IDS MONEY MARKET SERIES INC, 485APOS, 1999-07-27

IDS MONEY MARKET SERIES INC
485APOS, 1999-07-27

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No. _____

Post-Effective Amendment No. 49 (File No. 2-54516) [X]
----

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 40 (File No. 811-2591) [X]
---------

AXP MONEY MARKET SERIES, INC.
IDS Tower 10
Minneapolis, Minnesota 55440-0010

Leslie L. Ogg - 901 S. Marquette Avenue, Suite 2810,
Minneapolis, MN 55402-3268
(612) 330-9283

Approximate Date of Proposed Public Offering:

It is proposed that this filing will become effective (check appropriate box)

[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[X] on September 29, 1999 pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

<PAGE>

AXPSM Cash Management Fund

Prospectus
September 29, 1999

AXP Cash Management Fund seeks to provide shareholders with maximum current
income consistent with liquidity and stability of principal.

Please note that this Fund:
o is not a bank deposit
o is not federally insured
o is not endorsed by any bank or government agency
o is not guaranteed to achieve its goal

Like all mutual funds, the Securities and Exchange Commission has not approved
or disapproved these securities or passed upon the adequacy of this prospectus.
Any representation to the contrary is a criminal offense.

<PAGE>

Table of Contents

TAKE A CLOSER LOOK AT:

The Fund
Goal
Investment Strategy
Risks
Past Performance
Fees and Expenses
Management

Buying and Selling Shares
Valuing Fund Shares
Investment Options
Purchasing Shares
Exchanging/Selling Shares

Distributions and Taxes

Personalized Shareholder Information

About the Company

Quick Telephone Reference

Financial Highlights

<PAGE>

FUND INFORMATION KEY

icon of magnifying glass Goal and Investment Strategy
The Fund's particular investment goal and
the strategies it intends to use in pursuing
its goal.

icon of die Risks
The major risk factors associated with the
Fund.

icon of checkbook Fees and Expenses
The overall costs incurred by an investor in
the Fund, including sales charges and annual
expenses.

icon of folder Management
The individual or group designated by the
investment manager to handle the Fund's
day-to-day management.

icon of stack of dollar bills Financial Highlights
Tables showing the Fund's financial
performance.

<PAGE>

The Fund

GOAL
AXP Cash Management Fund (the Fund) seeks to provide shareholders with maximum
current income consistent with liquidity and stability of principal. Because any
investment involves risk, the Fund cannot guarantee this goal.

INVESTMENT STRATEGY
The Fund's assets primarily are invested in money market instruments, such as
marketable debt obligations issued by the U.S. government or its agencies, bank
certificates of deposit, bankers' acceptances, letters of credit, and commercial
paper. The Fund may invest more than 25% of its total assets in U.S. banks, U.S.
branches of foreign banks and U.S. government securities. Additionally, the
Fund may invest up to 35% of its total assets in foreign investments.

Because the Fund seeks to maintain a constant net asset value of $1.00 per
share, capital appreciation is not expected to play a role in the Fund's return.
The Fund's yield will vary from day-to-day.

The selection of short-term debt obligations is the primary decision in building
the investment portfolio. The Fund restricts its investments to instruments that
meet certain maturity and quality standards required by the SEC for money market
funds. For example, the Fund:

o limits its average portfolio maturity to ninety days or less;
o buys obligations with remaining maturities of 397 days or less; and
o buys only obligations that are denominated in U.S. dollars and present
minimal credit risk.

In pursuit of the Fund's goal, American Express Financial Corporation (AEFC),
the Fund's investment manager, chooses investments by:

o Considering opportunities and risks given current interest rates and
anticipated interest rates.
o Purchasing securities based on the timing of cash flows in and out of the
Fund.

In evaluating whether to sell a security, AEFC considers, among other factors,
whether:

- - the issuer's credit rating declines or AEFC expects a decline (the Fund,
in certain cases, may continue to own securities that are down-graded
until AEFC believes it is advantageous to sell),
- - political, economic, or other events could affect the issuer's
performance,
- - AEFC identifies a more attractive opportunity, and
- - the issuer or the security continues to meet the other standards
described above.

For more information on strategies and holdings, see the Fund's Statement of
Additional Information (SAI) and the annual/semiannual reports.

RISKS

Please remember that with any mutual fund investment you may lose money.
Although the Fund's share price has remained constant in the past, THE FUND
CANNOT GUARANTEE THAT IT WILL ALWAYS BE ABLE TO MAINTAIN A STABLE NET ASSET
VALUE. An investment in the Fund is not insured or guaranteed by the U.S.
government.
Principal risks associated with an investment in the Fund include:

Credit Risk
Foreign/Emerging Markets Risk
Interest Rate Risk
Market Risk
Sector/Concentration Risk

<PAGE>

Credit Risk

The risk that the issuer of a security, or the counterparty to a contract, will
default or otherwise become unable to honor a financial obligation (such as
payments due on a bond or a note). The price of junk bonds may react more to the
ability of the issuing company to pay interest and principal when due than to
changes in interest rates. They have greater price fluctuations and are more
likely to experience a default.

Foreign/Emerging Markets Risk

The following are all components of foreign/emerging markets risk:

Country risk includes the political, economic, and other conditions of
a country. These conditions include lack of publicly available information, less
government oversight (including lack of accounting, auditing, and financial
reporting standards), the possibility of government-imposed restrictions, and
even the nationalization of assets.

Currency risk results from the constantly changing exchange rate
between local currency and the U.S. dollar. Whenever the Fund holds securities
valued in a foreign currency or holds the currency, changes in the exchange rate
add or subtract from the value of the investment.

Custody risk refers to the process of clearing and settling trades. It
also covers holding securities with local agents and depositories. Low trading
volumes and volatile prices in less developed markets make trades harder to
complete and settle. Local agents are held only to the standard of care of the
local market. Governments or trade groups may compel local agents to hold
securities in designated depositories that are not subject to independent
evaluation. The less developed a country's securities market is, the greater the
likelihood of problems occurring.

Emerging markets risk includes the dramatic pace of change (economic,
social, and political) in emerging market countries as well as the other
considerations listed above. These markets are in early stages of development
and are extremely volatile. They can be marked by extreme inflation, devaluation
of currencies, dependence on trade partners, and hostile relations with
neighboring countries.

Interest Rate Risk

The risk of losses attributable to changes in interest rates. This term is
generally associated with bond prices (when interest rates rise, bond prices
fall). In general, the longer the maturity of a debt obligation, the higher its
yield and the greater the sensitivity to changes in interest rates.

Market Risk

The market may drop and you may lose money. Market risk may affect a single
issuer, sector of the economy, industry, or the market as a whole. The market
value of all securities may move up and down, sometimes rapidly and
unpredictably.

Sector/Concentration Risk

Investments that are concentrated in a particular issuer, geographic region, or
industry will be more susceptible to changes in price (the more you diversify,
the more you spread risk).

<PAGE>

PAST PERFORMANCE
The following bar chart and table indicate the risks and variability of
investing in the Fund by showing :

o how the Fund's performance has varied for each full calendar year shown on
the chart below, and

o how the Fund's average annual total returns compare to other
recognized indexes below.

How the Fund has performed in the past does not indicate how the Fund will
perform in the future.

Class A Performance (based on calendar years)
- ------------------------------------------------------------------------------

- ------------------------------------------------------------------------------

- ------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------

During the period shown in the bar chart, the highest return for a calendar
quarter was ___% (quarter ending __ 19__) and the lowest return for a calendar
quarter was ___% (quarter ending __ 19__).

The Fund's year to date return as of June 30, 1998 was _____%.

Average Annual Total Returns (for the calendar year periods ending Dec. 31,
1998)

1 year 5 years 10 years Since inception

Cash Management:

Class A -

Class B - - a

Class Y - - a

a Inception date was March 20, 1995.
</TABLE>

This table shows total returns from hypothetical investments in shares of the
Fund.

For purposes of this calculation we assumed:
o sales at the end of the period and deduction of the applicable contingent
deferred sales charge (CDSC) for Class B shares,
o no sales charge for Class Y shares, and
o no adjustments for taxes paid by an investor on the reinvested income and
capital gains.

<PAGE>

FEES AND EXPENSES
Fund investors pay various expenses. The table below describes the fees and
expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
<S> <C> <C> <C>

Class A Class B Class Y
Maximum sales charge
(load) imposed on purchasesa
(as a percentage
of offering price) none none none
Maximum deferred sales
charge (load) imposed on
sales (as a percentage
of offering price at time of purchase) none 5% none

Annual Fund operating expensesb (expenses that are deducted from Fund assets)

As a percentage of average daily net assets: Class A Class B Class Y
- ----------------------------------------------- -------------------- -------------------- -------------------
Management fees % % %
- ----------------------------------------------- -------------------- -------------------- -------------------
- ----------------------------------------------- -------------------- -------------------- -------------------
Distribution (12b-1) fees % % %
- ----------------------------------------------- -------------------- -------------------- -------------------
- ----------------------------------------------- -------------------- -------------------- -------------------
Other expensesc % % %
- ----------------------------------------------- -------------------- -------------------- -------------------
- ----------------------------------------------- -------------------- -------------------- -------------------
Total % % %
- ----------------------------------------------- -------------------- -------------------- -------------------

a This charge may be reduced depending on your total investments in American Express funds. See
"Sales Charges."
b Expenses for Class A, Class B and Class Y are based on actual expenses for
the last fiscal year, restated to reflect current fees.
c Other expenses include an administrative services fee, a transfer
agency fee and other nonadvisory expenses.
</TABLE>

Example

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

Assume you invest $10,000 and the Fund earns a 5% annual return. The operating
expenses remain the same each year. If you hold your shares until the end of the
years shown, your costs would be:

1 year 3 years 5 years 10 years
Class A $ $ $ $
Class Ba $ $ $ $ c
Class Bb $ $ $ $ c
Class Y $ $ $ $

a Assumes you sold your Class B shares at the end of the period and incurred
the applicable CDSC.
b Assumes you did not sell your Class B shares at the end of the period.
c Based on conversion of Class B shares to Class A shares in the ninth year
of ownership.

This example does not represent actual expenses, past or future. Actual expenses
may be higher or lower than those shown.

<PAGE>

MANAGEMENT
Terry Fettig, senior portfolio manager, joined AEFC in 1986. He has managed this
Fund since April 1993. He also serves as portfolio manager of AXP Intermediate
Tax-Exempt Fund, AXP Tax-Free Money Fund, AXP Variable Portfolio - Cash
Management Fund and IDS Life Series Fund, Money Market Portfolio.

Buying and Selling Shares

VALUING FUND SHARES
The NAV is the value of a single Fund share. The NAV usually changes daily, and
is calculated at the close of business of the New York Stock Exchange, normally
3 p.m. Central Standard Time (CST), each business day (any day the New York
Stock Exchange is open).

The Fund's investments are valued at amortized cost, which approximates market
value, as explained in the SAI. Although the Fund cannot guarantee it will
always be able to maintain a constant net asset value of $1 per share, it will
use its best efforts to do so.

INVESTMENT OPTIONS
New investments must be made in Class A shares of the Fund. The Fund offers
Class B and Class Y shares only to facilitate exchanges between classes of these
shares in other IDS funds. The primary differences among the classes are in the
sales charge structures and in their ongoing expenses. These differences are
summarized in the table below.

Investment options summary:

Class A

No initial sales charge

No annual distribution fee

Class B

No initial sales charge

CDSC on shares sold in the first six years (maximum of 5% in first year, reduced
to 0% after year six)

CDSC waived in certain circumstances

Shares convert to Class A in ninth year of ownership

Annual distribution fee of 0.75% of average daily net assets*

Higher annual expenses than Class A shares

Class Y

No initial sales charge

No annual distribution fee

Available only to certain qualifying institutional investors

<PAGE>

* The Fund has adopted a plan under Rule 12b-1 of the Investment Company Act
of 1940 that allows it to pay distribution fees for the sale of Class B
shares. Because these fees are paid out of the Fund's assets on an on-going
basis, the fees may cost long-term shareholders more than paying other
types of sales charges imposed by some mutual funds.

PURCHASING SHARES
If you do not have a mutual fund account, you need to establish one. Your
financial advisor will help you fill out and submit an application. Your
application will be accepted only when federal funds (funds of the Federal
Reserve System) are available to the Fund, normally within three days of receipt
of your application. Once your account is set up, you can choose among several
convenient ways to invest.

When you purchase shares for a new or existing account, your order will be
priced at the next NAV calculated after your order is accepted by the Fund. If
your application does not specify which class of shares you are purchasing, we
will assume you are investing in Class A shares.

Important: When you open an account, you must provide your correct Taxpayer
Identification Number (TIN), which is either your Social Security or Employer
Identification number.

If you do not provide the correct TIN, you could be subject to backup
withholding of 31% of taxable distributions and proceeds from certain sales and
exchanges. You also could be subject to further penalties, such as:

o a $50 penalty for each failure to supply your correct TIN,

o a civil penalty of $500 if you make a false statement that results in no
backup withholding, and

o criminal penalties for falsifying information.

You also could be subject to backup withholding if the IRS requires us to do so
because you failed to report required interest or dividends on your tax return.

How to determine the correct TIN
<TABLE>
<CAPTION>
<S> <C>

For this type of account: Use the Social Security or Employer Identification
number of:
- ------------------------------------------------------- -----------------------------------------------------
- ------------------------------------------------------- -----------------------------------------------------

Individual or joint account The individual or one of the individuals listed on
the joint account
- ------------------------------------------------------- -----------------------------------------------------
- ------------------------------------------------------- -----------------------------------------------------

Custodian account of a minor The minor
(Uniform Gifts/Transfers to Minors Act)
- ------------------------------------------------------- -----------------------------------------------------
- ------------------------------------------------------- -----------------------------------------------------

A revocable living trust The grantor-trustee
(the person who puts the money into the trust)
- ------------------------------------------------------- -----------------------------------------------------
- ------------------------------------------------------- -----------------------------------------------------

An irrevocable trust, The legal entity
pension trust or estate (not the personal representative or trustee, unless
no legal entity is designated in the account title)
- ------------------------------------------------------- -----------------------------------------------------
- ------------------------------------------------------- -----------------------------------------------------

Sole proprietorship The owner
- ------------------------------------------------------- -----------------------------------------------------

<PAGE>

- ------------------------------------------------------- -----------------------------------------------------

Partnership The partnership
- ------------------------------------------------------- -----------------------------------------------------
- ------------------------------------------------------- -----------------------------------------------------

Corporate The corporation
- ------------------------------------------------------- -----------------------------------------------------
- ------------------------------------------------------- -----------------------------------------------------

Association, club or The organization
tax-exempt organization
- ------------------------------------------------------- -----------------------------------------------------
</TABLE>

For details on TIN requirements, ask your financial advisor or contact your
local American Express Financial Advisors office to obtain a copy of federal
Form W-9, "Request for Taxpayer Identification Number and Certification."

Three ways to invest

(1) By mail:

Once your account has been established, send your check with the account number
on it to:

American Express Financial Advisors Inc.
P.O. Box 74
Minneapolis, MN 55440-0074

Minimum amounts
Initial investment: $2,000
Additional investments: $100
Account balances: $1,000

If your account balance falls below $1,000, you will be asked to increase it to
$1,000 or establish a scheduled investment plan. If you do not do so within 30
days, your shares can be sold and the proceeds mailed to you.

(2) By scheduled investment plan:

Contact your financial advisor for assistance in setting up one of the following
scheduled plans:

o automatic payroll deduction,
o bank authorization,
o direct deposit of Social Security check, or
o other plan approved by the Fund.

Minimum amounts
Initial investment: $100
Additional investments: $100/mo.
Account balances: none (on active plans with monthly payments)

If your account balance is below $2,000, you must make payments at least
monthly.

(3) By wire or electronic funds transfer:

If you have an established account, you may wire money to:

Norwest Bank Minnesota
Routing Transit No. 091000019

<PAGE>

Give these instructions:
Credit American Express Financial Advisors Account #0000030015 for personal
account # (your account number) for (your name). Please remember that you need
to provide all 10 digits.

If this information is not included, the order may be rejected, and all money
received by the Fund, less any costs the Fund or American Express Client Service
Corporation (AECSC) incurs, will be returned promptly.

Minimum amounts
Each wire investment: $1,000

If you are in a wrap fee program sponsored by AEFA and your balance falls below
the required program minimum or your program is terminated, your shares will be
sold and the proceeds will be mailed to you.

Class B -- contingent deferred sales charge (CDSC) alternative

A CDSC is based on the sale amount and the number of calendar years -- including
the year of purchase -- between purchase and sale. The following table shows how
CDSC percentages on sales decline after a purchase:

If the sale is The CDSC
made during the: percentage rate is:
First year 5%
Second year 4%
Third year 4%
Fourth year 3%
Fifth year 2%
Sixth year 1%
Seventh year 0%

If the amount you are selling causes the value of your investment in Class B
shares to fall below the cost of the shares you have purchased during the last
six years including the current year, the CDSC is based on the lower of the cost
of those shares purchased or market value.

Example:
Assume you had invested $10,000 in Class B shares and that your investment had
appreciated in value to $12,000 after 15 months, including reinvested dividends
and capital gain distributions. You could sell up to $2,000 worth of shares
without paying a CDSC ($12,000 current value less $10,000 purchase amount). If
you sold $2,500 worth of shares, the CDSC would apply to the $500 representing
part of your original purchase price. The CDSC rate would be 4% because the sale
was made during the second year after the purchase.

Because the CDSC is imposed only on sales that reduce your total purchase
payments, you never have to pay a CDSC on any amount that represents
appreciation in the value of your shares, income earned by your shares, or
capital gains. In addition, the CDSC rate on your sale will be based on your
oldest purchase payment. The CDSC on the next amount sold will be based on the
next oldest purchase payment.

The CDSC on Class B shares will be waived on sales of shares:

o in the event of the shareholder's death,
o held in trust for an employee benefit plan, or

<PAGE>

o held in IRAs or certain qualified plans if American Express Trust Company
is the custodian, such as Keogh plans, tax-sheltered custodial accounts or
corporate pension plans, provided that the shareholder is:
- - at least 59 1/2 years old and
- - taking a retirement distribution (if the sale is part of a transfer to an
IRA or qualified plan in a product distributed by AEFA, or a custodian-to-
custodian transfer to a product not distributed by AEFA, the CDSC will not
be waived) or
- - selling under an approved substantially equal periodic payment arrangement.

EXCHANGING/SELLING SHARES
Exchanges

New investments of Class A shares may be exchanged for either Class A or Class B
shares of any other publicly offered American Express fund, except that
exchanges into AXP Tax-Free Money Fund must be made from Class A shares. If you
exchange shares from this Fund to another American Express fund, any further
exchanges must be between shares of the same class. For example, you may not
exchange from Class B shares of another American Express fund into Class A
shares of this Fund. Exchange rules are illustrated in the following tables:

Exchanges:
FROM TO
- ------------------------------------------------------------------------------
Cash
Management Other American Express funds*
Class A Class B

Class A Yes Yes

Class B No Yes

Exchanges:
FROM TO
- ------------------------------------------------------------------------------
Other
American Express funds* Cash Management Fund
Class A Class B

Class A Yes No

Class B No Yes

*Tax-Free Money Fund has only a single class. Therefore, exchanges into Tax-Free
Money Fund must be made from Class A shares.

Note: Exchanges from Class A to Class B are not permitted within Cash Management
Fund.

If your initial investment was in this Fund, and you exchange into a non-money
market fund, you will pay an initial sales charge if you exchange into Class A
and be subject to a CDSC if you exchange into Class B. If your initial
investment was in Class A shares of a non-money market fund and you exchange
shares into this Fund, you may exchange that amount, including dividends earned
on that amount, without paying a sales charge. For complete information on the
other funds, including fees and expenses, read that fund's prospectus carefully.
Your exchange will be priced at the next NAV calculated after it is accepted by
that fund.

