corporation Vice President
IDS Trust Company Director
Investors Syndicate Development Corp. Vice President
Douglas L. Forsberg, Vice President--Securities Services
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Securities Services
<PAGE>
PAGE 9
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Carl W. Gans, Region Vice President--North Central Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
North Central Region
Robert G. Gilbert, Vice President--Real Estate
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Real Estate
John J. Golden, Vice President--Field Compensation Development
IDS Financial Services Inc. 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
National Computer Systems, Inc. 11000 Prairie Lakes Drive Director
Minneapolis, MN 55440
Morris Goodwin Jr., Vice President and Corporate Treasurer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Treasurer
American Enterprise Life Insurance Co. Vice President and
Treasurer
American Express Minnesota Foundation Director, Vice President
and Treasurer
American Express Service Corporation Vice President and
Treasurer
IDS Advisory Group Inc. Vice President and
Treasurer
IDS Aircraft Services Corporation Vice President and
Treasurer
IDS Cable Corporation Vice President and
Treasurer
IDS Cable II Corporation 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 Financial Services Inc. Vice President and
Corporate Treasurer
<PAGE>
PAGE 10
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
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 Nevada 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 Vice President and
Treasurer
IDS Partnership Services Corporation 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 Vice President and
Treasurer
IDS Sales Support Inc. Director, Vice President
and Treasurer
IDS Securities Corporation Vice President and
Treasurer
Investors Syndicate Development Corp. Vice President and
Treasurer
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
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Systems Services
<PAGE>
PAGE 11
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
David A. Hammer, Vice President and Marketing Controller
IDS Financial Services Inc. IDS Tower 10 Vice President and
Minneapolis, MN 55440 Marketing Controller
IDS Plan Services of California, Inc. Director and Vice President
Robert L. Harden, Region Vice President--Mid-Atlantic Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Mid Atlantic Region
IDS Insurance Agency of Alabama Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of Nevada Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of Ohio Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Mid Atlantic Region
Lorraine R. Hart, Vice President--Insurance Investments
American Enterprise Life IDS Tower 10 Vice President-Investments
Insurance Company Minneapolis, MN 55440
American Partners Life Insurance Co. Director and Vice
President-Investments
IDS Certificate Company Vice President-Investments
IDS Financial Services Inc. Vice President-Insurance
Investments
IDS Life Insurance Company Vice President-Investments
Investors Syndicate Development Corp. Vice President-Investments
Mark S. Hays, Vice President--Senior Portfolio Manager, IDS International
IDS Financial Services Inc. IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager, IDS
International
IDS Fund Management Limited Director
IDS International, Inc. Senior Vice President
<PAGE>
PAGE 12
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Brian M. Heath, Region Vice President--Southwest Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Southwest Region
IDS Insurance Agency of Alabama Inc. Vice President-
Southwest Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Southwest Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Southwest Region
IDS Insurance Agency of Nevada Inc. Vice President-
Southwest Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Southwest Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Southwest Region
IDS Insurance Agency of Ohio Inc. Vice President-
Southwest Region
IDS Insurance Agency of Texas Inc. Director and President
IDS Insurance Agency of Wyoming Inc. Vice President-
Southwest Region
Raymond E. Hirsch, Vice President--Senior Portfolio Manager
IDS Advisory Group Inc. IDS Tower 10 Vice President
IDS Financial Services Inc. Minneapolis, MN 55440 Vice President-Senior
Portfolio Manager
James G. Hirsh, Vice President and Assistant General Counsel
IDS Financial Services Inc. IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
IDS Securities Corporation Director, Vice President
