1998 SEMIANNUAL REPORT
IDS
Bond
Fund
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. The Fund invests primarily in corporate bonds and other debt
securities.
American Express financial Advisors
Distributed by American Express Financial Advisors Inc.
<PAGE>
(icon of) Greek 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.
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 chairman 3
From the portfolio manager 3
The Fund's ten largest holdings 5
Financial statements 6
Notes to financial statements 9
Investments in securities 21
Board members and officers 43
IDS mutual funds 44
<PAGE>
To our shareholders
From the chairman
If you're an experienced investor, you know that the past few years have
been unusually strong in many financial markets. Perhaps just as
important, history shows that bull markets don't last forever. Though
they're often unpredictable, declines -- whether they're brief or
long-lasting, moderate or substantial -- are always a possibility. We saw
evidence of that last October, when declines in Asian markets spawned a
sharp drop in several financial markets worldwide, including the U.S.
The potential for such volatility reinforces the need for investors to
review periodically their long-term goals and examine whether their
investment program remains on track to achieving them. Your quarterly
investment statements are one part of that monitoring process. The other
is a meeting with your American Express financial advisor. That becomes
even more important if there's a major change in your financial situation
or in the financial markets.
William R. Pearce
(picture of) William R. Pearce
William R. Pearce
Chairman of the board
<PAGE>
From the portfolio manager
A decline in long-term interest rates provided strong support for U.S.
bonds during the past six months. IDS Bond Fund's performance reflected
the positive trend, as its Class A shares generated a total return of 5.6%
for the first half of the fiscal year -- September 1997 through February
1998.
Despite relatively robust economic growth, the inflation rate remained
remarkably low during the past period. Against that backdrop, long-term
interest rates followed a generally declining path through mid-January.
Using the yield on the 30-year Treasury bond as a measuring stick, long
rates went from about 6.7% in early September to about 5.8% in
mid-January. Because bond prices move in the opposite direction of
interest rates, the U.S. bond market and the Fund's net asset value
benefited accordingly.
Also enhancing the Fund's performance was the slightly long duration of
the portfolio, a strategy that increases its sensitivity to interest rate
changes - the longer the duration, the greater the sensitivity. Therefore,
when rates came down, the Fund's value rose more than it would have with a
neutral duration.
A mix of assets
I kept the portfolio well-diversified during the period. The majority of
investments were in investment-grade, or high-quality bonds, including
those issued by U.S. corporations and the federal government and its
agencies. To boost the Fund's yield, I maintained a moderate exposure to
high-yield corporate bonds and emerging market bonds (those issued by
governments of developing foreign countries). While the high-yield bonds
performed quite well, financial turmoil in Asia took a toll on the
emerging market bonds last fall.
Changes to the portfolio were minor. I lengthened the duration somewhat
last September, while adding a bit to corporate bonds and mortgage-backed
bonds issued by government agencies. I also upgraded the overall quality
of the portfolio slightly as the period progressed.
Given the substantial decline in long-term interest rates in 1997, I think
it's unlikely that we'll see a repeat of that trend this year. More
likely, I think, is moderate fluctuation, with no sustained moves either
way. Therefore, at this point (mid-March), I plan to keep a basically
neutral duration in the portfolio and concentrate instead on enhancing the
Fund's dividend.
Frederick Quirsfeld
(picture of) Frederick Quirsfeld
Frederick Quirsfeld
Portfolio Manager
<PAGE>
To our shareholders
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Feb. 28, 1998 $5.24
Aug. 31, 1997 $5.22
Increase $0.02
Distributions
Sept. 1, 1997 - Feb. 28, 1998
From income $0.20
From capital gains $0.06
Total distributions $0.26
Total return* +5.6%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Feb. 28, 1998 $5.24
Aug. 31, 1997 $5.22
Increase $0.02
Distributions
Sept. 1, 1997 - Feb. 28, 1998
From income $0.18
From capital gains $0.06
Total distributions $0.24
Total return* +5.2%**
Class Y
6-month performance
(All figures per share)
Net asset value (NAV)
Feb. 28, 1998 $5.25
Aug. 31, 1997 $5.22
Increase $0.03
Distributions
Sept. 1, 1997 - Feb. 28, 1998
From income $0.21
From capital gains $0.06
Total distributions $0.27
Total return* +5.6%**
* The prospectus discusses the effect of sales charges, if any, on the
various classes.
** The total return is a hypothetical investment in the Fund with all
distributions reinvested.
<PAGE>
The Fund's ten largest holdings
Percent Value
(of Fund's net assets) (as of Feb. 28, 1998)
Virgina Electric & Power .92% $35,866,949
6.75% 2007
Bell Atlantic .80 30,963,936
9.375% 2031
Viacom .80 30,828,375
8.00% 2006
Connecticut Light & Power .76 29,251,400
7.75% 2002
Tenet Healthcare .62 24,200,000
10.125% 2005
Scotland Bank .59 22,815,065
8.80% 2004
Bistro Trust .59 22,793,224
9.50% 2002
Ford Capital .59 22,697,482
9.50% 2010
USX-Marathon Group .57 22,019,200
9.375% 2022
Salomon .55 21,226,799
7.00% 1999
Excludes U.S. Treasury and government agency holdings.
(icon of) pie chart
The ten holdings listed here make up 6.79% of the Fund's net assets
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Bond Fund, Inc.
Feb. 28, 1998
Assets
(Unaudited)
Investments in securities, at value (Note 1)
<S> <C>
(identified cost $3,675,244,503) $3,844,477,231
Dividends and accrued interest receivable 55,887,588
Unrealized appreciation on foreign currency contracts held, at value (Notes 1 and 6) 46,590
Receivable for investment securities sold 19,272,348
U.S. government securities held as collateral (Note 4) 26,138,000
----------
Total assets 3,945,821,757
-------------
Liabilities
Payable for investment securities purchased 42,831,145
Payable upon return of securities loaned (Note 4) 33,043,120
Disbursements in excess of cash on demand deposit 109,680
Dividends payable to shareholders 1,743,399
Accrued investment management services fee 51,021
Accrued distribution fee 20,508
Accrued service fee 18,128
Accrued transfer agency fee 10,782
Accrued administrative services fee 4,512
Other accrued expenses 414,126
-------
Total liabilities 78,246,421
----------
Net assets applicable to outstanding capital stock $3,867,575,336
==============
Represented by
Capital stock-- $.01 par value (Note 1) $ 7,373,862
Additional paid-in capital 3,667,632,423
Undistributed net investment income 1,885,684
Accumulated net realized gain (loss) 21,452,536
Unrealized appreciation (depreciation) on investments and on translation
of assets and liabilities in foreign currencies 169,230,831
-----------
Total-- representing net assets applicable to outstanding capital stock $3,867,575,336
==============
Net assets applicable to outstanding shares: Class A $2,713,612,884
Class B $1,003,690,036
Class Y $ 150,272,416
Net asset value per share of outstanding capital stock: Class A shares 517,376,159 $ 5.24
Class B shares 191,362,043 $ 5.24
Class Y shares 28,647,967 $ 5.25
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Statement of operations
IDS Bond Fund, Inc.
Six months ended Feb. 28, 1998
Investment income
(Unaudited)
Income:
<S> <C>
Dividends $ 1,512,750
Interest 139,726,602
-----------
Total income 141,239,352
-----------
Expenses (Note 2):
Investment management services fee 9,095,053
Distribution fee -- Class B 3,570,437
Transfer agency fee 1,859,688
Incremental transfer agency fee-- Class B 36,786
Service fee
Class A 2,299,757
Class B 826,189
Class Y 63,745
Administrative services fees and expenses 826,851
Compensation of board members 15,536
Custodian fees 152,890
Postage 264,026
Registration fees 116,754
Reports to shareholders 25,298
Audit fees 20,000
Other 19,218
------
Total expenses 19,192,228
Earnings credits on cash balances (Note 2) (388,212)
--------
Total net expenses 18,804,016
----------
Investment income (loss) -- net 122,435,336
-----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 28,018,752
Foreign currency transactions 494,956
Financial futures contracts (5,484,969)
----------
Net realized gain (loss) on investments 23,028,739
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 54,524,857
----------
Net gain (loss) on investments and foreign currencies 77,553,596
----------
Net increase (decrease) in net assets resulting from operations $199,988,932
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Bond Fund, Inc.
