<PAGE>
PAGE 1
Prospectus/Statement of Additional Information Supplement
September 12, 1994
<TABLE>
<CAPTION>
Publicly Offered Funds:
Prospectus
Fund Name (Date) Form # SAI Form # (MM/YY Printed)
<S> <C> <C> <C>
IDS Blue Chip Advantage Fund (April 1, 1994) S-6025 G S-6025-20 G (3/94)
IDS Bond Fund (Oct. 29, 1993) S-6495 G S-6495-20 G (10/93)
IDS California Tax-Exempt Fund
(Aug. 29, 1994) S-6328 J S-6328-20 J (8/94)
IDS Cash Management Fund (Sept. 24, 1993) S-6320 F S-6320-20 M (9/93)
IDS Discovery Fund (Sept. 24, 1993) S-6457 K S-6457-20 K (9/93)
IDS Diversified Equity Income Fund
(Nov. 24, 1993) S-6475 G S-6475-20 F (11/93)
IDS Equity Plus Fund (Jan. 28, 1994) S-6426 G S-6426-20 G (1/94)
IDS Extra Income Fund (Oct. 29, 1993) S-6370 F S-6370-20 G (9/93)
IDS Federal Income Fund (Aug. 29, 1994) S-6042 G S-6042-20 H (8/94)
IDS Global Bond Fund (Dec. 30. 1993) S-6309 G S-6309-20 H (12/93)
IDS Global Growth Fund (Dec. 30, 1993) S-6334 F S-6334-20 G (12/93)
IDS Growth Fund (Sept. 24, 1993) S-6455 K S-6455-20 K (9/93)
IDS High Yield Tax-Exempt Fund
(Jan. 28, 1994) S-6430 G S-6430-20 K (1/94)
IDS Insured Tax-Exempt Fund (Aug. 29, 1994) S-6327 G S-6327-20 K (8/94)
IDS International Fund (Dec. 30, 1993) S-6140 G S-6140-20 J (12/93)
IDS Managed Retirement Fund (Jan. 28, 1994) S-6141 G S-6141-20 G (1/94)
IDS Massachusetts Tax-Exempt Fund
(Aug. 29, 1994) S-6328 J S-6328-20 J (8/94)
IDS Michigan Tax-Exempt Fund (Aug. 29, 1994) S-6328 J S-6328-20 J (8/94)
IDS Minnesota Tax-Exempt Fund (Aug. 29, 1994) S-6328 J S-6328-20 J (8/94)
IDS Mutual (Nov. 24, 1993) S-6326 G S-6326-20 H (11/93)
IDS New Dimensions Fund,(Nov. 24, 1993) S-6440 G S-6440-20 G (11/93)
IDS New York Tax-Exempt Fund (Aug. 29, 1994) S-6328 J S-6328-20 J (8/94)
IDS Ohio Tax-Exempt Fund (Aug. 29, 1994) S-6328 J S-6328-20 J (8/94)
IDS Planned Investment Account
(Sept. 24, 1993) S-6318 G S-6320-20 M (9/93)
IDS Precious Metals Fund (May 27, 1994) S-6142 H S-6142-20 L (5/94)
IDS Progressive Fund (Nov. 24, 1993) S-6449 G S-6449-20 H (11/93)
IDS Selective Fund (Jan. 28, 1994) S-6376 G S-6376-20 G (1/94)
IDS Stock Fund (Dec. 30, 1993) S-6351 G S-6351-20 H (12/93)
IDS Strategy Fund (May 27, 1994) S-6380 H S-6380-20 K (5/94)
Aggressive Equity Fund
Equity Fund
Income Fund
Short-Term Income Fund
Worldwide Growth Fund
IDS Tax-Exempt Bond Fund (Jan. 28, 1994) S-6310 G (1/94)
IDS Tax-Free Money Fund (March 1, 1994) S-6433 G (2/94)
IDS Utilities Income Fund (Aug. 29, 1994) S-6341 J (8/94)
Life Funds
Retirement Annuity Mutual Funds
(October 29, 1993) S-6466 H (10/93)
IDS Life Capital Resource Fund, Inc.
IDS Life Capital Resource Fund
<PAGE>
PAGE 2
IDS Life Aggressive Growth Fund
IDS Life International Equity Fund
IDS Life Managed Fund
IDS Life Moneyshare Fund
IDS Life Special Income Fund
</TABLE>
SHAREHOLDER MEETINGS
At the regular meetings scheduled to be held on November 9, 1994,
shareholders of the funds listed on page one will vote on the
following proposals:
1. New Investment Management and Services Agreement ("IMS
Agreement") with IDS Financial Corporation ("IDS"). Except for
shareholders of Strategy - Income, Strategy - Short-Term Income,
Strategy - Worldwide Growth and Planned Investment Account,
shareholders will be asked to approve a new IMS Agreement with IDS.
