1997 SEMIANNUAL REPORT
IDS
Cash
Management
Fund
The goal of IDS Cash Management Fund, a part of IDS Money Market Series, Inc.,
is to provide maximum current income consistent with liquidity and stability of
principal. The Fund invests in money market securities.
Distributed by American Express Financial Advisors Inc.
A cache for cash
Keeping a portion of your investment portfolio in a cash reserve is a
cornerstone of a sound financial strategy. And a money market mutual fund that
stresses stability of your investment principal and easy access when you need it
is an excellent way to meet that need. That's what Cash Management Fund is all
about.
Contents
From the president 3
From the portfolio manager 3
Financial statements 5
Notes to financial statements 8
Investments in securities 14
Board members and officers 19
IDS mutual funds 20
From the president
If you're an experienced investor, you know that the past two years have
been unusually strong ones in many financial markets. Perhaps just as
important, you also know that 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.
That fact reinforces the need for investors to periodically review 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
<PAGE>
From the portfolio manager
IDS Cash Management Fund's yield was little changed during the first half
of its fiscal year (August 1996 through January 1997), reflecting
generally stable short-term interest rates over the period.
For the seven-day period ended Jan. 31, 1997, the Fund's compound
annualized yield was 4.97%, and the simple annualized yield was 4.85%. In
keeping with its objective, the Fund maintained a $1 per share price
throughout the six months. Although the Fund seeks to maintain a stable $1
per share price, there is no assurance that it will be able to do so. An
investment in the Fund is neither insured nor guaranteed by the U.S.
government.
Fed adopts
'hands-off' policy
With inflation remaining subdued and the economy showing no signs of
either overheating or falling into recession, the Federal Reserve
Board (Fed) elected to leave short-term interest unchanged during the past
six months. By way of background, the Fed adjusts short-term rates based
on the condition of the economy and the inflation outlook. When the
economy appears weak and inflation is low, the Fed usually lowers rates to
stimulate economic growth. When the economy is strong, the Fed usually
raises rates to reign in economic growth and thereby keep inflation in
check.
Given that uneventful environment, I kept the average maturity of the
securities in the portfolio in a neutral range, between 35 and 45 days. At
the end of January, the maturity level was approximately 44 days. The
longer the average maturity, the longer it takes the Fund's yield to
respond to a change in interest rates. As always, the entire
portfolio remained invested in commercial paper, bank letters of credit
and certificates of deposit.
Rates may
head higher
As for the rest of the
fiscal year, I expect the moderate economic growth we've experienced in
recent years to continue, accompanied by a modest increase in the
inflation rate. Should that forecast prove to be accurate, I think the Fed
probably will push short-term interest rates somewhat higher. In such a
scenario, rates on the short-term securities the Fund invests in would
rise as well and ultimately lead to a slightly higher yield.
Terry Fettig
William R. Pearce
President of the Fund
Terry Fettig
Portfolio manager
<PAGE>
Class A
6-month performamce
================================================================================
(All figures per share)
Net asset value (NAV)
- --------------------------------------------------------------------------------
Jan. 31, 1997 $ 1.00
July 31, 1996 $ 1.00
Increase $ --
- --------------------------------------------------------------------------------
Distributions
Aug. 1, 1996 - Jan. 31, 1997
- --------------------------------------------------------------------------------
From income $ 0.03
From capital gains $ --
Total distributions$ 0.03
- --------------------------------------------------------------------------------
Total return* +2.5% **
- --------------------------------------------------------------------------------
Class B
6-month performamce
================================================================================
(All figures per share)
Net asset value (NAV)
- --------------------------------------------------------------------------------
Jan. 31, 1997 $ 1.00
July 31, 1996 $ 1.00
Increase $ --
- --------------------------------------------------------------------------------
Distributions
Aug. 1, 1996 - Jan. 31, 1997
- --------------------------------------------------------------------------------