You may make up to three exchanges within any 30-day period, with each limited
to $300,000. These limits do not apply to certain employee benefit plans or
other arrangements through which one shareholder represents the interests of
several. Exceptions may be allowed with pre-approval of the Fund.

<PAGE>

Other exchange policies:

o Except as otherwise noted, exchanges must be made into the same class
of shares of the new fund.

o If your exchange creates a new account, it must satisfy the minimum
investment amount for new purchases.

o Once we receive your exchange request, you cannot cancel it.

o Shares of the new fund may not be used on the same day for another
exchange.

o If your shares are pledged as collateral, the exchange will be delayed
until AECSC receives written approval from the secured party.

AECSC and the Fund reserve the right to reject any exchange, limit the amount,
or modify or discontinue the exchange privilege, to prevent abuse or adverse
effects on the Fund and its shareholders. For example, if exchanges are too
numerous or too large, they may disrupt the Fund's investment strategies or
increase its costs.

Selling Shares

You can sell your shares at any time. AECSC will mail payment within seven days
after accepting your request.

When you sell shares, the amount you receive may be more or less than the amount
you invested. Your sale price will be the next NAV calculated after your request
is accepted by the Fund, minus any applicable CDSC.

You can change your mind after requesting a sale of Class B shares and use all
or part of the proceeds to purchase new shares in the same account from which
you sold. If you reinvest in Class B, any CDSC you paid on the amount you are
reinvesting also will be reinvested. To take advantage of this option, send a
request within 30 days of the date your sale request was received and include
your account number. This privilege may be limited or withdrawn at any time and
may have tax consequences.

Requests to sell shares of the Fund are not allowed within 30 days of a
telephoned-in address change.

The Fund reserves the right to redeem in kind.

Important: If you request a sale of shares you recently purchased by a check or
money order that is not guaranteed, the Fund will wait for your check to clear.
It may take up to 10 days from the date of purchase before payment is made.
(Payment may be made earlier if your bank provides evidence satisfactory to the
Fund and AECSC that your check has cleared.)

For more details and a description of other sales policies, please see the SAI.

Three ways to request an exchange or sale of shares

(1) By letter:
Include in your letter:
o the name of the fund(s),
o the class of shares to be exchanged or sold,
o your mutual fund account number(s) (for exchanges, both funds must be
registered in the same ownership),
o your TIN,
o the dollar amount or number of shares you want to exchange or sell,
o signature(s) of all registered account owners,
o for sales, indicate how you want your money delivered to you, and
o any paper certificates of shares you hold.

<PAGE>

Regular mail:
American Express Client Service Corporation
Attn: Transactions
P.O. Box 534
Minneapolis, MN 55440-0534

Express mail:
American Express Client Service Corporation
Attn: Transactions
733 Marquette Ave.
Minneapolis, MN 55402

(2) By telephone:
American Express Financial Advisors
Telephone Transaction Service
800-437-3133

o The Fund and AECSC will use reasonable procedures to confirm authenticity
of telephone exchange or sale requests.
o Telephone exchange and sale privileges automatically apply to all accounts
except custodial, corporate or qualified retirement accounts. You may
request that these privileges NOT apply by writing AECSC. Each registered
owner must sign the request.
o Acting on your instructions, your financial advisor may conduct telephone
transactions on your behalf.
o Telephone privileges may be modified or discontinued at any time.

Minimum sale amount: $100

Maximum sale amount: $50,000

(3) By draft:

For Class A only, free drafts are available and can be used just like a check to
withdraw $100 or more from your account. The shares in your account earn
dividends until they are redeemed by the Fund to cover your drafts. Most
accounts will automatically receive free drafts. However, to receive drafts on
qualified or custodial business accounts, you must contact AECSC. A request form
will be supplied and must be signed by each registered owner. Your draft writing
privilege may be modified or discontinued at any time.

Minimum amount
Redemption: $100

Three ways to receive payment when you sell shares

(1) By regular or express mail:
o Mailed to the address on record.
o Payable to names listed on the account.

NOTE: The express mail delivery charges you pay will vary depending on the
courier you select.

(2) By wire or electronic funds transfer:
o Minimum wire: $1,000.
o Request that money be wired to your bank.
o Bank account must be in the same ownership as the American Express
fund account.

NOTE: Pre-authorization required. For instructions, contact your financial
advisor or AECSC.

<PAGE>

(3) By scheduled payout plan:
o Minimum payment: $50.
o Contact your financial advisor or AECSC to set up regular payments on a
monthly, bimonthly, quarterly, semiannual or annual basis.
o Purchasing new shares while under a payout plan may be disadvantageous
because of the sales charges.

Distributions and Taxes

As a shareholder you are entitled to your share of the Fund's net income and net
gains. The Fund distributes dividends and capital gains to qualify as a
regulated investment company and to avoid paying corporate income and excise
taxes.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS The Fund's net investment income is
distributed to you as dividends. Capital gains are realized when a security is
sold for a higher price than was paid for it. Each realized capital gain or loss
is either short-term or long-term depending on whether the Fund held the
security for one year or less, or more than one year. The Fund offsets any net
realized capital gains by any available capital loss carryovers. Net short-term
capital gains are included in net investment income. Net realized long-term
capital gains, if any, are distributed by the end of the calendar year as
capital gain distributions.

REINVESTMENTS
Dividends and capital gain distributions are automatically reinvested in
additional shares in the same class of the Fund, unless:

o you request distributions be paid monthly in cash, or
o you direct the Fund to invest your distributions monthly in any publicly
offered American Express fund for which you have previously opened an
account. Your purchases may be subject to a sales charge.

We reinvest the distributions for you at the next calculated NAV after the
distribution is paid.

If you choose cash distributions, you will receive cash only for distributions
declared after your request has been processed.

TAXES
Distributions are subject to federal income tax and may be subject to state and
local taxes in the year they are declared. You must report distributions on your
tax returns, even if they are reinvested in additional shares.

If you sell shares for more than their cost, the difference is a capital gain.
Your gain may be short term (for shares held for one year or less) or long term
(for shares held for more than one year).

Selling shares held in an IRA or qualified retirement account may subject you to
federal taxes, penalties and reporting requirements. Please consult your tax
advisor.

Important: This information is a brief and selective summary of some of the tax
rules that apply to this Fund. Because tax matters are highly individual and
complex, you should consult a qualified tax advisor.

Personalized Shareholder Information

To help you track and evaluate the performance of your investments, AECSC
provides these individualized reports:

QUARTERLY STATEMENTS
List your holdings and transactions during the previous three months, as well as
individualized return information.

<PAGE>

YEARLY TAX STATEMENTS
Feature average-cost-basis reporting of capital gains or losses if you sell your
shares, along with distribution information to simplify tax calculations.

PERSONALIZED MUTUAL FUND PROGRESS REPORTS
Detail returns on your initial investment and cash-flow activity in your
account. This report calculates a total return reflecting your individual
history in owning Fund shares and is available from your financial advisor.

About the Company

BUSINESS STRUCTURE
<TABLE>
<CAPTION>
<S> <C> <C> <C>

---------------------
Shareholders
---------------------

---------------------
Your American
Express financial
advisor and other
servicing agents

May receive a fee
for their sales
efforts and ongoing
service.
---------------------

- ----------------------- --------------------- --------------------- ---------------------
Transfer Agent: Administrative Distributor:
American Express Services Agent: American Express
Client Service American Express Financial Advisors
Corporation Financial
Corporation Markets and
Maintains shareholder distributes shares;
accounts and records Provides receives a portion
for the Fund; administrative and of the CDSC and
receives a fee based accounting services distribution fee.
on the number of for the Fund; The Fund
accounts it services. receives a fee
based on average
daily net assets.
- ----------------------- --------------------- ---------------------

--------------------- ---------------------
Investment Manager: Custodian:
American Express American Express
Financial Trust Company
Corporation
Provides
Manages the Fund's safekeeping of
investments and assets; receives a
receives a fee fee that varies
based on average based on the number
daily net assets.* of securities held.
--------------------- --------------------- ---------------------

* The Fund pays AEFC a fee for managing its assets. Under the Investment
Management Services Agreement, the fee for the most recent fiscal year was
____% of its average daily net assets. Under the Agreement, the Fund also
pays taxes, brokerage commissions and nonadvisory expenses.
</TABLE>

<PAGE>

AMERICAN EXPRESS FINANCIAL CORPORATION
AEFC has been a provider of financial services since 1894. Its family of
companies offers not only mutual funds but also insurance, annuities, investment
certificates and a broad range of financial management services.

In addition to managing assets of more than $__ billion for all American Express
funds, AEFC manages investments for itself and its subsidiaries, IDS Certificate
Company and IDS Life Insurance Company. Total assets under management as of the
end of the most recent fiscal year were more than $___ billion.

AEFA serves individuals and businesses through its nationwide network of more
than ___ offices and more than ____ advisors.

AEFC, located at IDS Tower 10, Minneapolis, MN 55440-0010, is a wholly-owned
subsidiary of American Express Company, a financial services company with
headquarters at American Express Tower, World Financial Center, New York, NY
10285.

YEAR 2000
The Fund could be adversely affected if the computer systems used by AEFC and
the Fund's other service providers do not properly process and calculate
date-related information from and after Jan. 1, 2000. While Year 2000-related
computer problems could have a negative effect on the Fund, AEFC is working to
avoid such problems and to obtain assurances from service providers that they
are taking similar steps.

The companies, governments or international markets in which the Fund invests
also may be adversely affected by Year 2000 issues. To the extent a portfolio
holding is adversely affected by a Year 2000 processing issue, the Fund's return
could be adversely affected.

Quick Telephone Reference

AMERICAN EXPRESS FINANCIAL ADVISORS
TELEPHONE TRANSACTION SERVICE
Sales and exchanges, dividend payments or reinvestments and automatic payment
arrangements: 800-437-3133

AMERICAN EXPRESS CLIENT SERVICE CORPORATION
Fund performance, fund prices, account values, recent account transactions and
account inquiries: 800-862-7919

TTY SERVICE
For the hearing impaired: 800-846-4852

<PAGE>

Financial Highlights

[insert financial highlights here from Accounting]

<PAGE>

AMERICAN
EXPRESS
Financial
Advisors

This Fund, along with the other American Express funds, is distributed by
American Express Financial Advisors Inc. and can be found under the "Amer
Express" banner in most mutual fund quotations.

Additional information about the Fund and its investments is available in the
Fund's Statement of Additional Information (SAI), annual and semiannual reports
to shareholders. In the Fund's annual report, you will find a discussion of
market conditions and investment strategies that significantly affected the Fund
during its last fiscal year. The SAI is incorporated by reference in this
prospectus. For a free copy of the SAI, the annual report or the semiannual
report contact American Express Client Service Corporation.

American Express Client Service Corporation
P.O. Box 534, Minneapolis, MN 55440-0534
800-862-7919 TTY: 800-846-4852
Web site address:
http://www.americanexpress.com/advisors

You may review and copy information about the Fund, including the SAI, at the
Securities and Exchange Commission's (Commission) Public Reference Room in
Washington, D.C. (for information about the public reference room call
1-800-SEC-0330). Reports and other information about the Fund are available on
the Commission's Internet site at http://www.sec.gov. Copies of this information
may be obtained by writing and paying a duplicating fee to the Public Reference
Section of the Commission, Washington, D.C.
20549-6009.

Investment Company Act File #811-2591

TICKER SYMBOL

Class A: IDSXX Class B: Class Y:IDYXX

<PAGE>

AXPSM MONEY MARKET SERIES, INC.

STATEMENT OF ADDITIONAL INFORMATION

FOR

AXPSM CASH MANAGEMENT FUND (the Fund)

September 29, 1999

This Statement of Additional Information (SAI) is not a prospectus. It should be
read together with the prospectus and the financial statements contained in the
most recent Annual Report to shareholders (Annual Report) that may be obtained
from your American Express financial advisor or by writing to American Express
Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534 or by calling
800-862-7919.

The Independent Auditors' Report and the Financial Statements, including Notes
to the Financial Statements and the Schedule of Investments in Securities,
contained in the Annual Report are incorporated in this SAI by reference. No
other portion of the Annual Report, however, is incorporated by reference. The
prospectus for the Fund, dated the same date as this SAI, also is incorporated
in this SAI by reference.

<PAGE>
TABLE OF CONTENTS

Mutual Fund Checklist............................................p.

Fundamental Investment Policies..................................p.

Investment Strategies and Types of Investments...................p.

Information Regarding Risks and Investment Strategies............p.

Security Transactions............................................p.

Brokerage Commissions Paid to Brokers Affiliated with
American Express Financial Corporation...........................p.

Performance Information..........................................p.

Valuing Fund Shares..............................................p.

Investing in the Fund............................................p.

Selling Shares...................................................p.

Pay-out Plans....................................................p.

[Capital Loss Carryover.........................................p.]

Taxes............................................................p.

Agreements.......................................................p.

Organizational Information.......................................p.

Board Members and Officers.......................................p.

Compensation for Board Members...................................p.

[Principal Holders of Securities................................p.]

Independent Auditors.............................................p.

Appendix: Description of Money Market Securities................p.

<PAGE>

Mutual Fund Checklist
- -----------------------------------------------------------------------------

|X| Mutual funds are NOT guaranteed or insured by any
bank or government agency. You can lose money.
|X|
Mutual funds ALWAYS carry investment risks. Some
types carry more risk than others.
|X|
A higher rate of return typically involves a
higher risk of loss.
|X|
Past performance is not a reliable indicator of
future performance.
|X|
ALL mutual funds have costs that lower investment
return.
|X|
You can buy some mutual funds by contacting them
directly. Others, like this one, are sold mainly
through brokers, banks, financial planners, or
insurance agents. If you buy through these
financial professionals, you generally will pay a
sales charge.
|X|
Shop around. Compare a mutual fund with others of
the same type before you buy.

OTHER IDEAS FOR SUCCESSFUL MUTUAL FUND INVESTING:

Develop a Financial Plan

Have a plan - even a simple plan can help you take control of your
financial future. Review your plan with your advisor at least once a year
or more frequently if your circumstances change.

Dollar-Cost Averaging

An investment technique that works well for many investors is one that
eliminates random buy and sell decisions. One such system is dollar-cost
averaging. Dollar-cost averaging involves building a portfolio through the
investment of fixed amounts of money on a regular basis regardless of the
price or market condition. This may enable an investor to smooth out the
effects of the volatility of the financial markets. By using this strategy,
more shares will be purchased when the price is low and less when the price
is high. As the accompanying chart illustrates, dollar-cost averaging tends
to keep the average price paid for the shares lower than the average market
price of shares purchased, although there is no guarantee.

While this does not ensure a profit and does not protect against a loss if
the market declines, it is an effective way for many shareholders who can
continue investing through changing market conditions to accumulate shares
to meet long-term goals.

<PAGE>
Dollar-cost averaging:

- ---------------------------------------------------------------------
Regular Market Price Shares
Investment of a Share Acquired
- ---------------------------------------------------------------------
$100 $6.00 16.7
100 4.00 25.0
100 4.00 25.0
100 6.00 16.7
100 5.00 20.0
$500 $25.00 103.4

Average market price of a share over 5 periods: $5.00 ($25.00 divided by 5)
The average price you paid for each share: $4.84 ($500 divided by 103.4)

Diversify

Diversify your portfolio. By investing in different asset classes and
different economic environments you help protect against poor performance
in one type of investment while including investments most likely to help
you achieve your important goals.

Understand Your Investment

Know what you are buying. Make sure you understand the potential risks,
rewards, costs, and expenses associated with each of your investments.

<PAGE>

Fundamental Investment Policies
- ------------------------------------------------------------------------------

Fundamental investment policies adopted by the Fund cannot be changed without
the approval of a majority of the outstanding voting securities of the Fund as
defined in the Investment Company Act of 1940, as amended (the 1940
Act).

Notwithstanding any of the Fund's other investment policies, the Fund may invest
its assets in an open-end management investment company having substantially the
same investment objectives, policies, and restrictions as the Fund for the
purpose of having those assets managed as part of a combined pool.

The policies below are fundamental policies that apply to the Fund and may be
changed only with shareholder approval. Unless holders of a majority of the
outstanding voting securities agree to make the change, the Fund will not:

o Act as an underwriter (sell securities for others). However, under the
securities laws, the Fund may be deemed to be an underwriter when it
purchases securities directly from the issuer and later resells them.

o Borrow money or property, except as a temporary measure for extraordinary
or emergency purposes, in an amount not exceeding one-third of the market
value of its total assets (including borrowings) less liabilities (other
than borrowings) immediately after the borrowing.

o Invest more than 5% of its total assets in securities of any one company,
government, or political subdivision thereof, except the limitation will
not apply to investments in securities issued by the U.S. government, its
agencies, or instrumentalities.

o Buy on margin, sell short or deal in options to buy or sell securities.

<PAGE>

o Buy or sell real estate, commodities or commodity contracts. For purposes
of this policy, real estate includes real estate limited partnerships.

o Lend Fund securities in excess of 30% of its net assets, at market value.

o Purchase common stocks, preferred stocks, warrants, other equity
securities, corporate bonds or debentures, state bonds, municipal bonds, or
industrial revenue bonds.

Except for the fundamental investment policies listed above, the other
investment policies described in the prospectus and in this SAI are not
fundamental and may be changed by the board at any time.

<PAGE>

Investment Strategies and Types of Investments
- ------------------------------------------------------------------------------

This table shows various investment strategies and investments that many funds
are allowed to engage in and purchase. It also lists certain percentage
guidelines that are generally followed by the Fund's investment manager. This
table is intended to show the breadth of investments that the investment
manager may make on behalf of the Fund. For a description of principal
risks, please see the prospectus. Notwithstanding the Fund's ability to
utilize these strategies and techniques, the investment manager is not
obligated to use them at any particular time. For example, even though the
investment manager is authorized to adopt temporary defensive positions and
is authorized to attempt to hedge against certain types of
risk, these practices are left to the investment manager's sole discretion.

- -------------------------------------------------------------------------------
Investment strategies & types of investments: AXP Cash Management Fund

Allowable for the Fund?
Agency and Government Securities yes
Borrowing yes
Cash/Money Market Instruments yes
Commercial Paper yes
Debt Obligations yes
Foreign Investments yes
Illiquid and Restricted Securities yes
Lending of Portfolio Securities yes
Mortgage- and Asset-Backed Securities yes
Repurchase Agreements yes
Reverse Repurchase Agreements yes
Sovereign Debt yes
Variable- or Floating-Rate Securities yes
- -------------------------------------------------------------------------------

The following are guidelines that may be changed by the board at any time:

o The Fund will not invest more than 10% of its net assets in securities that
are illiquid whether or not registration or the filing of a notification
under the Securities Act of 1933 or the taking of similar action under
other securities laws relating to the sale of securities is required. A
risk of any such investment is that is might not be able to be easily
liquidated. For the purpose of this policy, repurchase agreements with
maturities greater than seven days and non-negotiable fixed time deposits
will be treated as illiquid securities.

o The Fund may invest in commercial paper rated in the highest rating
category by at least two nationally recognized statistical rating
organizations (or by one, if only one rating is assigned) and in unrated
paper determined by the board to be of comparable quality. The Fund also
may invest up to 5% of its total assets in commercial paper receiving the
second highest rating or in unrated paper determined to be of comparable
quality.

o Notwithstanding any of the Fund's other investment policies, the Fund may
invest its assets in an open-end management investment company having
substantially the same investment objectives, policies and restrictions as
the Fund for the purpose of having those assets managed as part of a
combined pool.

o Depending on market conditions and the availability of other securities,
the Fund may invest more than 25% of its total assets in U.S. Banks, U.S.
branches of foreign banks and U.S. government securities.

o The Fund may invest up to 35% of its total assets in foreign investments.

o No more than 10% of the Fund's net assets will be held in illiquid
securities.

