<PAGE>
PAGE 1
IDS BOND FUND
1995 annual report
(prospectus enclosed)
(icon of) column
The goal of IDS Bond Fund, Inc. is to provide shareholders with a
high level of current income while attempting to conserve the value
of the investment and to continue a high level of income for the
longest period of time. The Fund invests primarily in corporate
bonds and other debt securities.
(This annual report includes a prospectus that describes in detail
the Fund's objective, investment policies, risks, sales charges,
fees and other matters of interest. Please read the prospectus
carefully before you invest or send money.)
Distributed by
American Express
Financial Advisors Inc.<PAGE>
PAGE 2
(icon of) column
Striking a balance among bonds
A bond is like an I.O.U. But with a bond, it's a corporation or
the government--the bond issuer--that promises to pay the money
back. In return for lending money to the issuer, bond investors
get paid interest, which varies by bond quality. (The lower the
quality, the higher the interest.)
Bond Fund invests largely in high-quality bonds, but includes some
lower-quality and even some foreign bonds seeking to boost the
return. The portfolio manager shifts this mix, as well as the
balance between corporate and government bonds, as investment
conditions dictate. In doing so, the Fund seeks to maximize the
long-term return potential for investors.<PAGE>
PAGE 3
Contents
(Icon of) One open book inside of another.
The purpose of this annual report is to tell investors how the Fund
performed.
The prospectus, which is bound into the middle of this annual
report, describes the Fund in detail.
1995 annual report
From the president 4
From the portfolio manager 4
Ten largest holdings 6
Making the most of your Fund 7
Long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 21
IDS mutual funds 35
Federal income tax information 38
1995 prospectus
The Fund in brief
Goal 3p
Types of Fund investments and their risks 3p
Manager and distributor 3p
Portfolio manager 3p
Alternative purchase arrangements 3p
Sales charge and fund expenses 4p
Performance
Financial highlights 6p
Total returns 7p
Yield 9p
Investment policies and risks
Facts about investments and their risks 10p
Alternative investment option 14p
Valuing Fund shares 15p
How to purchase, exchange or redeem shares
Alternative purchase arrangements 16p
How to purchase shares 19p
How to exchange shares 22p
How to redeem shares 22p
Reductions and waivers of the sales charge 27p
Special shareholder services
Services 32p
Quick telephone reference 32p
<PAGE>
PAGE 4
Distributions and taxes
Dividend and capital gain distributions 33p
Reinvestments 34p
Taxes 35p
How to determine the correct TIN 37p
How the Fund is organized
Shares 38p
Voting rights 38p
Shareholder meetings 38p
Directors and officers 38p
Investment manager and transfer agent 40p
Distributor 41p
About American Express Financial Corporation
General information 43p
Appendices
Description of corporate bond ratings 44p
Descriptions of derivative instruments 46p<PAGE>
PAGE 5
To our shareholders
(Photo of) William R. Pearce, President of the Fund
(Photo of) Fred Quirsfeld, Portfolio manager
From the president
As I indicated in the Fund's previous reports, new agreements
between the Fund and American Express Financial Corporation (AEFC)
were approved by shareholders in November 1994. The new agreements
became effective when the Fund began offering multiple classes of
shares on March 20, 1995.
The advantage of offering more than a single class of shares is
that investors may choose how they wish to pay sales charges. A
portion of these charges compensates your American Express
financial advisor (formerly called your IDS planner), who is
committed to providing you with outstanding services.
Adding new classes of mutual fund shares does make the presentation
of financial information in this report more complex. However, we
will continue our effort to make the reports easier to read and
understand. Meanwhile, your American Express financial advisor is
available to answer your questions.
William R. Pearce
From the portfolio manager
An improving bond market and an emphasis on corporate bonds keyed a
strong performance by IDS Bond Fund during the recent fiscal year
(September 1994 through August 1995).
As is always the case for bond mutual funds, the biggest influence
on the Fund's performance during the past 12 months was the
interest-rate trend. In February 1994, the Federal Reserve began
raising short-term interest rates to rein in economic growth and
thereby head off a potential spike in the inflation rate. Long-
term rates took their cue from the Fed's actions and began a
dramatic climb that didn't end until late last year. Because
rising rates drive down bond values, the Fund's performance was
negatively affected for the first two months of the fiscal year.
Rally begins
The turnaround for the bond market and the Fund began in November
1994. With inflation fears easing somewhat, long-term interest
rates began to decline, even as the Fed continued to nudge short-
term rates higher. The Fed's final rate hike came last February.
By that time, the positive market momentum had already turned into
a powerful rally that continued well into the summer of this year.
In fact, in July the Fed actually reversed its policy by taking
short-term rates down a notch--a reflection of the Fed's
recognition that its previous increases had achieved the desired
effect of slowing down the economy and easing upward pressures on
inflation.
<PAGE>
PAGE 6
In addition to the favorable market trend, the Fund also benefited
from my decision late in 1994 to switch from a relatively defensive
portfolio structure to a more aggressive one. This adjustment
included reducing cash reserves and putting that money to work in
bonds, and lengthening the duration of the portfolio. (Duration is
related to the average maturity of the bonds in the portfolio and
indicates a portfolio's sensitivity to interest-rate changes. When
rates are falling, it pays to have a longer duration.) As rates
soon declined, the Fund was therefore very well-positioned to
capitalize on that developing trend.
Successful sectors
Looking at market sectors, I kept a substantial exposure to
corporate bonds, including both investment grade and below-
investment-grade issues. For the most part, both were very good
performers during the fiscal year. On the foreign front, the
Fund's small amount of holdings in emerging markets suffered in
late 1994, but rebounded quite nicely this year to give it overall
positive performance. Also of note, throughout the fiscal year I
undertook a general upgrading of portfolio quality, evidenced by a
reduction in corporate bond holdings and an increase in U.S.
Treasury and mortgage-backed securities.
As we head into a new fiscal year, it appears that professional
bond investors have become more comfortable with the investment
climate that the Fund has embraced for some time: slow-to-moderate
economic growth and a modest rate of inflation. As unlikely as
others may have thought it, the Federal Reserve appears to have
negotiated the desired "soft landing" for the economy.
If that scenario continues to play out, I expect long-term interest
rates to fall somewhat lower by early next year. That, in turn,
would very likely allow bonds, especially below-investment-grade
bonds of domestic corporations and bonds issued by companies in
emerging foreign markets, to enjoy good performance in the months
ahead. I have structured the portfolio for such an environment and
look forward to what I believe will be a rewarding period.
Fred Quirsfeld
Class A
12-month performance
(All figures per share)
Net asset value (NAV)
Aug. 31, 1995 $5.05
Aug. 31, 1994 $4.91
Increase $0.14
Distributions
Sept. 1, 1994-Aug. 31, 1995
From income $0.37
From capital gains $0.10
Total distributions $0.47
Total return** +13.7%***
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PAGE 7
Class B
March 20, 1995-Aug. 31, 1995
(All figures per share)
Net asset value (NAV)
Aug. 31, 1995 $5.05
Aug. 31, 1994 $4.79
Increase $0.26
Distributions
March 20, 1995*-Aug. 31, 1995
From income $0.17
From capital gains $ --
Total distributions $0.17
Total return** +9.0%***
Class Y
March 20, 1995-Aug. 31, 1995
(All figures per share)
Net asset value (NAV)
Aug. 31, 1995 $5.05
March 20, 1995* $4.79
Increase $0.26
Distributions
March 20, 1995*-Aug. 31, 1995
From income $0.19
From capital gains $ --
Total distributions $0.19
Total return** +9.4%***
* Inception date.
** The prospectus discusses the effects of sales charges, if any,
on the various classes.
***The total return is a hypothetical investment in the Fund with
all distributions reinvested.<PAGE>
PAGE 8
<TABLE>
<CAPTION>
IDS Bond Fund, Inc.
Your Fund's ten largest holdings
(Pie chart)
The ten holdings listed here make up 7.04% of the Fund's
net assets
_____________________________________________________________________________________
Percent Value
(of Fund's net assets) (as of Aug. 31, 1995)
_____________________________________________________________________________________
<S> <C> <C>
Long Island Lighting .93% $ 29,935,479
9.625% General Refunding Mortgage 2024
New York Telephone .83 26,717,075
9.375% 2031
Viacom International .80 25,642,500
8% 2006
Scotland Bank .70 22,401,580
8.80% 2004
Ford Capital .69 22,084,409
9.50% 2010
Argentina .67 21,721,563
7.312 2005
Poland .61 19,580,000
3.250 2014
USX .61 19,524,400
9.375% 2022
San Diego Gas & Electric .60 19,200,228
9.625% 2020
Province of Quebec .60 19,177,440
11% 2015
Excludes U.S. Treasury and government agency holdings that total 28% of the fund's
net assets.