From income $ 0.02
From capital gains $ --
Total distributions$ 0.02
- --------------------------------------------------------------------------------
Total return* +2.1% **
- --------------------------------------------------------------------------------
Class Y
6-month performamce
================================================================================
(All figures per share)
Net asset value (NAV)
- --------------------------------------------------------------------------------
Jan. 31, 1997 $ 1.00
July 31, 1996 $ 1.00
Increase $ --
- --------------------------------------------------------------------------------
Distributions
Aug. 1, 1996 - Jan. 31, 1997
- --------------------------------------------------------------------------------
From income $ 0.03
From capital gains $ --
Total distributions$ 0.03
- --------------------------------------------------------------------------------
Total return* +2.5% **
- --------------------------------------------------------------------------------
* 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>
<TABLE>
<CAPTION>
Statement of assets and liabilities
IDS Cash Management Fund
Jan. 31, 1997
====================================================================================================================================
Assets
====================================================================================================================================
<S> <C>
(Unaudited)
Investments in securities, at value (Note 1)
(identified cost $2,929,892,045) $2,929,892,045
Cash in bank on demand deposit 23,143,555
Accrued interest receivable 4,179,270
-------------
Total assets 2,957,214,870
=============
====================================================================================================================================
Liabilities
====================================================================================================================================
Dividends payable to shareholders 767,086
Accrued investment management services fee 22,695
Accrued distribution fees 4,078
Accrued transfer agency fee 12,300
Accrued administrative services fee 2,076
Other accrued expenses 334,134
--------------
Total liabilities 1,142,369
--------------
Net assets applicable to outstanding capital stock $2,956,072,501
==============
====================================================================================================================================
Represented by
====================================================================================================================================
Capital stock-- authorized 10,000,000,000 shares of $.01 par value $ 29,561,969
Additional paid-in capital 2,926,537,834
Undistributed net investment income 580
Accumulated net realized loss (Note 1) (27,882)
--------------
Total-- representing net assets applicable to outstanding capital stock $2,956,072,501
==============
Net assets applicable to outstanding shares: Class A $2,683,921,074
Class B $ 195,348,647
Class Y $ 76,802,780
Net asset value per share of outstanding capital stock: Class A shares 2,683,979,596 $ 1.00
Class B shares 195,395,980 $ 1.00
Class Y shares 76,821,333 $ 1.00
See accompanying notes to financial statements.
<PAGE>
Statement of operations
IDS Cash Management Fund
Six months ended Jan. 31, 1997
====================================================================================================================================
Investment Income
====================================================================================================================================
(Unaudited)
Income:
Interest $76,248,943
-----------
Expenses (Note 2):
Investment management services fee 3,978,221
Distribution fee-- Class B 948,262
Transfer agency fee 2,837,430
Incremental transfer agency fee-- Class B 9,046
Administrative services fee and expenses 370,573
Compensation of board members 11,651
Compensation of officers 9,423
Custodian fees 73,464
Postage 333,000
Registration fees 397,987
Reports to shareholders 157,715
Audit fees 16,250
Administrative 7,977
Other 20,599
-----------
Total expenses 9,171,598
Earnings credits on cash balances (Note 2) (425,942)
-----------
Total net expenses 8,745,656
Investment income-- net 67,503,287
-----------
====================================================================================================================================
Realized loss -- net
====================================================================================================================================
Net realized loss (Note 3) (521)
Net increase in net assets resulting from operations $67,502,766
===========
See accompanying notes to financial statements.