<PAGE>

Information Regarding Risks and Investment Strategies
- ------------------------------------------------------------------------------

RISKS

The following is a summary of common risk characteristics. Following this
summary is a description of certain investments and investment strategies
and the risks most commonly associated with them (including certain risks
not described below and, in some cases, a more comprehensive discussion of
how the risks apply to a particular investment or investment strategy).
Please remember that a mutual fund's risk profile is largely defined by the
fund's primary securities and investment strategies. However, most mutual
funds are allowed to use certain other strategies and investments that may
have different risk characteristics. Accordingly, one or more of the
following types of risk will be associated with the Fund at any time (for a
description of principal risks, please see the prospectus):

Call/Prepayment Risk

The risk that a bond or other security might be called (or otherwise
converted, prepaid, or redeemed) before maturity.

Correlation Risk

The risk that a given transaction may fail to achieve its objectives due to
an imperfect relationship between markets. Certain investments may react
more negatively than others in response to changing market conditions.

Credit Risk

The risk that the issuer of a security, or the counterparty to a contract,
will default or otherwise become unable to honor a financial obligation
(such as payments due on a bond or a note). The price of junk bonds may
react more to the ability of the issuing company to pay interest and
principal when due than to changes in interest rates. They have greater
price fluctuations and are more likely to experience a default.

Event Risk

Occasionally, the value of a security may be seriously and unexpectedly
changed by a natural or industrial accident or occurrence.

Foreign/Emerging Markets Risk

The following are all components of foreign/emerging markets risk:

Inflation Risk

Also known as purchasing power risk, inflation risk measures the effects of
continually rising prices on investments. If an investment's yield is lower
than the rate of inflation, your money will have less purchasing power as time
goes on.

Interest Rate Risk

Issuer Risk

The risk that an issuer, or the value of its stocks or bonds, will perform
poorly. Poor performance may be caused by poor management decisions, competitive
pressures, breakthroughs in technology, reliance on suppliers, labor problems or
shortages, corporate restructurings, fraudulent disclosures, or other factors.

Legal/Legislative Risk

Congress and other governmental units have the power to change existing laws
affecting securities. A change in law might affect an investment adversely.

Leverage Risk

Some derivative investments (such as options, futures, or options on futures)
require little or no initial payment and base their price on a security, a
currency, or an index. A small change in the value of the underlying security,
currency, or index may cause a sizable gain or loss in the price of the
instrument.

Liquidity Risk

Securities may be difficult or impossible to sell at the time that the Fund
would like. The Fund may have to lower the selling price, sell other
investments, or forego an investment opportunity.

<PAGE>

Management Risk

The risk that a strategy or selection method utilized by the investment manager
may fail to produce the intended result. When all other factors have been
accounted for and the investment manager chooses an investment, there is
always the possibility that the choice will be a poor one.

Market Risk

Reinvestment Risk

The risk that an investor will not be able to reinvest their income or principal
at the same rate as it currently is earning.

Sector/Concentration Risk

Investments that are concentrated in a particular issuer, geographic region, or
industry will be more susceptible to changes in price (the more you diversify,
the more you spread risk).

Small Company Risk

Investments in small and medium companies often involve greater risks than
investments in larger, more established companies because small and medium
companies may lack the management experience, financial resources, product
diversification, and competitive strengths of larger companies. In addition, in
many instances the securities of small and medium companies are traded only
over-the-counter or on regional securities exchanges and the frequency and
volume of their trading is substantially less than is typical of larger
companies.

<PAGE>

INVESTMENT STRATEGIES

The following information supplements the discussion of the Fund's investment
objectives, policies, and strategies that are described in the prospectus and
in this SAI. The following describes many strategies that many mutual funds use
and types of securities that they purchase. Please refer to the section entitled
Investment Strategies and Types of Investments to see which are applicable to
the Fund.

Agency and Government Securities

The U.S. government and its agencies issue many different types of securities.
U.S. Treasury bonds, notes, and bills and securities including mortgage pass
through certificates of the Government National Mortgage Association (GNMA) are
guaranteed by the U.S. government. Other U.S. government securities are issued
or guaranteed by federal agencies or government-sponsored enterprises but are
not guaranteed by the U.S. government. This may increase the credit risk
associated with these investments.

Government-sponsored entities issuing securities include privately owned,
publicly chartered entities created to reduce borrowing costs for certain
sectors of the economy, such as farmers, homeowners, and students. They include
the Federal Farm Credit Bank System, Farm Credit Financial Assistance
Corporation, Federal Home Loan Bank, FHLMC, FNMA, Student Loan Marketing
Association (SLMA), and Resolution Trust Corporation (RTC). Government-sponsored
entities may issue discount notes (with maturities ranging from overnight to 360
days) and bonds. Agency and government securities are subject to the same
concerns as other debt obligations. (See also Debt Obligations and Mortgage- and
Asset-Backed Securities.)

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with agency and government securities include:
Call/Prepayment Risk, Inflation Risk, Interest Rate Risk, Management Risk, and
Reinvestment Risk.

Borrowing

The Fund may borrow money from banks for temporary or emergency purposes and
make other investments or engage in other transactions permissible under the
1940 Act that may be considered a borrowing (such as derivative instruments).
Borrowings are subject to costs (in addition to any interest that may be paid)
and typically reduce the Fund's total return. Except as qualified above,
however, the Fund will not buy securities on margin.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with borrowing include: Inflation Risk and Management
Risk.

Cash/Money Market Instruments

The Fund may maintain a portion of its assets in cash and cash-equivalent
investments. Cash-equivalent investments include short-term U.S. and Canadian
government securities and negotiable certificates of deposit, non-negotiable
fixed-time deposits, bankers' acceptances, and letters of credit of banks or
savings and loan associations having capital, surplus, and undivided profits
(as of the date of its most recently published annual financial statements) in
excess of $100 million (or the equivalent in the instance of a foreign branch of
a U.S. bank) at the date of investment. The Fund also may purchase short-term
notes and obligations of U.S. and foreign banks and corporations and may use
repurchase agreements with broker-dealers registered under the Securities
Exchange Act of 1934 and with commercial banks. (See also Commercial Paper, Debt
Obligations, Repurchase Agreements, and Variable- or Floating-Rate Securities.)
These types of instruments generally offer low rates of return and subject the
Fund to certain costs and expenses.

<PAGE>

See the appendix for a discussion of money market securities.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with cash/money market instruments include:
Credit Risk, Inflation Risk, and Management Risk.

Commercial Paper

Commercial paper is a short-term debt obligation with a maturity ranging from 2
to 270 days issued by banks, corporations, and other borrowers. It is sold to
investors with temporary idle cash as a way to increase returns on a short-term
basis. These instruments are generally unsecured, which increases the credit
risk associated with this type of investment. (See also Debt Obligations and
Illiquid and Restricted Securities.)

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with commercial paper include: Credit Risk, Liquidity
Risk, and Management Risk.

Debt Obligations

Many different types of debt obligations exist (for example, bills, bonds, or
notes). Issuers of debt obligations have a contractual obligation to pay
interest at a specified rate on specified dates and to repay principal on a
specified maturity date. Certain debt obligations (usually intermediate- and
long-term bonds) have provisions that allow the issuer to redeem or "call" a
bond before its maturity. Issuers are most likely to call these securities
during periods of falling interest rates. When this happens, an investor may
have to replace these securities with lower yielding securities, which could
result in a lower return.

The market value of debt obligations is affected primarily by changes in
prevailing interest rates and the issuers perceived ability to repay the debt.
The market value of a debt obligation generally reacts inversely to interest
rate changes. When prevailing interest rates decline, the price usually rises,
and when prevailing interest rates rise, the price usually declines.

In general, the longer the maturity of a debt obligation, the higher its yield
and the greater the sensitivity to changes in interest rates. Conversely, the
shorter the maturity, the lower the yield but the greater the price stability.

As noted, the values of debt obligations also may be affected by changes in the
credit rating or financial condition of their issuers. Generally, the lower the
quality rating of a security, the higher the degree of risk as to the payment of
interest and return of principal. To compensate investors for taking on such
increased risk, those issuers deemed to be less creditworthy generally must
offer their investors higher interest rates than do issuers with better credit
ratings. (See also Agency and Government Securities, Corporate Bonds, and
High-Yield (High-Risk) Securities.)

All ratings limitations are applied at the time of purchase. Subsequent to
purchase, a debt security may cease to be rated or its rating may be reduced
below the minimum required for purchase by the Fund. Neither event will require
the sale of such a security, but it will be a factor in considering whether to
continue to hold the security. To the extent that ratings change as a result of
changes in a rating organization or their rating systems, the Fund will attempt
to use comparable rating as standards for selecting investments.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with debt obligations include: Call/Prepayment Risk,
Credit Risk, Interest Rate Risk, Issuer Risk, Management Risk, and
Reinvestment Risk.

<PAGE>

Foreign Investments

Investments in foreign banks and branches of domestic banks outside the United
States involve certain risks. Domestic banks are required to maintain specified
levels of reserves, are limited in the amounts they can loan to a single
borrower and are subject to other regulations designed to promote financial
soundness. Not all of theselaws and regulations apply to the foreign branches of
domestic banks. Domestic bank regulations do not apply to foreign banks.
Eurodollar CDs and non-U.S. fixed-time deposits may be subject to political and
economic risks of the countries in which the investments are made, including the
possibility of seizure or nationalization of foreign deposits, penalties for
early withdrawal of time deposits, imposition of withholding taxes on income,
establishment of exchange controls or adoption of other restrictions that might
affect an investment adversely.

The introduction of a single currency, the euro, on January 1, 1999 for
participating European nations in the Economic and Monetary Union ("EU")
presents unique uncertainties, including whether the payment and operational
systems of banks and other financial institutions will be ready by the scheduled
launch date; the creation of suitable clearing and settlement payment systems
for the new currency; the legal treatment of certain outstanding
financial contracts after January 1, 1999 that refer to existing currencies
rather than the euro; the establishment and maintenance of exchange rates; the
fluctuation of the euro relative to non-euro currencies during the transition
period from January 1, 1999 to December 31, 2000 and beyond; whether the
interest rate, tax or labor regimes of European countries participating in the
euro will converge over time; and whether the conversion of the currencies of
other EU countries such as the United Kingdom, Denmark, and Greece into the euro
and the admission of other non-EU countries such as Poland, Latvia, and
Lithuania as members of the EU may have an impact on the euro.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with foreign securities include: Foreign/Emerging
Markets Risk, Issuer Risk, and Management Risk.

Illiquid and Restricted Securities

The Fund may invest in illiquid securities (i.e., securities that are not
readily marketable). These securities may include, but are not limited to,
certain securities that are subject to legal or contractual restrictions on
resale, certain repurchase agreements, and derivative instruments.

To the extent the Fund invests in illiquid or restricted securities, it may
encounter difficulty in determining a market value for such securities.
Disposing of illiquid or restricted securities may involve time-consuming
negotiations and legal expense, and it may be difficult or impossible for the
Fund to sell such an investment promptly and at an acceptable price.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with illiquid and restricted securities include:
Liquidity Risk and Management Risk.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with inverse floaters include: Interest Rate Risk and
Management Risk.

Lending of Portfolio Securities

The Fund may lend certain of its portfolio securities to broker-dealers. The
current policy of the Fund's board is to make these loans, either long- or
short-term, to broker-dealers. In making loans, the Fund receives the market
price in cash, U.S. government securities, letters of credit, or such other
collateral as may be permitted by regulatory agencies and approved by the board.
If the market price of the loaned securities goes up, the Fund will get
additional collateral on a daily basis. The risks are that the borrower may not
provide additional collateral when required or return the securities when due.
During the existence of the loan, the Fund receives cash payments equivalent to
all interest or other distributions paid on the loaned securities. The Fund may
pay reasonable administrative and custodial fees in connection with a loan and
may pay a negotiated portion of the interest earned on the cash or money market
instruments held as collateral to the borrower or placing broker. The Fund
will receive reasonable interest on the loan or a flat fee from the borrower and
amounts equivalent to any dividends, interest, or other distributions on the
securities loaned.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with the lending of portfolio securities include:
Credit Risk and Management Risk.

Mortgage- and Asset-Backed Securities

Mortgage-backed securities represent direct or indirect participations in, or
are secured by and payable from, mortgage loans secured by real property, and
include single- and multi-class pass-through securities and Collateralized
Mortgage Obligations (CMOs). These securities may be issued or guaranteed by
U.S. government agencies or instrumentalities (see also Agency and Government
Securities), or by private issuers, generally originators and investors in
mortgage loans, including savings associations, mortgage bankers, commercial
banks, investment bankers, and special purpose entities. Mortgage-backed
securities issued by private lenders may be supported by pools of mortgage loans
or other mortgage-backed securities that are guaranteed, directly or indirectly,
by the U.S. government or one of its agencies or instrumentalities, or they may
be issued without any governmental guarantee of the underlying mortgage assets
but with some form of non-governmental credit enhancement.

Stripped mortgage-backed securities are a type of mortgage-backed security that
receive differing proportions of the interest and principal payments from the
underlying assets. Generally, there are two classes of stripped mortgage-backed
securities: Interest Only (IO) and Principal Only (PO). IOs entitle the holder
to receive distributions consisting of all or a portion of the interest on the
underlying pool of mortgage loans or mortgage-backed securities. POs entitle the
holder to receive distributions consisting of all or a portion of the principal
of the underlying pool of mortgage loans or mortgage-backed securities. The cash
flows and yields on IOs and POs are extremely sensitive to the rate of principal
payments (including prepayments) on the underlying mortgage loans or mortgage-
backed securities. A rapid rate of principal payments may adversely affect the
yield to maturity of IOs. A slow rate of principal payments may adversely affect
the yield to maturity of POs. If prepayments of principal are greater than
anticipated, an investor in IOs may incur substantial losses. If prepayments of
principal are slower than anticipated, the yield on a PO will be affected more
severely than would be the case with a traditional mortgage-backed security.

CMOs are hybrid mortgage-related instruments secured by pools of mortgage loans
or other mortgage-related securities, such as mortgage pass through securities
or stripped mortgage-backed securities. CMOs may be structured into multiple
classes, often referred to as "tranches," with each class bearing a different
stated maturity and entitled to a different schedule for payments of principal
and interest, including prepayments. Principal prepayments on collateral
underlying a CMO may cause it to be retired substantially earlier than its
stated maturity.

The yield characteristics of mortgage-backed securities differ from those of
other debt securities. Among the differences are that interest and principal
payments are made more frequently on mortgage-backed securities, usually
monthly, and principal may be repaid at any time. These factors may reduce the
expected yield.

Asset-backed securities have structural characteristics similar to
mortgage-backed securities. Asset-backed debt obligations represent direct or
indirect participation in, or secured by and payable from, assets such as motor
vehicle installment sales contracts, other installment loan contracts, home
equity loans, leases of various types of property, and receivables from credit
card or other revolving credit arrangements. The credit quality of most
asset-backed securities depends primarily on the credit quality of the assets
underlying such securities, how well the entity issuing the security is
insulated from the credit risk of the originator or any other affiliated
entities, and the amount and quality of any credit enhancement of the
securities. Payments or distributions of principal and interest on asset-backed
debt obligations may be supported by non-governmental credit enhancements
including letters of credit, reserve funds, overcollateralization, and
guarantees by third parties. The market for privately issued asset-backed debt
obligations is smaller and less liquid than the market for government sponsored
mortgage-backed securities. (See also Derivative Instruments.)

<PAGE>

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with mortgage- and asset-backed securities include:
Call/Prepayment Risk, Credit Risk, Interest Rate Risk, Liquidity Risk, and
Management Risk.

Repurchase Agreements

The Fund may enter into repurchase agreements with certain banks or non-bank
dealers. In a repurchase agreement, the Fund buys a security at one price, and
at the time of sale, the seller agrees to repurchase the obligation at a
mutually agreed upon time and price (usually within seven days). The repurchase
agreement thereby determines the yield during the purchaser's holding period,
while the seller's obligation to repurchase is secured by the value of the
underlying security. Repurchase agreements could involve certain risks in the
event of a default or insolvency of the other party to the agreement, including
possible delays or restrictions upon the Fund's ability to dispose of the
underlying securities.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with repurchase agreements include: Credit Risk and
Management Risk.

Reverse Repurchase Agreements

In a reverse repurchase agreement, the investor would sell a security and enter
into an agreement to repurchase the security at a specified future date and
price. The investor generally retains the right to interest and principal
payments on the security. Since the investor receives cash upon entering into a
reverse repurchase agreement, it may be considered a borrowing.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with reverse repurchase agreements include: Credit
Risk, Interest Rate Risk, and Management Risk.

Sovereign Debt

A sovereign debtor's willingness or ability to repay principal and pay interest
in a timely manner may be affected by a variety of factors, including its cash
flow situation, the extent of its reserves, the availability of sufficient
foreign exchange on the date a payment is due, the relative size of the debt
service burden to the economy as a whole, the sovereign debtor's policy toward
international lenders, and the political constraints to which a sovereign debtor
may be subject. (See also Foreign Securities.)

With respect to sovereign debt of emerging market issuers, investors should be
aware that certain emerging market countries are among the largest debtors to
commercial banks and foreign governments. At times, certain emerging market
countries have declared moratoria on the payment of principal and interest on
external debt.

Certain emerging market countries have experienced difficulty in servicing their
sovereign debt on a timely basis that led to defaults and the restructuring of
certain indebtedness.

Sovereign debt includes Brady Bonds, which are securities issued under the
framework of the Brady Plan, an initiative announced by former U.S. Treasury
Secretary Nicholas F. Brady in 1989 as a mechanism for debtor nations to
restructure their outstanding external commercial bank indebtedness.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with sovereign debt include: Credit Risk,
Foreign/Emerging Markets Risk, and Management Risk.

<PAGE>

Variable- or Floating-Rate Securities

The Fund may invest in securities that offer a variable- or floating-rate of
interest. Variable-rate securities provide for automatic establishment of a new
interest rate at fixed intervals (e.g., daily, monthly, semi-annually, etc.).
Floating-rate securities generally provide for automatic adjustment of the
interest rate whenever some specified interest rate index changes.

Variable- or floating-rate securities frequently include a demand feature
enabling the holder to sell the securities to the issuer at par. In many cases,
the demand feature can be exercised at any time. Some securities that do not
have variable or floating interest rates may be accompanied by puts producing
similar results and price characteristics.

Variable-rate demand notes include master demand notes that are obligations that
permit the Fund to invest fluctuating amounts, which may change daily without
penalty, pursuant to direct arrangements between the Fund as lender, and the
borrower. The interest rates on these notes fluctuate from time to time. The
issuer of such obligations normally has a corresponding right, after a given
period, to prepay in its discretion the outstanding principal amount of the
obligations plus accrued interest upon a specified number of days' notice to the
holders of such obligations. Because these obligations are direct lending
arrangements between the lender and borrower, it is not contemplated that such
instruments generally will be traded. There generally is not an established
secondary market for these obligations. Accordingly, where these obligations are
not secured by letters of credit or other credit support arrangements, the
Fund's right to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. Such obligations frequently are not rated by
credit rating agencies and may involve heightened risk of default by the issuer.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with variable- or floating-rate securities include:
Credit Risk and Management Risk.

<PAGE>

Security Transactions
- ----------------------------------------------------------------------------

Subject to policies set by the board, AEFC is authorized to determine,
consistent with the Fund's investment goal and policies, which securities will
be purchased, held, or sold. In determining where the buy and sell orders are to
be placed, AEFC has been directed to use its best efforts to obtain the best
available price and the most favorable execution except where otherwise
authorized by the board. In selecting broker-dealers to execute transactions,
AEFC may consider the price of the security, including commission or mark-up,
the size and difficulty of the order, the reliability, integrity, financial
soundness, and general operation and execution capabilities of the broker, the
broker's expertise in particular markets, and research services provided by the
broker.

AEFC has a strict Code of Ethics that prohibits its affiliated personnel from
engaging in personal investment activities that compete with or attempt to take
advantage of planned portfolio transactions for any fund or trust for which it
acts as investment manager.