and General Counsel
Paul C. Hopkins, Vice President--Senior Portfolio Manager-IDS International
IDS Financial Services Inc. IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager-IDS
International
IDS International, Inc. Senior Vice President
Kevin P. Howe, Vice President--Government and Customer Relations and Chief Compliance Officer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Compliance Officer
American Express Service Corporation Vice President
IDS Financial Services Inc. Vice President-
Government and
Customer Relations
IDS Securities Corporation Vice President and Chief
Compliance Officer
<PAGE>
PAGE 13
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
David R. Hubers, Director, President and Chief Executive Officer
American Express Service Corporation IDS Tower 10 Director and President
Minneapolis, MN 55440
IDS Aircraft Services Corporation Director
IDS Certificate Company Director
IDS Financial Services Inc. Chairman, Chief Executive
Officer and President
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
IDS Financial Services Inc. IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
Douglas R. Jordal, Vice President--Taxes
IDS Aircraft Services Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-Taxes
Craig A. Junkins, Vice President--IDS 1994 Implementation Planning and Financial Planning
Development
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-IDS 1994
Implementation Planning
and Financial Planning
Development
James E. Kaarre, Vice President--Marketing Information
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Marketing Information
G. Michael Kennedy, Vice President--Investment Services and Investment Research
IDS Financial Services Inc. 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 Minnesota Foundation IDS Tower 10 Director
Minneapolis, MN 55440
American Express Service Corporation Vice President
IDS Financial Services Inc. Senior Vice President-
Human Resources
<PAGE>
PAGE 14
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Richard W. Kling, Director and Senior Vice President--Risk Management Products
American Enterprise Life Insurance Co. IDS Tower 10 Director and Chairman of
Minneapolis, MN 55440 the Board
American Partners Life Insurance Co. Director and Chairman of
the Board
IDS Financial Services Inc. Senior Vice President-
Risk Management Products
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 Nevada 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&B Member of Board of
Managers, 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
Harold D. Knutson, Vice President--System Services
IDS Financial Services Inc. IDS Tower 10 Vice President--
Minneapolis, MN 55440 System Services
Paul F. Kolkman, Vice President--Actuarial Finance
IDS Financial Services Inc. 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
Claire Kolmodin, Vice President--Service Quality
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Service Quality
David S. Kreager, Vice President--Field Management Development
IDS Financial Services Inc. IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management Development
Christopher R. Kudrna, Vice President--Systems and Technology Development
IDS Financial Services Inc. IDS Tower 10 Vice President-Systems and
Minneapolis, MN 55440 Technology Development
<PAGE>
PAGE 15
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Steven C. Kumagai, Director and Senior Vice President--Field Management and Business Systems
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Director and Senior Vice
President-Field
Management and Business
Systems
Mitre Kutanovski, Region Vice President--Midwest Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Midwest Region
Edward Labenski, Vice President--Senior Portfolio Manager
IDS Advisory Group Inc. IDS Tower 10 Senior Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-
Senior Portfolio
Manager
Peter L. Lamaison, Vice President--IDS International Division
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 IDS International
Division
IDS Fund Management Limited Director and Chairman of
the Board
IDS International, Inc. Director, President and
Chief Executive Officer
Kurt A. Larson, Vice President--Senior Portfolio Manager
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio Manager
Ryan R. Larson, Vice President--IPG Product Development
IDS Financial Services Inc. 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
IDS Financial Services Inc. IDS Tower 10 Vice President and
Minneapolis, MN 55440 Chief U.S. Economist
<PAGE>
PAGE 16