</TABLE>
<PAGE>
PAGE 9
Making the most of your fund
Average annual total return
(as of Aug. 31, 1995)
Class A
1 year 5 years 10 years
+7.96% +10.98% +10.15%
Total returns for Class A, Class B and Class Y for the period from
March 20, 1995 to Aug. 31, 1995 were +4.21%, +4.27% and +9.69%,
respectively. March 20, 1995 was the inception date for Class B
and Class Y. Total return for Class A is shown for comparative
purposes. The performance of Class B and Class Y will vary from
the performance of Class A based on differences in sales charges
and fees.
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Figures for Class A reflect the deduction of the maximum 5% sales
charge. This was a period of widely fluctuating security prices.
Past performance is no guarantee of future results.
Build your assets systematically
To keep your assets growing steadily, one of the best ways to
invest in the Fund is by dollar-cost averaging -- a time-tested
strategy that can make market fluctuations work for you. To
dollar-cost average, simply invest a fixed amount of money
regularly. You'll automatically buy more shares when the Fund's
share price is low, fewer shares when it is high.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00
Feb 100 18 5.56
Mar 100 17 5.88
Apr 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
Sept 100 21 4.76
Oct 100 20 5.00
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more
shares when the per share market price is low
<PAGE>
PAGE 10
(arrow in table pointing to September) and fewer shares when the
per share market price is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
Three ways to benefit from a mutual fund:
o your shares increase in value when the Fund's investments do
well
o you receive capital gains when the gains on investments sold
by the Fund exceed losses
o you receive income when the Fund's stock dividends, interest
and short-term gains exceed its expenses.
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gain distributions to buy additional shares
of the Fund or another fund.
Class A*
How your $10,000 has grown in IDS Bond Fund
Average annual total return
(as of Aug. 31, 1995)
1 year 5 years 10 years
+7.96% +10.98% +10.15% $26,298
Bond Fund
Lehman Aggregate
Bond Index
$9,500
'85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95
*The graph above is for Class A only. Class B and Class Y are not
shown. Total returns for Class A, Class B and Class Y for the
period from March 20, 1995 to Aug. 31, 1995 were +4.21%, +4.27% and
+9.69%, respectively. March 20, 1995 was the inception date for
Class B and Class Y. Total return for Class A is shown for
comparative purposes. The performance of Class B and Class Y will
vary from the performance of Class A based on differences in sales
charges and fees.
Assumes: Holding period from 8/31/85 to 8/31/95. Returns do not
reflect taxes payable on distributions. Also see "Performance" in
the Fund's current prospectus. Reinvestment of all income and
capital gain distributions for the Fund, with a value of $16,356.
The Lehman Aggregate Bond Index is made up of a representative list
of government and corporate bonds as well as asset-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 Bond Fund.
<PAGE>
PAGE 11
On the graph above you can see how the Fund's total return compared
to a widely cited performance measure, the Lehman Aggregate Bond
Index. In comparing Bond Fund with this index, you should take
into account the fact that the Fund's performance reflects the
maximum sales charge of 5%, while such charges are not reflected in
the performance of the index. If you were actually to buy either
individual bonds or bond mutual funds, any sales charges that you
pay would reduce your total return as well.
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Average annual total return figures reflect the deduction of the
maximum sales charge as discussed in the prospectus. This was a
period of widely fluctuating security prices. Past performance is
no guarantee of future results.<PAGE>
PAGE 12
Independent auditors' report
The board of directors and shareholders
IDS Bond Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments in securities,
of IDS Bond Fund, Inc. as of August 31, 1995, and the related
statement of operations for the year then ended and the statements
of changes in net assets for each of the years in the two-year
period ended August 31, 1995, and the financial highlights for each
of the years in the ten-year period ended August 31, 1995. 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.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IDS
Bond Fund, Inc. at August 31, 1995, and the results of its
operations for the year then ended and the changes in its net
assets for each of the years in the two-year period ended August
31, 1995, and the financial highlights for the periods stated in
the first paragraph above, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
October 6, 1995<PAGE>
PAGE 13
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Bond Fund, Inc.
Aug. 31, 1995
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $3,050,010,532) $3,161,989,118
Receivable for investment securities sold 2,123,458
Dividends and accrued interest receivable 56,545,044
U.S. government securities held as collateral (Note 5) 57,168,751
_____________________________________________________________________________________________________________
Total assets 3,277,826,371
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 636,834
Dividends payable to shareholders 3,802,152
Payable for investment securities purchased 3,344,469
Payable upon return of securities loaned (Note 5) 59,981,451
Accrued investment management services fee 86,107
Accrued distribution fee 31,969
Accrued service fee 30,017
Accrued transfer agency fee 15,495
Accrued administrative services fee 7,770
Other accrued expenses 501,873
_____________________________________________________________________________________________________________
Total liabilities 68,438,137
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $3,209,388,234
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value; $ 6,350,641
Additional paid-in capital 3,136,564,177
Undistributed net investment income 301,819
Accumulated net realized loss (Notes 1 and 8) (45,806,989)
Unrealized appreciation 111,978,586
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $3,209,388,234
_____________________________________________________________________________________________________________
Net assets applicable to outstanding shares: Class A $2,363,303,961
Class B $ 782,166,654
Class Y $ 63,917,619
Net asset value per share of outstanding capital stock: Class A shares 467,638,036 $ 5.05
Class B shares 154,782,761 $ 5.05
Class Y shares 12,643,387 $ 5.06
See accompanying notes to financial statements.<PAGE>
PAGE 14
Financial statements
Statement of operations
IDS Bond Fund, Inc.
Year ended Aug. 31, 1995
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
Income:
Interest $218,364,218
Dividends (net of foreign taxes withheld of $35,402) 2,682,191
_____________________________________________________________________________________________________________
Total income 221,046,409
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management services fee 13,073,299
Distribution fee
Class A 435,932
Class B 2,478,540
Transfer agency fee 2,584,747
Incremental transfer agency fee -- Class B 34,183
Service fee
Class A 1,801,808
Class B 575,211
Administrative services fee 618,745
Compensation of directors 29,489
Compensation of officers 26,660
Custodian fees 166,980
Postage 333,456
Registration fees 352,142
Reports to shareholders 103,200
Audit fees 38,500
Administrative 16,575
Other 26,509
_____________________________________________________________________________________________________________
Total expenses 22,695,976
_____________________________________________________________________________________________________________
Investment income -- net 198,350,433
_____________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________
Net realized loss on security and foreign currency transactions (including
loss of $226,344 from foreign currency transactions)(Note 3) (29,480,476)
Net realized gain on closed interest rate futures contracts 39,875
_____________________________________________________________________________________________________________
Net realized loss on investments and foreign currency (29,440,601)
Net change in unrealized appreciation or depreciation 182,633,301
_____________________________________________________________________________________________________________
Net gain on investments and foreign currency 153,192,700
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $351,543,133
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 15
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Bond Fund, Inc.
Year ended Aug. 31,
_____________________________________________________________________________________________________________
Operations and distributions 1995 1994
_____________________________________________________________________________________________________________
<C> <C> <C>
Investment income -- net $ 198,350,433 $ 184,268,545
Net realized gain (loss) on investments and foreign currency (29,440,601) 45,541,259
Net change in unrealized appreciation or depreciation 182,633,301 (279,119,373)
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations 351,543,133 (49,309,569)
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (172,502,967) (184,867,231)
Class B (22,840,548) --
Class Y (2,210,213) --
Net realized gain
Class A (44,353,816) (27,971,600)
Excess distribution of realized gain (Note 1)
Class A -- (29,043)
_____________________________________________________________________________________________________________
Total distributions (241,907,544) (212,867,874)
_____________________________________________________________________________________________________________
Capital share transactions (Note 6)
_____________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 340,793,447 323,953,867
Class B shares 125,204,756 --
Class Y shares 69,208,436 --
Fund merger (Note 7)
Class A shares 4,455,838 --
Class B shares 667,109,887 --
Reinvestment of distributions at net asset value
Class A shares 143,593,478 138,748,551
Class B shares 19,534,420 --
Class Y shares 2,033,460 --
Payments for redemptions
Class A shares (442,588,203) (441,905,072)
Class B shares (Note 2) (67,847,577) --
Class Y shares (10,418,481) --
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions 851,079,461 20,797,346
_____________________________________________________________________________________________________________
Total increase (decrease) in net assets 960,715,050 (241,380,097)
Net assets at beginning of year 2,248,673,184 2,490,053,281
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$301,819 and $1,179,366) $3,209,388,234 $2,248,673,184
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 16
IDS Bond Fund, Inc.
Notes to financial statements
___________________________________________________________________
1. Summary of significant accounting policies
The Fund is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company.
The Fund offers Class A, Class B and Class Y shares. Class A shares
are sold with a front-end sales charge. Class B shares, which the
Fund began offering on March 20, 1995, may be subject to a
contingent deferred sales charge. Class B shares automatically
convert to Class A after eight years. Class Y shares, which the
Fund also began offering on March 20, 1995, have no sales charge
and are offered only to qualifying institutional investors.