The Fund's securities may be traded on a principal rather than an agency basis.
In other words, AEFC will trade directly with the issuer or with a dealer who
buys or sells for its own account, rather than acting on behalf of another
client. AEFC does not pay the dealer commissions. Instead, the dealer's profit,
if any, is the difference, or spread, between the dealer's purchase and sale
price for the security.

On occasion, it may be desirable to compensate a broker for research services or
for brokerage services by paying a commission that might not otherwise be
charged or a commission in excess of the amount another broker might charge. The
board has adopted a policy authorizing AEFC to do so to the extent authorized by
law, if AEFC determines, in good faith, that such commission is reasonable in
relation to the value of the brokerage or research services provided by a broker
or dealer, viewed either in the light of that transaction or AEFC's overall
responsibilities with respect to the Fund and the other American Express funds
for which it acts as investment manager.

Research provided by brokers supplements AEFC's own research activities. Such
services include economic data on, and analysis of, U.S. and foreign economies;
information on specific industries; information about specific companies,
including earnings estimates; purchase recommendations for stocks and bonds;
portfolio strategy services; political, economic, business, and industry trend
assessments; historical statistical information; market data services providing
information on specific issues and prices; and technical analysis of various
aspects of the securities markets, including technical charts. Research services
may take the form of written reports, computer software, or personal contact by
telephone or at seminars or other meetings. AEFC has obtained, and in the future
may obtain, computer hardware from brokers, including but not limited to
personal computers that will be used exclusively for investment decision-making
purposes, which include the research, portfolio management, and trading
functions and other services to the extent permitted under an interpretation by
the SEC.

When paying a commission that might not otherwise be charged or a commission in
excess of the amount another broker might charge, AEFC must follow procedures
authorized by the board. To date, three procedures have been authorized. One
procedure permits AEFC to direct an order to buy or sell a security traded on a
national securities exchange to a specific broker for research services it has
provided. The second procedure permits AEFC, in order to obtain research, to
direct an order on an agency basis to buy or sell a security traded in the
over-the-counter market to a firm that does not make a market in that security.
The commission paid generally includes compensation for research services. The
third procedure permits AEFC, in order to obtain research and brokerage
services, to cause the Fund to pay a commission in excess of the amount another
broker might have charged. AEFC has advised the Fund that it is necessary to do
business with a number of brokerage firms on a continuing basis to obtain such
services as the handling of large orders, the willingness of a broker to risk
its own money by taking a position in a security, and the specialized handling
of a particular group of securities that only certain brokers may be able to
offer. As a result of this arrangement, some portfolio transactions may not be
effected at the lowest commission, but AEFC believes it may obtain better
overall execution. AEFC has represented that under all three procedures the
amount of commission paid will be reasonable and competitive in relation to the
value of the brokerage services performed or research provided.

<PAGE>

All other transactions will be placed on the basis of obtaining the best
available price and the most favorable execution. In so doing, if in the
professional opinion of the person responsible for selecting the broker or
dealer, several firms can execute the transaction on the same basis,
consideration will be given by such person to those firms offering research
services. Such services may be used by AEFC in providing advice to all American
Express funds even though it is not possible to relate the benefits to any
particular fund.

Each investment decision made for the Fund is made independently from any
decision made for another portfolio, fund, or other account advised by AEFC or
any of its subsidiaries. When the Fund buys or sells the same security as
another portfolio, fund, or account, AEFC carries out the purchase or sale in a
way the Fund agrees in advance is fair. Although sharing in large transactions
may adversely affect the price or volume purchased or sold by the Fund, the Fund
hopes to gain an overall advantage in execution.

On a periodic basis, AEFC makes a comprehensive review of the broker-dealers and
the overall reasonableness of their commissions. The review evaluates execution,
operational efficiency, and research services.

[The Fund paid total brokerage commissions of $________ for fiscal year ended
________ , 199_, $________ for fiscal year 19__, and $________ for fiscal year
19__. Substantially all firms through whom transactions were executed provide
research services.]

[In fiscal year 199_, transactions amounting to $________, on which $________ in
commissions were imputed or paid, were specifically directed to firms in
exchange for research services.]

[No transactions were directed to brokers because of research services they
provided to the Fund [except for the affiliates as noted below.**].]

- -------------------------------------------------------------------------------
** If accounting determines that no brokerage commissions were paid to
brokers affiliated with AEFC for the three most recent fiscal years,
please delete the second bracketed portion of the statement above.
- -------------------------------------------------------------------------------

[As of the end of the most recent fiscal year, the Fund held no securities of
its regular brokers or dealers or of the parent of those brokers or dealers that
derived more than 15% of gross revenue from securities-related activities.]

[As of the end of the most recent fiscal year, the Fund held securities of its
regular brokers or dealers of the parent of those brokers or dealers that
derived more than 15% of gross revenue from securities-related activities as
presented below:

Value of Securities
Name of Issuer owned at End of Fiscal Year

<PAGE>

Brokerage Commissions Paid to brokers Affiliated with American Express Financial
Corporation
- ------------------------------------------------------------------------------

Affiliates of American Express Company (of which AEFC is a wholly-owned
subsidiary) may engage in brokerage and other securities transactions on behalf
of the Fund according to procedures adopted by the board and to the extent
consistent with applicable provisions of the federal securities laws. AEFC will
use an American Express affiliate only if (i) AEFC determines that the Fund will
receive prices and executions at least as favorable as those offered by
qualified independent brokers performing similar brokerage and other services
for the Fund and (ii) the affiliate charges the Fund commission rates consistent
with those the affiliate charges comparable unaffiliated customers in similar
transactions and if such use is consistent with terms of the Investment
Management Services Agreement.

[No brokerage commissions were paid to brokers affiliated with AEFC for the
three most recent fiscal years.]

[Information about brokerage commissions paid by the Fund for the last three
fiscal years to brokers affiliated with AEFC is contained in the following
table:

As of the end of Fiscal Year,

1999 1998 1997

------------------------------------------------ --------------- --------------

<S> <C> <C> <C> <C> <C> <C>
Percent of
--------------- --------------- -------------- Aggregate --------------- --------------
Dollar Amount
of
Aggregate Percent of Transactions Aggregate Aggregate
Dollar amount Aggregate Involving Dollar Amount Dollar Amount
Broker Nature of of Commissions Brokerage Payment of of Commissions of
Affiliation Paid to Broker Commissions Commissions Paid to Broker Commissions
Paid to Broker
Wholly-owned $ % % $ $
subsidiary of
AEFC
- ------------------
</TABLE>

<PAGE>

Performance Information
- -----------------------------------------------------------------------------

The Fund may quote various performance figures to illustrate past performance.
Average annual total return and current yield quotations, if applicable, used by
the Fund are based on standardized methods of computing performance as required
by the SEC. An explanation of the methods used by the Fund to compute
performance follows below.

AVERAGE ANNUAL TOTAL RETURN

The Fund may calculate average annual total return for a class for certain
periods by finding the average annual compounded rates of return over the period
that would equate the initial amount invested to the ending redeemable value,
according to the following formula:

P(1+T)n = ERV

where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment,
made at the beginning of a period, at the end of the period
(or fractional portion thereof)

AGGREGATE TOTAL RETURN

The Fund may calculate aggregate total return for a class for certain periods
representing the cumulative change in the value of an investment in the Fund
over a specified period of time according to the following formula:

ERV - P
P

where: P = a hypothetical initial payment of $1,000
ERV = ending redeemable value of a hypothetical $1,000 payment,
made at the beginning of a period, at the end of the period
(or fractional portion thereof)

Annualized yield

The Fund calculates annualized simple and compound yields for a class based on a
seven-day period.

The simple yield is calculated by determining the net change in the value of a
hypothetical account having a balance of one share at the beginning of the
seven-day period, dividing the net change in account value by the value of the
account at the beginning of the period to obtain the return for the period, and
multiplying that return by 365/7 to obtain an annualized figure. The value of
the hypothetical account includes the amount of any declared dividends, the
value of any shares purchased with any dividend paid during the period and any
dividends declared for such shares. The Fund's yield does not include any
realized or unrealized gains or losses.

The Fund calculates its compound yield according to the following formula:

Compound Yield = (return for seven-day period + 1) x (365/7) - 1

The Fund's simple annualized yield was ___% for Class A, ___% for Class B and
___% for Class Y and its compound yield was ___% for Class A, ___% for Class B
and ___ for Class Y on ________, 19__, the last day of the Fund's fiscal year.

Yield, or rate of return, on Fund shares may fluctuate daily and does not
provide a basis for determining future yields. However, it may be used as one
element in assessing how the Fund is meeting its goal. When comparing an
investment in the Fund with savings accounts and similar investment
alternatives, you must consider that such alternatives often provide an agreed
to or guaranteed fixed yield for a stated period of time, whereas the Fund's
yield fluctuates. In comparing the yield of one money market fund to another,
you should consider the Fund's investment policies, including the types of
investments permitted.

In its sales material and other communications, the Fund may quote, compare or
refer to rankings, yields, or returns as published by independent statistical
services or publishers and publications such as The Bank Rate Monitor National
Index, Barron's, Business Week, CDA Technologies, Donoghue's Money Market Fund
Report, Financial Services Week, Financial Times, Financial World, Forbes,
Fortune, Global Investor, Institutional Investor, Investor's Business Daily,
Kiplinger's Personal Finance, Lipper Analytical Services, Money, Morningstar,
Mutual Fund Forecaster, Newsweek, The New York Times, Personal Investor,
Shearson Lehman Aggregate Bond Index, Stanger Report, Sylvia Porter's Personal
Finance, USA Today, U.S. News and World Report, The Wall Street Journal, and
Wiesenberger Investment Companies Service. The Fund also may compare its
performance to a wide variety of indexes or averages. There are similarities and
differences between the investments that the Fund may purchase and the
investments measured by the indexes or averages and the composition of the
indexes or averages will differ from that of the Fund.

<PAGE>

Valuing Fund Shares
- -----------------------------------------------------------------------------

All of the securities in the Fund's portfolio are valued at amortized cost. The
amortized cost method of valuation is an approximation of market value
determined by systematically increasing the carrying value of a security if
acquired at a discount, or reducing the carrying value if acquired at a premium,
so that the carrying value is equal to maturity value on the maturity date. It
does not take into consideration unrealized capital gains or losses.

The board has established procedures designed to stabilize the fund's price per
share for purposes of sales and redemptions at $1, to the extent that it is
reasonably possible to do so. These procedures include review of the Fund's
securities by the board, at intervals deemed appropriate by it, to determine
whether the Fund's net asset value per share computed by using available market
quotations deviates from a share value of $1 as computed using the amortized
cost method. The board must consider any deviation that appears and if it
exceeds 0.5% it must determine what action, if any, needs to be taken. If the
board determines a deviation exists that may result in a material dilution of
the holdings of current shareholders or investors, or in other unfair
consequences for such persons, it must undertake remedial action that it deems
necessary and appropriate. Such action may include withholding dividends,
calculating net asset value per share for purposes of sales and redemptions
using available market quotations, making redemptions in kind, and selling
securities before maturity in order to realize capital gains or losses or to
shorten average portfolio maturity.

While the amortized cost method provides certainty and consistency in portfolio
valuation, it may result in valuations of securities that are either somewhat
higher or lower than the prices at which the securities could be sold. This
means that during times of declining interest rates the yield on the Fund's
shares may be higher than if valuations of securities were made based on actual
market prices and estimates of market prices. Accordingly, if using the
amortized cost method were to result in a lower portfolio value, a prospective
investor in the Fund would be able to obtain a somewhat higher yield than he
would get if portfolio valuation were based on actual market values. Existing
shareholders, on the other hand, would receive a somewhat lower yield than they
would otherwise receive. The opposite would happen during a period of rising
interest rates.

Investing in the Fund
- -----------------------------------------------------------------------------

The minimum purchase for directors, officers and employees of the Fund or AEFC
and AEFC financial advisors is $1,000 for the Fund (except payroll deduction
plans), with a minimum additional purchase of $25.

SYSTEMATIC INVESTMENT PROGRAMS

After you make your initial investment of $100 or more, you must make additional
payments of $100 or more on at least a monthly basis until your balance reaches
$2,000. These minimums do not apply to all systematic investment programs. You
decide how often to make payments - monthly, quarterly, or semiannually. You are
not obligated to make any payments. You can omit payments or discontinue the
investment program altogether. The Fund also can change the program or end it at
any time.

AUTOMATIC DIRECTED DIVIDENDS

Dividends, including capital gain distributions, paid by another American
Express fund, may be used to automatically purchase shares in the same class of
the Fund. Dividends may be directed to existing accounts only. Dividends
declared by a fund are exchanged to this Fund the following day. Dividends can
be exchanged into the same class of another American Express fund but cannot be
split to make purchases in two or more funds. Automatic directed dividends are
available between accounts of any ownership except:

o Between a non-custodial account and an IRA, or 401(k) plan account or other
qualified retirement account of which American Express Trust Company acts
as custodian;

o Between two American Express Trust Company custodial accounts with
different owners (for example, you may not exchange dividends from your IRA
to the IRA of your spouse); and

o Between different kinds of custodial accounts with the same ownership (for
example, you may not exchange dividends from your IRA to your 401(k) plan
account, although you may exchange dividends from one IRA to another IRA).

Dividends may be directed from accounts established under the Uniform Gifts to
Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) only into other UGMA
or UTMA accounts with identical ownership.

The Fund's investment goal is described in its prospectus along with other
information, including fees and expense ratios. Before exchanging dividends into
another fund, you should read that fund's prospectus. You will receive a
confirmation that the automatic directed dividend service has been set up for
your account.

REJECTION OF BUSINESS

The Fund reserves the right to reject any business, in its sole discretion.

Selling Shares
- ------------------------------------------------------------------------------

You have a right to sell your shares at any time. For an explanation of sales
procedures, please see the prospectus.

During an emergency, the board can suspend the computation of NAV, stop
accepting payments for purchase of shares, or suspend the duty of the Fund to
redeem shares for more than seven days. Such emergency situations
would occur if:

o The Exchange closes for reasons other than the usual weekend and holiday
closings or trading on the Exchange is restricted, or

o Disposal of the Fund's securities is not reasonably practicable or it is
not reasonably practicable for the Fund to determine the fair value of its
net assets, or

o The SEC, under the provisions of the 1940 Act, declares a period of
emergency to exist.

Should the Fund stop selling shares, the board may make a deduction from the
value of the assets held by the Fund to cover the cost of future liquidations of
the assets so as to distribute fairly these costs among all shareholders.

The Fund has elected to be governed by Rule 18f-1 under the 1940 Act, which
obligates the Fund to redeem shares in cash, with respect to any one shareholder
during any 90-day period, up to the lesser of $250,000 or 1% of the net assets
of the Fund at the beginning of the period. Although redemptions in excess of
this limitation would normally be paid in cash, the Fund reserves the right to
make these payments in whole or in part in securities or other assets in case of
an emergency, or if the payment of a redemption in cash would be detrimental to
the existing shareholders of the Fund as determined by the board. In these
circumstances, the securities distributed would be valued as set forth in this
SAI. Should the Fund distribute securities, a shareholder may incur brokerage
fees or other transaction costs in converting the securities to cash.

<PAGE>

Pay-out Plans
- ------------------------------------------------------------------------------

You can use any of several pay-out plans to redeem your investment in regular
installments. If you redeem Class B shares you may be subject to a contingent
deferred sales charge as discussed in the prospectus. While the plans differ on
how the pay-out is figured, they all are based on the redemption of your
investment. Net investment income dividends and any capital gain distributions
will automatically be reinvested, unless you elect to receive them in cash. If
you are redeeming a tax-qualified plan account for which American Express Trust
Company acts as custodian, you can elect to receive your dividends and other
distributions in cash when permitted by law. If you redeem an IRA or a qualified
retirement account, certain restrictions, federal tax penalties, and special
federal income tax reporting requirements may apply. You should consult your tax
advisor about this complex area of the tax law.

Applications for a systematic investment in a class of the Fund subject to a
sales charge normally will not be accepted while a pay-out plan for any of those
funds is in effect. Occasional investments, however, may be accepted.

To start any of these plans, please write American Express Shareholder Service,
P.O. Box 534, Minneapolis, MN 55440-0534, or call American Express Financial
Advisors Telephone Transaction Service at 800-437-3133. Your authorization must
be received in the Minneapolis headquarters at least five days before the date
you want your payments to begin. The initial payment must be at least $50.
Payments will be made on a monthly, bimonthly, quarterly, semiannual, or annual
basis. Your choice is effective until you change or cancel it.

The following pay-out plans are designed to take care of the needs of most
shareholders in a way AEFC can handle efficiently and at a reasonable cost. If
you need a more irregular schedule of payments, it may be necessary for you to
make a series of individual redemptions, in which case you will have to send in
a separate redemption request for each pay-out. The Fund reserves the right to
change or stop any pay-out plan and to stop making such plans available.

Plan #1: Pay-out for a fixed period of time

If you choose this plan, a varying number of shares will be redeemed at regular
intervals during the time period you choose. This plan is designed to end in
complete redemption of all shares in your account by the end of the fixed
period.

Plan #2: Redemption of a fixed number of shares

If you choose this plan, a fixed number of shares will be redeemed for each
payment and that amount will be sent to you. The length of time these payments
continue is based on the number of shares in your account.

Plan #3: Redemption of a fixed dollar amount

If you decide on a fixed dollar amount, whatever number of shares is necessary
to make the payment will be redeemed in regular installments until the account
is closed.

Plan #4: Redemption of a percentage of net asset value

Payments are made based on a fixed percentage of the net asset value of the
shares in the account computed on the day of each payment. Percentages range
from 0.25% to 0.75%. For example, if you are on this plan and arrange to take
0.5% each month, you will get $50 if the value of your account is $10,000 on the
payment date.

<PAGE>

- ------------------------------------------------------------------------------
[Capital Loss Carryover

For federal income tax purposes, the Fund had total capital loss carryovers of
$___________ at the end of the most recent fiscal year, that if not offset by
subsequent capital gains will expire as follows:

199 2000 2001 2002

It is unlikely that the board will authorize a distribution of any net realized
capital gains until the available capital loss carryover has been offset or has
expired except as required by Internal Revenue Service rules.]

Taxes
- ------------------------------------------------------------------------------

If you buy shares in the Fund and then exchange into another fund, it is
considered a redemption and subsequent purchase of shares. Under the tax laws,
if this exchange is done within 91 days, any sales charge waived on Class A
shares on a subsequent purchase of shares applies to the new shares acquired in
the exchange. Therefore, you cannot create a tax loss or reduce a tax gain
attributable to the sales charge when exchanging shares within 91 days.

If you have a nonqualified investment in the Fund and you wish to move part or
all of those shares to an IRA or qualified retirement account in the Fund, you
can do so without paying a sales charge. However, this type of exchange is
considered a redemption of shares and may result in a gain or loss for tax
purposes. In addition, this type of exchange may result in an excess
contribution under IRA or qualified plan regulations if the amount exchanged
plus the amount of the initial sales charge applied to the amount exchanged
exceeds annual contribution limitations. For example: If you were to exchange
$2,000 in Class A shares from a nonqualified account to an IRA without
considering the 5% ($100) initial sales charge applicable to that $2,000, you
may be deemed to have exceeded current IRA annual contribution limitations. You
should consult your tax advisor for further details about this complex subject.

Net investment income dividends received should be treated as dividend income
for federal income tax purposes. Corporate shareholders are generally entitled
to a deduction equal to 70% of that portion of the Fund's dividend that is
attributable to dividends the Fund received from domestic (U.S.) securities. For
the most recent fiscal year, ____% of the Fund's net investment income dividends
qualified for the corporate deduction.

The Fund may be subject to U.S. taxes resulting from holdings in a passive
foreign investment company (PFIC). A foreign corporation is a PFIC when 75% or
more of its gross income for the taxable year is passive income or 50% or more
of the average value of its assets consists of assets that produce or could
produce passive income.