Operations and distributions Feb. 28, 1998 Aug. 31, 1997
Six months ended Year ended
(Unaudited)
<S> <C> <C>
Investment income (loss)-- net $ 122,435,336 $ 240,172,449
Net realized gain (loss) on investments 23,028,739 64,347,497
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 54,524,857 98,764,325
---------- ----------
Net increase (decrease) in net assets resulting from operations 199,988,932 403,284,271
----------- -----------
Distributions to shareholders from:
Net investment income
Class A (92,000,908) (177,119,796)
Class B (29,178,633) (53,865,341)
Class Y (4,439,540) (6,665,317)
Net realized gain
Class A (41,282,498) --
Class B (14,848,739) --
Class Y (1,901,326) --
---------- -----------
Total distributions (183,651,644) (237,650,454)
Capital share transactions (Note 5)
Proceeds from sales
Class A shares (Note 2) 200,229,066 365,266,875
Class B shares 152,599,581 255,566,189
Class Y shares 54,061,186 58,488,053
Reinvestment of distributions at net asset value
Class A shares 96,424,999 120,214,339
Class B shares 39,278,548 47,142,116
Class Y shares 6,340,866 6,665,317
Payments for redemptions
Class A shares (241,124,424) (523,078,485)
Class B shares (Note 2) (104,909,055) (278,467,674)
Class Y shares (26,294,387) (41,490,635)
----------- -----------
Increase (decrease) in net assets from capital share transactions 176,606,380 10,306,095
----------- ----------
Total increase (decrease) in net assets 192,943,668 175,939,912
Net assets at beginning of period 3,674,631,668 3,498,691,756
------------- -------------
Net assets at end of period $3,867,575,336 $3,674,631,668
============== ==============
Undistributed net investment income $ 1,885,684 $ 5,069,429
-------------- --------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
IDS Bond Fund, Inc.
(Unaudited as to Feb. 28, 1998)
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 invests primarily in corporate bonds and other debt securities. 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 may be subject to a
contingent deferred sales charge and such shares automatically convert to
Class A shares during the ninth calendar year of ownership. Class Y shares
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:
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.
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. Debt securities are
generally traded in the over-the-counter market and are valued at a price
deemed best to reflect fair value as quoted by dealers who make markets in
these securities or by an independent pricing service. Securities for
which market quotations are not readily available are valued at fair value
according to methods selected in good faith by the board. 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
and 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.
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 financial futures contracts traded on any U.S.
or foreign exchange. The Fund also may buy and 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 and/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.
Illiquid securities
At Feb. 28, 1998, investments in securities included issues that are
illiquid. The Fund currently limits investments in illiquid securities to
10% of net assets, at market value, at the time of purchase. The aggregate
value of such securities at Feb. 28, 1998 was $6,949,747 representing 0.2%
of net assets. Pursuant to guidelines adopted by the Fund's board, certain
unregistered securities are determined to be liquid and are not included
in the 10% limitation specified above.
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. 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.
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.
Effective March 20, 1995, the Fund entered into agreements with American
Express Financial Corporation (AEFC) for managing its portfolio, providing
administrative services and serving as transfer agent. 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 its 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. Additional administrative service expenses paid by the Fund are
office expenses, consultants' fees and compensation of officers and
employees. Under this agreement, the Fund also pays taxes, audit and
certain legal fees, registration fees for shares, compensation of board
members, corporate filing fees, organizational expenses and any other
expenses properly payable by the Fund and approved by the board.
Under a separate Transfer Agency Agreement, American Express Client
Service Corporation (AECSC) maintains shareholder accounts and records.
The Fund pays AECSC an annual fee per shareholder account for this service
as follows:
oClass A $15.50
oClass B $16.50
oClass 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. 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 and commencing on May 9,
1997, the fee is calculated at a rate of 0.10% of the Fund's average daily
net assets attributable to Class Y shares.
Sales charges received by American Express Financial Advisors Inc. for
distributing Fund shares were $4,423,281 for Class A and $334,882 for
Class B for the six months ended Feb. 28, 1998.
During the six months ended Feb. 28, 1998, the Fund's custodian and
transfer agency fees were reduced by $388,212 as a result of earnings
credits from overnight cash balances.
3
Securities
transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $1,100,683,808 and $746,800,307,
respectively, for the six months ended Feb. 28, 1998. Realized gains and
losses are determined on an identified cost basis.
4
Lending of
portfolio securities
At Feb. 28, 1998, securities valued at $32,354,649 were on loan to
brokers. For collateral, the Fund received $6,905,120 in cash and U.S.
government securities valued at $26,138,000. Income from securities
lending amounted to $94,654 for the six months ended Feb. 28, 1998. 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.
5
Capital share
transactions
Transactions in shares of capital stock for the periods indicated are as
follows:
Six months ended Feb. 28, 1998
Class A Class B Class Y
Sold 38,001,634 28,966,803 10,263,408
Issued for reinvested 18,408,518 7,500,594 1,214,049
distributions
Redeemed (45,763,246) (19,912,956) (4,982,781)
----------- ----------- ----------
Net increase (decrease) 10,646,906 16,554,441 6,494,676
---------- ---------- ---------
Year ended Aug. 31, 1997
Class A Class B Class Y
Sold 70,920,637 49,648,273 11,312,033
Issued for reinvested 23,385,736 9,173,422 1,302,408
distributions
Redeemed (101,710,017) (54,072,632) (8,062,196)
------------ ----------- ----------
Net increase (decrease) (7,403,644) 4,749,063 4,552,245
---------- --------- ---------
6
Foreign currency
contracts
At Feb. 28, 1998, the Fund had entered into a foreign currency exchange
contract that obligates the Fund to deliver currency at a specified future
date. The unrealized appreciation and/or depreciation on this contract is
included in the accompanying financial statements. See Summary of
significant accounting policies. The terms of the open contract are as
follows:
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
March 16, 1998 8,988,481 1,140,000,000 $46,590 $--
U.S. Dollar Japanese Yen
<PAGE>
<TABLE>
<CAPTION>
Notes to financial statements
IDS Bond Fund, Inc.
7
Financial highlights
The tables below show certain important financial information for
evaluating the Fund's results.
Fiscal period ended Aug. 31,
Per share income and capital changes(a)
Class A
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998(b) 1997 1996 1995 1994 1993 1992 1991 1990 1989
Net asset value, $5.22 $4.99 $5.05 $4.91 $5.48 $5.11 $4.74 $4.39 $4.74 $4.60
beginning of period
Income from investment operations:
Net investment income .18 .35 .36 .38 .41 .40 .40 .41 .40 .42
(loss)
Net gains (losses) .10 .23 (.07) .23 (.51) .38 .37 .33 (.36) .15
(both realized
and unrealized)
Total from investment .28 .58 .29 .61 (.10) .78 .77 .74 .04 .57
operations
Less distributions:
Dividends from net (.18) (.35) (.35) (.37) (.41) (.41) (.40) (.39) (.39) (.43)
investment income
Distributions from (.08) -- -- (.10) (.06) -- -- -- -- --
realized gains
Total distributions (.26) (.35) (.35) (.47) (.47) (.41) (.40) (.39) (.39) (.43)
Net asset value, $5.24 $5.22 $4.99 $5.05 $4.91 $5.48 $5.11 $4.74 $4.39 $4.74
end of period
Ratios/supplemental data
Class A
1998(b) 1997 1996 1995 1994 1993 1992 1991 1990 1989
Net assets, end of $2,714 $2,646 $2,563 $2,363 $2,249 $2,490 $2,174 $1,902 $1,730 $1,811
period (in millions)
Ratio of expenses to .83%c .84% .84% .78% .68% .70% .72% .77% .77% .75%
average daily net assets(d)
Ratio of net income 6.72%c 6.86% 7.01% 7.84% 7.71% 7.78% 8.29% 9.03% 8.83% 9.04%
(loss) to average
daily net assets
Portfolio turnover rate 21% 50% 45% 43% 40% 60% 64% 74% 81% 97%
(excluding short-term
securities)
Total return(e) 5.6% 12.1% 5.8% 13.7% (2.0%) 15.8% 16.9% 17.6% .9% 13.0%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 28, 1998 (Unaudited).
c Adjusted to an annual basis.
d Effective fiscal year 1996, expense ratio is based on
total expenses of the Fund before the reduction of
earnings credits on cash balances.
e Total return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Notes to financial statements
IDS Bond Fund, Inc.
