1998 SEMIANNUAL REPORT
IDS
Cash
Management
Fund
(icon of) piggy bank
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.
American Express Financial Advisors
Distributed by American Express Financial Advisors Inc.
<PAGE>
(icon of) piggy bank
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 chairman 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
<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
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
(picture of) William R. Pearce
William R. Pearce
Chairman of the board
<PAGE>
From the portfolio manager
IDS Cash Management Fund's yield was little changed during the first half of its
fiscal year (August 1997 through January 1998), reflecting generally stable
short-term interest rates.
For the seven-day period ended January 31, 1998, the Fund's compound annualized
yield was 5.31%, and the simple annualized yield was 5.18%. 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.)
With inflation remaining subdued and the economy showing no signs of either
overheating or falling into recession, the Federal Reserve Board -- or, simply,
the Fed -elected to leave short-term interest rates unchanged through last fall
and winter. Concern about impending higher inflation was also eased by the
financial crisis in Asia, which many observers believed would restrain U.S.
economic growth and, thus, temper a potential increase in consumer prices. (By
way of background, the Fed adjusts short-term interest 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.)
Short maturity
For the most part, I kept the average maturity of the Fund's investments
somewhat shorter than normal --between 35 and 45 days. This strategy reflected
my belief that interest rates were more likely to rise than fall, and a shorter
maturity would make it easier to add new, higher-yielding securities. (The
longer the Fund's average maturity, the longer it takes the Fund's yield to
reflect a change in interest rates.) In addition, I found the yield advantage
provided by longer-term issues too slight to warrant extending the portfolio's
average maturity. Last December, the average maturity declined to about 25 days,
as I took advantage of higher short-term rates. Then, in January, I extended the
maturity to about 40 days. As always, the entire portfolio remained invested in
first-rated commercial paper, bank letters of credit and certificates of
deposit.
As for the rest of the fiscal year, I continue to believe that the Fed is more
likely to raise short-term interest rates than to lower them, though it may be
some time before it decides any adjustment is needed. In light of that outlook,
I plan to stay with a moderately short portfolio maturity until action by the
Fed merits a change.
Terry Fettig
(picture of) Terry Fettig
Terry Fettig
Portfolio Manager
<PAGE>
To our shareholders
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Jan. 31, 1998 $1.00
July 31, 1997 $1.00
Increase $ --
Distributions
Aug. 1, 1997 - Jan. 31, 1998
From income $0.03
From capital gains $ --
Total distributions $0.03
Total return* +2.7%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Jan. 31, 1998 $1.00
July 31, 1997 $1.00
Increase $ --
Distributions
Aug. 1, 1997 - Jan. 31, 1998
From income $0.02
From capital gains $ --
Total distributions $0.02
Total return* +2.3%**
Class Y
6-month performance
(All figures per share)
Net asset value (NAV)
Jan. 31, 1998 $1.00
July 31, 1997 $1.00
Increase $ --
Distributions
Aug. 1, 1997 - Jan. 31, 1998
From income $0.03
From capital gains $ --
Total distributions $0.03
Total return* +2.7%**
*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>
Financial statements
Statement of assets and liabilities
IDS Cash Management Fund
Jan. 31, 1998
Assets
(Unaudited)
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $3,480,626,000) $3,480,626,000
Cash in bank on demand deposit 34,602,489
Accrued interest receivable 4,051,122
---------
Total assets 3,519,279,611
-------------
Liabilities
Dividends payable to shareholders 1,037,577
Accrued investment management services fee 26,361
Accrued distribution fee 2,268
Accrued transfer agency fee 19,568
Accrued administrative services fee 2,382
Other accrued expenses 302,139
-------
Total liabilities 1,390,295
---------
Net assets applicable to outstanding capital stock $3,517,889,316
==============
Represented by
Capital stock-- $.01 par value (Note 1) $ 35,179,904
Additional paid-in capital 3,482,745,327
Undistributed net investment income 890
Accumulated net realized gain (loss) (36,805)
-------
Total-- representing net assets applicable to outstanding capital stock $3,517,889,316
==============
Net assets applicable to outstanding shares: Class A $3,314,080,427
Class B $ 110,500,580
Class Y $ 93,308,309
Net asset value per share of outstanding capital stock: Class A shares 3,314,100,673$ 1.00
Class B shares 110,553,532$ 1.00
Class Y shares 93,336,209$ 1.00
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Financial statements
Statement of operations
IDS Cash Management Fund
Six months ended Jan. 31, 1998
Investment income
(Unaudited)
Income:
Interest $97,459,959
-----------
Expenses (Note 2):
Investment management services fee 4,742,002
Distribution fee-- Class B 470,850
Transfer agency fee 3,369,396
Incremental transfer agency fee-- Class B 5,466
Administrative services fees and expenses 447,856
Compensation of board members 12,626
Custodian fees 107,534
Postage 217,000
Registration fees 453,159
Reports to shareholders 148,400
Audit fees 16,750
Other 3,135
-----
Total expenses 9,994,174
Earnings credits on cash balances (Note 2) (1,965,356)
----------
Total net expenses 8,028,818
---------
Investment income (loss)-- net 89,431,141
----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on security transactions ( Note 3) (9,805)
------
Net increase (decrease) in net assets resulting from operations $89,421,336
===========
See accompanying notes to financial statements.