For the non-money market funds, the fee will no longer be based in
part on the assets of all non-money market funds in the IDS MUTUAL
FUND GROUP (the "GROUP"). Instead, the fee rate will be based on
the average daily net assets of each individual fund, decreasing as
the fund increases in size. The tables below reflect the combined
fee under the IMS Agreement and the Administration and Accounting
Agreement (the "Admin Agreement"). Fees under the Admin Agreement
range from a high of 0.06% to a low of 0.02%, decreasing as assets
increase.
<TABLE>
<CAPTION>
Small Life Life
Assets Int'l Cap Int'l Aggr
(Billions) Funds* Funds** Equity Growth
<S> <C> <C> <C> <C> <C>
First $0.25 0.86% 0.70% 0.93% 0.71%
Next 0.25 0.83 0.67 0.91 0.69
Next 0.25 0.80 0.64 0.89 0.67
Next 0.25 0.77 0.61 0.87 0.65
Next 1.0 0.74 0.58 0.85 0.63
Over 2.0 0.71 0.55 0.83 0.61
* Global Growth, International, Precious Metals
** Discovery, Progressive
Federal Life
Assets Growth Municipal Capital
(Billions) Funds* Mutual Income** Resource
First $1.0 0.65% 0.57% 0.49% 0.68%
Next 1.0 0.62 0.54 0.46 0.66
Next 1.0 0.59 0.51 0.43 0.64
Next 3.0 0.56 0.48 0.40 0.62
Over 6.0 0.53 0.45 0.37 0.60
* Growth, New Dimensions, Strategy - Aggressive Equity
** Insured Tax-Exempt, Tax-Exempt Bond
Taxable
Assets Extra Income High Life Special
(Billions) Income Funds* Yield Income
First $1.0 0.64% 0.57% 0.53% 0.66%
Next 1.0 0.61 0.54 0.50 0.64
Next 1.0 0.58 0.51 0.47 0.62
Next 3.0 0.55 0.48 0.44 0.60
Next 3.0 0.52 0.45 0.41 0.58
Over 9.0 0.49 0.42 0.38 0.56
* Bond, Federal Income, Selective
/TABLE
<PAGE>
PAGE 3
<TABLE>
<CAPTION>
State
Municipal Growth and
Assets Income Blue Global Assets Income Life
(Billions) Funds* Chip Bond (Billions) Funds** Managed
<S> <C> <C> <C> <C> <C> <C> <C>
First $0.25 0.51% 0.48% 0.71% First $0.50 0.57% 0.67%
Next 0.25 0.48 0.45 0.69 Next 0.50 0.54 0.65
Next 0.25 0.45 0.42 0.67 Next 1.0 0.51 0.63
Next 0.25 0.43 0.39 0.65 Next 1.0 0.48 0.61
Over 1.0 0.40 0.36 0.63 Next 3.0 0.45 0.59
Over 6.0 0.42 0.57
* California Tax-Exempt, Massachusetts Tax-Exempt, Michigan Tax-Exempt, Minnesota Tax-Exempt, New York Tax-Exempt, Ohio
Tax-Exempt
** Diversified Equity Income, Equity Plus, Managed Retirement, Stock, Strategy - Equity, Utilities Income
</TABLE>
The fee schedules for Cash Management, Tax-Free Money and Life
Moneyshare will remain unchanged. The IMS Agreement also will be
modified to reflect the fact that, in the future, IDS may manage
master funds that are not part of the GROUP.
Multiple Classes of Shares. The publicly offered funds, except for
Tax-Free Money, intend to offer multiple classes of shares if the
proposed IMS Agreement is approved by shareholders. Each fund will
offer three classes of shares:
o Class A - sold with a front-end sales charge and a
service fee;
o Class B - sold with a contingent deferred sales
charge("CDSC"), a 12b-1 fee and a service fee;
o Class Y - for certain institutional shareholders meeting
eligibility requirements, sold with no sales charge, no 12b-
1 fee and no service fee.
Multiple classes of shares are expected to be implemented in March
1995. Shareholders of funds currently sold with a front-end sales
charge will receive shares of Class A. Most shareholders of
Strategy-Aggressive Equity and Strategy - Equity will receive
shares of Class B. Shareholders of those two funds who are
eligible for a waiver of the CDSC will receive shares of Class A.
Institutional shareholders who meet eligibility requirements will
receive shares of Class Y.
If shareholders approve the proposed IMS Agreement, the Board of
Directors/Trustees (the "Board") will approve a new 12b-1 plan for
Class B with a fee equal to 0.75% of average daily net assets, a
new shareholder servicing agreement for Class A and Class B with a
fee equal to 0.175% of average daily net assets and a new transfer
agency agreement for the new classes. These changes will be
effective at the time multiple classes of shares are offered.
2. Name Changes. Shareholders of Equity Plus Fund will be asked
to approve a change in the name of the fund to Equity Select Fund.
