PAGE
IDS
Bond
Fund
1995 semiannual report
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.
Distributed by
American Express
Financial Advisors Inc.
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.
IDS Bond Fund invests mainly in bonds issued by U.S. corporations, but it
also holds some U.S. government bonds, as well as foreign bonds. The
portfolio manager shifts this mix as investment conditions dictate. In
doing so, the fund seeks to provide long-term return potential for
investors.
Contents
From the president 3
From the portfolio manager 3
Ten largest holdings 5
Financial statements 6
Notes to financial statements 9
Investments in securities 18
Directors and officers 32
IDS mutual funds 33
To our shareholders
William R. Pearce
President of the fund
Fred Quirsfeld
Portfolio manager
From the president
All of the funds in the ids mutual fund group held shareholder meetings
on Nov. 9, 1994. The meetings, which were well-attended, approved all
of the proposals advanced by management. Among the proposals were:
o The election of directors and the selection of KPMG Peat Marwick LLP
as independent auditors for each of the funds in the group.
o A new investment management agreement that created multiple classes
of fund shares, effective March 1995.
<PAGE>
o A change in investment policy that will permit the fund to adopt a
master/feeder structure if and when the board of each fund determines
that it is in the best interest of shareholders.
o And, finally, a change with respect to the number of "fundamental
investment policies" that allows the board to modify them should it deem
appropriate.
No other business was presented at the meeting, which was concluded by a
report to shareholders from the American Express Financial Corporation
Investment Department.
Thanks to all of you for your effort in reviewing the proxy material and
voting your proxies.
William R. Pearce
From the portfolio manager
An improving bond market and an emphasis on corporate bonds keyed a
positive performance by your fund during the first half of the fiscal
year. The total return for the period, which covered September 1994
through February 1995, was 3.4%. (Note: Although the net asset value was
lower at the end of the period, the change was more than made up by
dividend and capital gain distributions. When a capital gain is
distributed, the amount is deducted from the net asset value.)
As is always the case for bond mutual funds, the biggest influence on
the fund's performance during the past six months was the interest-rate
trend. In February 1994, the Federal Reserve began raising short-term
interest rates to temper 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 abate until late in
the year. Along the way, bond prices experienced a substantial slide-an
automatic result of rising interest rates. (Falling rates, on the other
hand, boost bond prices.)
Rally begins
The turnaround for the bond market and the fund began last November. With
inflation fears easing somewhat, long-term interest rates began to
decline, even as short-term rates moved higher. The positive momentum
soon turned into a powerful rally during January and February, as
interest rates declined nearly half a percentage point during that time.
In addition to the positive market trend, the fund also benefited from
our heavy exposure to corporate bonds, including high-yield issues,
which were especially good performers. Beyond that, we reduced our cash
reserves and moved more money into securities with longer maturities.
These bonds benefit most from declines in interest rates. The only
disappointment of note was the performance of our relatively small
holdings of bonds from emerging foreign markets, which performed quite
poorly.
<PAGE>
Environment remains positive
While we don't expect the bond market to repeat its remarkable early-year
advance, we're confident that we'll have a much better overall investment
environment than we had in 1994. Our optimism is based on our expectation
of less robust economic growth, but no recession; only moderately higher
inflation; and relatively stable long-term interest rates.
Given that outlook, we recently began to increase the overall credit
quality of the portfolio by adding more U.S. Treasury and mortgage-backed
securities. They carry AAA ratings and, we believe, will perform well if
the pace of the economy slows down. For the same reason, we've also
extended our emphasis on quality to our holdings of corporate bonds-still
the largest portion of the portfolio. We think these shifts will put the
fund in good position to benefit from the resumption of what should, on a
longer-term basis, be a productive period for bond investors.
Fred Quirsfeld
6-month performance
(All figures per share)
Net asset value (NAV)
Feb. 28, 1995 $ 4.77
Aug. 31, 1994 $ 4.91
Decrease $ (0.14)
Distributions
Sept. 1, 1994 - Feb. 28, 1995
From income $ 0.19
From capital gains $ 0.10
Total distributions $ 0.29
Total return* +3.4%
*If you purchased shares in the fund during this period, your return
also would have been affected by the sales charge, as described in the
prospectus.<PAGE>
PAGE
<TABLE>
<CAPTION>
IDS Bond Fund, Inc.
Your fund's ten largest holdings
(Pie chart)
The ten holdings listed here make up 8.44% of the fund's
net assets
_____________________________________________________________________________________
Percent Value
(of fund's net assets) (as of Feb. 28, 1995)
_____________________________________________________________________________________
<S> <C> <C>
Long Island Lighting 1.12% $ 24,787,760
9.625% General Refunding Mortgage 2024
Time Warner Entertainment 1.01 22,250,000
8.375% 2033
Ford Capital .93 20,574,938
9.50% 2010
Province of Quebec .83 18,300,000
11% 2015
USX .81 17,937,500
9.375% 2022
Scotland Bank .80 17,637,500
8.80% 2004
News American Holdings .77 16,957,500
8.875% 2023
Owens-Illinois .73 16,106,250
11% Sr Deb 2003
New York Telephone .72 16,068,750
9.375% 2031
Boeing .72 15,900,000
8.75% 2031
Excludes U.S. Treasury and government agency holdings that total 22% of the fund's
net assets.
/TABLE
<PAGE>
PAGE
Financial statements
Statement of assets and liabilities
IDS Bond Fund, Inc.
Feb. 28, 1995
<TABLE>
<CAPTION>
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
(Unaudited)
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $2,266,636,831) $2,224,727,648
Receivable for investment securities sold 5,358,785
Dividends and accrued interest receivable 41,448,370
U.S. government securities held as collateral (Note 5) 10,599,239
_____________________________________________________________________________________________________________
Total assets 2,282,134,042
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 2,513,586
Dividends payable to shareholders 2,095,230
Payable for investment securities purchased 54,171,816
Payable upon return of securities loaned (Note 5) 11,499,239
Accrued investment management and services fee 869,339
Accrued distribution fee 60,634
Accrued transfer agency fee 155,220
Other accrued expenses 419,372
_____________________________________________________________________________________________________________
Total liabilities 71,784,436
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $2,210,349,606
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 463,043,328 shares $ 4,630,433
Additional paid-in capital 2,271,083,983
Undistributed net investment income (Note 1) 3,026,664
Accumulated net realized loss (Note 6) (26,482,291)
Unrealized depreciation (41,909,183)
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $2,210,349,606
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 4.77
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.<PAGE>
PAGE
Financial statements
Statement of operations
IDS Bond Fund, Inc.