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Peter A. Lefferts, Director, Senior Vice President and Chief Marketing Officer
IDS Financial Services Inc. IDS Tower 10 Senior Vice President and
Minneapolis, MN 55440 Chief Marketing Officer
IDS Life Insurance Company Director and Executive
Vice President-Marketing
IDS Plan Services of California, Inc. Director
IDS Trust Company Director and Chairman of
the Board
Investors Syndicate Development Corp. Director
Douglas A. Lennick, Director and Executive Vice President--Private Client Group
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Director and Executive
Vice President-Private
Client Group
Mary J. Malevich, Vice President--Senior Portfolio Manager
IDS Financial Services Inc. 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
IDS Financial Services Inc. IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Marketing Readiness
William J. McKinney, Vice President--Field Management Support
IDS Financial Services Inc. IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management Support
Thomas W. Medcalf, Vice President--Senior Portfolio Manager
IDS Financial Services Inc. IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
William C. Melton, Vice President-International Research and Chief International Economist
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 International Research
and Chief International
Economist
<PAGE>
PAGE 17
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Janis E. Miller, Vice President--Variable Assets
IDS Cable Corporation IDS Tower 10 Director and President
Minneapolis, MN 55440
IDS Cable II Corporation Director and President
IDS Financial Services Inc. Vice President-
Variable Assets
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 Variable Annuity Funds A&B Director
IDS Life Series Fund, Inc. 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
IDS Certificate Company Director and Chairman of
the Board
IDS Financial Services Inc. Executive Vice President-
Marketing and Products
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 Minnesota Foundation IDS Tower 10 Director and President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-
Corporate Communications
Barry J. Murphy, Director and Senior Vice President--Client Service
IDS Financial Services Inc. IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Client Service
IDS Life Insurance Company Director and Executive
Vice President-Client
Service
Robert J. Neis, Vice President--Information Systems Operations
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Information Systems
Operations
<PAGE>
PAGE 18
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Vernon F. Palen, Region Vice President--Rocky Mountain Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Rocky Mountain Region
IDS Insurance Agency of Alabama Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of Nevada Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of Ohio Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Rocky Mountain Region
James R. Palmer, Vice President--Insurance Operations
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Insurance Operations
IDS Life Insurance Company Vice President-Taxes
Judith A. Pennington, Vice President--Field Technology
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Field Technology
George M. Perry, Vice President--Corporate Strategy and Development
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Strategy
and Development
IDS Property Casualty Insurance Co. Director
Susan B. Plimpton, Vice President--Segmentation Development and Support
IDS Financial Services Inc. IDS Tower 10 Vice President--
Minneapolis, MN 55440 Segmentation Development
and Support
<PAGE>
PAGE 19
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Ronald W. Powell, Vice President and Assistant General Counsel
IDS Cable Corporation IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant Secretary
IDS Cable II Corporation Vice President and
Assistant Secretary
IDS Financial Services Inc. Vice President and
Assistant General Counsel
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--TransAction Services
IDS Financial Services Inc. Vice President-Trans
Action Services
Frederick C. Quirsfeld, Vice President--Taxable Mutual Fund Investments
IDS Advisory Group Inc. IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President--
Taxable Mutual Fund
Investments
Roger B. Rogos, Region Vice President--Great Lakes Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Great Lakes Region
