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Prospectus Supplement May 1, 1998
IDS Bond Fund, Inc. S-6495 L (10/97)
IDS Discovery Fund, Inc. S-6457 L (9/97)
IDS Equity Select Fund, Inc. S-6426 M (1/98)
IDS Extra Income Fund, Inc. S-6370 L (7/97)
IDS Federal Income Fund, Inc. S-6042 M (7/97)
IDS Emerging Markets Fund S-6354 C (12/97)
IDS Global Balanced Fund S-6352 A (12/97)
IDS Global Bond Fund S-6309 L (12/97)
IDS Global Growth Fund S-6334 L (12/97)
IDS Growth Fund S-6455 M (9/97)
IDS Research Opportunities Fund S-6356 C (9/97)
IDS High Yield Tax-Exempt Fund, Inc. S-6340 M (1/98)
IDS International Fund, Inc. S-6140 L (12/97)
IDS Diversified Equity Income Fund S-6475 L (11/97)
IDS Mutual S-6326 M (11/97)
IDS Managed Allocation Fund S-6141 M (11/97)
IDS Blue Chip Advantage Fund S-6025-99 L (3/98)
IDS Small Company Index Fund S-6357 D (3/98)
IDS Cash Management Fund S-6320 L (9/97)
IDS New Dimensions Fund, Inc. S-6440 L (9/97)
IDS Progressive Fund, Inc. S-6449 L (11/97)
IDS Selective Fund, Inc. S-6376 M (7/97)
IDS Stock Fund, Inc. S-6351 M (11/97)
IDS Tax-Exempt Bond Fund S-6310 M (1/98)
IDS Intermediate Tax-Exempt Fund S-6355 C (1/98)
IDS Tax-Free Money Fund, Inc. S-6433 L (2/98)
IDS Utilities Income Fund, Inc. S-6341 L (8/97)
IDS Insured Tax-Exempt Fund S-6327 L (8/97)
IDS California Tax-Exempt Fund S-6328 L (8/97)
IDS Massachusetts Tax-Exempt Fund
IDS Michigan Tax-Exempt Fund
IDS Minnesota Tax-Exempt Fund
IDS New York Tax-Exempt Fund
IDS Ohio Tax-Exempt Fund
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For all funds the following section has been added to the prospectus after
"General Information":
Year 2000
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which would have a material impact on the operations of the Fund. The Fund has
no computer systems of its own but is dependent upon the systems maintained by
AEFC and certain other third parties.
A comprehensive review of AEFC's computer systems and business processes has
been conducted to identify the major systems that could be affected by the Year
2000 issue. Steps are being taken to resolve any potential problems including
modification of existing software and the purchase of new software. These
measures are scheduled to be completed and tested on a timely basis. AEFC's goal
is to complete internal remediation and testing of each of its critical systems
by the end of 1998 and to continue compliance efforts through 1999. The Year
2000 readiness of other third parties whose system failures could have an impact
on the Fund's operations currently is being evaluated. The companies or
governments in which the Fund invests also may be adversely affected by Year
2000 issues. This may affect the value of the Fund's investments. The potential
materiality of any such impact is not known at this time.
For all funds except IDS Cash Management Fund and IDS Tax-Free Money Fund, Inc.
the following paragraph in the section titled "Waivers of the sales charge for
Class A shares" has been modified to reflect the change as indicated in bold:
Purchases made through or under a "wrap fee" product sponsored by AEFA (total
amount of all investments must be $50,000); the University of Massachusetts
After-Tax Savings Program; the University of Texas System ORP; or a segregated
separate account offered by Nationwide Life Insurance Company or Nationwide Life
and Annuity Insurance Company.
The following section will be added to supplement existing foreign risk
disclosure for all funds except IDS Federal Income Fund, IDS High Yield
Tax-Exempt Fund, IDS Small Company Index Fund, IDS Cash Management Fund, IDS
Tax-Exempt Bond Fund, IDS Intermediate Tax-Exempt Fund, IDS Tax-Free Money Fund,
IDS Insured Tax-Exempt Fund, IDS California Tax-Exempt Fund, IDS Massachusetts
Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund,
IDS New York Tax-Exempt Fund, and IDS Ohio Tax-Exempt Fund.
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There are risks when investing in securities of foreign companies and
governments in addition to those assumed when investing in domestic securities.
These risks are classified as country risk, currency risk, and custody risk.
Each can adversely affect the value of an investment. Country risk includes the
political, economic, and other conditions of a country. These conditions include
lack of publicly available information, less government oversight, the
possibility of government-imposed restrictions, even the nationalization of
assets. Currency risk results from the constantly changing exchange rate between
local currency and the U.S. dollar. Whenever the fund holds securities valued in
local currency or holds the currency, changes in the exchange rate add or
subtract from the asset value of the fund. Custody risk refers to the process of
clearing and settling trades. It also covers holding securities with local
agents and depositories. Low trading volumes and volatile prices in less
developed markets make trades harder to complete and settle. Local agents are
held only to the standard of care of the local market. Governments or trade
groups may compel local agents to hold securities in designated depositories
that are not subject to independent evaluation. The less developed a country's
securities market is, the greater the likelihood of problems occurring. The
risks of foreign investments are managed carefully but the fund cannot guarantee
against losses that might result from them.
For Strategy Aggressive Fund the following paragraph will replace the paragraph
for the "Portfolio manager" section:
Louis Giglio joined AEFC in January 1994 as a senior equity analyst and serves
as portfolio manager. He has managed the assets of the Fund since May, 1998. He
also serves as portfolio manager of IDS Life Series Fund, Equity Portfolio and
World Technologies Portfolio. Prior to joining AEFC he had eight years of
experience as a financial analyst with Bear, Stearns & Co., Inc. covering the
microcomputer software and computer services industries.
Form S-6530 A (4/98) Valid until next prospectus update.
Destroy April 30, 1999.
