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Prospectus Supplement
July 1, 1999*
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<S> <C> <C> <C>
Date Prosp# (MM/YY
Fund Name Printed)
Retail Funds:
IDS Blue Chip Advantage Fund 4/1/99 S-6025 M (3/99)
IDS Bond Fund 10/30/98 S-6495 M (10/98)
IDS California Tax-Exempt Fund 8/28/98 S-6328 M (8/98)
IDS Cash Management Fund 9/29/98 S-6320 M (9/98)
IDS Discovery Fund 9/29/98 S-6457 M (9/98)
IDS Diversified Equity Income Fund 11/27/98 S-6475 M (11/98)
IDS Emerging Markets Fund 12/30/98 S-6354 D (12/98)
IDS Equity Select Fund 1/29/99 S-6426 N (1/99)
IDS Equity Value Fund 5/28/99 S-6382 G (5/99)
IDS Extra Income Fund 7/30/98 S-6370 M (7/98)
IDS Federal Income Fund 7/30/98 S-6042 N (7/98)
IDS Global Balanced Fund 12/30/98 S-6352 C (12/98)
IDS Global Bond Fund 12/30/98 S-6309 M (12/98)
IDS Global Growth Fund 12/30/98 S-6334 M (12/98)
IDS Growth Fund 9/29/98 S-6455 N (9/98)
IDS High Yield Tax-Exempt Fund 1/29/99 S-6430 N (1/99)
IDS Insured Tax-Exempt Fund 8/28/98 S-6327 M (8/98)
IDS Intermediate Tax-Exempt Fund 1/29/99 S-6353 D (1/99)
IDS International Fund 12/30/98 S-6140 M (12/98)
IDS Managed Allocation Fund 11/27/98 S-6141 N (11/98)
IDS Massachusetts Tax-Exempt Fund 8/28/98 S-6328 M (8/98)
IDS Michigan Tax-Exempt Fund 8/28/98 S-6328 M (8/98)
IDS Minnesota Tax-Exempt Fund 8/28/98 S-6328 M (8/98)
IDS Mutual 11/27/98 S-6326 N (11/98)
IDS New Dimensions Fund 9/29/98 S-6440 M (9/98)
IDS New York Tax-Exempt Fund 8/28/98 S-6328 M (8/98)
IDS Ohio Tax-Exempt Fund 8/28/98 S-6328 M (8/98)
IDS Precious Metals Fund 5/28/99 S-6142 N (5/99)
IDS Progressive Fund 11/27/98 S-6449 M (11/98)
IDS Research Opportunities Fund 9/29/98 S-6356 D (9/98)
IDS Selective Fund 7/30/98 S-6376 N (7/98)
IDS Small Company Index Fund 4/1/99 S-6357 E (3/99)
IDS Stock Fund 11/27/98 S-6351 N (11/98)
IDS Strategy Aggressive Fund 5/28/99 S-6381 G (5/99)
IDS Tax-Exempt Bond Fund 1/29/99 S-6310 N (1/99)
IDS Tax-Free Money Fund 3/1/99 S-6433 M (2/99)
IDS Utilities Income Fund 8/28/98 S-6341 M (8/98)
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SHAREHOLDER MEETINGS
At the recent regular meetings, shareholders of the funds listed above approved
the following proposals:
1. Change the Fund Name from IDS to AXP. Shareholders of all funds approved the
name change from IDS to AXP. AXP is an abbreviated form of the name of the
funds investment manager, American Express Financial Corporation. For example,
IDS New Dimensions Fund changed to AXP New Dimensions Fund.
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2. New Distribution Plan. For Class A, shareholders approved a proposal to
change the existing shareholder service agreement to a distribution plan (also
known as a 12b-1 plan) and increase the fee from 0.175% to 0.25% of average
daily net assets. For Class B, shareholders approved a proposal to convert the
existing shareholder service agreement to a distribution plan. In combination
with the existing distribution plan of 0.75%, this will increase the combined
fee from 0.925% to 1.0% of average daily net assets. Amounts paid under the
distribution plan will be used for service and education as well as for
advertising materials and programs designed to increase Fund sales.