IDS Insurance Agency of Alabama Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of Nevada Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of Ohio Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Great Lakes Region
<PAGE>
PAGE 20
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
ReBecca K. Roloff, Vice President--1994 Program Director
IDS Financial Services Inc. IDS Tower 10 Vice President-1994
Minneapolis, MN 55440 Program Director
Stephen W. Roszell, Vice President--Advisory Institutional Marketing
IDS Advisory Group Inc. IDS Tower 10 President and Chief
Minneapolis, MN 55440 Executive Officer
IDS Financial Services Inc. Vice President-Advisory
Institutional Marketing
Robert A. Rudell, Vice President--IDS Institutional Retirement Services
IDS Financial Services Inc. IDS Tower 10 Vice President-IDS
Minneapolis, MN 55440 Institutional Retirement
Services
IDS Sales Support Inc. Director and President
IDS Trust Company Director
John P. Ryan, Vice President and General Auditor
IDS Financial Services Inc. IDS Tower 10 Vice President and General
Minneapolis, MN 55440 Auditor
Erven A. Samsel, Director and Senior Vice President--Field Management
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Senior Vice President-
Field Management
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 Nevada 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 21
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
R. Reed Saunders, Director and Senior Vice President--Corporate Strategy and Development
American Express Service Corporation IDS Tower 10 Director and Vice
Minneapolis, MN 55440 President
IDS Financial Services Inc. Director and Senior
Vice President-Corporate
Strategy and Development
IDS Property Casualty Insurance Co. Director
Stuart A. Sedlacek, Vice President--Assured Assets
American Enterprise Life Insurance Co. IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President, Assured
Assets
IDS Certificate Company Director and President
IDS Financial Services Inc. Vice President-
Assured Assets
IDS Life Insurance Company Director and Executive
Vice President, Assured
Assets
Investors Syndicate Development Corp. Chairman of the Board
and President
Donald K. Shanks, Vice President--Property Casualty
IDS Financial Services Inc. 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 Partners Life Insurance Co. Vice President-Real
Estate Loan Management
IDS Certificate Company Vice President-Real
Estate Loan Management
IDS Financial Services Inc. Vice President-Senior
Portfolio Manager
Insurance Investments
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
IDS Financial Services Inc. IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources and
Organization Development
<PAGE>
PAGE 22
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Julian W. Sloter, Region Vice President--Southeast Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Southeast Region
IDS Insurance Agency of Alabama Inc. Vice President-
Southeast Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Southeast Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Southeast Region
IDS Insurance Agency of Nevada Inc. Vice President-
Southeast Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Southeast Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Southeast Region
IDS Insurance Agency of Ohio Inc. Vice President-
Southeast Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Southeast Region
Ben C. Smith, Vice President--Workplace Marketing
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Workplace Marketing
William A. Smith, Vice President and Controller--Private Client Group
IDS Financial Services Inc. IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller-Private
Client Group
James B. Solberg, Vice President--Advanced Financial Planning
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Advanced Financial
Planning
Bridget Sperl, Vice President--Human Resources Management Services
IDS Financial Services Inc. IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources Management
Services
Jeffrey E. Stiefler, Director
American Express Company American Express Tower Director and President
World Financial Center
New York, NY 10285
<PAGE>
PAGE 23
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Lois A. Stilwell, Vice President--Planner Training and Development
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Planner Training and
Development
William A. Stoltzmann, Vice President and Assistant General Counsel
American Partners Life Insurance Co. IDS Tower 10 Director, Vice President,
Minneapolis, MN 55440 General Counsel and
Secretary
IDS Financial Services Inc. Vice President and
Assistant General Counsel