Income earned by the Fund may have had foreign taxes imposed and withheld on it
in foreign countries. Tax conventions between certain countries and the U.S. may
reduce or eliminate such taxes. If more than 50% of the Fund's total assets at
the close of its fiscal year consists of securities of foreign corporations, the
Fund will be eligible to file an election with the Internal Revenue Service
under which shareholders of the Fund would be required to include their pro rata
portions of foreign taxes withheld by foreign countries as gross income in their
federal income tax returns. These pro rata portions of foreign taxes withheld
may be taken as a credit or deduction in computing federal income taxes. If the
election is filed, the Fund will report to its shareholders the per share amount
of such foreign taxes withheld and the amount of foreign tax credit or deduction
available for federal income tax purposes.

<PAGE>

Capital gain distributions, if any, received by corporate shareholders should be
treated as long-term capital gains regardless of how long they owned their
shares. Capital gain distributions, if any, received by individuals should be
treated as long-term if held for more than one year. Short-term capital gains
earned by the Fund are paid to shareholders as part of their ordinary income
dividend and are taxable. A special 28% rate on capital gains applies to sales
of precious metals owned directly by the Fund. A special 25% rate on capital
gains may apply to investments in REITs.

Under the Internal Revenue Code of 1986 (the Code), gains or losses attributable
to fluctuations in exchange rates that occur between the time the Fund accrues
interest or other receivables, or accrues expenses or other liabilities
denominated in a foreign currency and the time the Fund actually collects such
receivables or pays such liabilities generally are treated as ordinary income or
ordinary loss. Similarly, gains or losses on disposition of debt securities
denominated in a foreign currency attributable to fluctuations in the value of
the foreign currency between the date of acquisition of the security and the
date of disposition also are treated as ordinary gains or losses. These gains or
losses, referred to under the Code as "section 988" gains or losses, may
increase or decrease the amount of the Fund's investment company taxable income
to be distributed to its shareholders as ordinary income. If the Fund incurs a
loss, a portion of the dividends distributed to shareholders may be considered a
return of capital.

Under federal tax law, by the end of a calendar year the Fund must declare and
pay dividends representing 98% of ordinary income for that calendar year and 98%
of net capital gains (both long-term and short-term) for the 12-month period
ending Oct. 31 of that calendar year. The Fund is subject to an excise tax equal
to 4% of the excess, if any, of the amount required to be distributed over the
amount actually distributed. The Fund intends to comply with federal tax law and
avoid any excise tax.

For purposes of the excise tax distributions, "section 988" ordinary gains and
losses are distributable based on an Oct. 31 year end. This is an exception to
the general rule that ordinary income is paid based on a calendar year end.

If a mutual fund is the holder of record of any share of stock on the record
date for any dividend payable with respect to such stock, such dividend shall be
included in gross income by the Fund as of the later of (1) the date such share
became ex-dividend or (2) the date the Fund acquired such share. Because the
dividends on some foreign equity investments may be received some time after the
stock goes ex-dividend, and in certain rare cases may never be received by the
Fund, this rule may cause the Fund to take into income dividend income that it
has not received and pay such income to its shareholders. To the extent that the
dividend is never received, the Fund will take a loss at the time that a
determination is made that the dividend will not be received.

This is a brief summary that relates to federal income taxation only.
Shareholders should consult their tax advisor as to the application of federal,
state, and local income tax laws to Fund distributions.

<PAGE>

Agreements
- -----------------------------------------------------------------------------

INVESTMENT MANAGEMENT SERVICES AGREEMENT

AEFC, a wholly-owned subsidiary of American Express Company, is the investment
manager for the Fund. Under the Investment Management Services Agreement, AEFC,
subject to the policies set by the board, provides investment management
services.

For its services, AEFC is paid a fee based on the following schedule. Each
class of the Fund pays its proportionate share of the fee.

Assets Annual rate at
(billions) each asset level
First $1.00 0.360%
Next 0.50 0.343
Next 0.50 0.325
Next 0.50 0.308
Next 1.00 0.290
Next 3.00 0.270
Over 6.50 0.250

The management fee is paid monthly. Under the agreement, the total amount paid
was $________ for fiscal year 1999, $9,928,579 for fiscal year 1998, and
$8,354,016 for fiscal year 1997.

Under the agreement, the Fund also pays taxes, brokerage commissions and
nonadvisory expenses, which include custodian fees; audit and certain legal
fees; fidelity bond premiums; registration fees for shares; office expenses;
postage of confirmations except purchase confirmations; consultants' fees;
compensation of board members, officers and employees; corporate filing fees;
organizational expenses; expenses incurred in connection with lending
securities; and expenses properly payable by the Fund, approved by the board.
Under the agreement, nonadvisory expenses, net of earnings credits, paid by the
Fund were $________ for fiscal year 1999, $(367,393) for fiscal year 1998, and
$1,045,237 for fiscal year 1997.

Administrative Services Agreement

The Fund has an Administrative Services Agreement with AEFC. Under this
agreement, the Fund pays AEFC for providing administration and accounting
services. The fee is calculated as follows:

Assets Annual rate
(billions) each asset level
First $1.0 0.030%
Next 0.5 0.027
Next 0.5 0.025
Next 0.5 0.022
Over 2.5 0.020

On the last day of the most recent fiscal year, the daily rate applied to the
Fund's net assets was equal to 0.___% on an annual basis. The fee is calculated
for each calendar day on the basis of net assets as of the close of business two
business days prior to the day for which the calculation is made. Under the
agreement, the Fund paid fees of $________ for fiscal year 1999, $942,396 for
fiscal year 1998, and $__________ for fiscal year 199_.

<PAGE>

Transfer Agency Agreement

The Fund has a Transfer Agency Agreement with American Express Client Service
Corporation (AECSC). This agreement governs AECSC's responsibility for
administering and/or performing transfer agent functions, for acting as service
agent in connection with dividend and distribution functions and for performing
shareholder account administration agent functions in connection with the
issuance, exchange and redemption or repurchase of the Fund's shares. Under the
agreement, AECSC will earn a fee from the Fund determined by multiplying the
number of shareholder accounts at the end of the day by a rate determined for
each class and dividing by the number of days in the year. The rate for Class A
is $24.00 per year, for Class B is $25.00 per year and for Class Y is $22.00 per
year. The fees paid to AECSC may be changed by the board without shareholder
approval.

DISTRIBUTION AGREEMENT

AEFA is the Fund's principal underwriter (distributor). The Fund's shares are
offered on a continuous basis.

SHAREHOLDER SERVICE AGREEMENT

With respect to Class Y Shares, the Fund pays a fee for service provided to
shareholders by financial advisors and other servicing agents. The fee is
calculated at a rate of 0.10% of average daily net assets.

PLAN AND AGREEMENT OF DISTRIBUTION

For Class B shares, to help AEFA defray the cost of distribution and servicing,
not covered by the sales charges received under the Distribution Agreement, the
Fund and AEFA entered into a Plan and Agreement of Distribution (Plan) pursuant
to Rule 12b-1 under the 1940 Act. These costs cover almost all aspects of
distributing the Fund's shares (such as advertising).

These costs do not include compensation to the sales force. A substantial
portion of the costs are not specifically identified to any one of the American
Express funds. Under the Plan, AEFA is paid a fee up to actual expenses incurred
at an annual rate of up to 0.75% of the Fund's average daily net assets
attributable to Class B shares.

The Plan must be approved annually by the board, including a majority of the
disinterested board members, if it is to continue for more than a year. At least
quarterly, the board must review written reports concerning the amounts expended
under the Plan and the purposes for which such expenditures were made. The Plan
and any agreement related to it may be terminated at any time by vote of a
majority of board members who are not interested persons of the Fund and have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan, or by vote of a majority of the outstanding
voting securities of the Fund's Class B shares or by AEFA. The Plan (or any
agreement related to it) will terminate in the event of its assignment, as that
term is defined in the 1940 Act. The Plan may not be amended to increase the
amount to be spent for distribution without shareholder approval, and all
material amendments to the Plan must be approved by a majority of the board
members, including a majority of the board members who are not interested
persons of the Fund and who do not have a financial interest in the operation of
the Plan or any agreement related to it. The selection and nomination of
disinterested board members is the responsibility of the other disinterested
board members. No board member who is not an interested person, has any direct
or indirect financial interest in the operation of the Plan or any related
agreement. For the most recent fiscal year, under the agreement, the Fund paid
fees of $________. The fee is not allocated to any one service (such as
advertising, payments to underwriters, or other uses). However, a significant
portion of the fee is generally used for sales and promotional expenses.

Custodian Agreement

The Fund's securities and cash are held by American Express Trust Company, 1200
Northstar Center West, 625 Marquette Ave., Minneapolis, MN 55402-2307, through a
custodian agreement. The custodian is permitted to deposit some or all of its
securities in central depository systems as allowed by federal law. For its
services, the Fund pays the custodian a maintenance charge and a charge per
transaction in addition to reimbursing the custodian's out-of-pocket expenses.

Organizational Information
- -------------------------------------------------------------------------------

The Fund is an open-end management investment company. The Fund headquarters are
at 901 S. Marquette Ave., Suite 2810, Minneapolis, MN 55402-3268.

The shares of the Fund represent an interest in that fund's assets only (and
profits or losses), and, in the event of liquidation, each share of the Fund
would have the same rights to dividends and assets as every other share of that
Fund.
VOTING RIGHTS

As a shareholder in the Fund, you have voting rights over the Fund's management
and fundamental policies. You are entitled to one vote for each share you own.
Each class, if applicable, has exclusive voting rights with respect to matters
for which separate class voting is appropriate under applicable law. All shares
have cumulative voting rights with respect to the election of board members.
This means that you have as many votes as the number of shares you own,
including fractional shares, multiplied by the number of members to be elected.

Dividend Rights

Dividends paid by the Fund, if any, with respect to each class of shares, if
applicable, will be calculated in the same manner, at the same time, on the same
day, and will be in the same amount, except for differences resulting from
differences in fee structures.

<PAGE>

FUND HISTORY TABLE FOR ALL PUBLICLY OFFERED AMERICAN EXPRESS FUNDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Date of Form of State of Fiscal
Fund Organization Organization Organization Year End Diversified
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Bond Fund, Inc. 6/27/74, 6/31/86*** Corporation NV/MN 8/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Discovery Fund, Inc. 4/29/81, 6/13/86*** Corporation NV/MN 7/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Equity Select Fund, Inc.** 3/18/57, 6/13/86*** Corporation NV/MN 11/30 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Extra Income Fund, Inc. 8/17/83 Corporation MN 5/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Federal Income Fund, Inc. 3/12/85 Corporation MN 5/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Global Series, Inc. 10/28/88 Corporation MN 10/31
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Emerging Markets Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Global Balanced Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Global Bond Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Global Growth Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Innovations Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Growth Series, Inc. 5/21/70, 6/13/86*** Corporation NV/MN 7/31
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Growth Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Research Opportunities Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP High Yield Tax-Exempt Fund, Inc. 12/21/78, Corporation NV/MN 11/30 Yes
6/13/86***
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP International Fund, Inc. 7/18/84 Corporation MN 10/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Investment Series, Inc. 1/18/40, 6/13/86*** Corporation NV/MN 9/30
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Diversified Equity Income Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Mutual Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Managed Series, Inc. 10/9/84 Corporation MN 9/30
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Managed Allocation Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Market Advantage Series, Inc. 8/25/89 Corporation MN 1/31
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Blue Chip Advantage Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Small Company Index Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Money Market Series, Inc. 8/22/75, 6/13/86*** Corporation NV/MN 7/31
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Cash Management Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP New Dimensions Fund, Inc. 2/20/68, 6/13/86*** Corporation NV/MN 7/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Precious Metals Fund, Inc. 10/5/84 Corporation MN 3/31 No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Progressive Fund, Inc. 4/23/68, 6/13/86*** Corporation NV/MN 9/30 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Selective Fund, Inc. 2/10/45, 6/13/86*** Corporation NV/MN 5/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
<PAGE>

- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Stock Fund, Inc. 2/10/45, 6/13/86*** Corporation NV/MN 9/30 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Strategy Series, Inc. 1/24/84 Corporation MN 3/31
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Equity Value Fund** Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Small Cap Advantage Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Strategy Aggressive Fund** Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Tax-Exempt Series, Inc. 9/30/76, 6/13/86*** Corporation NV/MN 11/31
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Intermediate Tax-Exempt Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Tax-Exempt Bond Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Tax-Free Money Fund, Inc. 2/29/80, 6/13/86*** Corporation NV/MN 12/31 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Utilities Income Fund, Inc. 3/25/88 Corporation MN 6/30 Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP California Tax-Exempt Trust 4/7/86 Business MA 6/30
Trust****
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP California Tax-Exempt Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Special Tax-Exempt Series Trust 4/7/86 Business MA 6/30
Trust****
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Insured Tax-Exempt Fund Yes
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Massachusetts Tax-Exempt Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Michigan Tax-Exempt Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Minnesota Tax-Exempt Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP New York Tax-Exempt Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------
AXP Ohio Tax-Exempt Fund No
- -------------------------------------- -------------------- ----------------- ------------- --------- -----------

* At the shareholders meeting held on June 16, 1999, shareholders of the funds listed in the table (except for
AXP Small Cap Advantage Fund) approved the name change from IDS to AXP. In addition to substituting AXP for
IDS, the following series changed their names: IDS Growth Fund, Inc. to AXP Growth Series, Inc., IDS Managed
Retirement Fund, Inc. to AXP Managed Series, Inc., IDS Strategy Fund, Inc. to AXP Strategy Series, Inc., and
IDS Tax-Exempt Bond Fund, Inc. to AXP Tax-Exempt Series, Inc.
** At the shareholders meeting held on Nov. 9, 1994, IDS Equity Plus Fund, Inc. changed its name to IDS Equity
Select Fund, Inc. At that same time IDS Strategy Aggressive Equity Fund changed its name to IDS Strategy
Aggressive Fund, and IDS Strategy Equity Fund changed its name to IDS Equity Value Fund.
** Date merged into a Minnesota corporation incorporated on 4/7/86.
**** Under Massachusetts law, shareholders of a business trust may, under certain circumstances, be held
personally liable as partners for its obligations. However, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which the trust itself is unable to
meet its obligations.
</TABLE>

<PAGE>

Board Members and Officers
- ------------------------------------------------------------------------------

Shareholders elect a board that oversees the Fund's operations. The board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the board.

The following is a list of the Fund's board members. They serve 15 Master Trust
portfolios and 53 American Express funds.

H. Brewster Atwater, Jr.'
Born in 1931
4900 IDS Tower
Minneapolis, MN

Retired chairman and chief executive officer, General Mills, Inc. Director,
Merck & Co., Inc. and Darden Restaurants, Inc.

Arne H. Carlson+'*
Born in 1934
901 S. Marquette Ave.
Minneapolis, MN

Chairman and chief executive officer of the Fund. Chairman, Board Services
Corporation (provides administrative services to boards). Former Governor of
Minnesota.

Lynne V. Cheney
Born in 1941
American Enterprise Institute
for Public Policy Research (AEI)
1150 17th St., N.W.
Washington, D.C.

Distinguished Fellow AEI. Former Chair of National Endowment of the Humanities.
Director, The Reader's Digest Association Inc., Lockheed-Martin, and Union
Pacific Resources.

William H. Dudley'**
Born in 1932
2900 IDS Tower
Minneapolis, MN

Senior adviser to the chief executive officer of AEFC.

David R. Hubers**
Born in 1943
2900 IDS Tower
Minneapolis, MN

President, chief executive officer and director of AEFC.

<PAGE>

Heinz F. Hutter+'
Born in 1929
P.O. Box 2187
Minneapolis, MN

Retired president and chief operating officer, Cargill, Incorporated
(commodity merchants and processors).

Anne P. Jones+
Born in 1935
5716 Bent Branch Rd.
Bethesda, MD

Attorney and telecommunications consultant. Former partner, law firm of
Sutherland, Asbill & Brennan. Director, Motorola, Inc. (electronics), C-Cor
Electronics, Inc., and Amnex, Inc. (communications).

William R. Pearce'
Born in 1927
2050 One Financial Plaza
Minneapolis, MN

RII Weyerhaeuser World Timberfund, L.P. (develops timber resources) -
management committee. Retired vice chairman of the board, Cargill, Incorporated
(commodity merchants and processors). Former chairman, Board Services
Corporation.

Alan K. Simpson+
Born in 1931
1201 Sunshine Ave.
Cody, WY

Director of The Institute of Politics, Harvard University. Former three-term
United States Senator for Wyoming. Former Assistant Republican Leader, U.S.
Senate. Director, PacifiCorp (electric power) and Biogen (bio-pharmaceuticals).

John R. Thomas+'**
Born in 1937
2900 IDS Tower
Minneapolis, MN

Senior vice president of AEFC.

C. Angus Wurtele+'
Born in 1934
Valspar Corporation
Suite 1700
Foshay Tower
Minneapolis, MN

Retired chairman of the board and chief executive officer, The Valspar
Corporation (paints). Director, Valspar, Bemis Corporation (packaging) and
General Mills, Inc. (consumer foods).

+ Member of executive committee.
' Member of investment review committee.

Interested person by reason of being an officer and employee of the Fund.
* Interested person by reason of being an officer and employee of the Fund.
**Interested person by reason of being an officer, board member, employee and/or
shareholder of AEFC or American Express.

The board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. In addition to Mr. Carlson, who
is chairman of the board, and Mr. Thomas, who is president, the Fund's other
officers are:

Leslie L. Ogg
Born in 1938
901 S. Marquette Ave.
Minneapolis, MN

President of Board Services Corporation. Vice president, general counsel and
secretary for the Fund.

Officers who also are officers and employees of AEFC:

Peter J. Anderson
Born in 1942
IDS Tower 10
Minneapolis, MN

Director and senior vice president-investments of AEFC. Vice president-
investments for the Fund.

Frederick C. Quirsfeld
Born in 1947
IDS Tower 10
Minneapolis, MN

Vice president - taxable mutual fund investments of AEFC. Vice president -
fixed income investments for the Fund.

John M. Knight
Born in 1952
IDS Tower 10
Minneapolis, MN

Vice President - investment accounting of AEFC. Treasurer for the Fund.

<PAGE>

Compensation for Board Members
- ------------------------------------------------------------------------------

During the most recent fiscal year, the independent members of the Fund board,
for attending up to __ meetings, received the following compensation:
<TABLE>
<CAPTION>
<S> <C> <C>

Compensation Table

Total cash compensation from
--------------------------------- ---------------------------------
Board member Aggregate American Express Funds and
compensation from the Fund Preferred Master Trust Group
H. Brewster Atwater, Jr.
Lynne V. Cheney
Heinz F. Hutter
Anne P. Jones
William R. Pearce
Alan K. Simpson
C. Angus Wurtele

</TABLE>

As of 30 days prior to the date of this SAI, the Fund's board members and
officers as a group owned less than 1% of the outstanding shares of any class.

[Principal Holders of Securities
- ------------------------------------------------------------------------------

As of 30 days prior to the date of this SAI, ______________________ held ____ %
of Fund shares.]

- ------------------------------------------------------------------------------
Note: If the above section does not apply, please delete this section AND
the reference to it in the table of contents.

If the above section does apply, you will have received a group identification
number from accounting indicating more than 5% ownership in the Fund. Please
call Jill Goodermont (x-1-3896) to determine if the identification number
belongs to a person(s) that will be indicated in the SAI and if so Jill will
notify the person(s).
- ------------------------------------------------------------------------------

Independent Auditors
- ------------------------------------------------------------------------------

The financial statements contained in the Annual Report were audited by
independent auditors, KPMG LLP, 4200 Norwest Center, 90 S. Seventh St.,
Minneapolis, MN 55402-3900. The independent auditors also provide other
accounting and tax-related services as requested by the Fund.

<PAGE>

APPENDIX A

DESCRIPTION OF MONEY MARKET SECURITIES

The types of instruments that form the major part of the Fund's investments are
described below.

Certificates of Deposit -- A certificate of deposit is a negotiable receipt
issued by a bank or savings and loan association in exchange for the deposit of
funds. The issuer agrees to pay the amount deposited, plus interest, on the date
specified on the certificate.