Six months ended Feb. 28, 1995
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
(Unaudited)
Income:
Interest $93,989,681
Dividends 1,236,597
_____________________________________________________________________________________________________________
Total income 95,226,278
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 5,633,716
Distribution fee 394,488
Transfer agency fee 1,008,392
Compensation of directors 163,359
Compensation of officers 12,268
Custodian fees 82,205
Postage 163,248
Registration fees 111,095
Reports to shareholders 35,401
Audit fees 17,500
Administrative 13,383
Other 18,593
_____________________________________________________________________________________________________________
Total expenses 7,653,648
_____________________________________________________________________________________________________________
Investment income -- net 87,572,630
_____________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________
Net realized loss on security and foreign currency transactions (including
loss of $238,403 from foreign currency transactions)(Note 3) (29,262,894)
Net realized gain on closed interest rate futures contracts 39,875
_____________________________________________________________________________________________________________
Net realized loss on investments and foreign currency (29,223,019)
Net change in unrealized appreciation or depreciation 12,278,950
_____________________________________________________________________________________________________________
Net loss on investments and foreign currency (16,944,069)
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $70,628,561
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Bond Fund, Inc.
_____________________________________________________________________________________________________________
Operations and distributions Feb. 28, 1995 Aug. 31, 1994
_____________________________________________________________________________________________________________
Six months ended Year ended
(Unaudited)
<S> <C> <C>
Investment income -- net $ 87,572,630 $ 184,268,545
Net realized gain (loss) on investments and foreign currency (29,223,019) 45,541,259
Net change in unrealized appreciation or depreciation 12,278,950 (279,119,373)
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations 70,628,561 (49,309,569)
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (85,725,332) (184,867,231)
Net realized gain (44,353,816) (27,971,600)
Excess distribution of realized gain (Note 1) -- (29,043)
_____________________________________________________________________________________________________________
Total distributions (130,079,148) (212,867,874)
_____________________________________________________________________________________________________________
Capital share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
33,661,717 and 62,340,332 shares (Note 2) 159,515,204 323,953,867
Net asset value of 18,949,118 and 26,592,240 shares
issued in reinvestment of distributions 88,962,868 138,748,551
Payments for redemptions of
47,914,273 and 85,276,606 shares (227,351,063) (441,905,072)
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions
representing net addition of
4,696,562 and 3,655,966 shares 21,127,009 20,797,346
_____________________________________________________________________________________________________________
Total decrease in net assets (38,323,578) (241,380,097)
Net assets at beginning of period 2,248,673,184 2,490,053,281
_____________________________________________________________________________________________________________
Net assets at end of period
(including undistributed net investment income of
$3,026,664 and $1,179,366) $2,210,349,606 $2,248,673,184
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE
Notes to financial statements
IDS Bond Fund, Inc.
(Unaudited as to Feb. 28, 1995)
______________________________________________________________________________
1. Summary of significant accounting policies
The fund is registered under the Investment Company Act of 1940 (as amended)
as a diversified, open-end management investment company. Significant
accounting policies followed by the fund are summarized below:
Valuation of securities
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.
Options 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 able
to enter into a closing transaction if a liquid secondary market does not
exist.<PAGE>
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 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.<PAGE>
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.
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.<PAGE>
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 and interest
income, including level-yield amortization of premium and discount is accrued
daily.
______________________________________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991, the fund pays American
Express Financial Corporation a fee for managing its investments,
recordkeeping and other specified services. The fee is a percentage of the
fund's average daily net assets consisting of 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.
The fund also pays American Express Financial Corporation a distribution fee
at an annual rate of $6 per shareholder account and a transfer agency fee at
an annual rate of $15.50 per shareholder account. The transfer agency fee is
reduced by earnings on monies pending shareholder redemptions.
Effective March 1995, the fund entered into a new agreement for managing
investments, recordkeeping and other services for the creation of multiple
classes of fund shares. The management fee is a percentage of the fund's
average daily net assets in reducing percentages from 0.52% to 0.395%
annually. An administration and accounting fee for all classes of shares in
reducing percentages from 0.05% to 0.025% annually of the fund's average daily
net assets is also effective. Class B shares will incur a 12b-1 fee of 0.75%
of average daily net assets. The fund also pays a transfer agency fee at an
annual rate of $15.50 per shareholder account for Class A and Y shares and
$16.50 per shareholder account for Class B shares. A shareholder service
agreement will also be put in place at 0.175% of average daily net assets for
Class A and B shares.
American Express Financial Corporation will assume and pay any expenses
(except taxes and brokerage commissions) that exceed the most restrictive
applicable state expense limitation.
<PAGE>
Sales charges by American Express Financial Advisors Inc. for distributing
fund shares were $3,376,597 for the six months ended Feb. 28, 1995.
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 $13,741 for the six months ended Feb. 28,
1995.
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $568,677,282 and $546,937,070, respectively, for the
six months ended Feb. 28, 1995. Realized gains and losses are determined on an
identified cost basis.
______________________________________________________________________________
4. Illiquid securities
At Feb. 28, 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 Feb. 28, 1995 was $8,255,835 which represents 0.4% 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 Feb. 28, 1995, securities valued at $11,243,300 were on loan to brokers.
For collateral, the fund received $900,000 in cash and U.S. government
securities valued at $10,599,239. Income from securities lending amounted to
$56,806, for the six months ended Feb. 28, 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 loss carryover
For federal income tax purposes, the fund had a capital loss carryover of
approximately $61,536,000 at Feb. 28, 1995, that if not offset by subsequent
capital gains, will expire in 2003.<PAGE>
PAGE
<TABLE>
<CAPTION>
7. Financial highlights
The table below shows certain important financial
information for evaluating the fund's results.