All classes of shares have identical voting, dividend, liquidation
and other rights, and the same terms and conditions, except that
the level of distribution fee, transfer agency fee and service fee
(class specific expenses) differs among classes. Income, expenses
(other than class specific expenses) and realized and unrealized
gains or losses on investments are allocated to each class of
shares based upon its relative net assets.
Significant accounting policies followed by the Fund are summarized
below:
Valuation of securities
All securities are valued at the close of each business day.
Securities traded on national securities exchanges or included in
national market systems are valued at the last quoted sales price;
securities for which market quotations are not readily available,
including illiquid securities, are valued at fair value according
to methods selected in good faith by the board of directors.
Determination of fair value involves, among other things, reference
to market indexes, matrixes and data from independent brokers.
Short-term securities maturing in more than 60 days from the
valuation date are valued at the market price or approximate market
value based on current interest rates; those maturing in 60 days or
less are valued at amortized cost.
Option transactions
In order to produce incremental earnings, protect gains, and
facilitate buying and selling of securities for investment
purposes, the Fund may buy or write options traded on any U.S. or
foreign exchange or in the over-the-counter market where the
completion of the obligation is dependent upon the credit standing
of the other party. The Fund also may buy and sell put and call
options and write covered call options on portfolio securities and
may write cash-secured put options. The risk in writing a call
option is that the Fund gives up the opportunity of profit if the
market price of the security increases. The risk in writing a put
option is that the Fund may incur a loss if the market price of the
security decreases and the option is exercised. The risk in buying
an option is that the Fund pays a premium whether or not the option
is exercised. The Fund also has the additional risk of not being<PAGE>
PAGE 17
able to enter into a closing transaction if a liquid secondary
market does not exist.
Option contracts are valued daily at the closing prices on their
primary exchanges and unrealized appreciation or depreciation is
recorded. The Fund will realize a gain or loss upon expiration or
closing of the option transaction. When options on debt securities
or futures are exercised, the Fund will realize a gain or loss.
When other options are exercised, the proceeds on sales for a
written call option, the purchase cost for a written put option or
the cost of a security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Futures transactions
In order to gain exposure to or protect itself from changes in the
market, the Fund may buy and sell interest rate futures contracts
traded on any U.S. or foreign exchange. The Fund also may buy or
write put and call options on these futures contracts. Risks of
entering into futures contracts and related options include the
possibility that there may be an illiquid market and that a change
in the value of the contract or option may not correlate with
changes in the value of the underlying securities.
Upon entering into a futures contract, the Fund is required to
deposit either cash or securities in an amount (initial margin)
equal to a certain percentage of the contract value. Subsequent
payments (variation margin) are made or received by the Fund each
day. The variation margin payments are equal to the daily changes
in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the
contract is closed or expires.
Foreign currency translations and 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 and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in
foreign exchange rates on realized and unrealized security gains or
losses is reflected as a component of such gains or losses. In the
statement of operations, net realized gains or losses from foreign
currency transactions may arise from sales of foreign currency,
closed forward contracts, exchange gains or losses realized between
the trade date and settlement dates on securities transactions, and
other translation gains or losses on dividends, interest income and
foreign withholding taxes.
The Fund may enter into forward foreign currency exchange contracts
for operational purposes and to protect against adverse exchange
rate fluctuation. The net U.S. dollar value of foreign currency
underlying all contractual commitments held by the Fund and the
resulting unrealized appreciation or depreciation are determined
using foreign currency exchange rates from an independent pricing
service. The Fund is subject to the credit risk that the other
party will not complete the obligations of the contract.<PAGE>
PAGE 18
Federal taxes
Since the Fund's policy is to comply with all sections of the
Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income to shareholders, no
provision for income or excise taxes is required.
Net investment income (loss) and net realized gains (losses) may
differ for financial statement and tax purposes primarily because
of the deferral of losses on certain futures contracts, the
recognition of certain foreign currency gains (losses) as ordinary
income (loss) for tax purposes, and losses deferred due to "wash
sale" transactions. The character of distributions made during the
year from net investment income or net realized gains may differ
from their ultimate characterization for federal income tax
purposes. 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) were recorded by the Fund.
On the statement of assets and liabilities, as a result of
permanent book-to-tax differences, undistributed net investment
income has been decreased by $1,674,252, accumulated net realized
loss has been decreased by $1,670,248, resulting in a
reclassification adjustment to increase additional paid-in capital
by $4,004.
Dividends to shareholders
Dividends from net investment income, declared daily and payable
monthly, are reinvested in additional shares of the Fund at net
asset value or payable in cash. Capital gains, when available, are
distributed along with the last income dividend of the calendar
year.
Other
Security transactions are accounted for on the date securities are
purchased or sold. Dividend income is recognized on the ex-dividend
date. For U.S. dollar denominated bonds, interest income includes
level-yield amortization of premium and discount. For foreign
bonds, except for original issue discount, the Fund does not
amortize premium and discount. Interest income, including
level-yield amortization of premium and discount, is accrued daily.<PAGE>
PAGE 19
2. Expenses and sales charges
Under terms of a prior agreement that ended March 19,1995, the Fund
paid AEFC a fee for managing its investments, recordkeeping and
other specified services. The fee was a percentage of the Fund's
average daily net assets consisting of a group asset charge in
reducing percentages from 0.46% to 0.32% annually on the combined
net assets of all non-money market Funds in the IDS MUTUAL FUND
GROUP and an individual annual asset charge of 0.13% of average
daily net assets.
Also under the terms of a prior agreement, the Fund paid AEFC a
distribution fee at an annual rate of $6 per shareholder account
and a transfer agency fee at an annual rate of $15.50 per
shareholder account. The transfer agency fee was reduced by
earnings on monies pending shareholder redemptions.
Effective March 20, 1995, when the Fund began offering multiple
classes of shares, the Fund entered into agreements with AEFC for
managing its portfolio, providing administrative services and
serving as transfer agent as follows: Under its Investment
Management Services Agreement, AEFC determines which securities
will be purchased, held or sold. The management fee is a percentage
of the Fund's average daily net assets in reducing percentages from
0.52% to 0.395% annually.
Under an Administrative Services Agreement, the Fund pays AEFC for
administration and accounting services at a percentage of the
Fund's average daily net assets in reducing percentages from 0.05%
to 0.025% annually.
Under a separate Transfer Agency Agreement, AEFC maintains
shareholder accounts and records. The Fund pays AEFC an annual fee
per shareholder account for this service as follows:
o Class A $15.50
o Class B $16.50
o Class Y $15.50
Also effective March 20, 1995, the Fund entered into agreements
with American Express Financial Advisors Inc. for distribution and
shareholder servicing- related services as follows: Under a Plan
and Agreement of Distribution, the Fund pays a distribution fee at
an annual rate of 0.75% of the Fund's average daily net assets
attributable to Class B shares for distribution-related services.
Under a Shareholder Service Agreement, the Fund pays a fee for
service provided to shareholders by financial advisors and other
servicing agents. The fee is calculated at a rate of 0.175% of the
Fund's average daily net assets attributable to Class A and Class B
shares.
AEFC will assume and pay any expenses (except taxes and brokerage
commissions) that exceed the most restrictive applicable state
expense limitation.
Sales charges by American Express Financial Advisors Inc. for
distributing Fund shares were $7,548,342 for Class A and $252,528
for Class B for the year ended Aug. 31, 1995. <PAGE>
PAGE 20
The Fund has a retirement plan for its independent directors. Upon
retirement, directors receive monthly payments equal to one-half of
the retainer fee for as many months as they served as directors up
to 120 months. There are no death benefits. The plan is not funded
but the Fund recognizes the cost of payments during the time the
directors serve on the board. The retirement plan expense amounted
to $22,390 for the year ended Aug. 31, 1995.
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $1,384,878,657 (including
$625,480,515 that was acquired in the Fund merger as described in
Note 7) and $1,021,928,936 respectively, for the year ended
Aug. 31, 1995. Realized gains and losses are determined on an
identified cost basis.
___________________________________________________________________
4. Illiquid securities
At Aug. 31, 1995, investments in securities included issues that
are illiquid. The Fund currently limits investments in illiquid
securities to 10% of the net assets, at market value, at the time
of purchase. The aggregate value of such securities at Aug. 31,
1995 was $11,097,097, representing 0.35% of net assets. Pursuant to
guidelines adopted by the fund's board of directors, certain
unregistered securities are determined to be liquid and are not
included within the 10% limitation specified above.
___________________________________________________________________
5. Lending of portfolio securities
At Aug. 31, 1995, securities valued at $57,927,184 were on loan to
brokers. For collateral, the Fund received $2,812,700 in cash and
U.S. government securities valued at $7,168,751. Income from
securities lending amounted to
$117,125 for the year ended Aug. 31, 1995. The risks to the Fund of
securities lending are that the borrower may not provide additional
collateral when required or return the securities when due.