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<TABLE>
<CAPTION>
Statements of changes in net assets
IDS Cash Management Fund
Operations and distributions Jan. 31, 1998 July 31, 1997
Six months ended Year ended
(Unaudited)
<S> <C> <C>
Investment income (loss)-- net $ 89,431,141 $ 145,783,026
Net realized gain (loss) on investments (9,805) 361
------ ---
Net increase (decrease) in net assets resulting from operations 89,421,336 145,783,387
---------- -----------
Distributions to shareholders from:
Net investment income
Class A (84,756,275) (133,616,882)
Class B (2,796,533) (8,786,661)
Class Y (1,878,418) (3,374,403)
---------- ----------
Total distributions (89,431,226) (145,777,946)
----------- ------------
Capital share transactions at constant $1 net asset value
Proceeds from sales
Class A shares 6,538,140,903 9,587,486,301
Class B shares 78,949,498 263,976,722
Class Y shares 124,832,996 126,673,627
Reinvestment of distributions at net asset value
Class A shares 84,371,011 129,747,271
Class B shares 2,808,227 8,706,594
Class Y shares 1,875,032 3,018,917
Payments for redemptions
Class A shares (6,402,337,329) (8,958,744,870)
Class B shares (118,014,028) (399,060,300)
Class Y shares (95,365,714) (124,384,459)
----------- ------------
Increase (decrease) in net assets from capital share transactions 215,260,596 637,419,803
----------- -----------
Total increase (decrease) in net assets 215,250,706 637,425,244
Net assets at beginning of period 3,302,638,610 2,665,213,366
------------- -------------
Net assets at end of period $3,517,889,316 $3,302,638,610
============== ==============
Undistributed net investment income $ 890 $ 975
-------------- --------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
IDS Cash Management Fund
(Unaudited as to Jan. 31, 1998)
1
Summary of
significant
accounting policies
IDS Cash Management 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. IDS Money Market Series, Inc. has 10 billion
authorized shares of capital stock that can be allocated among the
separate series as designated by the board. 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 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 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, the Fund entered into agreements with American
Express Financial Corporation (AEFC) for managing its portfolio, providing
administrative services and serving as transfer agent. Under an 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 a fee 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 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 $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 $395,915 for the six months ended Jan.
31, 1998.
During the six months ended Jan. 31, 1998 the Fund's custodian and
transfer agency fees were reduced by $1,965,356 as a result of earnings
credits from overnight cash balances.
3
Securities
transactions
Cost of purchases and proceeds from sales of securities aggregated
$8,890,436,651 and $8,297,784,065, respectively, for the six months ended
Jan. 31, 1998. Realized gains and losses are determined on an identified
cost basis.
<PAGE>
<TABLE>
<CAPTION>
4. Financial highlights
The tables below show certain important financial information for evaluating the
Funds results.
Fiscal period ended July 31,
Per share income and capital changesa
Class A
1998b 1997 1996 1995 1994 1993 1992 1991 1990 1989
<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 .05 .03 .02 .04 .07 .08 .08
(loss)
Less distributions:
Dividends from net (.03) (.05) (.05) (.05) (.03) (.02) (.04) (.07) (.08) (.08)
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
Ratios/supplemental data
Class A
1998 b1997 1996 1995 1994 1993 1992 1991 1990 1989
Net assets, end of $3,314 $3,094 $2,335 $1,707 $1,154 $1,053 $1,230 $1,655 $1,617 $1,392
(in millions)
Ratio of expenses to .e5% .58% .63% .73% .d4% .d4% .91% .77% .74% .75%
average daily net assetsc
Ratio of net income (5.e3% 4.96% 4.97% 4.99% 2.61% 2.36% 3.84% 6.55% 7.81% 8.42%
to average daily net assets
Total return 2.7% 5.1% 5.1% 5.0% 2.6% 2.4% 3.8% 6.7% 7.9% 8.7%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Jan. 31, 1998 (Unaudited).