<PAGE>
Statements of changes in net assets
IDS Cash Management Fund
====================================================================================================================================
Operations and distributions
====================================================================================================================================
Six months ended Year ended
(Unaudited)
Investment income-- net $ 67,503,287 $ 109,971,618
Net realized loss (521) (2,565)
----------- ------------
Net increase in net assets resulting from operations 67,502,766 109,969,053
Distributions to shareholders from: ----------- ------------
Net investment income
Class A (60,651,613) (98,832,686)
Class B (5,182,955) (7,718,760)
Class Y (1,664,034) (3,425,225)
----------- ------------
Total distributions (67,498,602) (109,976,671)
====================================================================================================================================
Capital share transactions at constant $1 net asset value
====================================================================================================================================
Proceeds from sales
Class A shares 4,283,896,137 6,873,710,335
Class B shares 155,871,787 546,797,564
Class Y shares 88,480,284 137,595,869
Reinvestment of distributions at net asset value
Class A shares 60,166,135 96,280,970
Class B shares 5,225,917 7,549,183
Class Y shares 1,461,867 3,059,283
Payments for redemptions
Class A shares (3,995,551,989) (6,341,900,642)
Class B shares (Note 2) (238,888,542) (379,219,480)
Class Y shares (69,806,625) (169,773,277)
-------------- ---------------
Increase in net assets from capital share transactions 290,854,971 774,099,805
-------------- ---------------
Total increase in net assets 290,859,135 774,092,187
Net assets at beginning of period 2,665,213,366 1,891,121,179
-------------- ---------------
Net assets at end of period
(including undistributed net investment income of
$580 and $(4,105)) $2,956,072,501 $2,665,213,366
============== ==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
IDS Cash Management Fund
(Unaudited as to Jan. 31, 1997)
1. Summary of
significant
accounting policies
The Fund is a series of IDS Money Market Series, Inc. and is registered
under the Investment Company Act of 1940 (as amended) as a diversified,
open-end management investment company. The Fund invests in money market
securities. The Fund offers Class A, Class B and Class Y shares. Class A
shares have no sales charge. Class B shares may be subject to a contingent
deferred sales charge and such shares automatically convert to Class A
after eight years. 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 and transfer agent 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
Pursuant to Rule 2a-7 of the 1940 Act, all securities are valued daily at
amortized cost, which approximates market value, in order to maintain a
constant net asset value of $1 per share.
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. 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.
Other
Security transactions are accounted for on the date securities are
purchased or sold. Interest income, including amortization of premium and
discount, is accrued daily.
2. Expenses and
sales charges
Effective March 20, 1995, when the Fund began offering multiple classes of
shares, 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 0.31% to 0.24% annually.
Under an Administrative Services Agreement, the Fund pays AEFC for
administration and accounting services at a percentage of the Fund's
average daily net assets in reducing percentages from 0.03% to 0.02%
annually. Additional administrative services paid by the Fund are office
expenses, consultant's 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 approved by the board.
Under a separate Transfer Agency Agreement, AEFC maintains shareholder
accounts and records. The Fund pays AEFC an annual fee per shareholder
account for this service as follows:
oClass A $20
oClass B $21
oClass Y $20
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.
Sales charges received by American Express Financial Advisors Inc. for
distributing Class B shares were $288,485 for the six months ended
Jan. 31, 1997.
During the six months ended Jan. 31, 1997 the Fund's custodian and
transfer agency fees were reduced by $425,942 as a result of earnings
credits from overnight cash balances.
3. Securities
transactions
Cost of purchases and proceeds from sales of
securities aggregated $9,088,242,347 and $8,802,599,657, respectively,
for the six months ended Jan. 31, 1997. Realized gains
and losses are determined on an identified cost basis.
<PAGE>
4. Financial
highlights
The tables below show certain important financial information for
evaluating the Fund's results.
<TABLE>
<CAPTION>
Fiscal period ended July 31,
Class A
1997** 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
beginning of period
Income from investment operations:
Net investment income .03 .05 .05 .03 .02 .04 .07 .08 .08 .06
Less distributions:
Dividends from net (.03) (.05) (.05) (.03) (.02) (.04) (.07) (.08) (.08) (.06)
investment income
Net asset value, $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
end of period
Class A
1997** 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net assets, end of $2,684 $2,335 $1,707 $1,154 $1,053 $1,230 $1,655 $1,617 $1,392 $1,136
period (in millions)
Ratio of expenses to .56% .63% .73% .94%## .94%## .91% .77% .74% .75% .69%
average daily net assets#
Ratio of net income to 4.88% 4.97% 4.99% 2.61% 2.36% 3.84% 6.55% 7.81% 8.42% 6.53%
average daily net assets
Total return 2.5% 5.1% 5.0% 2.6% 2.4% 3.8% 6.7% 7.9% 8.7% 6.7%
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Six months ended Jan. 31, 1997 (Unaudited).