IDS Life Insurance Company Vice President, General
Counsel and Secretary
IDS Life Series Fund, Inc. General Counsel and
Assistant Secretary
IDS Life Variable Annuity Funds A&B General Counsel and
Assistant 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
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Planning and
Analysis
Jeffrey J. Stremcha, Vice President--Information Resource Management/ISD
IDS Financial Services Inc. IDS Tower 10 Vice President-Information
Minneapolis, MN 55440 Resource Management/ISD
Fenton R. Talbott, Director
ACUMA Ltd. ACUMA House President and Chief
The Glanty, Egham Executive Officer
Surrey TW 20 9 AT
UK
Neil G. Taylor, Vice President--Field Business Systems
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Field Business Systems
<PAGE>
PAGE 24
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
John R. Thomas, Director and Senior Vice President--Information and Technology
IDS Bond Fund, Inc. IDS Tower 10 Director
Minneapolis, MN 55440
IDS California Tax-Exempt Trust Trustee
IDS Discovery Fund, Inc. Director
IDS Equity Plus Fund, Inc. Director
IDS Extra Income Fund, Inc. Director
IDS Federal Income Fund, Inc. Director
IDS Financial Services Inc. Senior Vice President-
Information and
Technology
IDS Global Series, Inc. Director
IDS Growth Fund, Inc. Director
IDS High Yield Tax-Exempt Fund, Inc. Director
IDS Investment Series, Inc. Director
IDS Managed Retirement Fund, Inc. Director
IDS Market Advantage Series, Inc. Director
IDS Money Market Series, Inc. Director
IDS New Dimensions Fund, Inc. Director
IDS Precious Metals Fund, Inc. Director
IDS Progressive Fund, Inc. Director
IDS Selective Fund, Inc. Director
IDS Special Tax-Exempt Series Trust Trustee
IDS Stock Fund, Inc. Director
IDS Strategy Fund, Inc. Director
IDS Tax-Exempt Bond Fund, Inc. Director
IDS Tax-Free Money Fund, Inc. Director
IDS Utilities Income Fund, Inc. Director
Melinda S. Urion, Vice President and Corporate Controller
American Enterprise Life IDS Tower 10 Vice President and
Insurance Company Minneapolis, MN 55440 Controller
American Partners Life Insurance Co. Director, Vice President,
Controller and Treasurer
IDS Financial Services Inc. Vice President and
Corporate Controller
IDS Life Insurance Company Director, Executive Vice
President and Controller
IDS Life Series Fund, Inc. Vice President and
Controller
Wesley W. Wadman, Vice President--Senior Portfolio Manager
IDS Advisory Group Inc. IDS Tower 10 Executive Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-
Senior Portfolio Manager
IDS Fund Management Limited Director
IDS International, Inc. Senior Vice President
<PAGE>
PAGE 25
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Norman Weaver, Jr., Director and Senior Vice President--Field Management
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Senior Vice President-
Field Management
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 Nevada 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--Corporate Tax Operations
IDS Capital Holdings Inc. IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-Corporate
Tax Operations
IDS Futures III Corporation Vice President, Treasurer
and Secretary
IDS Futures Brokerage Group Vice President
IDS Futures Corporation Vice President, Treasurer
and Secretary
Lawrence J. Welte, Vice President--Investment Administration
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Investment Administration
IDS Securities Corporation Director, Executive Vice
President and Chief
Operating Officer
William N. Westhoff, Director and Senior Vice President--Fixed Income Management
American Enterprise Life Insurance IDS Tower 10 Director
Company Minneapolis, MN 55440
IDS Financial Services Inc. Senior Vice President-
Fixed Income Management
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
<PAGE>
PAGE 26
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Edwin M. Wistrand, Vice President and Assistant General Counsel
IDS Financial Services Inc. IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
Michael R. Woodward, Director and Senior Vice President--Field Management
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Senior Vice President-
Field Management
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 Nevada 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 27
Item 29. Principal Underwriters.
(a) IDS Financial Services Inc. acts as principal underwriter
for the following investment companies:
IDS Bond Fund, Inc.; IDS California Tax-Exempt Trust; IDS
Discovery Fund, Inc.; IDS Equity Plus 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 Field Administration