Fiscal period ended Aug. 31,
Per share income and capital changes*
1995** 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $4.91 $5.48 $5.11 $4.74 $4.39 $4.74
beginning of period
Income from investment operations:
Net investment income .19 .41 .40 .40 .41 .40
Net gains (losses) (.04) (.51) .38 .37 .33 (.36)
(both realized
and unrealized)
Total from investment .15 (.10) .78 .77 .74 .04
operations
Less distributions:
Dividends from net (.19) (.41) (.41) (.40) (.39) (.39)
investment income
Distributions from (.10) (.06) -- -- -- --
realized gains
Total distributions (.29) (.47) (.41) (.40) (.39) (.39)
Net asset value, $4.77 $4.91 $5.48 $5.11 $4.74 $4.39
end of period
Ratios/supplemental data
1995** 1994 1993 1992 1991 1990
Net assets, end of period $2,210 $2,249 $2,490 $2,174 $1,902 $1,730
(in millions)
Ratio of expenses to .71%*** .68% .70% .72% .77% .77%
average daily net assets
Ratio of net income to 8.14%*** 7.71% 7.78% 8.29% 9.03% 8.83%
average daily net assets
Portfolio turnover rate 28% 40% 60% 64% 74% 81%
(excluding short-term
securities)
Total return+ 3.4%++(2.0%) 15.8% 16.9% 17.6% 0.9%
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended Feb. 28, 1995 (Unaudited).
***Adjusted to an annual basis.
+Total return does not reflect payment of a sales charge.
++For the fiscal period ended Feb. 28, 1995, the annualized total return is 6.8%.
/TABLE
<PAGE>
PAGE
<TABLE>
<CAPTION>
Investments in securities
IDS Bond Fund, Inc. (Percentages represent value of
Feb. 28, 1995 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Bonds (89.4%)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. government obligations (7.9%)
U.S. Treasury 7.125% 1999 $37,500,000 $ 37,619,996
7.25 2022 25,000,000 24,134,748
7.50 2016 15,975,000 15,837,294
7.875 2004 10,000,000 (c) 10,463,399
8.875 2017 28,500,000 32,415,615
Govt Trust Certs Israel 9.25 1995-01 11,100,000 11,835,375
Resolution Funding Corp 8.125 2019 40,925,000 42,780,126
______________
Total 175,086,553
_________________________________________________________________________________________________________________________________
Mortgage-backed securities (14.8%)
Federal Home Loan Mtge Corp 8.00 2024 20,000,000 19,843,750
Collateralized Mtge Obligation 3.24 2023 7,640,693 3,063,440
5.741 2023 4,000,000 2,240,000
7.00 2022 10,000,000 8,703,300
8.50 2022 10,000,000 10,091,100
13.895 2023 9,000,000 4,387,500
Federal Natl Mtge Assn 6.00 1995-24 49,679,235 43,950,598
6.50 1995-24 94,300,563 86,938,677
8.00 1995-24 12,000,000 11,891,250
8.50 1995-24 60,448,070 61,317,012
9.00 1995-24 33,393,378 34,489,098
Collateralized Mtge Obligation 5.00 2024 9,961,155 7,952,645
6.168 2023 1,970,023 1,307,603
14.00 2023 1,855,845 1,201,079
Inverse Floater 1.10 2023 450,569 (b) 105,884
Trust Series Z 7.00 2019 16,781,678 (d) 15,169,630
Govt Natl Mtge Assn 8.00 2025 5,100,000 5,055,375
Prudential Bache
Collateralized Mtge Obligation Trust 7.965 2019 8,710,570 8,459,531
______________
Total 326,167,472
______________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Financial (8.4%)
Banks and savings & loans (3.5%)
BankAmerica
Sub Nts 7.50 2002 15,000,000 14,625,000
Bankers Trust
Sub Deb 7.50 2002 10,000,000 9,712,500
Barclays NA Capital 9.75 2021 10,000,000 11,100,000
CoreStates Capital
Gtd Sub Nts 9.375 2003 10,000,000 10,912,500
Meridian Bancorp
Sub Deb 7.875 2002 10,400,000 10,296,000
NationsBank
Sub Nts 6.50 2003 12,000,000 10,920,000
Standard Credit Card 8.625 2002 10,000,000 10,257,800
______________
Total 77,823,800
_____________________________________________________________________________________________________________________________
Financial services (2.7%)
Camden Property Trust 7.33 2001 2,000,000 1,840,000
Corporate Property Investors 7.05 2003 5,000,000 (e) 4,706,250
7.18 2013 5,000,000 (e) 4,375,000
Developers Dividend Realty 7.00 1999 2,500,000 2,350,000
First Union REIT
Sub Nts 8.875 2003 7,000,000 5,932,500
General Electric Capital
Reset Nt 8.65 1996 14,750,000 (f) 15,045,000
Liberty Property Trust
Cv 8.00 2001 2,000,000 2,050,000
Malan REIT
Cv 9.50 2004 3,500,000 3,045,000
Property Trust Amer REIT 7.50 2014 10,000,000 9,087,500
Salomon 8.91 1998 7,000,000 7,052,500
Saul (BF) REIT 11.625 2002 5,000,000 4,750,000
______________
Total 60,233,750
_____________________________________________________________________________________________________________________________
Insurance (2.2%)
Amer Life Holding
Sr Sub Nts 11.25 2004 5,000,000 5,068,750
Americo Life
Sr Sub Nts 9.25 2005 5,000,000 4,387,500
General Amer Life 7.625 2024 5,000,000 (e) 4,381,250
Leucadia Natl 7.75 2013 7,780,000 6,924,200
Sr Sub Nts 10.375 2002 5,250,000 5,565,000
NAC Re
Cv 5.25 2002 3,000,000 (e) 2,550,000
Nationwide Mutual 7.50 2024 4,000,000 (e) 3,385,000
New England Mutual
Credit Sensitive Nts 7.875 2024 10,000,000 (e) 8,487,500
Principal Mutual 8.00 2044 10,000,000 (e) 8,762,500
______________
Total 49,511,700
_____________________________________________________________________________________________________________________________<PAGE>
Industrial (30.3%)
Aerospace & defense (1.8%)
Allied
Zero Coupon 9.57 1996 5,000,000 (g) 4,706,250
Allison Engine Acquisition
Sr Sub Nts 10.00 2003 2,000,000 2,047,500