# Effective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credits on cash balances.
## During the fiscal years ended July 31, 1993 and 1994, AEFC voluntarily
reimbursed the Fund for a portion of its expenses. Had AEFC not done so,
the ratio of expenses to average daily net assets would have been 0.97%.
Adjusted to an annual basis.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Fiscal period ended July 31,
Class B Class Y
1997** 1996 1995*** 1997** 1996 1995***
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
beginning of period
Income from investment operations:
Net investment income .02 .04 .02 .03 .05 .02
Less distributions:
Dividends from net (.02) (.04) (.02) (.03) (.05) (.02)
investment income
Net asset value, $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
end of period
Class B Class Y
1997** 1996 1995*** 1997** 1996 1995***
Net assets, end of $195 $273 $98 $77 $57 $86
period (in millions)
Ratio of expenses to 1.31% 1.38% 1.41% .56% .62% .65%
average daily net assets#
Ratio of net income to 4.08% 4.15% 4.73% 4.89% 4.97% 5.53%
average daily net assets
Total return 2.1% 4.3% 2.0% 2.5% 5.1% 2.3%
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended Jan. 31, 1997 (Unaudited)
***Inception date was March 20, 1995 for Class B and Class Y.
Adjusted to an annual basis
#Effective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credits on cash balances.
</TABLE>
<PAGE>
IDS Cash Management Fund
Jan. 31, 1997 (Unaudited)
(Percentages represent value of
investments compared to net assets)
================================================================================
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
================================================================================
U.S. government agencies (1.1%)
Federal Farm Credit Disc Nt
03-03-97 5.17% $15,000,000 $ 14,997,392
Federal Home Loan Bank
01-28-98 5.78 10,000,000 10,000,000
Federal Home Loan Mtge Corp Disc Nt
02-03-97 5.48 7,200,000 7,197,808
Total U.S. government agencies
(Cost: $32,195,200) 32,195,200
================================================================================
Banker's acceptance (0.3%)
First Union Bank
02-04-97 5.36 9,000,000 8,995,995
Total banker's acceptance
(Cost: $8,995,995) 8,995,995
================================================================================
Certificates of deposit (5.2%)
Domestic (0.4%)
Harris Trust
02-10-97 5.33 11,900,000 11,900,000
Eurodollar (4.8%)
ABN Amro Yankee
03-18-97 5.53 15,000,000 14,998,392
Canadian Imperial Bank Yankee
03-11-97 5.37 15,000,000 15,000,000
04-15-97 5.75 5,000,000 5,000,000
01-08-98 5.83 12,000,000 12,000,000
Deutsche Bank Yankee
04-11-97 5.73 5,000,000 4,999,865
Natl Westminster Bank
02-03-97 5.37 25,000,000 24,999,921
Societe Generale Yankee
02-24-97 5.35 13,000,000 13,000,000
03-04-97 5.44 10,000,000 10,000,000
06-03-97 5.90 10,000,000 10,000,000
12-16-97 5.73 12,000,000 12,000,000
12-24-97 5.49 20,000,000(c) 19,987,496
Total 141,985,674
Total certificates of deposit
(Cost: $153,885,674) 153,885,674
================================================================================
Commercial Paper (62.8%)
Automotive & related (2.2%)
Ford Motor Credit
03-05-97 5.33 31,300,000 31,152,542
03-10-97 5.35 4,000,000 3,978,129
03-11-97 5.33 16,600,000 16,507,132
04-14-97 5.40 12,000,000 11,871,840
Total 63,509,643
Banks and savings & loans (15.4%)