Minneapolis, MN 55440
Douglas A. Alger Vice President-Total None
IDS Tower 10 Compensation
Minneapolis, MN 55440
Jerome R. Amundson Vice President and None
IDS Tower 10 Controller-Mutual Funds
Minneapolis, MN 55440 Operations
Peter J. Anderson Senior Vice President- None
IDS Tower 10 Investments
Minneapolis, MN 55440
Ward D. Armstrong Vice President- None
IDS Tower 10 Sales and Marketing,
Minneapolis, MN 55440 IDS Institutional Retirement
Services
Alvan D. Arthur Region Vice President- None
IDS Tower 10 Pacific Northwest Region
Minneapolis, MN 55440
Kent L. Ashton Vice President- None
IDS Tower 10 Financial Education
Minneapolis, MN 55440 Services
<PAGE>
PAGE 28
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
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
Timothy V. Bechtold Vice President-Insurance None
IDS Tower 10 Product Development
Minneapolis, MN 55440
John D. Begley Region Vice President- None
Olentangy Valley Center Mid-Central Region
Suite 300
7870 Olentangy River Rd.
Columbus, OH 43235
Carl E. Beihl Vice President- None
IDS Tower 10 Strategic Technology
Minneapolis, MN 55440 Planning
Alan F. Bignall Vice President- None
IDS Tower 10 Financial Planning
Minneapolis, MN 55440 Systems
Brent L. Bisson Region Vice President- None
Seafirst Financial Northwest Region
Center, Suite 1730
601 W. Riverside Ave.
Spokane, WA 99201
John C. Boeder Vice President- None
IDS Tower 10 Mature Market Group
Minneapolis, MN 55440
Karl J. Breyer Senior Vice President- None
IDS Tower 10 Corporate Affairs and
Minneapolis, MN 55440 Special Counsel
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-IDS None
IDS Tower 10 Securities Services
Minneapolis, MN 55440
Orison Y. Chaffee III Vice President-Field None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
<PAGE>
PAGE 29
Item 29. (continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
James E. Choat Senior Vice President- None
Suite 124 Field Management
6210 Campbell Rd.
Dallas, TX 75248
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 Region Vice President- None
345 Woodcliff Drive Northeast Region
Fairport, NY 14450
Kevin F. Crowe Region Vice President- None
IDS Tower 10 Atlantic Region
Minneapolis, MN 55440
Alan R. Dakay Vice President- None
IDS Tower 10 Institutional Insurance
Minneapolis, MN 55440 Marketing
William F. Darland Region Vice President- None
Suite 108C South Central Region
301 Sovereign Court
Manchester, MO 63011
William H. Dudley Director and Executive Director/
IDS Tower 10 Vice President- Trustee
Minneapolis MN 55440 Investment Operations
Roger S. Edgar Senior Vice President- None
IDS Tower 10 Information Systems
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
Gordon M. Fines Vice President- None
IDS Tower 10 Mutual Fund Equity
Minneapolis MN 55440 Investments
Louis C. Fornetti Senior Vice President None
IDS Tower 10 and Chief Financial
Minneapolis, MN 55440 Officer
<PAGE>
PAGE 30
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Douglas L. Forsberg Vice President- None
IDS Tower 10 Securities Services
Minneapolis, MN 55440
Carl W. Gans Region Vice President- None
IDS Tower 10 North Central Region
Minneapolis, MN 55440
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
David A. Hammer Vice President None
IDS Tower 10 and Marketing
Minneapolis, MN 55440 Controller
Robert L. Harden Region Vice President- None
Suite 403 Mid-Atlantic Region
8500 Leesburg Pike
Vienna, VA 22180
Lorraine R. Hart Vice President- None
IDS Tower 10 Insurance Investments
Minneapolis, MN 55440
Mark S. Hays Vice President-Senior None
IDS Tower 10 Portfolio Manager, IDS
Minneapolis, MN 55440 International
Brian M. Heath Region Vice President- None
IDS Tower 10 Southwest Region
Minneapolis, MN 55440
Raymond E. Hirsch Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
James G. Hirsh Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
<PAGE>
PAGE 31
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Paul C. Hopkins Vice President- None
IDS Tower 10 Senior Portfolio Manager,
Minneapolis, MN 55440 IDS International
Kevin P. Howe Vice President- None
IDS Tower 10 Government and
Minneapolis, MN 55440 Customer Relations
David R. Hubers Chairman, Chief None
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
Douglas R. Jordal Vice President-Taxes None
IDS Tower 10
Minneapolis, MN 55440
Craig A. Junkins Vice President - IDS 1994 None
IDS Tower 10 Implementation Planning
Minneapolis, MN 55440 and Financial Planning
Development
James E. Kaarre Vice President- None
IDS Tower 10 Marketing Information
Minneapolis, MN 55440
G. Michael Kennedy Vice President-Investment None
IDS Tower 10 Services and Investment
Minneapolis, MN 55440 Research
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
Harold D. Knutson Vice President- None
IDS Tower 10 System Services
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 Vice President-Field None
IDS Tower 10 Management Development
Minneapolis, MN 55440
<PAGE>
PAGE 32