Boeing 8.75 2031 15,000,000 15,900,000
Fairchild Inds
Sr Secured Nts 12.25 1999 5,000,000 4,868,750
Sequa
Sr Sub Nts 9.375 2003 3,000,000 2,662,500
United Technologies 8.875 2019 10,000,000 10,687,500
______________
Total 40,872,500
_____________________________________________________________________________________________________________________________
Airlines (1.6%)
AMR 9.50 2001 4,000,000 4,185,000
9.75 2000 7,400,000 7,779,250
9.80 2021 10,000,000 10,175,000
Delta Air Lines 10.125 2010 10,000,000 10,262,500
10.375 2022 3,700,000 3,861,875
______________
Total 36,263,625
_____________________________________________________________________________________________________________________________
Automotive & related (0.3%)
Exide 10.75 2002 6,000,000 6,075,000
_____________________________________________________________________________________________________________________________
Beverages & tobacco (0.6%)
Dr. Pepper/Seven-Up
Zero Coupon 11.50 1997 4,929,000 (g) 4,158,844
RJR Nabisco 7.625 2003 5,000,000 4,561,000
Sr Nts 8.75 2004 5,000,000 4,887,500
______________
Total 13,607,344
_____________________________________________________________________________________________________________________________
Building materials (1.8%)
Building Material
Zero Coupon 11.75 2004 6,000,000 (g) 3,240,000
Emhart
SF Deb 9.25 2016 6,025,000 5,558,063
Nortek
Sr Sub Nts 9.875 2004 5,000,000 4,575,000
Owens-Corning Fiberglas 9.375 2012 4,900,000 5,187,875
Pulte
Sr Nts 7.00 2003 7,700,000 6,968,500
Schuller Intl Group
Sr Nts 10.875 2004 7,500,000 7,921,875
Southdown
Sr Sub Nts 14.00 2001 4,000,000 4,530,000
Toll
Cv 4.75 2004 2,500,000 2,025,000
______________
Total 40,006,313
_____________________________________________________________________________________________________________________________
<PAGE>
Chemicals (1.2%)
General Chemical
Sr Sub Nts 9.25 2003 7,000,000 6,755,000
Goodrich (BF) 9.625 2001 7,000,000 7,577,500
Huntsman
1st Mtge 11.00 2004 5,750,000 6,109,375
Rexene
Sr Nts 11.75 2004 5,000,000 5,250,000
______________
Total 25,691,875
_____________________________________________________________________________________________________________________________
Communications equipment (0.6%)
CenCall Communications
Zero Coupon 16.49 1999 10,000,000 (g) 3,887,500
Comcast Cellular
Zero Coupon 9.45 2000 12,500,000 (g) 9,062,500
______________
Total 12,950,000
_____________________________________________________________________________________________________________________________
Computers & office equipment (0.4%)
Conner Peripherals
Cv 6.50 2002 5,000,000 3,750,000
Data General
SF Deb 8.375 2002 4,700,000 4,112,500
______________
Total 7,862,500
_____________________________________________________________________________________________________________________________
Electronics (0.5%)
Berg Electronics 11.375 2003 5,000,000 5,150,000
Reliance Electric 6.80 2003 6,000,000 5,670,000
______________
Total 10,820,000
_____________________________________________________________________________________________________________________________
Energy (2.5%)
Atlantic Richfield 9.125 2011 9,000,000 9,787,500
Cross Timbers Oil
Cv 5.25 2003 700,000 556,500
Oryx Energy 9.50 1999 4,000,000 3,950,000
PDV Amer 7.875 2003 10,000,000 7,800,000
Texaco Capital
Gtd Deb 8.625 2032 10,000,000 10,600,000
Triton Energy
Zero Coupon 9.75 1996 5,000,000 (g) 4,025,000
USX 9.375 2022 17,500,000 17,937,500
______________
Total 54,656,500
_____________________________________________________________________________________________________________________________
Energy equipment & services (0.4%)
McDermott 9.375 2002 4,000,000 4,330,000
OPI Intl
Gtd Sr Nts 12.875 2002 5,000,000 5,568,750
______________
Total 9,898,750
_____________________________________________________________________________________________________________________________
<PAGE>
Food (0.3%)
Specialty Foods
Sr Nt 10.25 2001 7,500,000 (e) 7,218,750
_____________________________________________________________________________________________________________________________
Health care (0.5%)
Healthtrust
Sub Deb 8.75 2005 4,000,000 4,040,000
Sub Nts 10.75 2002 7,000,000 7,630,000
______________
Total 11,670,000
_____________________________________________________________________________________________________________________________
Health care services (1.2%)
Amer Medical Intl
Sr Nts 11.00 2000 7,000,000 7,455,000
Charter Medical
Sr Sub Nts 11.25 2004 5,000,000 5,275,000
Foundation Health
Sr Nts 7.75 2003 5,650,000 5,445,187
Hillhaven
Sr Sub Nts 10.125 2001 4,000,000 4,080,000
Natl Medical Enterprises
Sr Sub Nts 10.125 2005 4,000,000 4,090,000
______________
Total 26,345,187
_____________________________________________________________________________________________________________________________
Industrial equipment & services (0.2%)
Mascotech
Cv 4.50 2003 5,000,000 3,500,000
_____________________________________________________________________________________________________________________________
Leisure time & entertainment (2.0%)
Bally's Grand
1st Mtge 10.375 2003 7,000,000 6,580,000
Bally's Park Place Funding
1st Mtge 9.25 2004 5,000,000 4,450,000
Caesars World