ABN Amro North America Finance
02-07-97 5.30 22,000,000 21,980,567
ANZ (Delaware)
04-21-97 5.44 15,000,000 14,823,237
05-13-97 5.44 15,000,000 14,775,275
Barclays U.S. Funding
02-13-97 5.36 17,900,000 17,868,436
BBV Finance (Delaware)
02-26-97 5.31 17,000,000 16,937,549
04-17-97 5.41 12,600,000 12,459,825
Ciesco LP
03-04-97 5.36 12,000,000(b) 11,944,923
03-05-97 5.33 15,300,000 15,227,784
04-01-97 5.36 10,800,000 10,706,013
Commerzbank U.S. Finance
03-25-97 5.35 12,300,000 12,205,659
Deutsche Bank
12-04-97 5.80 15,000,000 15,000,000
First Bank Minneapolis
10-24-97 5.38 20,000,000(c) 19,991,578
First Chicago NBD
02-10-97 5.35 7,100,000 7,090,539
02-24-97 5.32 25,000,000 24,915,347
First Union
06-06-97 5.95 5,000,000 5,000,000
Fleet Funding
02-19-97 5.34 17,500,000(b) 17,453,538
02-20-97 5.35 20,000,000(b) 19,943,739
02-24-97 5.35 18,000,000(b) 17,938,820
02-26-97 5.34 3,860,000(b) 3,845,766
02-27-97 5.33 15,000,000(b) 14,942,583
03-03-97 5.34 10,000,000(b) 9,955,667
Kredietbank North American Finance
05-06-97 5.42 18,800,000 18,537,865
05-09-97 5.43 30,000,000 29,567,542
Natl Australia Funding (Delaware)
02-03-97 5.37 6,400,000 6,398,105
03-12-97 5.36 7,300,000 7,257,928
03-26-97 5.46 18,000,000 17,857,165
04-25-97 5.40 15,500,000 15,309,169
NationsBank
02-13-97 5.37 11,700,000 11,700,000
NBD Bank Canada
02-10-97 5.40 18,000,000 17,975,948
02-24-97 5.32 15,000,000 14,949,208
Societe Generale North America
02-11-97 5.37 9,000,000 8,986,750
Total 453,546,525
Broker dealers (13.6%)
Dean Witter Discover & Co.
02-28-97 5.38 12,376,000 12,326,620
03-10-97 5.37 13,900,000 13,823,855
03-19-97 5.34 6,600,000 6,555,303
Goldman Sachs Group
02-27-97 5.32 34,900,000 34,766,410
02-27-97 5.39 15,000,000 14,942,258
03-05-97 5.58 8,000,000 7,960,676
03-18-97 5.39 18,300,000 18,177,848
04-17-97 5.39 15,000,000 14,833,750
04-21-97 5.49 15,000,000 14,823,896
Merrill Lynch
03-03-97 5.34 6,500,000 6,471,238
03-04-97 5.39 19,400,000 19,310,625
03-07-97 5.34 20,000,000 19,899,700
03-17-97 5.40 10,000,000 9,934,611
03-19-97 5.37 20,000,000 19,863,789
04-03-97 5.41 5,700,000 5,648,811
04-07-97 5.44 8,000,000 7,922,289
04-16-97 5.41 18,000,000 17,802,050
10-16-97 5.44 14,500,000(c) 14,500,000
Morgan Stanley Group
02-12-97 5.32 20,000,000 19,967,611
02-21-97 5.32 20,000,000 19,941,111
02-28-97 5.32 18,000,000 17,928,450
04-18-97 5.41 20,000,000 19,774,533
04-22-97 5.41 20,000,000 19,762,667
04-23-97 5.41 21,100,000 20,846,483
04-25-97 5.41 25,000,000 24,692,208
Total 402,476,792
Consumer finance -- personal loans (2.2%)
Household Finance
03-13-97 5.35 20,100,000 19,981,410
04-01-97 5.38 20,000,000 19,825,294
04-09-97 5.42 25,000,000 24,751,076
Total 64,557,780
Energy (2.3%)
Chevron Transport
02-26-97 5.36 10,000,000(b) 9,962,986
03-19-97 5.39 10,000,000(b) 9,932,150
03-20-97 5.39 10,000,000(b) 9,930,544
Chevron UK
02-06-97 5.37 10,000,000 9,992,542
02-13-97 5.32 10,000,000 9,982,267
03-10-97 5.31 10,000,000 9,945,425
03-17-97 5.35 7,000,000 6,954,228
Total 66,700,142
Financial services (14.5%)
A.I. Credit
04-08-97 12,000,000 11,882,080
American General Finance
02-27-97 5.33 15,000,000 14,942,691
03-12-97 5.40 6,800,000(b) 6,760,589
04-10-97 5.40 14,200,000(b) 14,057,038
04-18-97 5.41 11,200,000(b) 11,073,739
05-07-97 5.44 15,000,000(b) 14,788,229
Associates North America
02-21-97 5.38 17,300,000 17,248,581
02-21-97 5.40 15,100,000 15,055,036