___________________________________________________________________
6. Capital share transactions
Transactions in shares of capital stock for the periods indicated
are as follows:
<TABLE>
<CAPTION>
Period ended Aug. 31, 1995 Year ended
08/31/94
Class A Class B* Class Y* Class A
__________________________________________________________________________
<S> <C> <C> <C> <C>
Sold 70,297,518 25,211,637 14,357,265 62,340,332
Fund Merger 930,821 139,358,656 -- --
Issued for reinvested 29,953,783 3,918,832 407,713 26,592,240
distributions
Redeemed (91,890,852) (13,706,364) (2,121,591) (85,276,606)
___________________________________________________________________________
Net increase 9,291,270 154,782,761 12,643,387 3,655,966
___________________________________________________________________________
*Inception date was March 20, 1995.
/TABLE
<PAGE>
PAGE 21
7. Fund merger
As of the close of business on March 17, 1995, IDS Bond Fund
acquired the assets and assumed the identified liabilities of IDS
Strategy - Income Fund.
The aggregate net assets of IDS Bond Fund immediately before the
aquisition was $2,217,255,191.
The merger was accomplished by a tax-free exchange of 115,800,789
shares of IDS Strategy - Income Fund valued at $671,565,725.
In exchange for the IDS Strategy - Income Fund shares and assets,
IDS Bond Fund issued the following number of shares:
Class A 930,821
Class B 139,358,656
IDS Strategy - Income Fund's net assets at that date were as
follows, which include the following amounts of capital stock,
unrealized depreciation, and accumulated net realized loss that was
combined with IDS Bond Fund.
<TABLE>
<CAPTION>
Total net Capital stock Unrealized Accumulated net
assets depreciation realized loss
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
Class A $ 4,455,838 $ 4,702,952 $ (109,256) $ (137,858)
Class B 667,109,887 704,106,719 (16,357,326) (20,639,506)
______________________________________________________________________________
</TABLE>
8. Capital loss carryover
For federal income tax purposes, the Fund had a capital loss
carryover of $48,456,703 at Aug. 31, 1995, that if not offset by
subsequent capital gains, will expire in 2003 through 2004. The
carryover includes $21,076,538 acquired in connection with the IDS
Strategy - Income Fund merger (Note 7). There is no limitation on
the ability to utilize these losses, however, if not offset by
subsequent capital gains, they will expire in 2002. It is unlikely
the board of directors will authorize a distribution of any net
realized gains until the available capital loss carryover has been
offset or expires.
___________________________________________________________________
9. Financial highlights
"Financial highlights" showing per share data and selected
information is presented on page 6 of the prospectus.
<PAGE>
PAGE 22
<TABLE>
<CAPTION>
Investments in securities
IDS Bond Fund, Inc. (Percentages represent value of
Aug. 31, 1995 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Bonds (93.5%)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. government obligations (14.3%)
U.S. Treasury 6.25% 2023 $100,000,000 $ 93,865,000
6.375 1999 2,000,000 2,023,020
6.375 2002 17,300,000(b) 17,468,156
6.75 1997 10,000,000(b) 10,153,000
7.125 1999 56,500,000(b) 58,662,820
7.25 2022 25,000,000 26,476,750
7.50 2016 15,975,000 17,332,236
7.50 2024 6,500,000(b) 7,135,050
7.875 2004 12,000,000 13,267,920
8.875 2017 117,000,000 145,094,040
Govt Trust Certs Israel 9.25 2001 11,100,000 12,092,340
Resolution Funding Corp 8.125 2019 40,925,000 46,823,520
Zero Coupon 8.68 1999 11,500,000(g) 9,244,045
______________
Total 459,637,897
_________________________________________________________________________________________________________________________________
Mortgage-backed securities (14.5%)
Federal Home Loan Bank 7.32 1997 6,000,000 6,007,440
Federal Home Loan Mtge Corp 6.50 2007 1,094,444 1,079,264
8.00 2017-24 20,760,137 21,207,704
Collateralized Mtge Obligation 7.00 2022 22,000,000 21,124,080
8.50 2022 17,000,000 18,243,380
Inverse Floater 2.90 2023 7,640,693(c) 3,999,215
6.012 2023 4,000,000(c) 2,660,920
6.37 2023 9,000,000(c) 5,625,000
8.269 2023 5,665,564(c) 4,441,576
Trust Series Z 8.25 2024 9,532,238(d) 9,535,479
Federal Natl Mtge Assn 6.00 2024 68,093,558 63,901,719
6.50 2008-24 194,278,965 188,120,305
8.00 2025 11,704,143 11,956,484
8.50 2023-24 29,503,748 30,499,498
9.00 2009-24 17,300,454 18,057,349
Collateralized Mtge Obligation 5.00 2024 9,961,155 8,793,708
Inverse Floater 5.39 2023 1,936,228(c) 1,540,095
6.11 2023 1,855,845(c) 1,504,311
Trust Series Z 6.00 2024 5,496,856(d) 4,078,942
7.00 2019 17,581,000(d) 16,849,455
See accompanying notes to investments in securities
<PAGE>
PAGE 23
Govt Natl Mtge Assn 8.00 2024 4,755,731 4,882,044
9.00 2025 10,311,875 10,840,358
Prudential Bache
Collateralized Mtge Obligation Trust 7.965 2019 9,364,489 9,415,900
______________
Total 464,364,226
______________________________________________________________________________________________________________________________
Financial (8.0%)
Banks and savings & loans (2.9%)
BankAmerica
Sub Nts 7.50 2002 18,000,000 18,647,820
Barclays NA Capital 9.75 2021 13,600,000 15,890,240
CoreStates Capital
Gtd Sub Nts 9.375 2003 14,300,000 16,365,921
Fleet/Norstar Financial Group
Sub Nts 9.00 2001 4,000,000 4,429,800
Meridian Bancorp
Sub Deb 7.875 2002 10,400,000 11,012,040
NationsBank
Sub Nts 6.50 2003 12,000,000 11,666,760
Society
Sub Nts 8.125 2002 3,000,000 3,257,280
Standard Credit Card 8.625 2002 12,000,000 12,406,875
______________
Total 93,676,736
_____________________________________________________________________________________________________________________________
Financial services (2.9%)
Camden Property Trust 7.33 2001 3,000,000 2,936,250
Corporate Property Investors 7.18 2013 7,000,000(e) 6,571,110
Developers Diversified Realty
Cv Sub Deb 7.00 1999 3,500,000 3,548,125
First Union REIT
Sub Nts 8.875 2003 10,000,000 8,900,000
General Electric Capital
Reset Nt 8.65 1996 16,035,000(f) 16,300,860
Lehman Brothers Holdings 8.875 2002 10,000,000 10,807,500
Liberty Property Trust
Cv 8.00 2001 2,500,000 2,537,500
Malan Realty Investors REIT
Cv Sub Deb 9.50 2004 4,500,000 3,988,125
Olympic Financial
Sr Nts 13.00 2000 6,100,000 6,443,125
Property Trust Amer REIT 7.50 2014 15,000,000 13,892,850
Salomon 8.91 1998 9,800,000 10,175,438
Saul (BF) REIT 11.625 2002 6,800,000 6,358,000
______________
Total 92,458,883
_____________________________________________________________________________________________________________________________
Insurance (2.2%)
Aetna Life & Casualty 7.25 2023 15,000,000 13,626,450
Americo Life
Sr Sub Nts 9.25 2005 5,900,000 5,450,125
Berkley (WR) 8.70 2022 3,000,000 3,270,750
General Amer Life 7.625 2024 8,000,000(e) 7,265,440
HoraceMann Educators
Cv 6.50 1999 1,600,000 1,628,000
Leucadia Natl 7.75 2013 11,780,000 11,191,000
NAC Re
Cv 5.25 2002 4,000,000(e) 3,950,000<PAGE>
PAGE 24
NACOLAH Holding
Sr Nts 9.50 2003 5,000,000 4,700,000
Nationwide Mutual 7.50 2024 8,000,000(e) 7,452,000
Nationwide Trust
Credit Sensitive Nts 9.875 2025 3,500,000(e) 3,901,345
Principal Mutual 8.00 2044 10,000,000(e) 9,367,600
______________
Total 71,802,710
_____________________________________________________________________________________________________________________________
Industrial (29.5%)
Aerospace & defense (1.6%)