c Effective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credits on cash balances.
d 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%.
e Adjusted to an annual basis.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Cash Management Fund
Fiscal period ended July 31,
Per share income and capital changesa
Class Y Class B
1998c 1997 1996 1995 b 1998c 1997 1996 1995b
<S> <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
beginning of period
Income from investment operations:
Net investment income .02 .04 .04 .02 .03 .05 .05 .02
(loss)
Less distributions:
Dividends from net (.02) (.04) (.04) (.02) (.03) (.05) (.05) (.02)
investment income
Net asset value, $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
end of period
Ratios/supplemental data
Class B Class Y
1998c 1997 1996 1995 b 1998c 1997 1996 1995b
Net assets, end of $111 $147 $273 $98 $93 $62 $57 $86
(in millions)
Ratio of expenses to 1.31% 1.34% 1.38% 1.e1% .e5% .58% .62% .e5%
average daily net assetsd
Ratio of net income (4.44% 4.14% 4.15% 4.e3% 5.e5% 4.96% 4.97% 5.e3%
to average daily net assets
Total return 2.3% 4.3% 4.3% 2.0% 2.7% 5.1% 5.1% 2.3%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Inception date was March 20, 1995.
c Six months ended Jan. 31, 1998 (Unaudited).
d Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
e Adjusted to an annual basis.
</TABLE>
<PAGE>
Investments in securities
IDS Cash Management Fund
Jan. 31, 1998 (Unaudited)
Percentages represent
value of investments
compared to net assets)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
Certificates of deposit (5.8%)
Domestic (1.4%)
Bank of New York
03-03-98 5.83% $17,000,000 $ 16,999,585
U.S. Bank Minneapolis
04-22-98 5.52 21,900,000 21,900,000
04-28-98 5.54 10,000,000 10,000,000
Total 48,899,585
Eurodollar (4.4%)
ABN Amro Yankee
05-15-98 6.08 14,000,000 13,999,238
Canadian Imperial Bank Yankee
02-27-98 5.50 25,000,000 25,000,000
02-27-98 5.83 20,000,000 20,000,000
04-08-98 5.58 25,000,000 25,000,000
04-27-98 5.53 25,000,000 25,000,000
Societe Generale Yankee
03-03-98 5.85 10,000,000 9,999,675
03-20-98 5.98 10,000,000 9,999,749
Westdeutsche Landesbank Yankee
02-18-98 5.50 25,000,000 25,000,000
Total 153,998,662
Total certificates of deposit
(Cost: $202,898,247) 202,898,247
Commercial paper (74.5%)
Automotive & related (8.6%)
Daimler-Benz
02-02-98 5.80 19,000,000 18,993,931
02-11-98 5.82 15,300,000 15,273,072
02-19-98 5.87 5,000,000 4,984,642
03-19-98 5.77 17,400,000 17,270,515
03-23-98 5.80 24,000,000 23,805,520
03-25-98 5.80 20,000,000 19,831,578
04-29-98 5.51 20,000,000 19,734,533
Ford Motor Credit
02-23-98 5.50 25,000,000 24,912,472
02-26-98 5.48 15,100,000 15,040,565
03-06-98 5.52 11,500,000 11,440,373
03-06-98 5.57 23,000,000 22,880,093
04-02-98 5.51 20,000,000 19,815,306
04-03-98 5.57 25,000,000 24,763,194
04-07-98 5.58 25,000,000 24,747,458
04-09-98 5.55 20,700,000 20,485,732
Toyota Motor Credit
02-17-98 5.53 12,500,000 12,467,535
02-27-98 5.83 5,300,000 5,277,064
Total 301,723,583
Banks and savings & loans (15.7%)
Bank of America
10-22-98 6.00 10,000,000 9,996,544