Fiscal period ended Aug. 31,
Per share income and capital changes(a)
Class B Class Y
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998(b) 1997 1996 1995(c) 1998(b) 1997 1996 1995(c)
Net asset value, $5.22 $4.99 $5.05 $4.79 $5.22 $4.99 $5.05 $4.79
beginning of period
Income from investment operations:
Net investment income .16 .31 .32 .17 .18 .36 .37 .19
(loss)
Net gains (both realized .10 .23 (.07) .26 .12 .23 (.07) .26
and unrealized)
Total from investment .26 .54 .25 .43 .30 .59 .30 .45
operations
Less distributions:
Dividends from net (.16) (.31) (.31) (.17) (.19) (.36) (.36) (.19)
investment income
Distributions from (.08) -- -- -- (.08) -- -- --
realized gains
Total distributions (.24) (.31) (.31) (.17) (.27) (.36) (.36) (.19)
Net asset value, $5.24 $5.22 $4.99 $5.05 $5.25 $5.22 $4.99 $5.05
end of period
Ratios/supplemental data
Class B Class Y
1998(b) 1997 1996 1995(c) 1998(b) 1997 1996 1995(c)
Net assets, end of $1,004 $913 $848 $782 $150 $116 $88 $64
period (in millions)
Ratio of expenses to 1.59%d 1.60% 1.60% 1.63%d .76%d .70% .67% .67%d
average daily net assets(e)
Ratio of net income 5.96%d 6.10% 6.24% 6.81%d 6.81%d 7.01% 7.19% 8.44%d
(loss) to average
daily net assets
Portfolio turnover rate 21% 50% 45% 43% 21% 50% 45% 43%
(excluding short-term
securities)
Total return(f) 5.2% 11.2% 5.0% 9.0% 5.6% 12.2% 5.9% 9.4%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 28, 1998 (Unaudited).
c Inception date was March 20, 1995.
d Adjusted to an annual basis.
e Effective fiscal year 1996, expense ratio is based on
total expenses of the Fund before the reduction of
earnings credits on cash balances.
f Total return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS Bond Fund, Inc.
Feb. 28, 1998 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Bonds -- 96.4%
Issuer Coupon Principal Value(a)
rate amount
<S> <C> <C> <C> <C>
U.S. government obligations - 6.2%
U.S. Treasury
01-15-99 6.375% $2,000,000 $2,014,660
09-30-99 7.125 26,500,000 27,116,390
11-15-01 7.50 29,900,000(g) 31,762,172
08-15-02 6.375 17,300,000 17,807,582
05-15-04 7.25 36,450,000 39,481,182
11-15-04 7.875 16,000,000 17,933,120
07-15-06 7.00 5,300,000 5,742,073
11-15-16 7.50 8,100,000 9,463,716
08-15-17 8.875 42,750,000 56,805,345
11-15-21 8.00 5,150,000 6,435,440
U.S. Treasury
Tips
01-15-07 3.375 5,900,000(k) 5,863,593
Govt Trust Certs Israel
11-15-01 9.25 8,278,413 8,587,281
Resolution Funding Corp
Zero Coupon
04-15-99 7.42 11,500,000(e) 10,808,160
Total 239,820,714
Mortgage-backed securities - 16.9%
Federal Home Loan Mtge Corp
07-01-07 6.50 502,174 506,594
03-01-10 5.50 11,900,000 11,490,938
11-01-10 6.00 12,054,801 11,973,431
04-01-17 8.00 681,836 709,116
08-01-24 8.00 12,801,379 13,319,195
10-01-26 8.50 16,719,806 17,478,217
12-01-27 6.00 10,786,750 10,452,360
Federal Home Loan Mtge Corp
Collateralized Mtge Obligation
03-15-22 7.00 10,000,000 10,292,700
04-15-22 8.50 17,000,000 18,829,030
07-15-22 7.00 12,000,000 12,253,200
Trust Series Z
04-25-24 8.25 11,707,432(c) 12,808,165
Federal Natl Mtge Assn
02-15-08 5.75 22,365,000 22,247,136
07-01-08 6.50 11,506,916 11,605,415
01-01-09 5.50 9,078,922 8,865,567
11-01-09 9.00 2,687 2,879
06-01-10 6.50 24,302,177 24,472,292
08-01-11 8.50 43,208,930 45,396,382
04-01-23 8.50 12,168,648 12,853,743
05-01-23 6.50 37,135,144 37,113,977
08-01-23 6.50 3,492,910 3,490,919
09-01-23 6.50 2,261,650 2,257,534
09-01-23 6.50 1,733,197 1,730,043
11-01-23 6.50 8,552,490 8,536,924
01-01-24 6.50 46,025,300 45,941,533
01-01-24 6.50 3,300,737 3,294,730
01-01-24 6.50 7,690,951 7,676,953
02-01-24 6.50 8,284,916 8,204,635
05-01-24 6.00 57,508,498 56,201,906
06-01-24 9.00 10,006,312 10,754,184
07-01-24 8.50 5,662,175 5,949,135
02-01-25 8.00 7,609,777 7,911,429
09-01-25 6.50 26,070,566 25,966,023
09-01-25 8.00 11,721,700 12,186,348
01-01-26 6.00 23,306,294 22,587,528
02-01-26 7.00 21,790,050 22,087,049
02-01-26 7.00 20,719,230 21,001,633
02-01-26 7.00 4,006,822 4,061,435
Federal Natl Mtge
Collateralized Mtge Obligation
01-25-24 5.00 9,281,012 9,043,232
05-18-26 5.00 15,000,000 13,575,000
Trust Series Z
02-25-24 6.00 6,352,446(c) 5,661,490
Govt Natl Mtge Assn
12-01-08 7.00 34,674,237 35,475,905
02-15-24 8.00 3,425,163 3,569,671
02-15-25 9.00 2,245,325 2,427,061
06-15-26 8.00 7,057,763 7,333,509
08-15-26 8.00 8,670,159 9,008,903
08-15-26 8.00 4,518,566 4,695,106
Merrill Lynch Mtge Investors
06-15-21 8.17 5,048,888 5,050,465
Prudential Bache
Collateralized Mtge Obligation
04-01-19 7.97 7,324,699 7,569,549
Total 655,920,169
Aerospace & defense - 2.7%
BE Aerospace
Sr Sub Nts Series B
02-01-06 9.875 7,000,000 7,428,750
Boeing
09-15-31 8.75 15,000,000 19,183,200
Goodrich (BF)
07-01-01 9.625 10,000,000 10,975,300
L-3 Communications
Sr Sub Nts Series B
05-01-07 10.375 9,260,000 10,209,150
McDonnell Douglas Finance
Medium-term Sr Nts
01-27-10 7.22 10,000,000 10,623,300
Newport News Shipbuilding
Sr Nts
12-01-06 8.625 7,500,000 8,006,250
Northrop-Grumman
03-01-06 7.00 8,000,000 8,311,760
Sequa
10-15-99 9.625 10,000,000 10,325,000
United Defense Inds
Sr Sub Nts
11-15-07 8.75 6,000,000(d) 6,150,000
United Techonologies
11-15-19 8.875 10,000,000 12,374,200
Total 103,586,910
Airlines - 1.2%
Atlantic Express
Company Guaranty
02-01-04 10.75 4,000,000(d) 4,310,000
Continental Airlines
Series 1996A
04-15-15 6.94 14,416,446 14,764,026
Series 1996B
04-15-15 7.82 4,805,482 5,180,934
Delta Air Lines
05-15-10 10.125 10,000,000 12,533,300
Northwest Airlines
Company Guaranty 1st Series 1991
01-02-15 8.07 4,917,931 5,350,118
01-02-15 8.97 2,931,156 3,205,689
Total 45,344,067
Automotive & related - 0.8%
Arvin Capital
Company Guaranty
02-01-27 9.50 10,000,000 11,151,100
Ford Motor Credit
06-15-07 7.20 5,500,000 5,863,000
Hayes Lemmerz Intl
Company Guaranty Series B