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Christopher R. Kudrna Vice President- None
IDS Tower 10 Systems and Technology
Minneapolis, MN 55440 Development
Steven C. Kumagai Director and Senior None
IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management and Business
Systems
Mitre Kutanovski Region Vice President- None
IDS Tower 10 Midwest Region
Minneapolis, MN 55440
Edward Labenski Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Peter L. Lamaison Vice President- None
One Broadgate IDS International
London, England Division
Kurt A. Larson Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
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
Peter A. Lefferts Senior Vice President and None
IDS Tower 10 Chief Marketing Officer
Minneapolis, MN 55440
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
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
<PAGE>
PAGE 33
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
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
Pamela J. Moret Vice President- None
IDS Tower 10 Corporate Communications
Minneapolis, MN 55440
Barry J. Murphy Senior Vice President- None
IDS Tower 10 Client Service
Minneapolis, MN 55440
Robert J. Neis Vice President- None
IDS Tower 10 Information Systems
Minneapolis, MN 55440 Operations
Vernon F. Palen Region Vice President- None
Suite D-222 Rocky Mountain Region
7100 E. Lincoln Drive
Scottsdale, AZ 85253
James R. Palmer Vice President- None
IDS Tower 10 Insurance Operations
Minneapolis, MN 55440
Judith A. Pennington Vice President- None
IDS Tower 10 Field Technology
Minneapolis, MN 55440
George M. Perry Vice President- None
IDS Tower 10 Corporate Strategy
Minneapolis, MN 55440 and Development
Susan B. Plimpton Vice President- None
IDS Tower 10 Segmentation Development
Minneapolis, MN 55440 and Support
Ronald W. Powell Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
James M. Punch Vice President- None
IDS Tower 10 TransAction Services
Minneapolis, MN 55440
Frederick C. Quirsfeld Vice President-Taxable None
IDS Tower 10 Mutual Fund Investments
Minneapolis, MN 55440
<PAGE>
PAGE 34
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Roger B. Rogos Region Vice President- None
Suite 15, Parkside Place Great Lakes Region
945 Boardman-Canfield Rd
Youngstown, Ohio 44512
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
Robert A. Rudell Vice President- None
IDS Tower 10 IDS Institutional
Minneapolis, MN 55440 Retirement Services
John P. Ryan Vice President and None
IDS Tower 10 General Auditor
Minneapolis, MN 55440
Erven A. Samsel Senior Vice President- None
45 Braintree Hill Park Field Management
Braintree, MA 02184
R. Reed Saunders Director and Senior None
IDS Tower 10 Vice President-Corporate
Minneapolis, MN 55440 Strategy and Development
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 Region Vice President- None
9040 Roswell Rd. Southeast Region
River Ridge-Suite 600
Atlanta, GA 30350
Ben C. Smith Vice President- None
IDS Tower 10 Workplace Marketing
Minneapolis, MN 55440
<PAGE>
PAGE 35
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
William A. Smith Vice President and None
IDS Tower 10 Controller-Private
Minneapolis, MN 55440 Client Group
James B. Solberg Vice President- None
IDS Tower 10 Advanced Financial
Minneapolis, MN 55440 Planning
Bridget Sperl Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440 Management Services
Lois A. Stilwell Vice President- None
IDS Tower 10 Planner Training and
Minneapolis, MN 55440 Development
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 Vice President- None
IDS Tower 10 Field Business Systems
Minneapolis, MN 55440
John R. Thomas Senior Vice President- Director/
IDS Tower 10 Information and Trustee
Minneapolis, MN 55440 Technology
Melinda S. Urion Vice President and None
IDS Tower 10 Corporate Controller
Minneapolis, MN 55440
Wesley W. Wadman Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Norman Weaver Jr. Senior Vice President- None
Suite 215 Field Management
1501 Westcliff Drive
Newport Beach, CA 92660
<PAGE>
PAGE 36
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Michael L. Weiner Vice President- None
IDS Tower 10 Corporate Tax
Minneapolis, MN 55440 Operations
Lawrence J. Welte Vice President- None
IDS Tower 10 Investment Administration
Minneapolis, MN 55440
William N. Westhoff Senior Vice President- None
IDS Tower 10 Fixed Income Management
Minneapolis, MN 55440
Edwin M. Wistrand Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
Michael R. Woodward Senior Vice President- None
Suite 815 Field Management
8585 Broadway
Merrillville, IN 46410
Item 29(c). Not applicable.
Item 30. Location of Accounts and Records
IDS 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 166
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, IDS Life Moneyshare
Fund, Inc. certifies that it meets all of the requirements for
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 State of Minnesota on the 28th day
of October, 1994.