3. Investment Management Services Agreement. As shown in the following table,
five funds voted on a fee increase. Four of those five funds voted on the
addition of breakpoints that reduce fee rates as the funds assets grow. In
addition, 11 funds voted on adding or changing a performance incentive
adjustment. Under a performance incentive adjustment, the management fee is
calculated as shown in the prospectus or the statement of additional
information. The fee is then adjusted for performance. The funds performance is
compared to the performance of a Lipper Index of similar funds. If the fund
performs better than the index, the fee will increase. If the fund performs
worse than the index, the fee will decrease. The maximum increase or decrease is
shown in the table.
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Management Fee Changes
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Performance Fee
Fund Incentive (Annual rate; in billions)
Adjustment
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Index/maximum Old New
adjustment
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Blue Chip Lipper Growth and First $.25 - .44% First $.25 - .54%
Income Fund Index next $.25 - .415% next $.25 - .515%
(maximum next $.25 - .39% next $.25 - .49%
adjustment of .08%) next $.25 - .365% next $.25 - .465%
over $1 - .34% next $1 - .44%
next $1 - .41%
next $3 - .38%
over $6 - .35%
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- -------------------------------- ----------------------- --------------------------- --------------------------
Cash Management NA First $1 - .31% First $1 - .36%
Tax-Free Money next $.5 - .293% next $.5 - .343%
next $.5 - .275% next $.5 - .325%
next $.5 - .258% next $.5 - .308%
over $2.5 - .24% next $1 - .29%
next $3 - .27%
over $6.5 - .25%
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Diversified Equity Income Lipper Equity *
Income Fund Index
(.08%)
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Emerging Markets Lipper Emerging *
Markets Fund Index
(.12%)
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Equity Select Lipper Growth Fund First $.5 - .53% First $1 - .60%
Index (.12%) next $.5 - .505% next $1 - .575%
next $1 - .48% next $1 - .55%
next $1 - .455% next $3 - .525%
next $3 - .43% next $6 - .50%
over $6 - .40% next $12 - .49%
over $24 - .48%
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Equity Value Lipper Growth and *
Income Fund Index
(.08%)
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Global Balanced Lipper Global Fund *
Index (.12%)
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Global Growth Lipper Global Fund *
Index (.12%)
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Research Opportunities Lipper Growth Fund *
Index (.12%)
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Small Company Index Lipper Small Cap *
Fund Index (.12%)
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Strategy Aggressive Lipper Capital *
Appreciation Fund
Index (.12%)
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Utilities Income Lipper Utility First $.5 - .53% First $0.5 - .61%
Fund Index(.08%) next $.5 - .505% next $0.5 - .585%
next $1 - .48% next $1 - .56%
next $1 - .455% next $1 - .535%
next $3 - .43% next $3 - .51%
over $6 - .40% over $6 - .48%
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* The fee schedule will not change.
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4. Fundamental Policies. Shareholders voted to eliminate or modify a number of
policies including those regarding potential conflicts of interest; issuing
senior securities; transactions with affiliates; investing in other investment
companies; pledging or mortgaging assets; investing in issuers with less than 3
years of operating history; investing in exploration or development programs;
and investing for purposes of exercising control or management.
5. New Subadvisory Agreement. Shareholders of Managed Allocation and Strategy
Aggressive approved a subadvisory agreement with Kenwood Capital Management,
LLC, a subsidiary of AEFC located at IDS Tower 10, Minneapolis, MN 55440-0010.
Kenwood manages the equity portion of Managed Allocation and a portion of
Strategy Aggressive.
6. Change in Investment Objective. Shareholders of Equity Select approved a
proposal to change the funds investment objective from growth of capital and
income to growth of capital.
S-6233 A (7/99)
*Destroy -next prospectus update