BBV Finance (Delaware)
04-07-98 5.56 39,100,000 38,706,459
04-08-98 5.49 20,000,000 19,798,255
07-13-98 5.49 8,500,000 8,294,099
Ciesco LP
02-05-98 5.60 20,000,000 19,984,500
02-06-98 5.80 8,950,000(b) 8,941,423
02-11-98 5.81 25,000,000(b) 24,956,076
03-09-98 5.50 30,000,000(b) 29,831,650
03-12-98 5.50 12,100,000(b) 12,026,593
04-17-98 5.50 23,500,000(b) 23,230,612
Deutsche Bank Financial
02-09-98 5.52 20,000,000 19,972,500
02-13-98 5.52 25,000,000 24,950,438
02-17-98 5.48 20,000,000 19,948,481
04-08-98 5.48 14,000,000 13,858,779
First Bank Minneapolis
03-06-98 5.53 13,000,000(c) 12,999,533
Fleet Funding
02-20-98 5.52 12,000,000(b) 11,963,400
03-03-98 5.51 14,900,000(b) 14,829,689
03-10-98 5.50 19,200,000(b) 19,089,141
03-13-98 5.53 29,318,000(b) 29,135,023
Harris Trust
02-04-98 5.55 14,300,000 14,300,000
03-05-98 5.50 15,000,000 15,000,000
Morgan Guaranty
06-22-98 6.00 15,000,000 14,998,048
NBD Bank Canada
02-09-98 5.58 15,000,000 14,979,150
03-12-98 5.54 25,000,000 24,847,500
New Center Asset Trust
03-04-98 5.50 25,000,000 24,878,444
03-11-98 5.53 20,000,000 19,880,833
04-13-98 5.50 21,000,000 20,771,940
Societe Generale North America
03-16-98 5.48 25,000,000 24,834,083
03-17-98 5.50 14,200,000 14,103,262
Total 551,106,455
Broker dealers (7.5%)
Goldman Sachs Group
02-04-98 5.77 15,000,000 14,990,467
04-06-98 5.53 25,000,000 24,753,542
04-09-98 5.64 11,100,000 10,983,425
05-12-98 5.52 20,000,000 19,695,317
05-13-98 5.52 20,000,000 19,692,300
05-14-98 5.50 30,000,000 29,535,642
Merrill Lynch
02-11-98 5.81 10,000,000 9,982,431
03-17-98 5.50 14,100,000 14,003,768
05-26-98 5.56 15,000,000(c) 15,000,000
11-27-98 5.56 18,000,000(c) 18,000,000
01-19-99 5.54 19,000,000(c) 19,000,000
01-25-99 5.57 18,000,000(c) 18,000,000
Morgan Stanley, Dean
Witter, Discover & Co
03-06-98 5.50 15,000,000 14,922,508
03-09-98 5.50 15,900,000 15,810,611
UBS Finance (Delaware)
02-02-98 5.63 19,500,000 19,493,901
Total 263,863,912
Consumer finance -- personal loans (1.1%)
Household Finance
03-10-98 5.53 20,000,000 19,883,889
03-12-98 5.51 20,000,000 19,878,222
Total 39,762,111
Energy (0.4%)
Chevron Transport
03-09-98 5.50 15,000,000(b) 14,915,825
Financial services (33.3%)
American General Finance
03-03-98 5.50 20,000,000 19,905,794
03-13-98 5.49 25,000,000 24,844,826
03-13-98 5.50 18,700,000 18,583,717
Associates Corp North America
03-02-98 5.62 30,000,000 29,860,750
03-03-98 5.50 12,000,000 11,943,477
03-12-98 5.54 20,000,000 19,877,555
Barclays U.S. Funding
02-11-98 5.50 4,200,000 4,192,967
Beneficial
03-04-98 5.50 25,000,000 24,878,444
03-05-98 5.50 25,000,000 24,874,646
03-06-98 5.51 25,000,000 24,870,611
03-11-98 5.51 15,000,000 14,910,950
03-26-98 5.55 20,000,000 19,834,700
BHP Finance
02-03-98 5.79 15,000,000 14,992,825
02-04-98 5.77 11,000,000 10,993,021
02-24-98 5.84 4,900,000 4,881,151
03-04-98 5.50 15,700,000 15,623,663
03-17-98 5.50 18,735,000 18,607,134
03-18-98 5.61 7,500,000 7,446,813
04-09-98 5.52 14,600,000 14,449,425
04-15-98 5.54 14,000,000 13,842,298
BOC Group
02-02-98 5.82 20,000,000 19,993,589
02-09-98 5.82 10,000,000 9,985,575
02-10-98 5.83 26,000,000(b) 25,958,256