IDS LIFE MONEYSHARE FUND, INC.
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 28th day
of October, 1994.
Signature Capacity
/s/ William R. Pearce** President, Principal
William R. Pearce Executive Officer and
Director
/s/ Robert O. Schneider** Controller and Principal
Robert O. Schneider Accounting Officer
/s/ Leslie L. Ogg** Vice President and
Leslie L. Ogg Secretary
/s/ Melinda S. Urion** Treasurer
Melinda S. Urion
/s/ William N. Westhoff** Vice President -
William N. Westhoff Investments
/s/ Robert F. Froehlke* Director
Robert F. Froehlke
/s/ David R. Hubers* Director
David R. Hubers
/s/ Anne P. Jones* Director
Anne P. Jones
/s/ Donald M. Kendall* Director
Donald M. Kendall
<PAGE>
PAGE 167
Signature Capacity
/s/ Melvin R. Laird* Director
Melvin R. Laird
/s/ Lewis W. Lehr* Director
Lewis W. Lehr
/s/ James A. Mitchell* Director
James A. Mitchell
/s/ Edson W. Spencer* Director
Edson W. Spencer
/s/ John R. Thomas* Director
John R. Thomas
/s/ Wheelock Whitney* Director
Wheelock Whitney
*Signed pursuant to Directors' Power of Attorney dated October 14,
1993, filed electronically as Exhibit 17(a) to Registrant's Post-
Effective Amendment No. 22 by:
____________________________
Leslie L. Ogg
**Signed pursuant to Officers' Power of Attorney dated June 1,
1993, filed electronically as Exhibit 17(b) to Registrant's Post-
Effective Amendment No. 22 by:
____________________________
Leslie L. Ogg
<PAGE>
PAGE 168
CONTENTS OF THIS POST-EFFECTIVE AMENDMENT NO. 23
TO REGISTRATION STATEMENT NO. 2-72584
This post-effective amendment contains 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.
The signatures.
<PAGE>
PAGE 1
IDS Life Moneyshare Fund, Inc.
File No. 2-72584/811-3190
Exhibit Index
Exhibit 11: Independent Auditors' Consent.
Exhibit 17: Financial Data Schedule.
<PAGE>
PAGE 1
Independent Auditors' Consent
__________________________________________________________________
The board of directors and shareholders
IDS Life Moneyshare Fund, Inc.
We consent to the use of our reports included or incorporated
herein by reference, and to the references to our Firm under the
heading "FINANCIAL HIGHLIGHTS" in Part A and "INDEPENDENT AUDITORS"
in Part B of the Registration Statement.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
October 28, 1994
<PAGE>
PAGE 1
[ARTICLE] 6
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] AUG-31-1994
[PERIOD-END] AUG-31-1994
[INVESTMENTS-AT-COST] 179326203
[INVESTMENTS-AT-VALUE] 179326203
[RECEIVABLES] 587423
[ASSETS-OTHER] 273645
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 180187271
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 944500
[TOTAL-LIABILITIES] 944500
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 179243452
[SHARES-COMMON-STOCK] 179257043
[SHARES-COMMON-PRIOR] 179660778
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (681)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 179242771
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 6399834
[OTHER-INCOME] 0
[EXPENSES-NET] 986155
[NET-INVESTMENT-INCOME] 5413679
[REALIZED-GAINS-CURRENT] (681)
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 5412998
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (5413679)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 54009530
[NUMBER-OF-SHARES-REDEEMED] (59827377)
[SHARES-REINVESTED] 5414112
[NET-CHANGE-IN-ASSETS] (404402)
[ACCUMULATED-NII-PRIOR] 5667964
[ACCUMULATED-GAINS-PRIOR] 1739
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 936246
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 986155
[AVERAGE-NET-ASSETS] 173378079
[PER-SHARE-NAV-BEGIN] 1.00
[PER-SHARE-NII] .03
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] (.03)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 1.00
[EXPENSE-RATIO] .57
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<PAGE>