07-15-07 9.125 10,000,000 10,625,000
Tower Automotive
08-01-04 5.00 2,000,000(d) 2,200,000
Total 29,839,100
Banks and savings & loans - 2.4%
BankAmerica
Series B
12-31-26 7.70 10,000,000(d) 10,281,100
Central Fidelity Capital
Company Guaranty Series A
04-15-27 6.75 16,500,000 16,888,245
First Nationwide Holdings
Sr Sub Nts
10-01-03 10.625 5,890,000 6,596,800
Firstar Capital
Company Guaranty Series B
12-15-26 8.32 10,000,000 10,809,900
Fleet Financial Group
Sub Deb
01-15-28 6.875 7,000,000 7,012,460
Greenpoint Capital
Company Guaranty
06-01-27 9.10 5,000,000 5,531,350
Mellon Capital
Company Guaranty Series A
12-01-26 7.72 3,850,000 4,014,049
Meridian Bancorp
Sub Deb
07-15-02 7.875 10,400,000 11,039,600
Society
Sub Nts
06-15-02 8.125 3,000,000 3,207,960
Union Planters Capital
Company Guaranty
12-15-26 8.20 10,000,000 10,670,800
Washington Mutual Capital
Company Guaranty
06-01-27 8.375 5,800,000(d) 6,330,816
Total 92,383,080
Building materials & construction - 0.6%
AAF-McQuay
Sr Nts
02-15-03 8.875 6,100,000 6,039,000
Owens-Corning Fiberglass
06-01-12 9.375 6,900,000 8,146,554
Pulte
Sr Nts
12-15-03 7.00 7,700,000 7,793,401
Total 21,978,955
Chemicals - 0.9%
Grace (WR)
08-15-04 8.00 10,420,000 11,288,820
USA Waste Services
Cv Sub Nts
02-01-02 4.00 5,300,000 6,061,875
Sr Nts
10-01-07 7.125 15,000,000 15,626,850
Total 32,977,545
Communications equipment & services - 1.2%
BellSouth Telecommunications
06-15-05 6.50 7,200,000 7,400,448
12-01-95 7.00 10,000,000 10,430,000
Comcast Cellular Holdings
Sr Nts Series B
05-01-07 9.50 8,500,000 8,967,500
GTE California
09-01-09 6.70 10,000,000 10,233,200
Interamericas Communications
10-27-07 14.00 1,250,000(d) 1,262,500
Jordan Telecommunications Products
Sr Nts Series B
08-01-07 9.875 4,400,000 4,664,000
PhoneTel Technologies
Sr Nts
12-15-06 12.00 4,000,000 4,210,000
Total 47,167,648
Computers & office equipment - 0.8%
Cooperative Computing
Sr Sub Nts
02-01-08 9.00 7,000,000(d) 6,912,500
Hewlett-Packard
Zero Coupon Cv Sub Nts
10-15-17 3.12 12,500,000(d,e) 6,734,375
Learning
Cv Sr Nts
11-01-00 5.50 12,000,000 10,770,000
Read-Rite
Sub Nts
09-01-04 6.50 4,725,000 3,898,125
Solectron
Cv Sub Nts
03-01-06 6.00 2,300,000 3,567,875
Total 31,882,875
Consumer finance -- personal loans - 0.2%
Yale University
04-15-96 7.375 6,000,000 6,486,900
Electronics - 0.4%
Reliance Electric
04-15-03 6.80 6,000,000 6,216,180
Thomas & Betts
01-15-06 6.50 9,200,000 9,210,212
Total 15,426,392
Energy - 2.3%
Enron Oil & Gas
11-15-06 6.70 5,000,000 5,131,700
Ocean Energy
Company Guaranty Series B
07-15-07 8.875 4,000,000 4,230,000
Oryx Energy
04-01-01 10.00 9,650,000 10,602,069
Parker & Parsley Petroleum
Sr Nts
08-15-07 8.25 9,500,000 10,659,380
PDV America
Sr Nts
08-01-03 7.875 15,000,000 15,582,300
Snyder Oil
Company Guaranty
06-15-07 8.75 6,000,000(d) 6,135,000
Texaco Capital
04-01-32 8.625 10,000,000 12,584,200
03-01-43 7.50 3,000,000 3,266,370
USX-Marathon Group
05-15-22 9.375 17,500,000 22,019,200
Total 90,210,219
Energy equipment & services - 0.9%
DI Inds
Sr Nts
07-01-07 8.875 6,750,000 7,104,375
Diamond Offshore Drilling
Cv Sr Sub Nts
09-15-07 3.125 8,000,000 7,830,000
Foster Wheeler
11-15-05 6.75 11,000,000 11,216,370
Global Marine
09-01-07 7.125 10,000,000(d) 10,358,700
Total 36,509,445
Financial services - 3.5%
Barclays North America Capital
05-15-21 9.75 13,600,000 15,540,992
Bat-Crave-800
08-12-00 6.68 10,100,000(d) 10,196,253
08-12-00 6.86 7,000,000 7,066,500
First Union-
Lehman Brothers Cl A3
Series 1997-C2
11-18-29 6.65 20,000,000 20,425,000
GenAmerica Capital
Company Guaranty
06-30-27 8.53 8,000,000 8,405,176
GMAC
Medium-term Nts
03-09-98 7.625 10,000,000 10,002,400
Merrill Lynch & Co
02-12-03 6.00 4,150,000 4,114,933
Merrill Lynch Mtge Investors Cl D
Series 1996-C2
12-21-28 6.96 7,515,000 7,482,122
Ohio Savings Capital
Company Guaranty
06-03-27 9.50 9,500,000 10,618,245
Salomon
Medium-term Nts
11-30-00 6.625 6,700,000 6,791,656
Sr Nts
05-15-99 7.00 21,000,000 21,226,799
Salomon Smith Barney Holdings
01-15-03 6.125 15,000,000 14,883,900
Total 136,753,976
Food - 0.4%
Ameriserve Food Distributions
Company Guaranty
10-15-06 8.875 7,500,000 7,762,500
Chiquita Brands Intl
Sr Nts
11-01-06 10.25 7,000,000 7,665,000
Fine Host
Cv Sub Nts
11-01-04 5.00 3,000,000(d) 1,965,000
Total 17,392,500
Foreign - 14.5%(i)
ABN-Amro Bank
(U.S. Dollar)
05-15-23 7.75 9,000,000 9,895,050
Airplanes GPA Cl D
(U.S. Dollar) Series 1
03-15-19 10.875 6,000,000 6,709,860
APP Finance VI Mauritius
(U.S. Dollar) Zero Coupon Cv
11-18-12 10.50 16,650,000(f) 3,829,500
Banca Commercial Italian
(U.S. Dollar)
07-15-07 8.25 9,200,000 10,237,024
Banco General
(U.S. Dollar)
08-01-02 7.70 7,500,000(d) 7,446,675
Bank of China
(U.S. Dollar)
03-15-14 8.25 10,000,000 9,466,200
Canadian Forest Oil
(U.S. Dollar) Company Guaranty
09-15-07 8.75 5,500,000 5,596,250
Carter Holt Harvey
(U.S. Dollar)
12-01-04 8.875 10,500,000 11,779,320
Celcaribe
(U.S. Dollar) Zero Coupon Sr Nts
03-15-04 16.23 3,250,000(d,f) 3,347,500
(U.S. Dollar) Zero Coupon Units
03-15-04 5.83 2,870,000(d,f) 5,309,500
Centaur Mining & Exploration
(U.S. Dollar) Company Guaranty
12-01-07 11.00 5,500,000(d) 5,596,250
China Power & Light
(U.S. Dollar) Sr Nts
04-15-06 7.50 8,000,000 7,812,720
City of Moscow
(Russian Ruble) Zero Coupon
07-01-98 22.80 5,576,575(f) 5,188,445
12-31-98 21.80 3,691,890(f) 3,115,955
City of Moscow
(U.S. Dollar)
05-31-00 9.50 6,000,000(d) 5,782,500
Comp Paranaense De Energ
(U.S. Dollar)
05-02-05 9.75 4,000,000(d) 3,955,000
Dao Heng Bank
(U.S. Dollar) Sub Nts
01-24-07 7.75 12,000,000(d) 9,909,600
Daya Guna
(U.S. Dollar) Company Guaranty
06-01-07 10.00 4,575,000(d) 3,797,250
Delphes 2
(U.S. Dollar)
05-05-09 7.75 8,500,000 8,489,375
Doman Inds
(U.S. Dollar)
03-15-04 8.75 4,000,000 3,930,000
Doman Inds