Alliant Techsystems
Sr Sub Nts 11.75 2003 5,000,000 5,437,500
Allied
Zero Coupon 9.57 1996 5,000,000(g) 4,889,800
Boeing 8.75 2031 15,000,000 17,644,350
Fairchild Inds
Sr Secured Nts 12.25 1999 8,000,000 8,150,000
Sequa
Sr Sub Nts 9.375 2003 3,000,000 2,793,750
United Technologies 8.875 2019 10,000,000 11,672,900
______________
Total 50,588,300
_____________________________________________________________________________________________________________________________
Airlines (1.4%)
AMR 9.80 2021 10,000,000 11,411,700
Delta Air Lines 10.125 2010 10,000,000 11,465,700
10.375 2022 3,700,000 4,440,000
Reno Air
Cv 9.00 2002 2,000,000(e) 1,990,000
United Air Lines 10.67 2004 14,400,000 16,735,968
______________
Total 46,043,368
_____________________________________________________________________________________________________________________________
Automotive & related (0.7%)
Chrysler Financial 13.25 1999 290,000 354,856
Exide 10.75 2002 6,000,000 6,367,500
General Motors Acceptance 7.625 1998 10,000,000 10,276,600
Penda
Sr Nts 10.75 2004 4,500,000 4,010,625
_____________
Total 21,009,581
_____________________________________________________________________________________________________________________________
Building materials (1.6%)
Emhart
SF Deb 9.25 2016 6,025,000 6,228,344
Georgia-Pacific 8.125 2023 10,000,000 9,981,500
Owens-Corning Fiberglas 9.375 2012 6,900,000 7,806,660
Pulte
Sr Nts 7.00 2003 7,700,000 7,343,875
Schuller Intl Group
Sr Nts 10.875 2004 7,500,000 8,268,750
Southdown
Sr Sub Nts 14.00 2001 4,000,000 4,510,000
Tarkett 9.00 2002 7,000,000 7,087,500
______________
Total 51,226,629<PAGE>
PAGE 25
Chemicals (1.6%)
General Chemical
Sr Sub Nts 9.25 2003 7,000,000 6,965,000
G-I Holdings
Zero Coupon Sr Disc Nts 10.59 1998 10,000,000(g) 7,275,000
Goodrich (BF) 9.625 2001 10,000,000 11,306,600
Grace (WR) 8.00 2004 10,420,000 10,871,394
Harris Chemical North Amer
Zero Coupon Sr Nts 11.37 1996 5,000,000(g) 4,493,750
Huntsman
1st Mtge 11.00 2004 5,750,000 6,317,812
Sifto Canada
Sr Sub Nt 8.50 2000 3,000,000 2,835,000
______________
Total 50,064,556
_____________________________________________________________________________________________________________________________
Communications equipment (0.6%)
CenCall Communications
Zero Coupon 16.49 1999 10,250,000(g) 5,317,187
Comcast Cellular
Zero Coupon 9.45 2000 14,000,000(g) 10,447,500
U.S. Cellular
Zero Coupon Cv 6.00 2015 6,600,000(g) 2,334,750
______________
Total 18,099,437
_____________________________________________________________________________________________________________________________
Computers & office equipment (0.5%)
Anacomp 12.25 1997 2,400,000(i) 2,376,000
Conner Peripherals
Cv 6.50 2002 7,000,000 6,090,000
Data General
SF Deb 8.375 2002 6,700,000 6,231,000
______________
Total 14,697,000
_____________________________________________________________________________________________________________________________
Electronics (0.4%)
Berg Electronics 11.375 2003 7,000,000 7,385,000
Reliance Electric 6.80 2003 6,000,000 6,041,460
______________
Total 13,426,460
_____________________________________________________________________________________________________________________________
Energy (2.5%)
Atlantic Richfield 9.125 2011 9,000,000 10,573,380
Mesa Capital 12.75 1998 5,000,000(f) 4,625,000
Oryx Energy 9.50 1999 4,000,000 4,255,000
Parker & Parsley Petroleum
Sr Nt 8.25 2007 9,500,000 9,679,645
PDV Amer 7.875 2003 15,000,000 13,706,100
Texaco Capital
Gtd Deb 7.50 2043 3,000,000 2,969,190
Gtd Deb 8.625 2032 10,000,000 11,566,800
Triton Energy
Zero Coupon Sr Nts 9.75 1996 5,000,000(g) 4,525,000
USX 9.375 2022 17,500,000 19,524,400
______________
Total 81,424,515<PAGE>
PAGE 26
Energy equipment & services (0.4%)
McDermott 9.375 2002 5,900,000 6,643,695
OPI Intl
Gtd Sr Nts 12.875 2002 5,000,000 5,643,750
______________
Total 12,287,445
_____________________________________________________________________________________________________________________________
Food (0.2%)
Specialty Foods
Sr Nt 10.25 2001 7,500,000(e) 7,546,875
_____________________________________________________________________________________________________________________________
Health care (0.1%)
Chiron
Cv 1.90 2000 2,600,000 2,346,500
_____________________________________________________________________________________________________________________________
Health care services (1.6%)
Charter Medical
Sr Sub Nts 11.25 2004 7,500,000 8,100,000
Columbia/HCA Healthcare 6.91 2005 7,000,000 6,930,560
7.69 2025 4,000,000 4,036,760
Foundation Health
Sr Nts 7.75 2003 8,400,000 8,554,560
GranCare
Cv 6.50 2003 1,000,000 947,500
Hillhaven
Sr Sub Nts 10.125 2001 7,000,000 7,621,250
Tenet Healthcare
Sr Sub Nts 10.125 2005 15,000,000 15,787,500
_____________
Total 51,978,130
_____________________________________________________________________________________________________________________________
Industrial equipment & services (0.1%)
Mascotech
Cv 4.50 2003 6,500,000 4,858,750
_____________________________________________________________________________________________________________________________
Leisure time & entertainment (0.8%)
Bally's Park Place Funding
1st Mtge 9.25 2004 3,000,000 2,823,750
Caesars World
Sr Sub Nts 8.875 2002 6,000,000 6,337,500
MGM Grand Hotel Finance
1st Mtge 11.75 1999 10,000,000 10,687,500
Premier Parks
Sr Nt 12.00 2003 5,000,000 5,050,000
______________
Total 24,898,750
_____________________________________________________________________________________________________________________________
Media (5.4%)
Ackerley Communications
Sr Secured Nts 10.75 2003 4,000,000(e) 4,205,000
Adelphia Communications
Sr Deb 11.875 2004 7,000,000 7,043,750
Sr Nts 12.50 2002 3,000,000 3,093,750
Amer Media Operations 11.625 2004 2,500,000 2,571,875
Benedek Broadcasting
Sr Nt 11.875 2005 5,625,000(e) 5,941,406
Cablevision Systems
Sr Sub Deb 9.875 2013 3,000,000 3,270,000
Sr Sub Deb 10.75 2004 4,000,000 4,265,000<PAGE>
PAGE 27
Continental Cablevision
Sr Deb 8.875 2005 5,000,000 5,031,250
Sr Sub Deb 11.00 2007 2,500,000 2,762,500
Cox Communications 7.625 2025 7,000,000 6,905,570
News Amer Holdings 8.875 2023 17,000,000 18,678,750
News Corp 10.15 2010 3,869,240(e) 4,410,934
Outdoor Systems
Sr Nts 10.75 2003 7,800,000 7,536,750
Panamsat
Sr Nts 9.75 2000 3,000,000 3,120,000
Paramount Communications
Sub Deb 7.00 2003 5,000,000 4,762,650
Plitt Theatres 10.875 2004 7,500,000 7,331,250
Robin Media Group 11.125 1997 7,000,000 6,763,750
Scandinavian Broadcasting
Cv Sub Deb 7.25 2005 6,000,000 6,525,000
Tele-Communications
Sr Deb 7.875 2013 3,000,000 2,857,740
Sr Deb 9.80 2012 8,000,000 8,994,000
Sr Deb 9.875 2022 10,000,000 11,335,900
Time Warner
Zero Coupon Cv 6.59 2012 8,550,000(g) 2,885,625
Turner Broadcasting
Sr Nts 8.375 2013 10,000,000 9,662,500
Universal Outdoor
Sr Nt 11.00 2003 5,000,000 4,906,250
Viacom
Sr Nts 7.75 2005 3,000,000 3,063,750
Sub Deb 8.00 2006 26,300,000 25,642,500
______________
Total 173,567,450
_____________________________________________________________________________________________________________________________
Metals (0.6%)
Magma Copper
Sr Sub Nts 12.00 2001 10,000,000 11,062,500
Sahaviriya Steel Inds
Cv 3.50 2005 4,000,000(e) 4,040,000
Santa Fe Pacific Gold
Sr Deb 8.375 2005 5,000,000 4,956,250
_____________
Total 20,058,750