02-26-97 5.37 10,000,000(b) 9,963,125
03-04-97 5.33 30,000,000 29,862,825
03-31-97 5.36 18,400,000 18,242,588
Beneficial
02-25-97 5.36 25,000,000 24,911,166
03-06-97 5.33 8,300,000 8,259,600
BHP Finance (USA)
02-06-97 5.35 25,000,000 24,981,458
02-25-97 5.33 12,500,000 12,455,833
03-06-97 5.39 10,658,000 10,605,731
CAFCO
03-03-97 5.35 15,000,000 14,933,375
03-14-97 5.36 18,000,000 17,890,940
04-17-97 5.39 7,400,000(b) 7,317,829
Commercial Credit
02-27-97 5.33 17,500,000 17,432,887
02-28-97 5.33 25,000,000 24,900,438
General Electric Capital
02-04-97 5.40 20,300,000 20,290,932
03-25-97 5.35 14,700,000 14,587,251
Novartis Finance
02-11-97 5.34 11,600,000 11,582,858
03-03-97 5.33 12,000,000(b) 11,947,000
Transamerica Financial
02-24-97 5.37 2,200,000 2,192,551
03-27-97 5.47 8,800,000 8,728,720
04-03-97 5.38 12,000,000 11,892,437
04-18-97 5.39 6,600,000 6,525,875
USAA Capital
02-13-97 5.41 10,000,000 9,982,100
02-28-97 5.38 3,900,000 3,884,439
Total 429,179,941
Food (3.8%)
Cargill
03-05-97 5.36 10,600,000 10,550,062
Cargill Global
03-17-97 5.35 11,200,000(b) 11,127,312
04-15-97 5.39 12,000,000(b) 11,871,033
CPC Intl
02-21-97 5.36 30,000,000(b) 29,911,167
03-05-97 5.38 10,000,000(b) 9,952,889
04-07-97 5.41 13,100,000(b) 12,973,694
Kellogg
02-05-97 5.44 13,400,000(b) 13,391,960
Sysco
02-25-97 5.38 11,600,000(b) 11,558,859
Total 111,336,976
Health care (0.4%)
Pfizer
03-05-97 5.36 12,100,000(b) 12,042,780
Industrial equipment & services (0.9%)
Mobil Australia Finance (Delaware)
03-03-97 5.39 27,064,000(b) 26,943,791
Insurance (2.2%)
Lincoln Natl
02-20-97 5.32 16,800,000(b) 16,753,007
Metlife
03-06-97 5.37 9,514,000 9,467,620
SAFECO Credit
02-11-97 5.39 8,000,000 7,988,133
02-18-97 5.44 12,200,000 12,168,890
04-29-97 5.41 20,000,000 19,741,900
Total 66,119,550
Media (1.5%)
Gannett
02-12-97 5.31 10,200,000(b) 10,183,513
02-21-97 5.32 25,000,000(b) 24,926,389
Reed Elsevier
04-21-97 5.39 10,000,000(b) 9,883,256
Total 44,993,158
Utilities -- gas (2.3%)
Consolidated Natl
02-04-97 5.63 10,500,000 10,495,100
Michigan Consolidated Gas
03-14-97 5.36 10,000,000 9,939,867
03-18-97 5.35 5,700,000 5,662,166
03-18-97 5.43 10,000,000 9,933,000
Southern California Gas
02-10-97 5.38 8,911,000(b) 8,899,171
03-04-97 5.37 14,173,000(b) 14,108,316
03-20-97 5.37 9,694,000(b) 9,626,417
Total 68,664,037
Utilities -- telephone (1.5%)
BellSouth Capital Funding
02-07-97 5.36 15,000,000 14,986,775
03-13-97 5.41 9,100,000 9,045,906
Southwestern Bell Telephone
02-21-97 5.42 6,900,000 6,879,415
U S WEST Communications
02-26-97 5.45 7,250,000 7,222,813
03-07-97 5.37 7,000,000 6,964,961
Total 45,099,870
Total commercial paper
(Cost: $1,855,170,985) 1,855,170,985
================================================================================
Letters of credit (29.8%)
ABN Amro-
Formosa Plastics
02-14-97 5.31 10,000,000 9,980,825
02-18-97 5.30 11,700,000 11,670,718
02-19-97 5.32 20,000,000 19,946,800
02-24-97 5.30 12,700,000 12,656,996
ABN Amro-
U.S. Prime Properties
03-17-97 5.40 14,000,000 13,907,600
05-19-97 5.35 5,000,000 4,920,493
Bank of America-
AES Barbers Point
02-14-97 5.31 10,000,000 9,980,644
Bank of America-
Formosa Plastics
03-18-97 5.42 7,400,000 7,350,512
04-02-97 5.41 20,000,000 19,822,333
04-09-97 5.39 10,000,000 9,900,989
Bank of New York-
River Fuel
02-12-97 5.37 19,300,000 19,268,450
03-12-97 5.37 9,129,000(b) 9,076,189
Barclays Bank-
Banc de Columbia