(U.S. Dollar) Sr Nts
11-15-07 9.25 3,500,000(d) 3,465,000
Espirito Santo Centrais
(U.S. Dollar) Sr Nts
07-15-07 10.00 6,000,000(d) 5,595,000
Ford Capital
(U.S. Dollar)
05-01-98 9.125 4,000,000 4,020,880
06-01-10 9.50 18,350,000 22,697,482
Govt of Algeria
(U.S. Dollar)
09-04-06 7.06 6,000,000 4,980,000
Govt of Algeria
Zero Coupon (U.S. Dollar)
12-31-20 1.27 4,000,000(f) 2,405,000
Govt of Russia
(Russian Ruble)
09-27-00 2.31 19,002,914 2,285,000
(U.S. Dollar)
07-28-00 10.375 10,000,000 8,600,000
Greater Beijing
(U.S. Dollar) Sr Nts
06-15-04 9.25 3,500,000(d) 2,821,245
06-15-07 9.50 5,000,000(d) 3,994,100
Gruma Sa De Cv
(U.S. Dollar)
10-15-07 7.625 6,000,000(d) 5,989,560
Grupo Iusacell
(U.S. Dollar)
07-15-04 10.00 3,000,000 3,127,500
Grupo Televisa
(U.S. Dollar) Sr Nts Series A
05-15-03 11.375 6,000,000 6,645,000
Honam Oil Refinery
(U.S. Dollar)
10-15-05 7.125% $9,000,000(d) $7,425,000
Hutchison Whampo Finance
(U.S. Dollar) Company Guaranty
08-01-17 7.45 2,600,000(d) 2,339,168
08-01-27 7.50 8,000,000(d) 7,003,840
Hyder PLC
(U.S. Dollar)
12-15-17 7.25 8,000,000(d) 8,074,240
Hyundai Semiconductor
(U.S. Dollar) Sr Nts
05-15-07 8.625 10,000,000(d) 7,862,900
Imexsa Export Trust
(U.S. Dollar)
05-31-03 10.125 7,500,000(d) 7,837,500
Israel Electric
(U.S. Dollar) Sr Nts
12-15-06 7.25 10,000,000 10,210,400
Korea Electric Power
(U.S. Dollar)
07-01-02 8.00 2,800,000 2,647,568
12-01-03 6.375 5,000,000 4,303,750
MacMillan Bloe Delaware
(U.S. Dollar)
01-15-04 8.50 3,000,000 3,189,330
Mexican Cetes
(Mexican Peso) Zero Coupon
06-04-98 19.05 42,580,000(e) 5,035,085
07-02-98 20.59 48,250,000(e) 5,277,103
MGM Grand
(U.S. Dollar)
02-01-05 6.95 10,000,000 9,843,500
Ministry Finance Russia
(U.S. Dollar)
11-27-01 9.25 4,000,000(d) 3,860,000
06-26-07 10.00 8,000,000(d) 7,390,000
Morgan (JP)
(U.S. Dollar) Sr Sub Nts Series A
02-15-12 4.00 13,000,000(l) 12,079,600
Nationwide CSN Trust
(U.S. Dollar)
02-15-25 9.875 11,500,000(d) 13,809,890
People's Republic of China
(U.S. Dollar)
07-03-01 7.375 3,500,000 3,565,625
01-15-96 9.00 10,000,000 11,081,500
Petronas
(U.S. Dollar)
08-15-15 7.75 10,000,000 9,392,200
Petrozuata Finance
(U.S. Dollar)
04-01-09 7.63 3,000,000(d) 3,072,090
04-01-17 8.22 7,000,000(d) 7,315,210
Philippine Long Distance Telephone
(U.S. Dollar)
03-06-07 7.85 4,000,000(d) 3,606,600
(U.S. Dollar) Medium-term Nts Series E
03-06-17 8.35 3,000,000(d) 2,662,020
Phoenix Shannon
(U.S. Dollar) Cv Sr Sub Nts
11-01-00 9.50 1,089,480(b,d) 599,214
Plitt Theatres
(U.S. Dollar) Sr Sub Nts
06-15-04 10.875 4,000,000 4,380,000
Province of Mendoza
(U.S. Dollar)
09-04-07 10.00 4,000,000(d) 3,880,000
Quno Corp
(U.S. Dollar) Sr Nts
05-15-05 9.125 7,000,000 7,332,500
Repap New Brunswick
(U.S. Dollar) Sr Nts
07-15-00 9.875 14,250,000 14,570,625
Republic of Argentina
(Argentine Peso)
07-10-02 8.75 2,750,000(d) 2,516,250
02-12-07 11.75 2,500,000 2,643,750
(U.S. Dollar)
07-10-02 8.75 5,000,000(d) 4,575,000
Republic of Austria
(U.S. Dollar)
07-01-98 10.00 3,150,000 3,191,344
Republic of Brazil
(U.S. Dollar)
04-15-14 8.00 5,701,300 4,607,363
05-15-27 10.125 8,000,000(g) 7,670,000
Republic of Panama
(U.S. Dollar)
02-13-02 7.875 3,000,000(d) 3,010,470
Rogers Cablesystems
(Canadian Dollar)
01-15-14 6.78 3,700,000 2,756,837
Rogers Cantel
(U.S. Dollar)
06-01-08 9.375 9,300,000 9,927,750
Scotland Bank
(U.S. Dollar)
01-27-04 8.80 20,500,000(d) 22,815,065
Tarkett Intl
(U.S. Dollar) Sr Sub Nts
03-01-02 9.00 11,000,000 11,165,000
Tatneft Finance
(U.S. Dollar) Company Guaranty
10-29-02 9.00 4,000,000(d) 3,470,000
Telecom NewZeal Finance
(U.S. Dollar)
02-10-08 6.50 10,000,000(d) 9,870,219
Telekom Malaysia
(U.S. Dollar)
08-01-25 7.875 15,000,000(d) 12,508,800
Texas Utilities Electric
(U.S. Dollar)
08-01-07 7.17 13,900,000 14,516,743
TU Electric Capital
(U.S. Dollar) Company Guaranty
01-30-37 8.175 10,000,000 10,534,500
United Mexican States
(U.S. Dollar)
05-15-26 11.50 8,000,000(g) 9,785,000
WMC Finance USA
(U.S. Dollar)
11-15-13 7.25 10,000,000 10,587,700
Zhuhai Highway
(U.S. Dollar) Sub Nts
07-01-08 11.50 10,000,000(d) 9,115,400
Zurich Capital Trust
(U.S. Dollar) Company Guaranty
06-01-37 8.38 7,500,000(d) 8,264,025
Total 560,997,415
Furniture & appliances - 0.2%
Interface
Sr Sub Nts Series B
11-15-05 9.50 7,500,000 8,053,125
Health care - 0.5%
Alaris Medical Systems
Company Guaranty
12-01-06 9.75 6,250,000 6,640,625
Dura Pharmaceuticals
Cv Sub Nts
07-15-02 3.50 3,300,000 2,904,000
Lilly (Eli)
01-01-36 6.77 7,950,000 8,192,714
Total 17,737,339
Health care services - 2.2%
La Petite Holdings
Sr Nts
08-01-01 9.625 9,425,000 9,849,125
Magellan Health Services
Sr Sub Nts
02-15-08 9.00 10,000,000(d) 10,150,000
Novacare
Cv Sub Deb
01-15-00 5.50 7,000,000 6,702,500
Owens & Minor
Company Guaranty
06-01-06 10.875 4,000,000 4,480,000
Paracelsus Healthcare
Sr Sub Nts
08-15-06 10.00 8,500,000 8,903,750
Physician Sales & Service
Company Guaranty
10-01-07 8.50 8,400,000 8,673,000
Tenet Healthcare
Sr Nts
12-01-03 8.625 3,850,000 4,061,750
Sr Sub Nts
03-01-05 10.125 22,000,000 24,200,000
Vencor
Sr Sub Nts
07-15-07 8.625 8,250,000 9,157,500
Total 86,177,625
Household products - 0.3%
Revlon Consumer Products
Sr Nts
02-01-06 8.125 13,500,000(d) 13,500,000
Industrial equipment & services - 0.3%
AGCO
Sr Sub Nts
03-15-06 8.50 5,200,000 5,414,500
Thermo Electron
Cv Sub Deb
01-01-03 4.25 2,600,000(d) 3,084,250
Tyco Intl
Cv Sub Nts
07-06-10 6.50 2,650,000(e) 3,557,625
Total 12,056,375
Insurance - 2.6%
Americo Life
Sr Sub Nts
06-01-05 9.25 9,400,000 9,658,500
Arkwright CSN Trust
08-15-26 9.625 5,000,000(d) 6,043,400
Conseco Financing Trust
Company Guaranty
11-15-26 8.70 9,300,000 10,379,451
Equitable Cos
Sr Nts
12-15-04 9.00 4,250,000 4,851,970
Equitable Life Assurance Society US Cl B1
Series 174
05-15-09 7.33 5,500,000 5,838,250