_____________________________________________________________________________________________________________________________
Multi-industry conglomerates (0.9%)
Boc Group
Sr Nts 8.73 1996 6,000,000(e) 6,013,200
Coltec Inds
Sr Nts 9.75 2000 5,000,000 5,231,250
Mark IV Inds
Sr Sub Nts 8.75 2003 8,000,000 8,200,000
Talley Inds
Zero Coupon Sr Disc Deb 12.25 1998 3,500,000(g) 2,450,000
Talley Mfg & Technology
Sr Nts 10.75 2003 7,000,000 7,000,000
______________
Total 28,894,450<PAGE>
PAGE 28
Paper & packaging (3.8%)
Container Corp Amer
Sr Nts 9.75 2003 7,000,000 7,113,750
Federal Paper Board 10.00 2011 11,900,000 14,421,015
Fort Howard 11.00 2002 9,366,182 9,717,414
Gaylord Container
Zero Coupon Sr Sub Deb 3.10 1996 8,000,000(g) 8,000,000
Intl Paper 5.125 2012 9,000,000 7,204,230
Owens-Illinois
Sr Deb 11.00 2003 10,000,000 10,950,000
Sr Sub Nts 9.75 2004 5,000,000(b) 5,118,750
Plastic Containers
Sr Secured Nts 10.75 2001 6,000,000 6,157,500
Pope & Talbot 8.375 2013 11,000,000 10,283,570
Riverwood Intl
Sr Nts 10.75 2000 7,000,000 7,630,000
Sappi BVI Finance
Cv 7.50 2002 4,250,000(e) 4,382,812
Scotia Pacific Holding 7.95 2015 4,548,481 4,647,501
Silgan
Sr Sub Nts 11.75 2002 10,000,000 10,562,500
Stone Container
1st Mtge 10.75 2002 5,300,000 5,538,500
Sr Nts 12.625 1998 3,000,000 3,300,000
Warren (SD)
Sr Nts 12.00 2004 5,000,000 5,581,250
______________
Total 120,608,792
_____________________________________________________________________________________________________________________________
Restaurants & lodging (0.8%)
Flagstar
Sr Nts 10.875 2002 8,000,000 7,370,000
Hammons (John Q) Hotel
1st Mtge 8.875 2004 7,000,000 6,632,500
Santa Fe Hotel
1st Mtge 11.00 2002 5,500,000 4,400,000
Trump Taj Mahal
Pay-in-Kind -- 1999 10,290,714(m) 8,644,200
______________
Total 27,046,700
_____________________________________________________________________________________________________________________________
Retail (2.1%)
Dairy Mart Convenience Stores
Sr Sub Nts 10.25 2004 7,750,000(b) 6,519,687
Eye Care Center 12.00 2003 9,000,000(e) 7,650,000
Grand Union
Sr Nt 12.00 2004 7,000,000 6,685,000
Kash n' Karry Food Stores
Pay-in-Kind -- 2003 7,740,980(m) 7,818,390
Pathmark Stores
Sr Sub Nts 9.625 2003 5,000,000 5,000,000
Penn Traffic
Sr Sub Nts 9.625 2005 10,000,000 8,100,000
Pep Boys-Manny,Mo,Jack
Cv 4.00 1999 2,500,000 2,350,000
Pueblo Xtra Intl
Sr Nts 9.50 2003 7,000,000 6,720,000
<PAGE>
PAGE 29
Ralphs Grocery
Sr Sub Nts 10.45 2004 4,600,000 4,508,000
Service Merchandise
Sr Nts 8.375 2001 4,300,000 4,063,500
Super Rite Foods
Sr Sub Nts 10.625 2002 5,000,000 5,425,000
Wal-Mart Stores 8.875 2011 3,500,000 4,007,885
______________
Total 68,847,462
_____________________________________________________________________________________________________________________________
Soaps & cosmetics (0.7%)
Coty
Sr Sub Nts 10.25 2005 7,500,000 7,771,875
Revlon Consumer Products
Sr Sub Nts 9.375 2001 7,000,000 6,947,500
Sweetheart Cup
Sr Sub Nts 9.625 2000 6,500,000 6,418,750
______________
Total 21,138,125
_____________________________________________________________________________________________________________________________
Textiles & apparel (0.5%)
Dominion Textiles
Sr Nts 8.875 2003 7,500,000 7,471,875
WestPoint Stevens
Sr Nts 8.75 2001 7,500,000 7,415,625
______________
Total 14,887,500
_____________________________________________________________________________________________________________________________
Miscellaneous (0.6%)
BellSouth Telecommunications 6.50 2005 7,200,000 7,096,968
ECM Funding LP 11.918 2002 3,030,093(i) 3,333,102
EIP Funding 10.25 2012 7,000,000 6,921,250
Samsonite
Sr Sub NTs 11.125 2005 3,000,000(e) 3,063,750
______________
Total 20,415,070
_____________________________________________________________________________________________________________________________
Utilities (14.7%)
Electric (9.8%)
Appalachian Power 8.50 2022 5,000,000 5,409,800
Arizona Public Service
1st Mtge 8.00 2025 5,800,000 5,878,474
1st Mtge 8.75 2024 9,000,000 9,686,880
Sale Lease-Backed Obligation 8.00 2015 12,556,000 12,479,659
Cajun Electric Power Cooperative
Mtge Trust 8.92 2019 5,000,000 5,479,200
California Energy
Ltd Resource Sr Secured Nts 9.875 2003 5,000,000 5,056,250
Cleveland Electric Illum
1st Mtge 9.50 2005 14,000,000 14,261,940
Commonwealth Edison
1st Mtge 8.375 2023 5,000,000 5,223,900
1st Mtge 9.75 2020 10,000,000 11,333,900
1st Mtge 9.875 2020 4,000,000 4,609,880
Consumers Power
1st Mtge 7.375 2023 10,000,000 9,475,200
First Palo Verde Funding 10.15 2016 6,000,000 6,130,920
10.30 2014 4,500,000(b) 4,604,850
<PAGE>
PAGE 30
Gulf States Utilities
1st Mtge 8.70 2024 6,000,000 6,362,940
Long Island Lighting
Gen Ref Mtge 9.625 2024 28,888,000 29,935,479
Gen Ref Mtge 9.75 2021 15,500,000 16,330,645
Louisiana Power & Light
1st Mtge 10.125 2020 3,500,000 3,728,130
Louisiana Power & Light Waterford
Sale Lease-Backed Obligation 10.67 2017 7,500,000 7,994,250
Midland Cogeneration Venture 11.75 2005 9,900,000 10,308,375
Sub Secured Sale
Lease-Backed Obligation 10.33 2002 12,529,036 12,951,891
North Atlantic Energy
1st Mtge 9.05 2002 6,606,000 6,903,270
Pacific Gas & Electric
1st Ref 7.25 2026 14,000,000 13,482,280
Pennsylvania Power & Light
1st Mtge 9.25 2019 900,000 967,626
RGS Funding
Sale Lease-Backed Obligation 9.82 2022 9,941,259 12,049,502
Salton Sea
Sr Nt 7.84 2010 10,000,000(e) 9,937,800
San Diego Gas & Electric
1st Mtge 9.625 2020 16,925,000 19,200,228
Sithe Independant Funding 8.50 2007 7,500,000 8,073,525
9.00 2013 4,700,000 5,063,498
Texas-New Mexico Power
1st Mtge 9.25 2000 6,000,000 6,255,000
1st Mtge 10.00 2017 2,939,000 3,049,213
Secured Deb 10.75 2003 5,000,000 5,318,750
Texas Utilities Electric
1st Collateral Trust 7.375 2025 3,000,000 2,859,300
1st Collateral Trust 9.75 2021 9,900,000 11,483,505
1st Mtge 7.625 2025 10,000,000 9,819,500
Secured Facility Bond 9.45 2005 4,185,000 4,827,816
Tucson Electric Power
1st Mtge 8.50 2009 7,000,000 6,746,250
______________
Total 313,279,626
______________________________________________________________________________________________________________________________
Gas (2.3%)
Coastal
Sr Deb 10.25 2004 13,000,000 15,546,440
Equitable Resources 7.50 1999 5,000,000 5,155,750
Questar Pipeline 9.375 2021 8,000,000 9,103,760
Southern California Gas
1st Mtge 7.375 2023 6,900,000 6,800,019
Southwest Gas 9.75 2002 7,900,000 8,940,983
Tenneco 9.00 2012 9,000,000 10,121,580
Tennessee Gas Pipeline 6.00 2011 3,600,000 2,971,548
Transco Energy 9.875 2020 4,800,000 5,814,000
9.375 2001 4,000,000 4,455,000
TransTexas Gas
Sr Secured Nts 11.50 2002 5,000,000 5,262,500
______________
Total 74,171,580
<PAGE>
PAGE 31
Telephone & other (2.6%)
Ameritech Capital Funding
Gtd Deb 9.10 2016 16,000,000 18,895,840
GTE 10.25 2020 7,000,000 8,112,370
Intermedia Communications 13.50 2005 1,200,000(e) 1,226,550
New York Tel 9.375 2031 23,665,000 26,717,075
Pacific Bell 6.625 2034 10,000,000 8,875,100
7.125 2026 10,200,000 9,946,020
7.375 2043 10,000,000 9,786,100
______________
Total 83,559,055
_____________________________________________________________________________________________________________________________
Foreign (12.5%)(j)
ABN Amro
(U.S. Dollar) 7.75 2023 9,000,000 9,122,130
Aegon Euro
(U.S. Dollar) Cv 4.75 2004 2,275,000 2,752,750
Argentina Euro
(U.S. Dollar) 7.312 2005 35,500,000 21,721,563
Argentina Republic
(U.S. Dollar) 5.00 2023 15,000,000 7,078,125
Banca Italy N.Y.