IDS Life Capital Resource Fund, Inc., the corporate entity composed
of three underlying funds, including IDS Life Capital Resource
Fund, is seeking to change its name to IDS Life Investment Series,
Inc. The name of the underlying fund will remain unchanged. If
shareholders of Strategy - Aggressive Equity Fund and Strategy -
Equity Fund approve the proposed IMS Agreement discussed in
paragraph 1, the Board will change the names of those funds to
Strategy Aggressive Fund and Equity Value Fund.<PAGE>
PAGE 4
3. Diversification Status. Shareholders of Precious Metals will
be asked to approve a change in the status of the fund from
diversified to non-diversified. While concentration of investments
in fewer issuers may result in more risk, the change will provide
the portfolio manager with more flexibility in investing the fund's
assets.
4. New 12b-1 Plan. Shareholders of Strategy - Aggressive Equity
and Strategy - Equity will be asked to approve a new 12b-1 plan.
Under the current 12b-1 plan, each fund pays a fee of 1% of the
lower of the fund's average daily net assets or the original net
asset value minus shares redeemed or transferred. Under the new
12b-1 plan, each fund will pay a fee of 0.75% of average daily net
assets. In addition, each fund will pay a service fee of 0.175% of
average daily net assets.
5. Mergers. Shareholders of Planned Investment Account,
Strategy - Income, Strategy - Short-Term Income and Strategy -
Worldwide Growth will be asked to approve the merger of those funds
into other funds in the GROUP. Because its declining assets have
made the fund difficult to manage, Planned Investment Account will
be merged into Cash Management in November 1994. The Strategy
funds originally were developed to give investors a contingent
deferred sales charge option for paying the sales charge. The
Strategy Funds were modeled on existing IDS funds that imposed a
front-end sales charge. Once multiple classes of shares are
implemented, as discussed in paragraph 1, there will no longer be
any reason to have separate funds and the Strategy funds will be
merged into the comparable IDS funds in March 1995. Income will be
merged with Bond. Short-Term Income will be merged with Federal
Income. Worldwide Growth will be merged with International.
6. Master-Feeder Investment Policy. At some future time, the
Board of Directors/Trustees (the "Board") may determine that it is
in the best interest of the Fund and its shareholders to create
what is known as a master/feeder fund structure. This structure
allows several investment companies and other investment groups,
including pension plans and trust accounts, to have their
investment portfolios managed as a combined pool called the master
fund. The purpose of the structure is to achieve operational
efficiencies. Except for shareholders of Strategy - Income,
Strategy - Short-Term Income, Strategy - Worldwide Growth and
Planned Investment Account, shareholders will be asked to approve a
new investment policy permitting the structure if the Board decides
it is appropriate.
7. Changes in Fundamental Policies. Except for shareholders of
Cash Management, Planned Investment Account, Strategy - Income,
Strategy - Short-Term Income, Strategy - Worldwide Growth, Tax-Free
Money and Life Moneyshare, shareholders will be asked to change the
status of a number of policies from fundamental (changeable only
with shareholder approval) to nonfundamental (changeable by the
Board without shareholder vote). Policies to be voted on include
those regarding: buying on margin or selling short; pledging
assets as collateral; investing in issuers with less than 3 years
of operating history; investing in other investment companies;
<PAGE>
PAGE 5
investing for purposes of exercising control or management;
investing in oil, gas or mineral exploration or development
programs; investing in warrants; investing in illiquid securities;
and investing in interest rate futures contracts.
In addition, shareholders will be asked to approve a revision in
the fundamental policy on making loans to permit the fund to make
cash loans up to 5% of its total assets; a revision in the policy
on investing in real estate to clarify that the Fund may invest in
securities or other instruments backed by real estate or securities
of companies engaged in the real estate business; and a revision in
the policy on investing in commodities to clarify that the Fund may
invest in securities or other instruments backed by, or whose value
is derived from, physical commodities.
Extra Income shareholders will vote to eliminate the policy on
concentrating in electric utility securities. Shareholders of
Global Bond will vote to revise the policy on concentrating in one
industry to clarify that the Fund may invest more than 25% of its
assets in government securities of a single country.
NAME CHANGES OF ADVISER, DISTRIBUTOR AND CUSTODIAN
Effective January 1, 1995, the name of IDS Financial Corporation,
the Funds' investment adviser and transfer agent, will be changed
to American Express Financial Corporation. The name of IDS
Financial Services Inc., the Funds' distributor, will be changed to
American Express Financial Advisors Inc. For those Funds for which
IDS Trust Company serves as custodian, the name of the custodian
will be changed to American Express Trust Company.
EQUITY PLUS CHANGE IN FOREIGN INVESTMENT POLICY
For Equity Plus, the "Foreign Investments" paragraph of the
"Investment policies" section is modified to read that the Fund may
invest up to 25% of its total assets in foreign investments.
"PORTFOLIO MANAGER" CHANGE FOR DIVERSIFIED EQUITY INCOME
Keith Tufte joined IDS in 1990 and serves as portfolio manager. He
was appointed to manage this fund in September 1994. He also
manages IDS wealth management yield portfolios and serves as
associate portfolio manager of IDS Strategy, Equity Fund. Prior to
joining IDS, he was vice president and analyst at J. P. Morgan
Investment Management.
S-6508 A (9/94)
*Destroy - Nov. 9, 1994