Sr Sub Nts 8.875 2002 6,000,000 6,045,000
Disney (Walt)
Sr Deb 7.55 2093 10,000,000 8,925,000
GB Property Funding
1st Mtge 10.875 2004 1,900,000 1,638,750
Kloster Cruise
Sr Secured Nts 13.00 2003 7,000,000 5,460,000
MGM Grand Hotel Finance
1st Mtge 11.75 1999 10,000,000 10,725,000
______________
Total 43,823,750
_____________________________________________________________________________________________________________________________
Media (4.5%)
Ackerley Communication
Sr Secured Nts 10.75 2003 4,000,000 (e) 4,000,000
Adelphia Communications
Sr Deb 11.875 2004 4,000,000 3,700,000
Sr Nts 12.50 2002 3,000,000 2,895,000
<PAGE>
Amer Media Operations 11.625 2004 5,000,000 5,300,000
Cablevision Systems
Sr Sub Deb 10.75 2004 4,000,000 4,185,000
Continental Cablevision
Sr Deb 8.875 2005 5,000,000 4,750,000
News Amer Holdings 8.875 2023 17,000,000 16,957,500
Outdoor Systems
Sr Nts 10.75 2003 6,000,000 5,452,500
Panamsat
Sr Nts 9.75 2000 3,000,000 2,947,500
Plitt Theatres 10.875 2004 2,000,000 1,920,000
Robin Media Group 11.125 1997 5,000,000 4,906,250
Tele-Communications
Sr Deb 9.80 2012 8,000,000 8,410,000
Time Warner
Zero Coupon Cv 6.59 2012 6,650,000 (g) 2,094,750
Time Warner Entertainment 8.375 2003 25,000,000 22,250,000
Turner Broadcasting
Sr Nts 8.375 2013 6,000,000 5,077,500
Viacom Intl 8.00 2006 5,000,000 4,487,500
______________
Total 99,333,500
_____________________________________________________________________________________________________________________________
Metals (0.5%)
Magma Copper
Sr Sub Nts 12.00 2001 10,000,000 10,800,000
_____________________________________________________________________________________________________________________________
Multi-industry conglomerates (1.1%)
Boc Group
Sr Nts 8.73 1996 6,000,000 (e) 6,081,600
Coltec Inds
Sr Nts 9.75 2000 5,000,000 5,025,000
Mark IV Inds
Sr Sub Nts 8.75 2003 8,000,000 7,640,000
Talley Inds
Zero Coupon Sr Disc Deb 12.25 1998 1,500,000 (g) 840,000
Talley Mfg & Technology
Sr Nts 10.75 2003 4,000,000 3,660,000
______________
Total 23,246,600
_____________________________________________________________________________________________________________________________
Paper & packaging (4.9%)
Container Corp Amer
Sr Nts 9.75 2003 5,000,000 4,887,500
Sr Nts 10.75 2002 3,000,000 3,067,500
Crown Packaging
Zero Coupon Sr Sub Nts 12.33 2000 5,000,000 (g) 2,475,000
Federal Paper Board 10.00 2011 10,000,000 11,162,500
Fort Howard 11.00 2002 9,366,182 9,647,168
Gaylord Container
Sr Nts 11.50 2001 5,000,000 5,225,000
Intl Paper 5.125 2012 9,000,000 6,615,000<PAGE>
Owens-Illinois
Sr Deb 11.00 2003 15,000,000 16,106,250
Plastic Containers
Sr Secured Nts 10.75 2001 6,000,000 6,037,500
Pope & Talbot 8.375 2013 8,000,000 7,600,000
Riverwood Intl
Sr Nts 10.75 2000 7,000,000 7,315,000
Scotia Pacific Holding 7.95 2015 4,617,877 4,438,934
Silgan
Sr Sub Nts 11.75 2002 7,000,000 7,201,250
Stone Container
1st Mtge 10.75 2002 4,000,000 4,160,000
Sr Nts 9.875 2001 3,500,000 3,430,000
Sr Nts 12.625 1998 3,000,000 3,172,500
Warren (SD)
Sr Nts 12.00 2004 5,000,000 (e) 5,350,000
______________
Total 107,891,102
_____________________________________________________________________________________________________________________________
Restaurants & lodging (0.4%)
Hammons (John Q) Hotel
1st Mtge 8.875 2004 7,000,000 6,475,000
Trump Taj Mahal
Pay-in-Kind -- 1999 5,081,340 3,607,751
______________
Total 10,082,751
_____________________________________________________________________________________________________________________________
Retail (1.5%)
Eye Care Center 12.00 2003 5,000,000 4,068,750
Food 4 Less Supermarkets
Zero Coupon 12.44 1997 2,500,000 (g) 1,937,500
Musicland Group
Sr Sub Nts 9.00 2003 4,000,000 3,450,000
Pathmark Stores
Sr Sub Nts 9.625 2003 5,000,000 4,700,000
Penn Traffic
Sr Sub Nts 9.625 2005 7,000,000 6,597,500
Purity Supreme 11.75 1999 4,000,000 3,440,000
Ralphs Grocery
Sr Sub Nts 10.25 2002 5,000,000 4,912,500
Super Rite Foods
Sr Sub Nts 10.625 2002 5,000,000 5,081,250
______________
Total 34,187,500
_____________________________________________________________________________________________________________________________
Soaps & cosmetics (0.5%)
Revlon Consumer Products
Sr Sub Nts 10.50 2003 5,000,000 4,681,250
Sweetheart Cup
Sr Sub Nts 9.625 2000 6,500,000 6,191,250
______________
Total 10,872,500
_____________________________________________________________________________________________________________________________<PAGE>
Textiles & apparel (0.5%)
Dominion Textiles
Sr Nts 8.875 2003 7,000,000 6,597,500
WestPoint Stevens
Sr Nts 8.75 2001 5,000,000 4,737,500
______________
Total 11,335,000
_____________________________________________________________________________________________________________________________
Miscellaneous (0.5%)
ECM Funding LP 11.918 2002 3,040,841 (i) 3,344,925
EIP Funding 10.25 2012 4,000,000 3,945,000
Nationwide Trust
Credit Sensitive Nts 9.875 2025 3,500,000 (e) 3,626,875
______________
Total 10,916,800
_____________________________________________________________________________________________________________________________
Utilities (14.7%)
Electric (9.7%)
Arizona Public Service
1st Mtge 8.00 2025 5,800,000 5,408,500
1st Mtge 8.75 2024 6,000,000 6,045,000