02-23-98 5.81 10,000,000 9,963,264
03-02-98 5.79 10,000,000 9,952,333
03-02-98 5.82 10,000,000 9,952,000
03-09-98 5.50 10,000,000 9,943,883
03-16-98 5.51 10,000,000 9,933,267
03-16-98 5.54 10,000,000(b) 9,932,656
CAFCO
02-13-98 5.81 20,000,000(b) 19,958,400
02-23-98 5.87 20,000,000(b) 19,925,761
02-24-98 5.85 9,500,000(b) 9,463,330
03-19-98 5.50 12,000,000(b) 11,914,460
03-23-98 5.52 20,000,000(b) 19,845,300
03-24-98 5.54 25,000,000(b) 24,802,111
04-01-98 5.49 30,000,000(b) 29,728,500
CIT Group Holdings
02-05-98 5.88 6,700,000 6,694,556
03-27-98 5.63 23,800,000 23,597,832
Commercial Credit
02-12-98 5.60 25,000,000 24,953,583
03-10-98 5.50 30,000,000 29,827,100
03-13-98 5.51 25,000,000 24,844,542
03-18-98 5.51 13,900,000 13,802,847
Delaware Funding
02-19-98 5.51 6,036,000 6,018,543
02-27-98 5.52 10,076,000(b) 10,034,588
03-12-98 5.50 20,265,000(b) 20,142,059
03-17-98 5.54 4,053,000(b) 4,025,186
04-17-98 5.52 18,000,000(b) 17,792,900
General Electric Capital
02-10-98 5.71 15,000,000 14,976,583
02-12-98 5.70 20,000,000 19,962,533
03-05-98 5.50 20,000,000 19,899,717
03-20-98 5.50 20,000,000 19,854,400
04-09-98 5.49 30,000,000 29,692,300
04-30-98 5.51 25,000,000 24,664,396
Intl Lease Finance
03-18-98 5.48 25,000,000 24,826,542
04-06-98 5.57 25,000,000 24,751,736
04-10-98 5.57 20,848,000 20,628,227
04-10-98 5.58 25,000,000 24,736,458
04-21-98 5.50 25,000,000 24,698,333
Natl Australia Funding (Delaware)
04-15-98 5.49 25,000,000 24,721,472
04-15-98 5.50 36,200,000 35,795,640
04-21-98 5.52 16,200,000 16,003,800
Paccar Financial
02-03-98 5.78 9,400,000 9,395,496
02-04-98 5.59 15,000,000 14,990,717
Xerox Credit
02-10-98 5.51 14,400,000 14,378,040
02-20-98 5.51 22,100,000 22,032,718
02-26-98 5.82 14,000,000 13,941,659
Total 1,172,351,955
Food (0.6%)
Heinz (HJ)
02-02-98 5.59 8,000,000 7,997,524
02-13-98 5.83 11,620,000 11,595,746
Total 19,593,270
Household products (0.9%)
Clorox
04-13-98 5.47 14,000,000 13,848,800
04-17-98 5.49 20,000,000 19,771,155
Total 33,619,955
Insurance (2.5%)
AIG Funding
02-02-98 5.62 9,800,000 9,796,940
Lincoln Natl
04-10-98 5.59 11,000,000(b) 10,883,831
04-14-98 5.47 10,000,000(b) 9,890,500
07-07-98 5.58 10,000,000(b) 9,763,192
Metlife Funding
02-03-98 5.80 12,600,000 12,593,963
02-06-98 5.80 9,563,000 9,553,835
02-18-98 5.83 5,400,000 5,384,421
02-25-98 5.85 9,338,000 9,300,388
03-24-98 5.80 10,000,000 9,917,378
Total 87,084,448
Media (0.7%)
Gannett
02-26-98 5.48 4,900,000(b) 4,880,713
Reed Elsevier
02-06-98 5.51 20,700,000(b) 20,681,060
Total 25,561,773
Utilities -- electric (0.1%)
Alabama Power
02-12-98 5.52 3,025,000 3,019,444
Utilities -- gas (0.8%)
Gateway Fuel
02-12-98 5.82 16,548,000 16,516,173
04-03-98 5.46 12,685,000 12,567,030
Total 29,083,203
Utilities -- telephone (2.3%)
Ameritech Capital Funding
02-05-98 5.57 14,100,000 14,089,131
AT&T
02-19-98 5.53 7,600,000 7,577,939
Bell Atlantic
02-12-98 5.48 10,000,000 9,981,800
03-09-98 5.54 15,000,000 14,915,054
BellSouth Capital Funding
02-04-98 5.59 14,700,000 14,690,902
02-06-98 5.60 9,100,000 9,091,552
BellSouth Telecommunications
02-09-98 5.94 10,000,000 9,985,250