02-03-97 5.35 30,000,000 29,991,083
Barclays Bank-
Banca Serfin
02-05-97 5.31 20,000,000 19,988,200
Barclays Bank-
Banco Bredesco
02-12-97 5.31 10,000,000 9,983,775
Barclays Bank-
Banco de Columbia
03-19-97 5.32 5,000,000 4,966,011
04-16-97 5.40 15,000,000 14,833,500
Canadian Imperial Bank-
Commed Fuel
04-14-97 5.34 7,218,000 7,140,912
04-17-97 5.36 15,188,000 15,018,401
Chase Manhattan Bank-
Sommerset Railroad
02-11-97 5.37 22,300,000 22,266,860
Credit Agricole-
Louis Dreyfus
02-07-97 5.35 15,000,000 14,986,625
02-24-97 5.36 16,000,000 15,945,516
02-28-97 5.33 10,000,000 9,960,025
Credit Suisse-
Cemex
03-11-97 5.32 5,000,000 4,971,922
Credit Suisse-
COFCO Capital
02-14-97 5.39 15,000,000 14,970,804
02-19-97 5.42 10,000,000 9,972,900
Credit Suisse-
Commed Fuel
04-18-97 5.38 9,121,000 9,017,406
Credit Suisse-
KOC Funding
05-19-97 5.32 10,000,000(b) 9,841,878
Credit Suisse-
Natl Bank of Pakistan
04-04-97 5.32 15,000,000 14,862,567
Credit Suisse-
Sinochem
02-14-97 5.45 15,000,000 14,970,479
03-14-97 5.40 25,000,000 24,846,250
03-17-97 5.47 6,800,000 6,754,538
Credit Suisse-
Sunkyong America
02-20-97 5.35 7,000,000 6,980,235
02-24-97 5.32 17,000,000 16,942,219
04-25-97 5.34 12,000,000 11,852,260
Dresdner Bank-
Banco Inbursa
02-03-97 5.37 14,500,000 14,495,674
Dresdner Bank-
Galicia Buenos Aires Funding
02-18-97 5.35 35,000,000(b) 34,911,576
First Chicago-
Commed Fuel
02-18-97 5.40 18,442,000 18,395,408
02-25-97 5.37 10,300,000 10,263,607
03-07-97 5.38 14,118,000 14,047,332
04-08-97 5.42 16,053,000 15,895,547
04-10-97 5.40 7,214,000 7,141,235
04-14-97 5.42 9,984,000 9,876,572
Natl Westminster Bank-
Nebraska Higher Education
02-19-97 5.34 16,132,000 16,088,928
02-20-97 5.35 12,365,000 12,330,086
02-26-97 5.33 7,000,000 6,974,090
Societe Generale-
China Intl Marine Containers
03-10-97 5.34 14,500,000 14,420,419
Societe Generale-
Nacional Financiera
02-25-97 5.32 12,000,000 11,957,440
03-07-97 5.34 12,000,000 11,939,480
Toronto Dominion Bank-
Franciscan Service
02-14-97 5.32 24,600,000 24,552,741
Union Bank Switzerland-
River Fuel Trust
02-19-97 5.32 20,000,000(b) 19,946,800
02-20-97 5.30 17,218,000(b) 17,169,837
03-12-97 5.34 20,267,000(b) 20,149,756
Westdeutsche Landesbank-
Beal Argentina
02-06-97 5.35 10,000,000 9,992,569
02-20-97 5.39 20,000,000(b) 19,943,844
03-06-97 5.32 10,000,000 9,951,233
03-06-97 5.35 17,000,000 16,916,629
Westdeutsche Landesbank-
Comision Federale de Electricidad
02-04-97 5.35 20,000,000 19,991,083
02-20-97 5.39 13,214,000 13,176,410
03-10-97 5.35 15,000,000 14,917,521
04-11-97 5.42 10,000,000 9,897,459
04-16-97 5.40 15,000,000 14,833,500
Westdeutsche Landesbank-
Hillsborough
03-26-97 5.40 10,000,000 9,920,500
Total letters of credit
(Cost: $879,644,191) 879,644,191
================================================================================
Total investments in securities
(Cost: $2,929,892,045)(d) $2,929,892,045
==============
================================================================================
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) 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.
(c) Interest rate varies to reflect current market conditions; rate shown is the
effective rate on Jan. 31, 1997.
(d) Also represents the cost of securities for federal income tax purposes at
Jan. 31, 1997.
<PAGE>
President and interested
board member
William R. Pearce
President and director, Board Services Corporation (provides