Sale Lease-Backed Obligation 8.00 2015 8,956,000 8,385,055
Cajun Electric Power Cooperative
Mtge Trust 8.92 2019 5,000,000 5,325,000
Commonwealth Edison
1st Mtge 8.00 2023 10,000,000 9,225,000
1st Mtge 8.375 2023 10,000,000 9,575,000
1st Mtge 9.75 2020 10,000,000 10,537,500
First Palo Verde Funding 10.15 2016 6,000,000 5,910,000
10.30 2014 4,500,000 4,432,500
Long Island Lighting
Gen Ref Mtge 9.625 2024 25,888,000 24,787,760
Gen Ref Mtge 9.75 2021 12,500,000 12,078,125
Louisiana Power & Light
1st Mtge 10.125 2020 3,500,000 3,819,375
Louisiana Power & Light Waterford
Sale Lease-Backed Obligation 10.30 2005 1,998,000 2,072,925
10.67 2017 7,500,000 7,978,125
Midland Cogeneration Venture 11.75 2005 7,900,000 7,544,500
Sub Secured Sale
Lease-Backed Obligation 10.33 2002 8,639,521 8,574,724
North Atlantic Energy
1st Mtge 9.05 2002 7,000,000 6,798,750
Pacific Gas & Electric
1st Ref 7.25 2026 10,000,000 8,787,500
RGS Funding
Sale Lease-Backed Obligation 9.82 2022 9,939,223 10,846,177<PAGE>
San Diego Gas & Electric
1st Mtge 9.625 2020 10,800,000 12,177,000
Sithe Independant Funding 8.50 2007 7,500,000 7,509,375
9.00 2013 2,700,000 2,713,500
Texas-New Mexico Power
1st Mtge 9.25 2000 3,000,000 3,007,500
Secured Deb 10.75 2003 5,000,000 5,075,000
Texas Utilities Electric
1st Collateral Trust 9.75 2021 5,000,000 5,425,000
1st Mtge 7.625 2025 10,000,000 9,050,000
Secured Facility Bond 9.45 2005 4,185,000 4,566,881
Tucson Electric Power
1st Mtge 8.50 2009 7,000,000 (h) 6,265,000
______________
Total 213,920,772
______________________________________________________________________________________________________________________________
Gas (2.6%)
Coastal
Sr Deb 10.25 2004 13,000,000 14,495,000
Equitable Resources 7.50 1999 5,000,000 5,006,250
Questar Pipeline 9.375 2021 5,000,000 5,475,000
Southern California Gas
1st Mtge 7.375 2023 6,900,000 6,227,250
Southwest Gas 9.75 2002 7,900,000 8,532,000
Tenneco 9.00 2012 9,000,000 9,517,500
Tennessee Gas Pipeline 6.00 2011 3,000,000 2,302,500
Transco Energy 9.875 2020 4,800,000 (h) 5,394,000
______________
Total 56,949,500
_____________________________________________________________________________________________________________________________
Telephone & other (2.4%)
Ameritech Capital Funding
Gtd Deb 9.10 2016 12,000,000 12,990,000
GTE 10.25 2020 7,000,000 7,857,500
New York Tel 9.375 2031 15,000,000 16,068,750
Pacific Bell 6.625 2034 10,000,000 8,100,000
7.375 2043 10,000,000 8,900,000
______________
Total 53,916,250
_____________________________________________________________________________________________________________________________
Foreign (13.3%)(j)
ABN Amro
(U.S. Dollar) 7.75 2023 9,000,000 8,415,000
Aegon Euro
(U.S. Dollar) Cv 4.75 2004 1,775,000 1,899,250
Agnico Eagle Mines
(U.S. Dollar) Cv 3.50 2004 2,900,000 1,986,500
Austria Republic Euro
(U.S. Dollar) 10.00 1998 5,000,000 5,338,850
Avenor
(U.S. Dollar) 9.375 2004 3,000,000 2,947,500
Bacnotan Consolidated Inds
(U.S. Dollar) Cv 5.50 2004 2,500,000 (e) 2,225,000<PAGE>
Banca Italy N.Y.
(U.S. Dollar) 8.25 2007 6,200,000 6,153,500
Banco Nacional de Comercia
(U.S. Dollar) 7.25 2004 9,000,000 5,220,000
Brazil C Bonds
(U.S. Dollar) 4.00 2014 13,219,720 5,370,511
Carter Holt Harvey
(U.S. Dollar) 8.875 2004 6,500,000 6,808,750
Celcaribe
(U.S. Dollar) Zero Coupon 14.71 2004 6,120,000 (e,g) 4,488,900
Centragas Euro
(U.S. Dollar) 10.65 2010 750,000 (e) 735,937
Dart Kraft Euro
(U.S. Dollar) 7.75 1998 13,754,000 13,925,925
Doman Inds
(U.S. Dollar) 8.75 2004 5,000,000 4,587,500
Ford Capital
(U.S. Dollar) 9.50 2010 18,350,000 20,574,938
Govt of Australia
(Australian Dollar) 7.50 2005 15,000,000 9,404,550
Grand Metropolitan
(U.S. Dollar) Cv 6.50 2000 1,775,000 (e) 1,846,000
Groupe Videotron
(U.S. Dollar) 10.625 2005 5,000,000 5,150,000
Guang Dong Enterprise
(U.S. Dollar) 8.75 2003 10,000,000 (e) 9,175,000
Hanson Inds
(British Pound) Cv 9.50 2006 1,600,000 2,597,744
Helsinki City
(U.S. Dollar) Sr Nts 9.25 2007 4,900,000 (i) 4,906,125
Hydro-Quebec Euro
(Canadian Dollar) 10.875 2001 12,500,000 9,700,000
Indorayon
(U.S. Dollar) Sr Nts 9.125 2000 4,000,000 3,280,000
Korea Electric Power
(U.S. Dollar) 6.375 2003 3,100,000 2,724,125
(U.S. Dollar) 7.75 2013 4,000,000 3,595,000
Legrand
(U.S. Dollar) 8.50 2025 7,000,000 7,043,750
Methanex
(U.S. Dollar) 8.875 2001 6,000,000 6,180,000
Mexican/United States Govt Euro
(U.S. Dollar) 6.25 2019 3,000,000 1,470,000
(U.S. Dollar) 6.77 2019 3,000,000 1,860,000
Petroleos Mexicanos
(U.S. Dollar) 8.625 2023 5,000,000 3,125,000
Philippine Long Distance Telephone
(U.S. Dollar) 10.625 2004 2,500,000 2,425,000
Poland Discount
(U.S. Dollar) 6.812 2024 5,750,000 (e) 3,834,531
Poland Euro
(U.S. Dollar) 3.25 2014 6,000,000 (f) 2,400,000<PAGE>
Province of Quebec
(U.S. Dollar) 11.00 2015 16,000,000 18,300,000
PT Indah Kiat Pulp & Paper
(U.S. Dollar) 11.875 2002 4,000,000 3,940,000
Qantas Air
(U.S. Dollar) 7.50 2003 10,000,000 (e) 9,400,000
Republic of Argentina
(U.S. Dollar) 4.25 2023 15,000,000 5,943,750
Republic of Brazil
(U.S. Dollar) 6.75 2012 15,800,000 7,900,000
Republic of Brazil Euro
(U.S. Dollar) 4.00 2024 16,000,000 6,180,000
Republic of Columbia
(U.S. Dollar) 7.25 2004 9,750,000 8,165,625
Roche Holdings