Time Deposit -- A time deposit is a non-negotiable deposit in a bank for a
fixed period of time.

Bankers' Acceptances -- A bankers' acceptance arises from a short-term credit
arrangement designed to enable businesses to obtain funds to finance commercial
transactions. It is a time draft drawn on a bank by an exporter or an importer
to obtain a stated amount of funds to pay for specific merchandise. The draft is
then "accepted" by a bank that, in effect, unconditionally guarantees to pay the
face value of the instrument on its maturity date.

Commercial Paper -- Commercial paper is generally defined as unsecured
short-term notes issued in bearer form by large well-known corporations and
finance companies. Maturities on commercial paper range from one day to nine
months.

Commercial paper rated A by Standard & Poor's Corporation has the following
characteristics: Liquidity ratios are better than the industry average.
Long-term senior debt rating is "A" or better. The issuer has access to at least
two additional channels of borrowing. Basic earnings and cash flow have an
upward trend with allowances made for unusual circumstances. Typically, the
issuer's industry is well established, the issuer has a strong position within
its industry and the reliability and quality of management is unquestioned.
Issuers rated A are further rated by use of numbers 1, 2 and 3 to denote
relative strength within this highest classification.

A Prime rating is the highest commercial paper rating assigned by Moody's
Investors Services Inc. Issuers rated Prime are further rated by use of numbers
1, 2 and 3 to denote relative strength within this highest classification. Among
the factors considered by Moody's in assigning ratings for an issuer are the
following: (1) management; (2) economic evaluation of the industry and an
appraisal of speculative type risks which may be inherent in certain areas; (3)
competition and customer acceptance of products; (4) liquidity; (5) amount and
quality of long-term debt; (6) ten year earnings trends; (7) financial strength
of a parent company and the relationships which exist with the issuer; and (8)
recognition by management of obligations which may be present or may arise as a
result of public interest questions and preparations to meet such obligations.

Letters of Credit -- A letter of credit is a short-term note issued in bearer
form with a bank letter of credit which provides that the bank pay to the bearer
the amount of the note upon presentation.

U.S. Treasury Bills -- Treasury bills are issued with maturities of any period
up to one year. Three-month and six-month bills are currently offered by the
Treasury on 13-week and 26-week cycles respectively and are auctioned each week
by the Treasury. Treasury bills are issued in book entry form and are sold only
on a discount basis, i.e., the difference between the purchase price and the
maturity value constitutes interest income for the investor. If they are sold
before maturity, a portion of the income received may be a short-term capital
gain.

U.S. Government Agency Securities -- Federal agency securities are debt
obligations which principally result from lending programs of the U.S.
government. Housing and agriculture have traditionally been the principal
beneficiaries of Federal credit programs, and agencies involved in providing
credit to agriculture and housing account for the bulk of the outstanding agency
securities.

<PAGE>

Repurchase Agreements -- A repurchase agreement involves the acquisition of
securities by the Fund, with the concurrent agreement by a bank (or securities
dealer if permitted by law or regulation), to reacquire the securities at the
Fund's cost, plus interest, within a specified time. The Fund thereby receives a
fixed rate of return on this investment, one that is insulated from market and
rate fluctuations during the holding period. In these transactions, the
securities acquired by the Fund have a total value equal to or in excess of the
value of the repurchase agreement and are held by the Fund's custodian until
required.

Floating rate instruments -- These instruments pay interest at a rate tied to an
external interest rate. The rate changes whenever there is a change in the
external interest rate.

If AEFC becomes aware that a security owned by the Fund is downgraded below the
second highest rating, AEFC will either sell the security or recommend to the
Fund's board why it should not be sold.

<PAGE>

PART C. OTHER INFORMATION

Item 23. Exhibits

(a) Articles of Incorporation, as amended Nov. 14, 1991, filed as Exhibit
No. 1 to Registrant's Post-Effective Amendment No. 34 to Registration
Statement No. 2-54516, are incorporated by reference.

(b) By-laws, as amended January 12, 1989, filed as Exhibit No. 2 to
Registrant's Post-Effective Amendment No. 24 to Registration Statement
No. 2-54516, are incorporated by reference.

(c) Stock certificate, filed as Exhibit 4 to Registrant's Amendment No. 12
to Registration Statement No. 2-54516 dated September 18, 1982, is
incorporated by reference.

(d) Investment Management Services Agreement dated July 1, 1999 between
Registrant and American Express Financial Corporation is filed
electronically herewith.

(e) Distribution Agreement between Registrant and American Express
Financial Advisors, Inc. dated March 20, 1995, filed electronically as
Exhibit 6 to Registrant's Amendment No. 47 to Registration Statement
No. 2-54516 is incorporated by reference.

(f) All employees are eligible to participate in a profit sharing plan.
Entry into the plan is Jan. 1 or July 1. The Registrant contributes
each year an amount up to 15 percent of their annual salaries, the
maximum deductible amount permitted under Section 404(a) of the
Internal Revenue Code.

(g)(1) Custodian Agreement between Registrant and American Express Trust
Company, dated March 20, 1995, filed electronically as Exhibit 8(a) to
Registrant's Amendment No. 47 to Registration Statement No. 2-54516 is
incorporated by reference.

(g)(2) Custodian Agreement Amendment between Registrant and American Express
Trust Company, dated Oct. 9, 1997 is incorporated by reference to
Exhibit 8(c) to Registrant's Post-Effective Amendment No. 48 filed on
or about Sept. 30, 1998.

(h)(1) Administrative Services Agreement between Registrant and American
Express Financial Corporation, dated March 20, 1995, filed
electronically as Exhibit 9(e) to Registrant's Amendment No. 47 to
Registration Statement No. 2-54516 is incorporated by reference.

(h)(2) License Agreement between the Registrant and IDS Financial Corporation
dated Jan. 25, 1988, filed electronically as Exhibit 9(c) to
Registrant's Post-Effective Amendment No. 26 to Registration Statement
No. 2-54516, is incorporated by reference.

<PAGE>

(h)(3) Plan and Agreement of Merger dated April 10, 1986, filed as Exhibit 9
to Registrant's Post-Effective Amendment No. 19 to Registration
Statement No. 2-54516, is incorporated by reference.

(h)(4) Agreement and Plan of Reorganization, dated Sept. 8, 1994, between IDS
Cash Management Fund, a series of IDS Money Market Series, Inc. and IDS
Planned Investment Account, also a series of IDS Money Market Series,
Inc., filed electronically as Exhibit 4 to Registrant's Pre-Effective
Amendment No. 1 on Form N-14, is incorporated by reference.

(h)(5) Transfer Agency Agreement dated Feb. 1, 1999 between Registrant and
American Express Client Service Corporation, is filed
electronically herewith.

(i) Opinion and consent of counsel as to the legality of the securities
being registered is incorporated by reference to Exhibit 10 to
Registrant's Post-Effective Amendment No. 48 filed on or about Sept.
30, 1998.

(j) Independent Auditors' Consent to be filed by amendment.

(k) Omitted Financial Statements: Not Applicable.

(l) Initial Capital Agreements: Not Applicable.

(m) Plan and Agreement of Distribution between Registrant and American
Express Financial Advisors Inc., dated March 20, 1995, filed
electronically as Exhibit 15 to Registrant's Amendment No. 47 to
Registration Statement No. 2-54516 is incorporated by reference.

(n) Financial Data Schedule: Not Applicable.

(o) Plan under Section 18f-3 dated April, 1999 is filed electronically
herewith.

(p)(1) Directors' Power of Attorney to sign Amendment to this Registration
Statement dated January 14, 1999, is filed electronically herewith.

(p)(2) Officers' Power of Attorney to sign Amendments to this Registration
Statement dated March 1, 1999 is filed electronically herewith.

Item 24. Persons Controlled by or Under Common Control with Registrant.

None.

<PAGE>

Item 25. Indemnification

The Articles of Incorporation of the registrant provide that the Fund shall
indemnify any person who was or is a party or is threatened to be made a party,
by reason of the fact that she or he is or was a director, officer, employee or
agent of the Fund, or is or was serving at the request of the Fund as a
director, officer, employee or agent of another company, partnership, joint
venture, trust or other enterprise, to any threatened, pending or completed
action, suit or proceeding, wherever brought, and the Fund may purchase
liability insurance and advance legal expenses, all to the fullest extent
permitted by the laws of the State of Minnesota, as now existing or hereafter
amended. The By-laws of the registrant provide that present or former directors
or officers of the Fund made or threatened to be made a party to or involved
(including as a witness) in an actual or threatened action, suit or proceeding
shall be indemnified by the Fund to the full extent authorized by the Minnesota
Business Corporation Act, all as more fully set forth in the By-laws filed as an
exhibit to this registration statement.

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

Any indemnification hereunder shall not be exclusive of any other rights of
indemnification to which the directors, officers, employees or agents might
otherwise be entitled. No indemnification shall be made in violation of the
Investment Company Act of 1940.

Item 26. Business and Other Connections of Investment Adviser (American Express Financial Corporation)

Directors and officers of American Express Financial Corporation who are
directors and/or officers of one or more other companies:

- ------------------------------- ---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C>
Name and Title Other company(s) Address Title within other
company(s)
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Ronald G. Abrahamson, American Express Client IDS Tower 10 Director and Vice President
Vice President Service Corporation Minneapolis, MN 55440

American Express Financial Vice President
Advisors Inc.

Public Employee Payment Director and Vice President
Company
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Douglas A. Alger, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Peter J. Anderson, Advisory Capital IDS Tower 10 Director
Director and Senior Vice Strategies Group Inc. Minneapolis, MN 55440
President

American Express Asset Director and Chairman of
Management Group Inc. the Board

American Express Asset Director, Chairman of the
Management International, Board and Executive Vice
Inc. President

American Express Financial Senior Vice President
Advisors Inc.

IDS Capital Holdings Inc. Director and President

IDS Futures Corporation Director

NCM Capital Management 2 Mutual Plaza Director
Group, Inc. 501 Willard Street
Durham, NC 27701
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Ward D. Armstrong, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440

American Express Service Vice President
Corporation

American Express Trust Director and Chairman of
Company the Board
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

John M. Baker, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440

American Express Trust Senior Vice President
Company
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Joseph M. Barsky III, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Timothy V. Bechtold, American Centurion Life IDS Tower 10 Director and President
Vice President Assurance Company Minneapolis, MN 55440

American Express Financial Vice President
Advisors Inc.

IDS Life Insurance Company Executive Vice President

IDS Life Insurance Company P.O. Box 5144 Director and President
of New York Albany, NY 12205
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

John C. Boeder, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440

IDS Life Insurance Company P.O. Box 5144 Director
of New York Albany, NY 12205
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Douglas W. Brewers, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Karl J. Breyer, American Express Financial IDS Tower 10 Senior Vice President
Director, Corporate Senior Advisors Inc. Minneapolis, MN 55440
Vice President

American Express Financial Director
Advisors Japan Inc.

American Express Minnesota Director
Foundation
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Cynthia M. Carlson, American Enterprise IDS Tower 10 Director, President and
Vice President Investment Services Inc. Minneapolis, MN 55440 Chief Executive Officer

American Express Financial Vice President
Advisors Inc.

American Express Service Vice President
Corporation
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Mark W. Carter, American Express Financial IDS Tower 10 Senior Vice President and
Director, Senior Vice Advisors Inc. Minneapolis, MN 55440 Chief Marketing Officer
President and Chief Marketing
Officer

IDS Life Insurance Company Executive Vice President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

James E. Choat, American Centurion Life IDS Tower 10 Executive Vice President
Director and Senior Vice Assurance Company Minneapolis, MN 55440
President

American Enterprise Life Director, President and
Insurance Company Chief Executive Officer

American Express Financial Senior Vice President
Advisors Inc.

American Express Insurance Vice President
Agency of Idaho Inc.

American Express Insurance Vice President
Agency of Nevada Inc.

American Express Insurance Vice President
Agency of Oregon Inc.

American Express Property Vice President
Casualty Insurance Agency
of Kentucky Inc.

American Express Property Vice President
Casualty Insurance Agency
of Maryland Inc.

American Express Property Vice President
Casualty Insurance Agency
of Pennsylvania Inc.

IDS Insurance Agency of Vice President
Alabama Inc.

IDS Insurance Agency of Vice President
Arkansas Inc.

IDS Insurance Agency of Vice President
Massachusetts Inc.

IDS Insurance Agency of Vice President
New Mexico Inc.

IDS Insurance Agency of Vice President
North Carolina Inc.

IDS Insurance Agency of Vice President
Ohio Inc.

IDS Insurance Agency of Vice President
Wyoming Inc.

IDS Life Insurance Company P.O. Box 5144 Executive Vice President
of New York Albany, NY 12205
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Kenneth J. Ciak, AMEX Assurance Company IDS Tower 10 Director and President
Vice President and General Minneapolis, MN 55440
Manager

American Express Financial Vice President and General
Advisors Inc. Manager

IDS Property Casualty 1 WEG Blvd. Director and President
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Paul A. Connolly, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440

Colleen Curran, American Express Financial IDS Tower 10 Vice President and
Vice President and Assistant Advisors Inc. Minneapolis, MN 55440 Assistant General Counsel
General Counsel

American Express Service Vice President and Chief
Corporation Legal Counsel
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Luz Maria Davis American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Douglas K. Dunning, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Gordon L. Eid, American Express Financial IDS Tower 10 Senior Vice President,
Director, Senior Vice Advisors Inc. Minneapolis, MN 55440 General Counsel and Chief
President, General Counsel Compliance Officer
and Chief Compliance Officer

American Express Financial Vice President and Chief
Advisors Japan Inc. Compliance Officer

American Express Insurance Director and Vice President
Agency of Arizona Inc.

American Express Insurance Director and Vice President
Agency of Idaho Inc.

American Express Insurance Director and Vice President
Agency of Nevada Inc.

American Express Insurance Director and Vice President
Agency of Oregon Inc.

American Express Property Director and Vice President
Casualty Insurance Agency
of Kentucky Inc.

American Express Property Director and Vice President
Casualty Insurance Agency
of Maryland Inc.

American Express Property Director and Vice President
Casualty Insurance Agency
of Pennsylvania Inc.

IDS Insurance Agency of Director and Vice President
Alabama Inc.

IDS Insurance Agency of Director and Vice President
Arkansas Inc.

IDS Insurance Agency of Director and Vice President
Massachusetts Inc.

IDS Insurance Agency of Director and Vice President
New Mexico Inc.

IDS Insurance Agency of Director and Vice President
North Carolina Inc.

IDS Insurance Agency of Director and Vice President
Ohio Inc.

IDS Insurance Agency of Director and Vice President
Wyoming Inc.

IDS Real Estate Services, Vice President
Inc.

Investors Syndicate Director
Development Corp.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Robert M. Elconin, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440

IDS Life Insurance Company Vice President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Gordon M. Fines, American Express Asset IDS Tower 10 Senior Vice President and
Vice President Management Group Inc. Minneapolis, MN 55440 Chief Investment Officer

American Express Financial Vice President
Advisors Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Douglas L. Forsberg, American Centurion Life IDS Tower 10 Director
Vice President Assurance Company Minneapolis, MN 55440

American Express Financial Vice President
Advisors Inc.

American Express Financial Director, President and
Advisors Japan Inc. Chief Executive Officer
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Jeffrey P. Fox, American Enterprise Life IDS Tower 10 Vice President and
Vice President and Corporate Insurance Company Minneapolis, MN 55440 Controller
Controller

American Express Financial Vice President and
Advisors Inc. Corporate Controller
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Harvey Golub, American Express Company American Express Tower Chairman and Chief
Director World Financial Center Executive Officer
New York, NY 10285

American Express Travel Chairman and Chief
Related Services Company, Executive Officer
Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

David A. Hammer, American Express Financial IDS Tower 10 Vice President and
Vice President and Marketing Advisors Inc. Minneapolis, MN 55440 Marketing Controller
Controller

IDS Plan Services of Director and Vice President
California, Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Lorraine R. Hart, AMEX Assurance Company IDS Tower 10 Vice President
Vice President Minneapolis, MN 55440

American Centurion Life Vice President
Assurance Company

American Enterprise Life Vice President
Insurance Company

American Express Financial Vice President
Advisors Inc.

American Partners Life Director and Vice
Insurance Company President

IDS Certificate Company Vice President

IDS Life Insurance Company Vice President

IDS Life Series Fund, Inc. Vice President

IDS Life Variable Annuity Vice President
Funds A and B

Investors Syndicate Director and Vice
Development Corp. President

IDS Life Insurance Company P.O. Box 5144 Vice President
of New York Albany, NY 12205

IDS Property Casualty 1 WEG Blvd. Vice President
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Scott A. Hawkinson, American Express Financial IDS Tower 10 Vice President and
Vice President and Controller Advisors Inc. Minneapolis, MN 55440 Controller
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Janis K. Heaney, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Darryl G. Horsman, American Express Trust IDS Tower 10 Director and President
Vice President Company Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Jeffrey S. Horton, AMEX Assurance Company IDS Tower 10 Vice President, Treasurer
Vice President and Corporate Minneapolis, MN 55440 and Assistant Secretary
Treasurer

American Centurion Life Vice President and
Assurance Company Treasurer

American Enterprise Vice President and
Investment Services Inc. Treasurer

American Enterprise Life Vice President and
Insurance Company Treasurer

American Express Asset Vice President and
Management Group Inc. Treasurer

American Express Asset Vice President and
Management International Treasurer
Inc.

American Express Client Vice President and
Service Corporation Treasurer

American Express Vice President and
Corporation Treasurer

American Express Financial Vice President and
Advisors Inc. Treasurer

American Express Financial Vice President and
Advisors Japan Inc. Treasurer

American Express Insurance Vice President and
Agency of Arizona Inc. Treasurer

American Express Insurance Vice President and
Agency of Idaho Inc. Treasurer

American Express Insurance Vice President and
Agency of Nevada Inc. Treasurer

American Express Insurance Vice President and
Agency of Oregon Inc. Treasurer

American Express Minnesota Vice President and
Foundation Treasurer

American Express Property Vice President and
Casualty Insurance Agency Treasurer
of Kentucky Inc.

American Express Property Vice President and
Casualty Insurance Agency Treasurer
of Maryland Inc.

American Express Property Vice President and
Casualty Insurance Agency Treasurer
of Pennsylvania Inc.

American Partners Life Vice President and
Insurance Company Treasurer

IDS Cable Corporation Director, Vice President
and Treasurer

IDS Cable II Corporation Director, Vice President
and Treasurer

IDS Capital Holdings Inc. Vice President, Treasurer
and Assistant Secretary

IDS Certificate Company Vice President and
Treasurer

IDS Insurance Agency of Vice President and
Alabama Inc. Treasurer

IDS Insurance Agency of Vice President and
Arkansas Inc. Treasurer

IDS Insurance Agency of Vice President and
Massachusetts Inc. Treasurer

IDS Insurance Agency of Vice President and
New Mexico Inc. Treasurer

IDS Insurance Agency of Vice President and
North Carolina Inc. Treasurer

IDS Insurance Agency of Vice President and
Ohio Inc. Treasurer

IDS Insurance Agency of Vice President and
Wyoming Inc. Treasurer

IDS Life Insurance Company Vice President, Treasurer
and Assistant Secretary

IDS Life Insurance Company P.O. Box 5144 Vice President and
of New York Albany, NY 12205 Treasurer

IDS Life Series Fund Inc. Vice President and
Treasurer

IDS Life Variable Annuity Vice President and
Funds A & B Treasurer

IDS Management Corporation Director, Vice President
and Treasurer

IDS Partnership Services Vice President and
Corporation Treasurer

IDS Plan Services of Vice President and
California, Inc. Treasurer

IDS Real Estate Services, Vice President and
Inc. Treasurer

IDS Realty Corporation Vice President and
Treasurer

IDS Sales Support Inc. Vice President and
Treasurer

Investors Syndicate Vice President and
Development Corp. Treasurer

IDS Property Casualty 1 WEG Blvd. Vice President, Treasurer
Insurance Company DePere, WI 54115 and Assistant Secretary

Public Employee Payment Vice President and
Company Treasurer
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

David R. Hubers, AMEX Assurance Company IDS Tower 10 Director
Director, President and Chief Minneapolis, MN 55440
Executive Officer

American Express Financial Chairman, President and
Advisors Inc. Chief Executive Officer

American Express Service Director and President
Corporation

IDS Certificate Company Director

IDS Life Insurance Company Director

IDS Plan Services of Director and President
California, Inc.