(U.S. Dollar) 8.25 2007 9,200,000 9,580,144
Bank of China
(U.S. Dollar) 8.25 2014 10,000,000 9,228,400
Brazil C Bonds
(U.S. Dollar) 4.00 2014 14,305,500 7,108,045
Brazil Disc ZL
(U.S. Dollar) 7.25 2024 15,000,000(f) 8,596,875
Carter Holt Harvey
(U.S. Dollar) 7.625 2002 5,000,000 5,224,000
(U.S. Dollar) 8.875 2004 10,500,000 11,835,915
Celcaribe
(U.S. Dollar) Zero Coupon 2.14 2004 2,870,000(e,g) 2,482,550
(U.S. Dollar) Zero Coupon 24.37 2004 3,250,000(e,g) 2,161,250
Doman Inds
(U.S. Dollar) 8.75 2004 8,000,000 7,770,000
Ford Capital
(U.S. Dollar) 9.125 1998 4,000,000 4,264,479
(U.S. Dollar) 9.50 2010 18,350,000 22,084,409
Groupe Videotron
(U.S. Dollar) 10.625 2005 5,000,000 5,275,000
Guang Dong Enterprise
(U.S. Dollar) 8.75 2003 14,000,000(e) 12,611,200
Helsinki City
(U.S. Dollar) Sr Nts 9.25 2007 4,900,000(i) 4,965,170
Hydro-Quebec Euro
(Canadian Dollar) 9.40 2021 2,400,000 2,824,488
(Canadian Dollar) 10.875 2021 6,000,000 5,005,062
Korea Electric Power
(U.S. Dollar) 8.00 2002 2,800,000 2,972,676
(U.S. Dollar) 7.75 2013 8,900,000 8,993,005
Legrand
(U.S. Dollar) 8.50 2025 7,000,000 7,761,110
MacMillan Bole Delaware
(U.S. Dollar) 8.50 2004 3,000,000 3,249,210
Mexican Cetes Treasury Bill
(Mexican Peso) Zero Coupon 45.94 1996 17,281,150(g) 2,329,309
<PAGE>
PAGE 32
Petronas
(U.S. Dollar) 7.75 2015 10,000,000(e) 10,203,700
Philippine Long Distance Telephone
(U.S. Dollar) 10.625 2004 4,000,000 4,280,000
Placer Dome
(U.S. Dollar) 7.125 2003 5,000,000 5,023,850
Poland Discount Euro
(U.S. Dollar) 7.125 2024 5,750,000 4,377,188
Poland Euro
(U.S. Dollar) 3.25 2014 32,000,000(f) 19,580,000
Province of Quebec
(U.S. Dollar) 11.00 2015 16,000,000 19,177,440
PT Indah Kiat Pulp & Paper
(U.S. Dollar) 11.875 2002 7,000,000 7,218,750
Qantas Air
(U.S. Dollar) 7.50 2003 14,000,000 13,989,500
Quno
(U.S. Dollar) Sr Nts 9.125 2005 7,000,000 6,930,000
Repap New Brunswick
(U.S. Dollar) 9.875 2000 7,000,000 7,096,250
Republic of Austria Euro
(U.S. Dollar) 10.00 1998 5,000,000 5,425,855
Republic of Brazil
(U.S. Dollar) 5.312 2012 22,300,000 11,777,188
Republic of Brazil Euro
(U.S. Dollar) 4.25 2024 16,000,000 7,270,000
Republic of Columbia
(U.S. Dollar) 7.25 2004 14,750,000 13,502,888
Rogers Cable System
(Canadian Dollar) 9.65 2014 3,700,000 2,307,849
Rogers Cantel Mobile
(U.S. Dollar) Sr Sec Gtd Nts 10.75 2001 11,000,000 11,398,750
Rogers Communications
(U.S. Dollar) Zero Coupon Cv 5.50 2013 6,000,000(g) 2,047,500
Scotland Bank
(U.S. Dollar) 8.80 2004 20,500,000(e) 22,401,580
Telekom Malaysia
(U.S. Dollar) 7.875 2025 15,000,000(e) 15,428,550
Tjiwi Kimia
(U.S. Dollar) 13.25 2001 6,500,000 6,995,625
United Mexican States
(U.S. Dollar) 6.25 2019 10,750,000 6,523,906
(U.S. Dollar) 5.437 2019 3,000,000(f) 2,133,750
WMC Finance
(U.S. Dollar) 7.25 2013 10,000,000 9,898,900
______________
Total 401,985,884
_____________________________________________________________________________________________________________________________
Total bonds
(Cost: $2,873,258,721) 3,043,723,758 $3,000,897,192
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 33
<TABLE>
<CAPTION>
Stocks and other (1.3%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
ABN Amro Holdings
6% Cv Preferred 95,900 $ 3,504,761
Amer Life Holdings
$2.16 Cm Preferred 120,000 2,955,000
Celcaribe
Common 528,450(e,h) 686,985
Crown Package
Warrants 5,000 100,000
EUA Power
Contingent Interest Certificates 5,000(h,i,k) --
EnviroSource
7.25% Cv Preferred 30,000(h) 3,900,000
First Chicago
2.875% Cm Cv Preferred 100,000 6,050,000
First Nationwide Bank
11.50% Cm Preferred 80,000 8,600,000
Great Bay Power
Common 75,552(h) 623,304
Intermedia
Warrants 1,200 12,300
Kash n' Karry Food Stores
Common 150,570(h) 3,952,463
Natl Health Investors
8.50% Cv Preferred 83,000 2,209,875
Pullman
Common Series B 182,094(h) 1,456,752
Purity Supreme
Warrants 13,862(i) 277
Security Pacific
Cv Preferred 136,500 3,241,875
Supermarket General
$3.52 Pay-in-Kind Cv Preferred 120,972(h,m) 3,508,188
Thermadyne Holdings
Common 6,693(h) 121,729
Thermadyne Inds
Common Cl B 120,000(h,i,k) --
Triangle Wire Cable
Common 211,111(h,i) 422,222
Webcraft Technology
Common 32,502(h,i) 325
WestFed Holdings
Non-Voting Common Cl B 13,019(h,i,k) --
Pay-in-Kind Cm Sr Preferred 42,753(h,i,k,m) --
_____________________________________________________________________________________________________________________________
Total stocks and other
(Cost: $57,004,691) 2,154,178 $ 41,346,056
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 34
<TABLE>
<CAPTION>
Short-term securities (3.7%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable
date of at
purchase maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (0.4%)
Federal Home Loan Mtge Corp Disc Notes
09-20-95 5.69% $ 6,650,000 $ 6,630,135
09-20-95 5.70 3,200,000 3,190,424
Federal Natl Mtge Assn Disc Note
09-05-95 5.68 2,800,000 2,798,242
______________
Total 12,618,801
_____________________________________________________________________________________________________________________________
Commercial paper (3.3%)
AIG Funding
09-13-95 5.80 3,200,000 3,193,845
Alabama Power
09-19-95 5.77 5,600,000 5,583,956
Albertson's
09-14-95 5.77 7,000,000 6,985,516
Campbell Soup
10-20-95 5.76 5,000,000(l) 4,959,959
Ciesco
09-14-95 5.76 600,000 598,761
09-19-95 5.78 4,600,000(l) 4,586,775
CIT Group Holdings
10-10-95 5.79 1,000,000 993,770
Corporate Asset Funding
10-03-95 5.76 500,000 497,458
Intel
09-05-95 5.77 17,200,000 17,189,030
Lincoln Natl
09-12-95 5.77 2,000,000(l) 1,996,492
Metlife Funding
09-12-95 5.75 9,200,000 9,183,920
Morgan Stanley
09-07-95 5.77 5,200,000 5,195,017
Motorola
09-12-95 5.77 5,200,000 5,190,896
Natl Detroit Canada
09-22-95 5.77 1,000,000 996,652
Pacific Mutual Life
09-06-95 5.77 8,600,000 8,593,144
Penney (JC) Funding
09-11-95 5.77 3,900,000 3,893,792
SAFECO Credit
09-14-95 5.80 2,300,000 2,295,208
Southern California Gas
10-05-95 5.76 8,500,000(l) 8,454,081
Toyota Motor
09-29-95 5.75 6,600,000 6,570,637
<PAGE>
PAGE 35
USAA Capital
10-03-95 5.74 4,200,000 4,178,683
USL Capital
09-12-95 5.77 6,000,000 5,989,477
______________
Total 107,127,069
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $119,747,120) 120,050,000 $ 119,745,870
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $3,050,010,532)(n) 3,165,927,936 $3,161,989,118
_____________________________________________________________________________________________________________________________
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Security is partially or fully on loan. See Note 5 to the financial statements.