Executive Risk Capital
Company Guaranty Series B
02-01-27 8.675 11,500,000 12,776,269
Leucadia Natl
Sr Sub Nts
10-15-06 7.875 10,850,000 11,369,390
Lincoln Natl
05-15-05 7.25 6,000,000 6,264,192
New York Life Insurance
(U.S. Dollar)
12-15-23 7.50 6,000,000(d) 6,259,200
Orion Capital
Company Guaranty
04-15-28 7.70 4,250,000(d) 4,230,195
Principal Mutual
03-01-44 8.00 10,000,000(d) 10,795,900
SAFECO Capital
Company Guaranty
07-15-37 8.07 10,000,000 10,560,400
Total 99,027,117
Leisure time & entertainment - 2.4%
Caesars World
Sr Sub Nts
08-15-02 8.875 6,000,000 6,195,000
Hammons (JQ) Hotels
1st Mtge
02-15-04 8.875 7,000,000 7,192,500
IHF Holdings
Zero Coupon Sr Disc Nts Series B
11-15-04 9.44 7,500,000(e) 6,450,000
Lodgenet Entertainment
Sr Nts
12-15-06 10.25 5,500,000 5,692,500
Mirage Resorts
02-01-08 6.75 11,850,000 11,703,297
Time Warner
02-01-24 7.57 11,875,000 12,618,850
01-15-28 6.95 17,000,000 16,642,150
Trump Atlantic City Assn/Funding
Company Guaranty
05-01-06 11.25 4,000,000 4,145,000
United Artists Theatres
Series 1995A
07-01-15 9.30 13,264,477 13,662,411
Venetian Casino/LV Sands
Mtge
11-15-04 12.25 7,680,000(d) 7,814,400
Total 92,116,108
Media - 4.5%
Ackerly Communications
Sr Nts Series B
10-01-03 10.75 11,000,000 11,742,500
Adelphia Communications
Sr Nts
02-01-08 8.375 5,000,000 5,000,000
Cablevision Systems
Sr Sub Nts
11-01-05 9.25 6,000,000 6,435,000
Cox Communications
06-15-25 7.625 7,000,000 7,582,330
EchoStar Communications
Zero Coupon Sr Sec Disc Nts
06-01-04 6.73 6,000,000(e) 5,670,000
Jacor Communications
Zero Coupon Cv
02-09-18 17.57 9,000,000(e) 3,926,250
Sr Sub Nts
02-15-10 8.00 6,300,000(d) 6,331,500
Lamar Advertising
Company Guaranty
09-15-07 8.625 12,000,000 12,510,000
Marcus Cable Operating
Zero Coupon Sr Disc Nts
08-01-04 6.59 10,000,000(f) 9,475,000
News Corp
06-24-10 10.15 3,701,757(d) 4,037,158
Outdoor Systems
Company Guaranty
06-15-07 8.875 13,700,000 14,436,375
Time Warner Entertainment
Sr Nts
07-15-33 8.375 17,500,000 20,271,125
Turner Broadcasting
07-01-13 8.375 10,000,000 11,207,700
02-01-24 8.40 19,500,000 20,693,595
Viacom
Sub Deb
07-07-06 8.00 30,150,000 30,828,375
Viacom Intl
07-01-03 7.00 3,000,000 2,933,400
07-01-03 7.00 2,000,000 1,959,880
Total 175,040,188
Metals - 0.2%
EnviroSource
Sr Nts
06-15-03 9.75 4,200,000 4,278,750
06-15-03 9.75 1,800,000 1,833,750
Total 6,112,500
Miscellaneous - 3.6%
Adams Outdoor Advertising
Sr Nts
03-15-06 10.75 7,500,000 8,343,750
American General Institute Capital
Company Guaranty Series A
12-01-45 7.57 10,000,000(d) 10,369,800
Bistro Trust
12-31-02 9.50 22,750,000(d) 22,793,224
California Infrastructure
Series 1997-1
12-26-09 6.42 5,500,000 5,573,906
Comforce Operating
Sr Nts
12-01-07 12.00 4,500,000(d) 4,815,000
ECM Funding LP
06-10-02 11.92 1,661,847(d,h) 1,661,847
ESI Tractebel Acquisitions
12-30-11 7.99 1,750,000 1,756,563
First Empire Capital
Company Guaranty
02-01-27 8.23 10,450,000 11,258,412
M & I Capital
Company Guaranty
12-01-26 7.65 10,000,000 10,392,000
MSX Intl
Sr Sub Nts
01-15-08 11.375 5,700,000 5,899,500
Norcal Waste Systems
Company Guaranty Series B
11-15-05 13.50 7,500,000 8,728,125
Omnipoint Communications
Sr Nts
02-17-06 8.875 10,000,000(d) 9,990,000
Penn-American Water
1st Mtge Medium-term Nts
11-01-17 7.08 13,000,000 13,094,510
Roche Holdings
Zero Coupon
05-16-12 4.95 6,700,000(e) 3,391,875
SC Intl
09-01-07 9.25 11,500,000 12,075,000
Stellex Inds
Sr Sub Nts
11-01-07 9.50 8,800,000(d) 9,042,000
Total 139,185,512
Multi-industry conglomerates - 1.2%
Corestaff
Cv Sub Nts
08-15-04 2.94 3,900,000 3,558,750
Employee Solutions
Sr Nts
10-15-04 10.00 7,250,000 7,041,563
Pierce Leahy
Sr Sub Nts
07-15-06 11.125 4,723,000(d) 5,419,643
Prime Succession
Sr Sub Nts
08-15-04 10.75 4,240,000 4,674,600
Tenneco
06-15-07 7.625 5,000,000 5,393,650
USI American Holdings
Sr Nts Series B
12-01-06 7.25 10,920,000 11,066,109
Westinghouse Electric
06-01-01 8.875 10,000,000 10,643,500
Total 47,797,815
Municipal bonds - 0.3%(m)
Denver Colorado City & County School
District 1 Taxable-Pension-School
Facilities Lease (AMBAC Insured)
12-15-12 6.94 7,700,000 7,927,766
New Jersey Economic Development
Authority State Pension Funding
Revenue Bonds (MBIA Insured)
02-15-29 7.43 4,600,000 5,036,540
Total 12,964,306
Paper & packaging - 1.4%
Fort Howard
Series 1991
01-02-02 11.00 8,426,173 8,805,351
Gaylord Container
Sr Nts
06-15-07 9.375 7,500,000(d) 7,406,250
06-15-07 9.75 8,500,000 8,585,000
Intl Paper
11-15-12 5.125 9,000,000 7,815,780
Scotia Pacific Holding
Collateralized Mtge Obligation
07-20-15 7.95 4,015,481 4,224,808
Tenneco
11-15-12 9.20 9,000,000 10,957,409
Warren (SD)
Sr Sub Nts Series B
12-15-04 12.00 5,000,000 5,593,750
Total 53,388,348
Real estate investment trust - 0.7%
First Union RE Eq SBI
Sr Nts
10-01-03 8.875 10,000,000 10,325,000
Property Trust of America
02-15-14 7.50 15,000,000 15,479,250
Total 25,804,250
Restaurants & lodging - 0.3%
La Quinta Inns
Sr Sub Nts
05-15-03 9.25 10,000,000 10,412,500
Retail - 1.4%
Costco
Zero Coupon Cv Sub Nts
08-01-17 3.50 5,025,000(d,e) 3,203,438
Dairy Mart Convenience Stores
Sr Sub Nts
03-15-04 10.25 6,250,000 6,203,125
Kroger
Sr Nts
07-15-06 8.15 13,000,000 14,170,000
Office Depot
Zero Coupon Cv Nt
11-01-08 4.00 8,600,000(e) 6,170,500
Rite Aid
Cv Sub Nts
09-15-02 5.25 3,100,000 3,572,750
Wal-Mart CRAVE Trust
07-17-06 7.00 16,130,710(d) 16,585,434
Wal-Mart Stores
06-29-11 8.875 3,500,000 3,640,385
Total 53,545,632
Textiles & apparel - 0.2%
WestPoint Stevens
12-15-01 8.75 7,500,000 7,875,000
Transportation - 1.3%
Atlas Air
01-02-10 8.01 15,000,000 15,004,200
CSX
05-01-27 7.25 9,700,000 10,378,612
Enterprise Rent-A-Car USA Finance
02-15-08 6.80 10,000,000 9,949,000
Norfolk Southern Corp
05-15-07 7.35 10,000,000 10,687,200