Total80,331,628
Total commercial paper
(Cost: $2,622,017,562) 2,622,017,562
Letters of credit (18.6%)
ABN Amro-
Glencore Finance
02-05-98 5.85 25,000,000 24,979,861
ABN Amro-
Louis Dreyfus
02-11-98 5.80 20,000,000 19,964,556
02-13-98 5.80 20,000,000 19,958,111
03-16-98 5.51 20,000,000 19,866,533
ABN Amro-
U.S. Prime Properties
03-02-98 5.51 17,000,000 16,922,367
03-02-98 5.53 14,000,000 13,935,833
03-06-98 5.51 10,000,000 9,948,244
Bank of America-
AES Hawaii
02-05-98 5.51 11,000,000 10,991,597
02-20-98 5.51 13,500,000 13,458,900
03-20-98 5.50 15,000,000 14,891,000
Bank of America-
MinMetals
02-13-98 5.70 20,000,000 19,959,411
Bank of America-
Orix America
10-09-98 5.58 10,000,000(b) 9,625,592
Bank of New York-
River Fuel Trust
03-31-98 5.52 14,093,000(b) 13,966,660
04-14-98 5.53 14,525,000(b) 14,363,890
Canadian Imperial Bank-
Commed Fuel
02-13-98 5.57 9,957,000 9,936,973
02-24-98 5.50 15,000,000 14,945,200
03-04-98 5.51 9,861,000 9,812,703
04-16-98 5.54 10,169,000 10,052,904
Credit Agricole-
Louis Dreyfus
02-06-98 5.53 7,800,000 7,792,837
02-13-98 5.91 9,100,000 9,080,711
02-19-98 5.47 5,000,000 4,985,565
02-24-98 5.51 10,000,000 9,963,400
02-25-98 5.66 10,000,000 9,960,972
03-06-98 5.50 17,000,000 16,911,695
Credit Suisse-
China Merchants
02-05-98 5.80 20,000,000(b) 19,984,083
02-23-98 5.73 11,750,000 11,706,985
Dresdner Bank-
ContiFinancial
03-03-98 5.52 25,000,000 24,881,597
03-13-98 5.52 22,000,000 21,861,693
First Bank-
Midwest CP
02-10-98 5.68 8,500,000 8,486,660
02-26-98 5.66 10,000,000 9,959,411
04-30-98 5.55 11,000,000 10,850,974
First Chicago-
Commed Fuel
03-04-98 5.53 7,890,000 7,851,357
03-06-98 5.51 9,977,000 9,925,364
04-08-98 5.55 12,829,000 12,698,159
04-16-98 5.54 17,141,000 16,945,307
04-23-98 5.51 17,000,000 16,789,738
04-24-98 5.52 10,377,000 10,246,610
Societe Generale-
JMG Funding
04-06-98 5.68 13,688,000 13,549,599
05-15-98 5.49 24,231,000 23,852,996
Societe Generale-
Nacional Financiera
04-17-98 5.65 10,000,000 9,880,722
Toronto Dominion Bank-
Presbyterian Healthcare Services
03-18-98 5.47 17,000,000 16,881,179
03-18-98 5.51 30,000,000 29,790,317
Union Bank Switzerland-
River Fuel Trust
02-19-98 5.53 9,030,000(b) 9,003,693
04-14-98 5.50 22,079,000(b) 21,835,892
Westdeutsche Landesbank-
Hillsborough
02-04-98 5.83 8,671,000 8,665,431
Westpac Banking-
U.S. Prime Properties
03-09-98 5.48 13,865,000 13,786,909
Total letters of credit
(Cost: $655,710,191) 655,710,191
Total investments in securities
(Cost: $3,480,626,000)(d) $3,480,626,000
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS Cash Management Fund
Notes to investments in securities
(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, 1998.
(d) Also represents the cost of securities for federal income tax purposes at
Jan. 31, 1998.
<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.
(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
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.
<PAGE>
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
<PAGE>
AMERICAN EXPRESS Financial Advisors
IDS Cash Management Fund
IDS Tower 10
Minneapolis, MN 55440-0010