administrative services to boards including the boards of the IDS and
IDSLife funds and Master Trust portfolios).
Independent
board members
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.
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.
Melvin R. Laird
Senior counsellor for national and international affairs,
The Reader's Digest Association, Inc.
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.
Interested board
members who are
officers and/or
employees of AEFC
William H. Dudley
Executive vice president, AEFC.
David R. Hubers
President and chief executive officer, AEFC.
John R. Thomas
Senior vice president, AEFC.
Officers who also
are officers and/or
employees of AEFC
Peter J. Anderson
Senior vice president, AEFC. Vice president - Investments for the Fund.
Melinda S. Urion Senior vice president and chief financial officer, AEFC.
Treasurer for the Fund.
Other officer
Leslie L. Ogg
Vice president, treasurer and corporate secretary of Board Services
Corporation. Vice president, general counsel and secretary for the Fund.
Refer to the SAI for the board members' and officers' biographies.
<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 globe
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) flower
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 and 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.
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) spinning toy
IDS Stock Fund
Invests in a Portfolio comprised primarily of 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) 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 in long-term, high-yielding corporate
fixed-income securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) 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.
(icon of) Greek column
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.
(icon of) skyline
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.
(icon of) shield with eagle head
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.
(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 star
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 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.
(icon of) shield with basket of apples enclosed
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.
(icon of) shield with tree enclosed
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.
(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
<PAGE>
Quick telephone reference
- --------------------------------------------------------------------------------
American Express Redemptions and exchanges, National/Minnesota:
Telephone Transaction dividend payments or 800-437-3133
Service reinvestments and automatic
payment arrangements Mpls./St. Paul area:
671-3800
American Express Fund performance, objectives 612-671-3733
Shareholder Service and account inquiries
- --------------------------------------------------------------------------------
TTY Service For the hearing impaired 800-846-4852
- --------------------------------------------------------------------------------
American Express Automated account information National/Minnesota:
Infoline (TouchTone(R) phones only), 800-272-4445
including current fund prices and
performance, account values Mpls./St. Paul area:
and recent account transactions 671-1630
IDS Cash Management Fund
IDS Tower 10
Minneapolis, MN 55440-0010