Union Pacific
02-01-08 6.625 6,000,000 5,967,300
Total 51,986,312
Utilities -- electric - 10.7%
AEP Generating
Series F
12-07-22 9.82 4,968,844 5,991,681
AES
Sr Sub Nts
11-01-07 8.50 9,375,000 9,679,688
Appalachian Power
12-01-22 8.50 5,000,000 5,461,900
Arizona Public Service
12-30-15 8.00 12,556,000 13,860,694
Cajun Electric Power
03-15-19 8.92 5,000,000 5,392,850
California Energy
Zero Coupon Disc Nts
01-15-04 6.08 10,000,000(f) 10,800,000
Cleveland Electric Illuminating
07-01-00 7.19 8,000,000 8,143,840
07-01-04 7.67 20,500,000 21,115,000
1st Mtge
12-01-11 8.375 8,115,000 8,336,945
1st Mtge Series B
05-15-05 9.50 15,100,000 16,895,541
CMS Energy
Sr Nts
05-15-02 8.125 10,000,000 10,306,400
11-15-04 7.625 12,000,000 12,126,000
Connecticut Light & Power
1st Mtge Series A
06-01-01 7.875 3,500,000 3,625,720
1st Mtge Series C
06-01-02 7.75 28,750,000 29,251,400
Consumers Energy
1st Mtge
09-15-23 7.375 10,000,000 10,155,700
EIP Funding-PNM
10-01-12 10.25 6,701,000 7,855,917
First PV Funding
Series 1986A
01-15-14 10.30 3,082,000 3,266,920
Series 1986B
01-15-16 10.15 5,003,000 5,303,180
Indiana & Michigan Power
Sale Lease-backed Obligation Series F
12-07-22 9.82 4,968,839 5,991,674
Long Island Lighting
Gen Ref Mtge
04-15-04 8.625 8,500,000 9,128,490
05-01-21 9.75 15,500,000 15,776,055
07-01-24 9.625 20,188,000 20,549,567
Midland Cogeneration
Series 1991-C
07-23-02 10.33 5,692,503 6,126,556
Midland Funding I
Series 1994-C
07-23-02 10.33 3,064,795 3,298,486
Midland Funding II
Series A
07-23-05 11.75 14,900,000 17,563,375
Niagara Mohawk Power
1st Mtge
05-15-06 7.75 19,600,000 20,765,024
Ohio Edison
1st Mtge
04-01-23 7.875 6,000,000 6,142,260
Public Services Electric & Gas
1st & Ref Mtge
03-01-06 6.75 5,500,000 5,716,370
Salton Sea Funding
Series C
05-30-10 7.84 10,000,000 10,632,100
Sithe Independence Funding
Series A
06-30-07 8.50 7,500,000 8,259,600
12-30-13 9.00 4,700,000 5,528,140
Texas Utilities Electric
01-01-05 9.45 3,999,000 4,276,611
07-01-25 7.625 10,000,000 10,308,500
10-01-25 7.375 3,000,000 3,040,590
Texas-New Mexico Power
09-15-03 10.75 5,000,000 5,425,000
1st Mtge Series U
09-15-00 9.25 6,000,000 6,300,000
Tucson Electric Power
10-01-09 8.50 7,000,000 6,746,250
Virginia Electric & Power
02-01-07 6.75 35,000,000 35,866,949
Western Massachusetts Electric
1st Mtge Series B
07-01-01 7.375 12,000,000 12,083,880
Wisconsin Electric Power
12-01-95 6.875 8,000,000 8,134,720
Total 415,229,573
Utilities -- gas - 1.1%
Coastal
Sr Deb
02-15-37 7.42 6,000,000 6,368,580
Columbia Gas System
Series C
11-28-05 6.80 7,700,000 7,912,828
Equitable Resources
07-01-99 7.50 5,000,000 5,099,350
Questar Pipeline
06-01-21 9.375 8,000,000 9,003,600
Southern California Gas
1st Mtge Series BB
03-01-23 7.375 6,900,000 7,030,893
Southwest Gas
Series F
06-15-02 9.75 7,900,000 8,726,814
Total 44,142,065
Utilities -- telephone - 5.1%
360 Communications
03-01-06 7.50 17,470,000 18,478,543
Ameritech Capital Funding
06-01-16 9.10 16,000,000 19,927,360
AT&T
01-15-25 8.35 17,500,000 19,271,350
Bell Atlantic
07-15-31 9.375 27,200,000 30,963,936
Geotek Communications
Cv Sr Sub Nts
02-15-01 12.00 4,135,000(d,h) 2,894,500
GTE
11-01-20 10.25 7,000,000 7,856,940
GTE Florida
02-01-28 6.86 7,000,000 7,017,080
Intermedia Communications
Sr Nts
11-01-07 8.875 3,200,000(d) 3,384,000
Intermedia Communications
Zero Coupon Sr Disc Nts Series B
07-15-07 9.52 15,000,000(f) 10,987,500
ITC Deltacom
Sr Nts
03-01-08 8.875 6,500,000(d) 6,532,500
Metrocall
Sr Sub Nts
11-01-07 9.75 7,000,000(d) 7,070,000
Pacific Bell
07-15-43 7.375 10,000,000 10,425,700
SBC Communications
03-15-26 7.125 10,200,000 10,798,230
10-15-34 6.625 10,000,000 9,646,500
U S WEST Communications
11-10-26 7.20 14,000,000 14,151,200
Worldcom
04-01-07 7.75 15,000,000 16,215,600
Total 195,620,939
Total bonds
(Cost: $3,566,933,432) $3,732,450,539
Common stock - 0.1%
Issuer Shares Value(a)
Celcaribe 528,450(b,d) $2,113,800
Total common stock
(Cost: $628,856) $2,113,800
Preferred stocks & other - 2.0%
Issuer Shares Value(a)
Airtouch Communications 87,000 $5,850,750
Cv Series C
Asia Pulp & Paper 5,405 4,134,825
12.00%
Cendant 120,000 6,015,000
Cv PRIDES
Cooper Inds 214,100 3,760,131
Cv
Dairy Mart 51,666(d) 25,833
Warrants
Finova Finance Trust 3,150 243,338
5.50% Cv
Glenborough Realty Trust 112,505 2,981,383
Cv Series A
Houston Inds 54,300 3,359,813
7% Cv ACES
Intermedia Communication 100,000 3,487,500
Cv Series E
Occidental Petroleum 42,300 3,130,200
Cv
Pinto Totta Intl Finance 100,000(d,l) 9,692,559
7.77%
Sanwa Bank 380,000(c,d) 9,213,187
(Japanese Yen)
SI Financing Trust 400,000 10,949,999
9.50%
Sinclair Broadcast Group 3,300 221,513
Cv
Sprint 31,575 $1,736,625
Cv
TCI Communications 50,000 3,412,500
Cv Series A
Transdigm 3,989(d,h) 2,393,400
Warrants
WBK Strypes Trust 168,000 5,691,000
Cv
Total preferred stocks & other
(Cost: $74,068,879) $76,299,556
Short-term securities - 0.9%
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
U.S. government agencies - 0.4%
Federal Home Loan Bank Disc Nt
03-18-98 5.41% $10,700,000 $10,671,163
Federal Home Loan Mtge Corp Disc Nt
03-27-98 5.44 2,900,000 2,888,212
Total 13,559,375
Commercial paper - 0.5%
A.I. Credit
03-02-98 5.68 1,000,000 999,684
Fleet Funding
03-13-98 5.53 3,200,000(j) 3,193,644
Morgan Stanley, Dean Witter, Discover & Co
03-06-98 5.50 7,000,000 6,993,618
Natl Australia Funding (Delaware)
04-01-98 5.53 4,300,000 4,278,940
Novartis Financial
03-17-98 5.52 4,600,000 4,588,075
Total 20,053,961
Total short-term securities
(Cost: $33,613,336) $33,613,336
Total investments in securities
(Cost: $3,675,244,503)(n) $3,844,477,231
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing. For long term debt securities, item identified is in
default as to payment of interest and/or principal.