(U.S. Dollar) 2.75 2000 15,000,000 12,009,300
Rogers Cable System
(Canadian Dollar) 7.01 2014 3,700,000 2,163,975
Rogers Cantel Mobile
(U.S. Dollar) Sr Sec Gtd Nts 10.75 2001 8,000,000 8,240,000
Scotland Bank
(U.S. Dollar) 8.80 2004 17,000,000 (e) 17,637,500
Tarkett Intl
(U.S. Dollar) 9.00 2002 5,000,000 4,725,000
Tjiwi Kimia
(U.S. Dollar) 13.25 2001 5,000,000 5,075,000
United Engineers Malaysia
(U.S. Dollar) Cv 2.00 2004 3,750,000 (e) 3,740,625
WMC Finance
(U.S. Dollar) 7.25 2013 10,000,000 8,800,000
______________
Total 293,615,661
_____________________________________________________________________________________________________________________________
Total bonds
(Cost: $2,003,166,379) $1,977,153,305
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Preferred stocks and other (1.7%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
ABN Amro Holdings
6% Cv 68,500 $ 2,419,900
Capital Gaming
Warrants 25,000 15,000
Celcaribe 528,450 (e) 686,985
Crown Package
Warrants 5,000 212,500<PAGE>
EUA Power
Contingent Interest Certificates 5,000 (h,k) --
Envirodyne
Common 242,372 (h) 1,014,933
Eye Care Center
Warrants 5,000 25,000
First Chicago
2.875% Cm Cv 75,000 3,862,500
First Nationwide Bank
11.50% Cm 50,000 5,000,000
Foodmaker
Warrants 5,000 62,500
Great Bay Power
Common 75,552 (h) 604,416
Natl Health Investors
8.50% Cv 60,000 1,380,000
Pittston Minerals Group
Cv 40,000 (e,l) 1,560,000
Property Tr Amer
1.75% Cv 75,000 1,706,250
Public Service of
New Hampshire
10.60% Cm 240,500 6,137,560
Pullman
Common Series B 182,094 1,456,752
Purity Supreme
Warrants 13,862 (i) 277
Service
3.125% Cm Cv 70,000 3,920,000
Sonoco Products
2.25% Cv 69,400 3,626,150
Southdown
Warrants 40,000 120,000
Supermarket General
$3.52 Pay-in-Kind Cv 120,972 2,661,384
Thermadyne Holdings
Common 6,693 97,049
Thermadyne Inds
Common 120,000 (k) --
Triangle Wire Cable
Common 211,111 844,444
Webcraft Technology
Common 32,502 330
WestFed Holdings
Non-Voting Common 13,019 (h,k) --
Pay-in-Kind Cm Sr 42,753 (h,i,k) --
____________________________________________________________________________________________________________________________
Total preferred stocks and other
(Cost: $53,293,142) $ 37,413,930
_____________________________________________________________________________________________________________________________
/TABLE
<PAGE>
PAGE
<TABLE>
<CAPTION>
Short-term securities (9.5%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable
date of at
purchase maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C>
U.S. government agencies (0.3%)
Federal Home Loan Mtge Corp Disc Note
03-27-95 5.90% $6,300,000 $ 6,273,291
Federal Natl Mtge Assn Disc Note
03-20-95 5.88 1,600,000 1,595,060
______________
Total 7,868,351
_____________________________________________________________________________________________________________________________
Commercial paper (9.2%)
Amgen
03-10-95 5.88 3,000,000 2,995,628
03-17-95 6.01 6,600,000 6,582,488
Aon
03-15-95 6.01 3,400,000 3,392,093
AT&T Capital
03-21-95 6.05 8,300,000 8,272,333
Avco Financial Services
03-02-95 5.88 8,000,000 7,998,700
BBV Finance (Delaware)
04-04-95 6.33 2,700,000 2,683,307
Cargill
03-01-95 5.91 4,300,000 4,300,000
03-06-95 6.06 4,100,000 4,095,390
Ciesco LP
04-05-95 6.00 8,000,000 7,953,645
CIT Group Holdings
03-15-95 6.01 4,500,000 4,489,553
04-10-95 6.08 5,000,000 4,962,818
04-21-95 6.06 7,600,000 7,532,058
Commerzbank U.S. Finance
04-06-95 6.03 2,400,000 2,385,624
Consolidated Rail
03-16-95 6.02 3,700,000 (l) 3,690,765
04-28-95 6.04 4,200,000 (l) 4,159,535
Corporate Asset Funding
03-16-95 5.96 3,600,000 3,591,105
03-20-95 6.13 11,000,000 10,959,256
CPC Intl
03-13-95 6.04 2,100,000 (l) 2,094,897
04-18-95 6.09 8,000,000 (l) 7,932,060
Fleet Funding
03-21-95 6.06 4,800,000 (l) 4,784,000
<PAGE>
Gannett
03-07-95 6.04 4,300,000 (l) 4,294,932
General Electric Capital
Services
03-06-95 6.10 5,400,000 5,394,529
Kellogg
03-30-95 6.00 3,300,000 3,284,130
Mobile Australia Finance (Delaware)
03-17-95 6.15 2,400,000 (l) 2,392,601
Natl Australia Funding (Delaware)
03-17-95 5.98 12,300,000 12,267,473
Paribas Finance
03-14-95 5.98 6,800,000 6,785,389
Penney (JC) Funding
03-17-95 6.01 1,100,000 1,097,076
PepsiCo
03-20-95 6.01 6,400,000 6,379,801
Pitney Bowes Credit
04-17-95 6.11 7,500,000 7,435,827
Sandoz
03-03-95 6.06 600,000 599,799
04-04-95 6.02 8,900,000 8,849,735
Siemens
03-06-95 6.26 3,600,000 3,595,772
03-21-95 5.98 4,600,000 4,584,794
Southwestern Bell Capital
05-19-95 6.15 6,500,000 (l) 6,410,156
Sysco
03-22-95 6.01 5,200,000 (l) 5,199,835
Toyota Motor Credit
04-11-95 6.06 6,000,000 5,959,000
U S WEST Communications
04-10-95 6.06 5,000,000 4,963,482
04-13-95 6.08 8,000,000 7,942,476
______________
Total 202,292,062
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $210,177,310) $ 210,160,413
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $2,266,636,831)(n) $2,224,727,648
_____________________________________________________________________________________________________________________________<PAGE>
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) 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 Offering Rate) Index. Interest rate disclosed is the rate
in effect on Feb. 28, 1995.