IDS Property Casualty 1 WEG Blvd. Director
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Martin G. Hurwitz, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Debra A. Hutchinson American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

James M. Jensen, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440

IDS Life Insurance Company Vice President

IDS Life Series Fund, Inc. Director
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Marietta L. Johns, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Nancy E. Jones, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440

American Express Service Vice President
Corporation
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Ora J. Kaine, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Linda B. Keene, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

G. Michael Kennedy, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Susan D. Kinder, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Richard W. Kling, AMEX Assurance Company IDS Tower 10 Director
Director and Senior Vice Minneapolis, MN 55440
President

American Centurion Life Director and Chairman of
Assurance Company the Board

American Enterprise Life Director and Chairman of
Insurance Company the Board

American Express Director and President
Corporation

American Express Financial Senior Vice President
Advisors Inc.

American Express Insurance Director and President
Agency of Arizona Inc.

American Express Insurance Director and President
Agency of Idaho Inc.

American Express Insurance Director and President
Agency of Nevada Inc.

American Express Insurance Director and President
Agency of Oregon Inc.

American Express Property Director and President
Casualty Insurance Agency
of Kentucky Inc.

American Express Property Director and President
Casualty Insurance Agency
of Maryland Inc.

American Express Property Director and President
Casualty Insurance Agency
of Pennsylvania Inc.

American Express Service Vice President
Corporation

American Partners Life Director and Chairman of
Insurance Company the Board

IDS Certificate Company Director and Chairman of
the Board

IDS Insurance Agency of Director and President
Alabama Inc.

IDS Insurance Agency of Director and President
Arkansas Inc.

IDS Insurance Agency of Director and President
Massachusetts Inc.

IDS Insurance Agency of Director and President
New Mexico Inc.

IDS Insurance Agency of Director and President
North Carolina Inc.

IDS Insurance Agency of Director and President
Ohio Inc.

IDS Insurance Agency of Director and President
Wyoming Inc.

IDS Life Insurance Company Director and President

IDS Life Series Fund, Inc. Director and President

IDS Life Variable Annuity Manager, Chairman of the
Funds A and B Board and President

IDS Property Casualty 1 WEG Blvd. Director
Insurance Company DePere, WI 54115

IDS Life Insurance Company P.O. Box 5144 Director and Chairman of
of New York Albany, NY 12205 the Board
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

John M. Knight American Express Financial IDS Tower 10 Vice President
Advisors Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Paul F. Kolkman, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440

IDS Life Insurance Company Director and Executive
Vice President

IDS Life Series Fund, Inc. Vice President and Chief
Actuary

IDS Property Casualty 1 WEG Blvd. Director
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Claire Kolmodin, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Steve C. Kumagai, American Express Financial IDS Tower 10 Director and Senior Vice
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440 President
President

Kurt A Larson, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Lori J. Larson, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Daniel E. Laufenberg, American Express Financial IDS Tower 10 Vice President and Chief
Vice President and Chief U.S. Advisors Inc. Minneapolis, MN 55440 U.S. Economist
Economist
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Peter A. Lefferts, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President

American Express Trust Director
Company

IDS Plan Services of Director
California, Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Douglas A. Lennick, American Express Financial IDS Tower 10 Director and Executive
Director and Executive Vice Advisors Inc. Minneapolis, MN 55440 Vice President
President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Mary J. Malevich, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Fred A. Mandell, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Timothy J. Masek American Express Financial IDS Tower 10 Vice President and
Vice President and Director Advisors Inc. Minneapolis, MN 55440 Director of Global Research
of Global Research
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Sarah A. Mealey, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Paula R. Meyer, American Enterprise Life IDS Tower 10 Vice President
Vice President Insurance Company Minneapolis, MN 55440

American Express Director
Corporation

American Express Financial Vice President
Advisors Inc.

American Partners Life Director and President
Insurance Company

IDS Certificate Company Director and President

IDS Life Insurance Company Director and Executive
Vice President

Investors Syndicate Director, Chairman of the
Development Corporation Board and President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

William P. Miller, Advisory Capital IDS Tower 10 Vice President
Vice President and Senior Strategies Group Inc. Minneapolis, MN 55440
Portfolio Manager

American Express Asset Senior Vice President and
Management Group Inc. Chief Investment Officer

American Express Financial Vice President and Senior
Advisors Inc. Portfolio Manager
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Shashank B. Modak American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Pamela J. Moret, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440

American Express Trust Vice President
Company

IDS Life Insurance Company Executive Vice President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Barry J. Murphy, American Express Client IDS Tower 10 Director and President
Director and Senior Vice Service Corporation Minneapolis, MN 55440
President

American Express Financial Senior Vice President
Advisors Inc.

IDS Life Insurance Company Director and Executive
Vice President

Mary Owens Neal, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Michael J. O'Keefe, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

James R. Palmer, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440

IDS Life Insurance Company Vice President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Carla P. Pavone, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440

Public Employee Payment Director and President
Company
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Thomas P. Perrine, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Susan B. Plimpton, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Ronald W. Powell, American Express Financial IDS Tower 10 Vice President and
Vice President and Assistant Advisors Inc. Minneapolis, MN 55440 Assistant General Counsel
General Counsel

IDS Cable Corporation Vice President and
Assistant Secretary

IDS Cable II Corporation Vice President and
Assistant Secretary

IDS Management Corporation Vice President and
Assistant Secretary

IDS Partnership Services Vice President and
Corporation Assistant Secretary

IDS Plan Services of Vice President and
California, Inc. Assistant Secretary

IDS Realty Corporation Vice President and
Assistant Secretary
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

James M. Punch, American Express Financial IDS Tower 10 Vice President and Project
Vice President and Project Advisors Inc. Minneapolis, MN 55440 Manager
Manager
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Frederick C. Quirsfeld, American Express Asset IDS Tower 10 Senior Vice President and
Director and Senior Vice Management Group Inc. Minneapolis, MN 55440 Senior Portfolio Manager
President

American Express Financial Senior Vice President
Advisors Inc.

Rollyn C. Renstrom, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

ReBecca K. Roloff, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Stephen W. Roszell, Advisory Capital IDS Tower 10 Director
Director and Senior Vice Strategies Group Inc. Minneapolis, MN 55440
President

American Express Asset Director, President and
Management Group Inc. Chief Executive Officer

American Express Asset Director
Management International,
Inc.

American Express Asset Director
Management Ltd.

American Express Financial Senior Vice President
Advisors Inc.

American Express Trust Director
Company
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Erven A. Samsel, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President

American Express Insurance Vice President
Agency of Idaho Inc.

American Express Insurance Vice President
Agency of Nevada Inc.

American Express Insurance Vice President
Agency of Oregon Inc.

American Express Property Vice President
Casualty Insurance Agency
of Kentucky Inc.

American Express Property Vice President
Casualty Insurance Agency
of Maryland Inc.

American Express Property Vice President
Casualty Insurance Agency
of Pennsylvania Inc.

IDS Insurance Agency of Vice President
Alabama Inc.

IDS Insurance Agency of Vice President
Arkansas Inc.

IDS Insurance Agency of Vice President
Massachusetts Inc.

IDS Insurance Agency of Vice President
New Mexico Inc.

IDS Insurance Agency of Vice President
North Carolina Inc.

IDS Insurance Agency of Vice President
Ohio Inc.

IDS Insurance Agency of Vice President
Wyoming Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Theresa M. Sapp American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Stuart A. Sedlacek, AMEX Assurance Company IDS Tower 10 Director
Director, Senior Vice Minneapolis, MN 55440
President and Chief Financial
Officer

American Enterprise Life Executive Vice President
Insurance Company

American Express Financial Senior Vice President and
Advisors Inc. Chief Financial Officer

American Express Trust Director
Company

American Partners Life Director and Vice President
Insurance Agency

IDS Certificate Company Director and President

IDS Life Insurance Company Executive Vice President
and Controller

IDS Property Casualty 1 WEG Blvd. Director
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Donald K. Shanks, AMEX Assurance Company IDS Tower 10 Senior Vice President
Vice President Minneapolis, MN 55440

American Express Financial Vice President
Advisors Inc.

IDS Property Casualty 1 WEG Blvd. Senior Vice President
Insurance Company DePere, WI 54115
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

F. Dale Simmons, AMEX Assurance Company IDS Tower 10 Vice President
Vice President Minneapolis, MN 55440

American Centurion Life Vice President
Assurance Company

American Enterprise Life Vice President
Insurance

American Express Financial Vice President
Advisors Inc.

American Partners Life Vice President
Insurance Company

IDS Certificate Company Vice President

IDS Life Insurance Company Vice President

IDS Partnership Services Director and Vice President
Corporation

IDS Real Estate Services Chairman of the Board and
Inc. President

IDS Realty Corporation Director and Vice President

IDS Life Insurance Company P.O. Box 5144 Vice President
of New York Albany, NY 12205
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Judy P. Skoglund, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Bridget Sperl, American Express Client IDS Tower 10 Vice President
Vice President Service Corporation Minneapolis, MN 55440

American Express Financial Vice President
Advisors Inc.

Public Employee Payment Director and President
Company
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Lisa A. Steffes, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

William A. Stoltzmann, American Enterprise Life IDS Tower 10 Director, Vice President,
Vice President and Assistant Insurance Company Minneapolis, MN 55440 General Counsel and
General Counsel Secretary

American Express Director, Vice President
Corporation and Secretary

American Express Financial Vice President and
Advisors Inc. Assistant General Counsel

American Partners Life Director, Vice President,
Insurance Company General Counsel and
Secretary

IDS Life Insurance Company Vice President, General
Counsel and Secretary

IDS Life Series Fund Inc. General Counsel and
Assistant Secretary

IDS Life Variable Annuity General Counsel and
Funds A & B Assistant Secretary
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

James J. Strauss, American Express Financial IDS Tower 10 Vice President
Vice President and General Advisors Inc. Minneapolis, MN 55440
Auditor
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Jeffrey J. Stremcha, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440

Barbara Stroup Stewart, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Keith N. Tufte American Express Financial IDS Tower 10 Vice President and
Vice President and Director Advisors Inc. Minneapolis, MN 55440 Director of Equity Research
of Equity Research
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Norman Weaver Jr., American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President

American Express Insurance Vice President
Agency of Arizona Inc.

American Express Insurance Vice President
Agency of Idaho Inc.

American Express Insurance Vice President
Agency of Nevada Inc.

American Express Insurance Vice President
Agency of Oregon Inc.

American Express Property Vice President
Casualty Insurance Agency
of Kentucky Inc.

American Express Property Vice President
Casualty Insurance Agency
of Maryland Inc.

American Express Property Vice President
Casualty Insurance Agency
of Pennsylvania Inc.

IDS Insurance Agency of Vice President
Alabama Inc.

IDS Insurance Agency of Vice President
Arkansas Inc.

IDS Insurance Agency of Vice President
Massachusetts Inc.

IDS Insurance Agency of Vice President
New Mexico Inc.

IDS Insurance Agency of Vice President
North Carolina Inc.

IDS Insurance Agency of Vice President
Ohio Inc.

IDS Insurance Agency of Vice President
Wyoming Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Michael L. Weiner, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440

IDS Capital Holdings Inc. Vice President

IDS Futures Brokerage Group Vice President

IDS Futures Corporation Vice President, Treasurer
and Secretary

IDS Sales Support Inc. Director, Vice President
and Assistant Treasurer
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Lawrence J. Welte, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Jeffry F. Welter, American Express Financial IDS Tower 10 Vice President
Vice President Advisors Inc. Minneapolis, MN 55440
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Edwin M. Wistrand, American Express Financial IDS Tower 10 Vice President and
Vice President and Assistant Advisors Inc. Minneapolis, MN 55440 Assistant General Counsel
General Counsel

American Express Financial Vice President and Chief
Advisors Japan Inc. Legal Officer
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Michael D. Wolf, American Express Asset IDS Tower 10 Executive Vice President
Vice President Management Group Inc. Minneapolis, MN 55440 and Senior Portfolio
Manager

American Express Financial Vice President
Advisors Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Michael R. Woodward, American Express Financial IDS Tower 10 Senior Vice President
Director and Senior Vice Advisors Inc. Minneapolis, MN 55440
President

American Express Insurance Vice President
Agency of Idaho Inc.

American Express Insurance Vice President
Agency of Nevada Inc.

American Express Insurance Vice President
Agency of Oregon Inc.

American Express Property Vice President
Casualty Insurance Agency
of Kentucky Inc.

American Express Property Vice President
Casualty Insurance Agency
of Maryland Inc.

American Express Property Vice President
Casualty Insurance Agency
of Pennsylvania Inc.

IDS Insurance Agency of Vice President
Alabama Inc.

IDS Insurance Agency of Vice President
Arkansas Inc.

IDS Insurance Agency of Vice President
Massachusetts Inc.

IDS Insurance Agency of Vice President
New Mexico Inc.

IDS Insurance Agency of Vice President
North Carolina Inc.

IDS Insurance Agency of Vice President
Ohio Inc.

IDS Insurance Agency of Vice President
Wyoming Inc.

IDS Life Insurance Company P.O. Box 5144 Director
of New York Albany, NY 12205
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>
<TABLE>
<CAPTION>
Item 27. Principal Underwriters.

(a) American Express Financial Advisors acts as principal underwriter for the
following investment companies:

AXP Bond Fund, Inc.; AXP California Tax-Exempt Trust; AXP Discovery
Fund, Inc.; AXP Equity Select Fund, Inc.; AXP Extra Income Fund, Inc.;
AXP Federal Income Fund, Inc.; AXP Global Series, Inc.; AXP Growth
Fund, Inc.; AXP High Yield Tax-Exempt Fund, Inc.; AXP International
Fund, Inc.; AXP Investment Series, Inc.; AXP Managed Retirement Fund,
Inc.; AXP Market Advantage Series, Inc.; AXP Money Market Series, Inc.;
AXP New Dimensions Fund, Inc.; AXP Precious Metals Fund, Inc.; AXP
Progressive Fund, Inc.; AXP Selective Fund, Inc.; AXP Special
Tax-Exempt Series Trust; AXP Stock Fund, Inc.; AXP Strategy Fund, Inc.;
AXP Tax-Exempt Bond Fund, Inc.; AXP Tax-Free Money Fund, Inc.; AXP
Utilities Income Fund, Inc., Growth Trust; Growth and Income Trust;
Income Trust, Tax-Free Income Trust, World Trust and IDS Certificate
Company.

(b) As to each director, officer or partner of the principal underwriter:

Name and Principal Business Address Position and Offices with Offices with Registrant
Underwriter
- -------------------------------------- ----------------------------------- -----------------------------------
<S> <C> <C>
Ronald G. Abrahamson Vice President-Service Quality None
IDS Tower 10 and Reengineering
Minneapolis, MN 55440

Douglas A. Alger Senior Vice President-Human None
IDS Tower 10 Resources
Minneapolis, MN 55440

Peter J. Anderson Senior Vice President-Investment Vice President-Investments
IDS Tower 10 Operations
Minneapolis, MN 55440

Ward D. Armstrong Vice President-American Express None
IDS Tower 10 Retirement Services
Minneapolis, MN 55440

John M. Baker Vice President-Plan Sponsor None
IDS Tower 10 Services
Minneapolis, MN 55440

Joseph M. Barsky III Vice President - Mutual Fund None
IDS Tower 10 Equities
Minneapolis, MN 55440

Timothy V. Bechtold Vice President-Risk Management None
IDS Tower 10 Products
Minneapolis, MN 55440

John D. Begley Group Vice President-Ohio/Indiana None
Suite 100
7760 Olentangy River Rd.
Columbus, OH 43235

Brent L. Bisson Group Vice President-Los Angeles None
Suite 900, E. Westside Twr Metro
11835 West Olympic Blvd.
Los Angeles, CA 90064

John C. Boeder Vice President-Nonproprietary None
IDS Tower 10 Products
Minneapolis, MN 55440

Walter K. Booker Group Vice President-New Jersey None
Suite 200, 3500 Market Street
Camp Hill, NJ 17011

Bruce J. Bordelon Group Vice President - San None
1333 N. California Blvd., Suite 200 Francisco Area
Walnut Creek, CA 94596

Charles R. Branch Group Vice President-Northwest None
Suite 200
West 111 North River Dr.
Spokane, WA 99201

Douglas W. Brewers Vice President-Sales Support None
IDS Tower 10
Minneapolis, MN 55440

Karl J. Breyer Corporate Senior Vice President None
IDS Tower 10
Minneapolis, MN 55440

Cynthia M. Carlson Vice President-American Express None
IDS Tower 10 Securities Services
Minneapolis, MN 55440

Mark W. Carter Senior Vice President and Chief None
IDS Tower 10 Marketing Officer
Minneapolis, MN 55440

James E. Choat Senior Vice President - Third None
IDS Tower 10 Party Distribution
Minneapolis, MN 55440

Kenneth J. Ciak Vice President and General None
IDS Property Casualty Manager-IDS Property Casualty
1400 Lombardi Avenue
Green Bay, WI 54304

Paul A. Connolly Vice President-Advisor Staffing, None
IDS Tower 10 Training and Support
Minneapolis, MN 55440

Henry J. Cormier Group Vice President-Connecticut None
Commerce Center One
333 East River Drive
East Hartford, CT 06108

John M. Crawford Group Vice President-Arkansas/ None
Suite 200 Springfield/Memphis
10800 Financial Ctr Pkwy
Little Rock, AR 72211

Kevin F. Crowe Group Vice None
Suite 312 President-Carolinas/Eastern
7300 Carmel Executive Pk Georgia
Charlotte, NC 28226

Colleen Curran Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440

Luz Maria Davis Vice President-Communications None
IDS Tower 10
Minneapolis, MN 55440

Arthur E. Delorenzo Group Vice President - Upstate None
4 Atrium Drive, #100 New York
Albany, NY 12205

Scott M. DiGiammarino Group Vice None
Suite 500, 8045 Leesburg Pike President-Washington/Baltimore
Vienna, VA 22182

Bradford L. Drew Group Vice President-Eastern None
Two Datran Center Florida
Penthouse One B
9130 S. Dadeland Blvd.
Miami, FL 33156

Douglas K. Dunning Vice President-Assured Assets None
IDS Tower 10 Product Development and Management
Minneapolis, MN 55440

James P. Egge Group Vice President-Western None
4305 South Louise, Suite 202 Iowa, Nebraska, Dakotas
Sioux Falls, SD 57103

Gordon L. Eid Senior Vice President, General None
IDS Tower 10 Counsel and Chief Compliance
Minneapolis, MN 55440 Officer

Robert M. Elconin Vice President-Government None
IDS Tower 10 Relations
Minneapolis, MN 55440

Phillip W. Evans Group Vice President-Rocky None
Suite 600 Mountain
6985 Union Park Center
Midvale, UT 84047-4177

Gordon M. Fines Vice President-Mutual Fund Equity None
IDS Tower 10 Investments
Minneapolis, MN 55440

Douglas L. Forsberg Vice President - International None
IDS Tower 10
Minneapolis, MN 55440

Jeffrey P. Fox Vice President and Corporate None
IDS Tower 10 Controller
Minneapolis, MN 55440

William P. Fritz Group Vice President-Gateway None
Suite 160
12855 Flushing Meadows Dr
St. Louis, MO 63131

Carl W. Gans Group Vice President-Twin City None
8500 Tower Suite 1770 Metro
8500 Normandale Lake Blvd.
Bloomington, MN 55437