(c) 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.
(d) 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.
(e) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(f) For those zero coupon bonds that become coupon paying at a future date, the
interest rate disclosed represents the annualized effective yield from the date
of acquisition to interest reset date disclosed.
(g) Security is partially or fully on loan. See Note 5 to the financial
statements.
(h) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Feb. 28, 1998, is as follows:
Security Acquisition Cost
date
ECM Funding LP
11.92% 06-10-02 04-13-92 $1,661,847
Geotek Communications
12% Cv Sr Sub Nts 02-15-01 03-04-96 4,135,000
Transdigm
Warrants 12-06-95 274,974
(i) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated.
(j) 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.
(k) U.S. Treasury inflation-protection securities (TIPS) are securities in which
the principal amount is adjusted for inflation and the semi-annual interest
payments equal a fixed percentage of the inflation-adjusted principal amount.
(l) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Feb. 28, 1998.
(m) The following abbreviations are used in portfolio descriptions to identify
the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
MBIA -- Municipal Bond Investors Assurance
(n) At Feb. 28, 1998, the cost of securities for federal income tax purposes was
approximately $3,670,319,000 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
Unrealized appreciation......................................$202,820,000
Unrealized depreciation...................................... (28,662,000)
Net unrealized appreciation..................................$174,158,000
<PAGE>
Board members and officers
Independent board members and officers
Chairman William R. Pearce*
of the board Chairman of the board, Board Services Corporation (provides
administrative services to boards including the boards of the
IDS and IDSLife funds and Master Trust portfolios).
H. Brewster Atwater, Jr.
Former chairman and chief executive officer, General Mills,
Inc.
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for Public
Policy Research.
Heinz F. Hutter
Former president and chief operating officer, Cargill, Inc.
Anne P. Jones
Attorney and telecommunications consultant.
Alan K. Simpson
Former United States senator for Wyoming.
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
C. Angus Wurtele
Chairman of the board, The Valspar Corporation.
Officer
Vice president, Leslie L. Ogg*
general counsel President, treasurer and corporate secretary of Board Services
and secretary Corporation.
Board members and officers associated with AEFC
President John R. Thomas*
Senior vice president, AEFC.
William H. Dudley*
Senior advisor to the chief executive officer, AEFC.
David R. Hubers*
President and chief executive officer, AEFC.
Officers associated with AEFC
Vice president Peter J. Anderson*
Senior vice president, AEFC
Treasurer Matthew N. Karstetter*
Vice president, AEFC
* Interested person as defined by the Investment Company Act of 1940.
<PAGE>
IDS mutual funds
Global/International funds
Funds in this group seek capital growth and/or income by investing primarily in
foreign securities. Foreign investments may be subject to currency fluctuations
and political and economic risks of the countries in which the investments are
made. They are high risk mutual funds with a potential for high reward.
IDS Emerging Markets Fund
Invests in a Portfolio comprised primarily of stocks of companies in developing
countries throughout the world that are believed to offer growth potential.
Seeks to provide long-term growth of capital.
(icon of) world with countries
IDS Global Growth Fund
Invests in a Portfolio comprised primarily of 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 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 Global Balanced Fund
Invests in stocks and bonds in, for the most part, major markets throughout the
world, including the U.S. Seeks to provide a balance of growth of capital and
current income.
(icon of) scale of globes
IDS Global Bond Fund
Invests in a Portfolio comprised primarily of debt securities of U.S. and
foreign issuers to seek high total return through income and growth of capital.
(icon of) globe
Growth funds
Funds in this group seek capital growth, primarily from common stocks. They are
high risk mutual funds with a potential for high reward.
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. A
highly aggressive and speculative fund that seeks long-term growth of capital.
(icon of) cart of precious gems
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 Small Company Index Fund
Invests in all or a representative group of the equity securities comprising the
S&P SmallCap 600 Index, as it strives to provide long-term capital appreciation.
(icon of) building
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 Research Opportunities Fund
Invests in a Portfolio comprised primarily of equity securities of companies
included in the S&P 500 Index that are believed to have strong growth potential.
The Portfolio is managed using a research methodology by the Research Department
of AEFC. Goal is long-term appreciation.
(icon of) magnifying glass
IDS Growth Fund
Invests in a Portfolio comprised primarily of companies that have above-average
potential for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) trees
IDS New Dimensions Fund
Invests in a Portfolio comprised primarily of 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
Growth & income funds
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. Foreign investments may be subject to currency fluctuations and
political and economic risks of the countries in which the investments are made.
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 pine 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 Managed Allocation Fund
Invests in a Portfolio comprised primarily of U.S. equity securities, U.S. and
foreign debt securities, foreign equity securities and money market instruments.
The Fund provides diversification among these major investment categories and
has a target mix that represents the way the Fund's investments will be
allocated over the long term. Seeks maximum total return.
(icon of) gyroscope
IDS Stock Fund
Invests in a Portfolio comprised primarily of 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
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) light bulb
IDS Diversified Equity Income Fund
Invests in a Portfolio comprised 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) two puzzle pieces
IDS Mutual
Invests in a Portfolio which seeks to 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
Income funds
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 Extra Income Fund
Invests in a Portfolio comprised mainly of 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) two coins
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.
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IDS Selective Fund
Invests in a Portfolio comprised primarily of high-quality corporate bonds and
other highly rated debt instruments including government securities and
short-term investments. Seeks current income and preservation of capital.
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IDS Federal Income Fund
Invests in a Portfolio comprised primarily of 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.
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Tax-exempt income funds
These funds provide tax-free income by investing in municipal bonds. The income
is generally free from federal income tax, but a portion of the income may be
subject to state and local taxes. Risk varies by bond quality.
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.
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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.
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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.)
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IDS High Yield Tax-Exempt Fund
Invests in a Portfolio comprised primarily of medium- and lower-quality
municipal bonds and notes. Lower-quality securities generally involve greater
risk of principal and income.
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IDS Intermediate Tax-Exempt Fund
Invests in mainly investment-grade bonds and other debt securities with
intermediate-term maturities issued by state and local government units. Goal is
to seek a high level of current income exempt from federal taxes.
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Money market funds
These money market funds have three main goals: conservation of capital,
constant liquidity and the highest possible current income consistent with these
objectives. An investment in these funds is neither insured nor guaranteed by
the U.S. government, and there can be no assurance that these funds will be able
to maintain a stable net asset value of $1.00 per share. 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.
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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.
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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.
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Quick telephone reference
American Express Redemptions and exchanges, National/Minnesota
Financial Advisors dividend payments or 800-437-3133
Telephone Transaction reinvestments and automatic
Service payment arrangements Mpls./St. Paul area:
671-3800
TTY Service For the hearing impaired 800-846-4852
American Express Automated account information 800-862-7919
Financial Advisors (TouchTone(R) phones only),
Easy Access Line including current fund prices
and performance, account values
and recent account transactions
AMERICAN EXPRESS Financial Advisors
IDS Bond Fund
IDS Tower 10
Minneapolis, MN 55440-0010