(c) Security is partially or fully on loan. See Note 5 to the financial statements.
(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; similar to a
zero coupon bond.
(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 Feb. 28, 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. For long-term debt securities, item identified is in default as to payment of interest
and/or principal.
(i) Identifies issues considered to be illiquid (see Note 4 to the financial statements). Information concerning such
security holdings at Feb. 28, 1995, is as follows:
Acquisition
Security date Cost
_______________________________________________________________________________________________
ECM Funding LP
11.918% 2002 04-13-92 $3,040,841
Helsinki City
Sr Nts
9.25% 2007 02-07-95 4,900,000
Purity Supreme
Warrants 07-29-92 --
WestFed Holdings
Pay-in-Kind Cm Sr 03-20-92 10,755
Pay-in-Kind Cm Sr 06-19-92 10,950
Pay-in-Kind Cm Sr 09-15-92 7,440
Pay-in-Kind Cm Sr 12-18-92 7,580
Pay-in-Kind Cm Sr 03-08-93 7,720
Pay-in-Kind Cm Sr 06-11-93 2,358
(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) At Feb. 28, 1995, the cost of securities for federal income tax purposes was approximately $2,264,629,000 and the
approximate aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $ 50,997,000
Unrealized depreciation (90,898,000)
_______________________________________________________________________________________
Net unrealized depreciation $(39,901,000)
_______________________________________________________________________________________
/TABLE
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Directors and officers
Directors and officers of the fund
_____________________________________________________________________
President and interested director
William R. Pearce
President of all funds in the IDS MUTUAL FUND GROUP.
_____________________________________________________________________
Independent directors
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for
Public Policy Research.
Robert F. Froehlke
Former president of all funds in the IDS MUTUAL FUND GROUP.
Heinz F. Hutter
Former president and chief operating officer, Cargill, Inc.
Anne P. Jones
Attorney and telecommunications consultant.
Donald M. Kendall
Former chairman and chief executive officer, PepsiCo, Inc.
Melvin R. Laird
Senior counsellor for national and international affairs,
The Reader's Digest Association, Inc.
Lewis W. Lehr
Former chairman and chief executive officer,
Minnesota Mining and Manufacturing Company (3M).
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
C. Angus Wurtele
Chairman of the board and chief executive officer, The Valspar Corporation.
_____________________________________________________________________
Interested directors who are officers and/or employees of American
Express Financial Corporation.
William H. Dudley
Exective vice president, American Express Financial Corporation.
David R. Hubers
President and chief executive officer, American Express Fianacial
Corporation.
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John R. Thomas
Senior vice president, American Express Financial Corporation.
_____________________________________________________________________
Other officer
Leslie L. Ogg
Vice president of all funds in the IDS MUTUAL FUND GROUP and general
counsel and treasurer of the publicly offered funds.
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IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conservation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposit (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income.
Secondary objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
seek high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed-income
securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
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IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher rated,
lower risk bond categories, or the equivalent, and in government bonds.
(icon of) greek column
IDS Selective Fund
Invests in high-quality corporate bonds and other highly rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(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.
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IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities
to provide income to residents of each respective state that is
exempt from federal, state and local income taxes. (New York
is the only state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government
units, with at least 75% in the four highest rated, lowest risk bond
categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the fund but does not guarantee
the market value of the fund's shares.
(icon of) shield with eagle head
Growth and income investments
These funds focus on securities of medium to large, well-established
companies that offer long-term growth of capital and reasonable income
from dividends and interest. Moderate risk.
IDS International Fund
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The fund may invest up to 20%
of its assets in the U.S. market.
(icon of) three flags
IDS 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
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IDS Equity Select Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of
capital and income.
(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 stocks 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
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.
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Growth investments
Funds in this group seek capital growth, primarily from common stocks.
They are high risk mutual funds with a potential for high reward.
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(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
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
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Specialty growth investment
This fund aggressively seeks capital growth as a hedge against inflation.
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic companies
that explore for, mine and process or distribute gold and other
precious metals. This is the most aggressive and most speculative
IDS mutual fund.
(icon of) cart of precious gems
For more complete information about any of these funds, including charges
and expenses, you can obtain a prospectus by contacting your financial
planner or writing to American Express Shareholder Service, P.O. Box 534,
Minneapolis, MN 55440-0534. Read it carefully before you invest or send
money.
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Quick telephone reference
American Express Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota:
800-437-3133
Mpls./St. Paul area:
671-3800
American Express Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
American Express Infoline
Automated account information (TouchTone phones only), including current
fund prices and performance, account values and recent account
transactions
National/Minnesota:
800-272-4445
Mpls./St. Paul area:
671-1630
AMERICAN EXPRESS FINANCIAL ADVISORS
IDS Bond Fund
IDS Tower 10
Minneapolis, MN 55440-0010