(c) Inverse floaters represent securities that pay interest at a rate that increases (decreases) in the same magnitude as, or in a
multiple of, a decline (increase) in the LIBOR (London InterBank Offed Rate) Index. Interest rate disclosed is the rate in effect
on Aug. 31, 1995. Inverse floaters in the aggregate represent 0.6% of the fund's net assets as of Aug. 31, 1995.
(d) This security is a collateralized mortgage obligation that pays no interest or principal during its initial accrual period
until payment of a previous series within the trust have been paid off. Interest is accrued at an effective yield.
(e) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as
amended. This security has been determined to be liquid under guidelines established by the board of directors.
(f) Interest rate varies to reflect current market conditions; rate shown is the effective rate on Aug. 31, 1995.
(g) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition.
(h) Presently non-income producing.
(i) Identifies issues considered to be illiquid (see Note 4 to the financial statements). Information concerning such
security holdings at Aug. 31, 1995, is as follows:
Acquisition
Security date Cost
_______________________________________________________________________________________________
Anacomp
12.25% 1997 08-21-92 $2,523,000
ECM Funding LP
11.918% 2002 04-13-92 3,030,093
EUA Power
Contingent Interest Certificates 05-25-90 --
Helsinki City
Sr Nts
9.25% 2007 02-07-95 4,900,000
Purity Supreme
Warrants 07-29-92 --
Thermadyne Inds
Common Cl B 01-11-89 86,400
Triangle Wire Cable
Common 01-13-92 5,000,045
Webcraft Technology
Common 12-22-86 16,875
WestFed Holdings
Non-Voting Common Cl B 09-30-88 393
Pay-in-Kind Cm Sr 09-03-88 3,012,900
Pay-in-Kind Cm Sr 01-01-89 thru 12-26-89 293,330
Pay-in-Kind Cm Sr 03-15-90 thru 12-26-90 145,590
Pay-in-Kind Cm Sr 04-01-91 thru 12-18-91 98,395
Pay-in-Kind Cm Sr 03-20-92 thru 12-18-92 36,725
Pay-in-Kind Cm Sr 03-18-93 thur 06-11-93 10,078<PAGE>
PAGE 36
(j) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in the currency
indicated.
(k) Presently negligible market value.
(l) 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." This
security has been determined to be liquid under guidelines established by the board of directors.
(m) Pay-in-kind securities are securities 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.
(n) At Aug. 31, 1995, the cost of securities for federal income tax purposes was $3,047,374,560 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $162,989,262
Unrealized depreciation (48,374,704)
___________________________________________________________________________________
Net unrealized appreciation $114,614,558
___________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 37
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conservation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposits (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income. Secondary
objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
seek high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed-income
securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) cornucopia
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher
rated, lower risk bond categories, or the equivalent, and in
government bonds.
(icon of) greek column
<PAGE>
PAGE 38
IDS Selective Fund
Invests in high-quality corporate bonds and other highly rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests primarily in securities issued or guaranteed as to the
timely payment of principal and interest by the U.S. government,
its agencies and instrumentalities. Seeks a high level of current
income and safety of principal consistent with its type of
investments.
(icon of) federal building
Tax-exempt income investments
These funds provide tax-free income by investing in municipal
bonds. The income is generally free from federal income tax. Risk
varies by bond quality.
IDS High Yield Tax-Exempt Fund
Invests primarily in medium- and lower-quality municipal bonds and
notes. Lower-quality securities generally involve greater risk of
principal and income.
(icon of) shield with basket of apples enclosed
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities to
provide income to residents of each respective state that is exempt
from federal, state and local income taxes. (New York is the only
state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government
units, with at least 75% in the four highest rated, lowest risk
bond categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the fund but does not guarantee
the market value of the fund's shares.
(icon of) shield with eagle head
<PAGE>
PAGE 39
Growth and income investments
These funds focus on securities of medium to large, well-
established companies that offer long-term growth of capital and
reasonable income from dividends and interest. Moderate risk.
IDS International Fund
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The fund may invest up to 20% of
its assets in the U.S. market.
(icon of) three flags
IDS Managed Retirement Fund
Invests in a combination of common stocks, fixed-income investments
and money market securities to seek a maximum total return through
a combination of growth of capital and current income.
(icon of) bird in a nest
IDS Equity Select Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of capital and
income.
(icon of) three apple trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by our research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund
Invests in common stock of companies representing many sectors of
the economy. Seeks current income and growth of capital.
(icon of) building with columns
IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) three growing flowers
<PAGE>
PAGE 40
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek
high current income and growth of income and capital with reduced
volatility.
(icon of) electrical cord
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to seek high
current income and, secondarily, to benefit from the growth
potential offered by stock investments.
(icon of) four puzzle pieces
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice
Growth investments
Funds in this group seek capital growth, primarily from common
stocks. They are high risk mutual funds with a potential for high
reward.
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Strategy Aggressive Fund
Invests primarily in common stocks of companies that are selected
for their potential for above-average growth. Above-average means
that their growth potential is better, in the opinion of the
portfolio's investment manager, than the Standard & Poor's
Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS Growth Fund
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) flower
<PAGE>
PAGE 41
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy. These
companies offer above-average potential for long-term growth.
(icon of) world
IDS New Dimensions Fund
Invests primarily in companies with significant growth potential
due to superiority in technology, marketing or management. The
fund frequently changes its industry mix.
(icon of) dimension
IDS Progressive Fund
Invests primarily in undervalued common stocks. The fund holds
stocks for the long term with the goal of capital growth.
(icon of) shooting star
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against
inflation.
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic
companies that explore for, mine and process or distribute gold and
other precious metals. This is the most aggressive and most
speculative IDS mutual fund.
(icon of) cart of precious gems
For more complete information about any of these funds, including
charges and expenses, you can obtain a prospectus by contacting
your financial advisor or writing to American Express Shareholder
Service, P.O. Box 534, Minneapolis, MN 55440-0534. Read it
carefully before you invest or send money.
<PAGE>
PAGE 42
Federal income tax information
IDS Bond Fund, Inc.
__________________________________________________________________
The Fund is required by the Internal Revenue Code of
1986 to tell its shareholders about the tax treatment
of the dividends it pays during its fiscal year.
Some of the dividends listed below were reported to
you on Form 1099-DIV, Dividends and Distributions, last
January. Dividends paid to you since the end of last year
will be reported to you on a tax statement sent next January.
Shareholders should consult a tax advisor on how to report
distributions for state and local purposes.
IDS Bond Fund, Inc.
Fiscal year ended Aug. 31, 1995
Class A
Income distributions
taxable as dividend income,
1.26% qualifying for deduction by corporations.
Payable date Per share
Sept. 26, 1994 $0.03250
Oct. 26, 1994 0.03270
Nov. 28, 1994 0.03250
Dec. 28, 1994 0.03250
Jan. 25, 1995 0.03000
Feb. 23, 1995 0.02800
March 27, 1995 0.02918
April 26, 1995 0.03069
May 25, 1995 0.03068
June 26, 1995 0.03078
July 26, 1995 0.03273
Aug. 25, 1995 0.03374
Total $0.37600
Capital gain distribution
taxable for long-term capital gain.
Payable date Per share
Dec. 28, 1994 $0.09834
Total distributions $0.47434
<PAGE>
PAGE 43
Class B
Income distributions
taxable as dividend income,
1.26% qualifying for deduction by corporations.
March 27, 1995 0.02838
April 26, 1995 0.02767
May 25, 1995 0.02770
June 26, 1995 0.02741
July 26, 1995 0.02956
Aug. 25, 1995 0.03062
Total distributions $0.17134
Class Y
Income distributions
taxable as dividend income,
1.26% qualifying for deduction by corporations.
March 27, 1995 0.02936
April 26, 1995 0.03138
May 25, 1995 0.03137
June 26, 1995 0.03156
July 26, 1995 0.03346
Aug. 25, 1995 0.03446
Total distributions $0.19159
<PAGE>
PAGE 44
Quick telephone reference
American Express Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
American Express Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
American Express Infoline
Automated account information (TouchToneR phones only), including
current fund prices and performance, account values and recent
account transactions
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 671-1630
AMERICAN
EXPRESS
FINANCIAL
ADVISORS
IDS BOND FUND
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
PAGE 45
STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report and
prospectus are placed
in blue strip at the top
of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described in
annual report and prospectus. parentheses.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