David A. Hammer Vice President and Marketing None
IDS Tower 10 Controller
Minneapolis, MN 55440

Teresa A. Hanratty Group Vice President-Northern New None
Suites 6&7 England
169 South River Road
Bedford, NH 03110

Robert L. Harden Group Vice President-Boston Metro None
Two Constitution Plaza
Boston, MA 02129

Lorraine R. Hart Vice President-Insurance None
IDS Tower 10 Investments
Minneapolis, MN 55440

Scott A. Hawkinson Vice President and None
IDS Tower 10 Controller-Private Client Group
Minneapolis, MN 55440

Brian M. Heath Group Vice President-North Texas None
Suite 150
801 E. Campbell Road
Richardson, TX 75081

Janis K. Heaney Vice President-Incentive None
IDS Tower 10 Management
Minneapolis, MN 55440

Jon E. Hjelm Group Vice President-Rhode None
319 Southbridge Street Island/Central-Western
Auburn, MA 01501 Massachusetts

David J. Hockenberry Group Vice President-Tennessee None
30 Burton Hills Blvd. Valley
Suite 175
Nashville, TN 37215

Jeffrey S. Horton Vice President and Treasurer None
IDS Tower 10
Minneapolis, MN 55440

David R. Hubers Chairman, President and Chief Board member
IDS Tower 10 Executive Officer
Minneapolis, MN 55440

Martin G. Hurwitz Vice President-Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440

Debra A. Hutchinson Vice President - Relationship None
IDS Tower 10 Leader
Minneapolis, MN 55440

James M. Jensen Vice President-Insurance Product None
IDS Tower 10 Development and Management
Minneapolis, MN 55440

Marietta L. Johns Senior Vice President-Field None
IDS Tower 10 Management
Minneapolis, MN 55440

Nancy E. Jones Vice President-Business None
IDS Tower 10 Development
Minneapolis, MN 55440

Ora J. Kaine Vice President-Financial Advisory None
IDS Tower 10 Services
Minneapolis, MN 55440

Linda B. Keene Vice President-Market Development None
IDS Tower 10
Minneapolis, MN 55440

G. Michael Kennedy Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440

Susan D. Kinder Senior Vice None
IDS Tower 10 President-Distribution Services
Minneapolis, MN 55440

Richard W. Kling Senior Vice President-Products None
IDS Tower 10
Minneapolis, MN 55440

John M. Knight Vice President-Investment Treasurer
IDS Tower 10 Accounting
Minneapolis, MN 55440

Paul F. Kolkman Vice President-Actuarial Finance None
IDS Tower 10
Minneapolis, MN 55440

Claire Kolmodin Vice President-Service Quality None
IDS Tower 10
Minneapolis, MN 55440

David S. Kreager Group Vice President-Greater None
Suite 108 Michigan
Trestle Bridge V
5136 Lovers Lane
Kalamazoo, MI 49002

Steven C. Kumagai Director and Senior Vice None
IDS Tower 10 President-Field Management and
Minneapolis, MN 55440 Business Systems

Mitre Kutanovski Group Vice President-Chicago Metro None
Suite 680
8585 Broadway
Merrillville, IN 48410

Kurt A. Larson Vice President-Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440

Lori J. Larson Vice President-Brokerage and None
IDS Tower 10 Direct Services
Minneapolis, MN 55440

Daniel E. Laufenberg Vice President and Chief U.S. None
IDS Tower 10 Economist
Minneapolis, MN 55440

Peter A. Lefferts Senior Vice President-Corporate None
IDS Tower 10 Strategy and Development
Minneapolis, MN 55440

Douglas A. Lennick Director and Executive Vice None
IDS Tower 10 President-Private Client Group
Minneapolis, MN 55440

Mary J. Malevich Vice President-Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440

Fred A. Mandell Vice President-Field Marketing None
IDS Tower 10 Readiness
Minneapolis, MN 55440

Daniel E. Martin Group Vice President-Pittsburgh None
Suite 650 Metro
5700 Corporate Drive
Pittsburgh, PA 15237

Timothy J. Masek Vice President and Director of None
IDS Tower 10 Global Research
Minnapolis, MN 55440

Sarah A. Mealey Vice President-Mutual Funds None
IDS Tower 10
Minneapolis, MN 55440

Paula R. Meyer Vice President-Assured Assets None
IDS Tower 10
Minneapolis, MN 55440

William P. Miller Vice President and Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440

Shashank B. Modak Vice President - Technology Leader None
IDS Tower 10
Minneapolis, MN 55440

Pamela J. Moret Vice President-Variable Assets None
IDS Tower 10
Minneapolis, MN 55440

Alan D. Morgenstern Group Vice President-Central None
Suite 200 California/Western Nevada
3500 Market Street
Camp Hill, NJ 17011

Barry J. Murphy Senior Vice President-Client None
IDS Tower 10 Service
Minneapolis, MN 55440

Mary Owens Neal Vice President-Mature Market None
IDS Tower 10 Segment
Minneapolis, MN 55440

Thomas V. Nicolosi Group Vice President-New York None
Suite 220 Metro Area
500 Mamaroneck Avenue
Harrison, NY 10528

Michael J. O'Keefe Vice President-Advisory Business None
IDS Tower 10 Systems
Minneapolis, MN 55440

James R. Palmer Vice President-Taxes None
IDS Tower 10
Minneapolis, MN 55440

Marc A. Parker Group Vice None
10200 SW Greenburg Road President-Portland/Eugene
Suite 110
Portland, OR 97223

Carla P. Pavone Vice President-Compensation and None
IDS Tower 10 Field Administration
Minneapolis, MN 55440

Thomas P. Perrine Senior Vice President-Group None
IDS Tower 10 Relationship Leader/American
Minneapolis, MN 55440 Express Technologies Financial
Services

Susan B. Plimpton Vice President-Marketing Services None
IDS Tower 10
Minneapolis, MN 55440

Larry M. Post Group Vice President-Philadelphia None
One Tower Bridge Metro
100 Front Street 8th Fl
West Conshohocken, PA 19428

Ronald W. Powell Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440

Diana R. Prost Group Vice None
3030 N.W. Expressway President-Kansas/Oklahoma
Suite 900
Oklahoma City, OK 73112

James M. Punch Vice President and Project None
IDS Tower 10 Manager-Platform I Value Enhanced
Minneapolis, MN 55440

Frederick C. Quirsfeld Senior Vice President-Fixed Income Vice President - Fixed Income
IDS Tower 10 Investments
Minneapolis, MN 55440

Rollyn C. Renstrom Vice President-Corporate Planning None
IDS Tower 10 and Analysis
Minneapolis, MN 55440

R. Daniel Richardson III Group Vice President-Southern None
Suite 800 Texas
Arboretum Plaza One
9442 Capital of Texas Hwy N.
Austin, TX 78759

ReBecca K. Roloff Senior Vice President-Field None
IDS Tower 10 Management and Financial Advisory
Minneapolis, MN 55440 Service

Stephen W. Roszell Senior Vice None
IDS Tower 10 President-Institutional
Minneapolis, MN 55440

Max G. Roth Group Vice None
Suite 201 S IDS Ctr President-Wisconsin/Upper Michigan
1400 Lombardi Avenue
Green Bay, WI 54304

Erven A. Samsel Senior Vice President-Field None
45 Braintree Hill Park Management
Suite 402
Braintree, MA 02184

Theresa M. Sapp Vice President - Relationship None
IDS Tower 10 Leader
Minneapolis, MN 55440

Russell L. Scalfano Group Vice None
Suite 201 President-Illinois/Indiana/Kentucky
101 Plaza East Blvd.
Evansville, IN 47715

William G. Scholz Group Vice President-Arizona/Las None
Suite 205 Vegas
7333 E Doubletree Ranch Rd
Scottsdale, AZ 85258

Stuart A. Sedlacek Senior Vice President and Chief None
IDS Tower 10 Financial Officer
Minneapolis, MN 55440

Donald K. Shanks Vice President-Property Casualty None
IDS Tower 10
Minneapolis, MN 55440

F. Dale Simmons Vice President-Senior Portfolio None
IDS Tower 10 Manager, Insurance Investments
Minneapolis, MN 55440

Judy P. Skoglund Vice President-Quality and None
IDS Tower 10 Service Support
Minneapolis, MN 55440

James B. Solberg Group Vice President-Eastern Iowa None
466 Westdale Mall Area
Cedar RapIDS, IA 52404

Bridget Sperl Vice President-Geographic Service None
IDS Tower 10 Teams
Minneapolis, MN 55440

Paul J. Stanislaw Group Vice President-Southern None
Suite 1100 California
Two Park Plaza
Irvine, CA 92714

Lisa A. Steffes Vice President - Marketing Offer None
IDS Tower 10 Development
Minneapolis, MN 55440

Lois A. Stilwell Group Vice President-Outstate None
Suite 433 Minnesota Area/ North
9900 East Bren Road Dakota/Western Wisconsin
Minnetonka, MN 55343

William A. Stoltzmann Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440

James J. Strauss Vice President and General Auditor None
IDS Tower 10
Minneapolis, MN 55440

Jeffrey J. Stremcha Vice President-Information None
IDS Tower 10 Resource Management/ISD
Minneapolis, MN 55440

Barbara Stroup Stewart Vice President-Channel Development None
IDS Tower 10
Minneapolis, MN 55440

Craig P. Taucher Group Vice None
Suite 150 President-Orlando/Jacksonville
4190 Belfort Road
Jacksonville, FL 32216

Neil G. Taylor Group Vice None
Suite 425 President-Seattle/Tacoma/Hawaii
101 Elliott Avenue West
Seattle, WA 98119

John R. Thomas Senior Vice President Board Member
IDS Tower 10
Minneapolis, MN 55440

Keith N. Tufte Vice President and Director of None
IDS Tower 10 Equity Research
Minneapolis, MN 55440

Peter S. Velardi Group Vice None
Suite 180 President-Atlanta/Birmingham
1200 Ashwood Parkway
Atlanta, GA 30338

Charles F. Wachendorfer Group Vice President-Detroit Metro None
8115 East Jefferson Avenue
Detroit, MI 48214

Donald F. Weaver Group Vice President-Greater None
3500 Market Street, Suite 200 Pennsylvania
Camp Hill, PA 17011

Norman Weaver Jr. Senior Vice President - Alliance None
1010 Main St. Suite 2B Group
Huntington Beach, CA 92648

Michael L. Weiner Vice President-Tax Research and None
IDS Tower 10 Audit
Minneapolis, MN 55440

Lawrence J. Welte Vice President-Investment None
IDS Tower 10 Administration
Minneapolis, MN 55440

Jeffry M. Welter Vice President-Equity and Fixed None
IDS Tower 10 Income Trading
Minneapolis, MN 55440

Thomas L. White Group Vice President-Cleveland None
Suite 200 Metro
28601 Chagrin Blvd.
Woodmere, OH 44122

Eric S. Williams Group Vice President-Virginia None
Suite 250
3951 Westerre Parkway
Richmond, VA 23233

William J. Williams Group Vice President-Western None
Two North Tamiami Trail Florida
Suite 702
Sarasota, FL 34236

Edwin M. Wistrand Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440

Michael D. Wolf Vice President-Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440

Michael R. Woodward Senior Vice President-Field None
32 Ellicott St Management
Suite 100
Batavia, NY 14020

</TABLE>

Item 27(c). Not applicable.

Item 28. Location of Accounts and Records

American Express Financial Corporation
IDS Tower 10
Minneapolis, MN 55440

Item 29. Management Services

Not Applicable.

Item 30. Undertakings

Not Applicable.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act and the Investment Company
Act, the Registrant, AXP Money Market Series, Inc., has duly caused this
Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Minneapolis and State of
Minnesota on the 26th day of July, 1999.

AXP MONEY MARKET SERIES, INC.

By /s/ Arne H. Carlson**
Arne H. Carlson, Chief Executive Officer

By /s/ /s/John Knight
John Knight, Treasurer

Pursuant to the requirements of the Securities Act, this Amendment to its
Registration Statement has been signed below by the following persons in the
capacities indicated on the 26th day of July, 1999.

Signature Capacity

/s/ H. Brewster Atwater, Jr.* Director
H. Brewster Atwater, Jr.

/s/ Arne H. Carlson* Chairman of the Board
Arne H. Carlson

/s/ Lynne V. Cheney* Director
Lynne V. Cheney

/s/ William H. Dudley* Director
William H. Dudley

/s/ David R. Hubers* Director
David R. Hubers

<PAGE>

Signature Capacity

/s/ Heinz F. Hutter* Director
Heinz F. Hutter

/s/ Anne P. Jones* Director
Anne P. Jones

/s/ William R. Pearce* Director
William R. Pearce

/s/ Alan K. Simpson* Director
Alan K. Simpson

/s/ John R. Thomas* Director
John R. Thomas

/s/ C. Angus Wurtele* Director
C. Angus Wurtele

*Signed pursuant to Directors' Power of Attorney, dated January 14, 1999, filed
electronically herewith, as Exhibit (p)(1), by:

/s/ Leslie L. Ogg
Leslie L. Ogg

**Signed pursuant to Officers' Power of Attorney, dated March 1, 1999, filed
electronically herewith, as Exhibit (p)(2), by:

/s/ Leslie L. Ogg
Leslie L. Ogg

<PAGE>

CONTENTS OF THIS
POST-EFFECTIVE AMENDMENT NO. 49
TO REGISTRATION STATEMENT NO. 2-54516

This Post-Effective Amendment contains the following papers and documents:

The facing sheet.

Part A.

AXP Cash Management Fund prospectus.

Part B.

Statement of Additional Information for AXP Money Market Series, Inc.,
AXP Cash Management Fund.

Part C.

Other information.

Exhibits.

The signatures.

AXP Cash Management Fund, Inc.
File No. 2-54516/811-2591

EXHIBIT INDEX

Exhibit (d): Investment Mangement Services Agreement dated July 1, 1999

Exhibit (h)(5): Transfer Agency Agreement dated February 1, 1999

Exhibit (o): Plan under Section 18f-3 dated April, 1999

Exhibit (p)(1): Directors Power of Attorney to Registration Statement
dated January 14, 1999

Exhibit (p)(2): Officers Power of Attorney to Registration Statement
dated March 1, 1999

<PAGE>

INVESTMENT MANAGEMENT SERVICES AGREEMENT

AGREEMENT made the 1st day of July, 1999, by and between AXP Money Market
Series, Inc. (the "Corporation"), a Minnesota corporation, on behalf of its
underlying series fund AXP Cash Management Fund (the "Fund"), and American
Express Financial Corporation, a Delaware corporation.

Part One: INVESTMENT MANAGEMENT AND OTHER SERVICES

(1) The Fund hereby retains American Express Financial Corporation, and American
Express Financial Corporation hereby agrees, for the period of this Agreement
and under the terms and conditions hereinafter set forth, to furnish the Fund
continuously with suggested investment planning; to determine, consistent with
the Fund's investment objectives and policies, which securities in American
Express Financial Corporation's discretion shall be purchased, held or sold and
to execute or cause the execution of purchase or sell orders; to prepare and
make available to the Fund all necessary research and statistical data in
connection therewith; to furnish services of whatever nature required in
connection with the management of the Fund as provided under this Agreement; and
to pay such expenses as may be provided for in Part Three; subject always to the
direction and control of the Board of Directors (the "Board"), the Executive
Committee and the authorized officers of the Fund. American Express Financial
Corporation agrees to maintain an adequate organization of competent persons to
provide the services and to perform the functions herein mentioned. American
Express Financial Corporation agrees to meet with any persons at such times as
the Board deems appropriate for the purpose of reviewing American Express
Financial Corporation's performance under this Agreement.

(2) American Express Financial Corporation agrees that the investment planning
and investment decisions will be in accordance with general investment policies
of the Fund as disclosed to American Express Financial Corporation from time to
time by the Fund and as set forth in its prospectuses and registration
statements filed with the United States Securities and Exchange Commission (the
"SEC").

(3) American Express Financial Corporation agrees that it will maintain all
required records, memoranda, instructions or authorizations relating to the
acquisition or disposition of securities for the Fund.

(4) The Fund agrees that it will furnish to American Express Financial
Corporation any information that the latter may reasonably request with respect
to the services performed or to be performed by American Express Financial
Corporation under this Agreement.

(5) American Express Financial Corporation is authorized to select the brokers
or dealers that will execute the purchases and sales of portfolio securities for
the Fund and is directed to use its best efforts to obtain the best available
price and most favorable execution, except as prescribed herein. Subject to
prior authorization by the Fund's Board of appropriate policies and procedures,
and subject to termination at any time by the Board, American Express Financial
Corporation may also be authorized to effect individual securities transactions
at commission rates in excess of the minimum commission rates available, to the
extent authorized by law, if American Express Financial Corporation determines
in good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or American Express
Financial Corporation's overall responsibilities with respect to the Fund and
other funds for which it acts as investment adviser.

<PAGE>

(6) It is understood and agreed that in furnishing the Fund with the services as
herein provided, neither American Express Financial Corporation, nor any
officer, director or agent thereof shall be held liable to the Fund or its
creditors or shareholders for errors of judgment or for anything except willful
misfeasance, bad faith, or gross negligence in the performance of its duties, or
reckless disregard of its obligations and duties under the terms of this
Agreement. It is further understood and agreed that American Express Financial
Corporation may rely upon information furnished to it reasonably believed to be
accurate and reliable.

Part Two: COMPENSATION TO INVESTMENT MANAGER

(1) The Fund agrees to pay to American Express Financial Corporation, and
American Express Financial Corporation covenants and agrees to accept from the
Fund in full payment for the services furnished, a fee for each calendar day of
each year equal to the total of 1/365th (1/366th in each leap year) of each of
the respective percentages set forth below of the net assets of the Fund; to be
computed for each day on the basis of net assets as of the close of business of
the full business day two (2) business days prior to the day for which the
computation is being made. In the case of the suspension of the computation of
net asset value, the asset charge for each day during such suspension shall be
computed as of the close of business on the last full business day on which the
net assets were computed. Net assets as of the close of a full business day
shall include all transactions in shares of the Fund recorded on the books of
the Fund for that day.

Assets Annual Rate at
(Billions) Each Asset Level
First $1.0 0.360%
Next 0.5 0.343
Next 0.5 0.325
Next 0.5 0.308
Next 1.0 0.290
Next 3.0 0.270
Over 6.5 0.250

(2) The fee shall be paid on a monthly basis and, in the event of the
termination of this Agreement, the fee accrued shall be prorated on the basis of
the number of days that this Agreement is in effect during the month with
respect to which such payment is made.

(3) The fee provided for hereunder shall be paid in cash by the Fund to American
Express Financial Corporation within five business days after the last day of
each month.

Part Three: ALLOCATION OF EXPENSES

(1) The Fund agrees to pay:

(a) Fees payable to American Express Financial
Corporation for its services under the terms of this
Agreement.

(b) Taxes.

(d) Custodian fees and charges.

(e) Fees and charges of its independent certified public
accountants for services the Fund requests.

(f) Premium on the bond required by Rule 17g-1 under the
Investment Company Act of 1940.

(g) Fees and expenses of attorneys (i) it employs in
matters not involving the assertion of a claim by a
third party against the Fund, its directors and
officers, (ii) it employs in conjunction with a claim
asserted by the Board against American Express
Financial Corporation, except that American Express
Financial Corporation shall reimburse the Fund for
such fees and expenses if it is ultimately determined
by a court of competent jurisdiction, or American
Express Financial Corporation agrees, that it is
liable in whole or in part to the Fund, and (iii) it
employs to assert a claim against a third party.

(h) Fees paid for the qualification and registration for
public sale of the securities of the Fund under the
laws of the United States and of the several states
in which such securities shall be offered for sale.

(i) Fees of consultants employed by the Fund.

(j) Directors, officers and employees expenses which
shall include fees, salaries, memberships, dues,
travel, seminars, pension, profit sharing, and all
other benefits paid to or provided for directors,
officers and employees, directors and officers
liability insurance, errors and omissions liability
insurance, worker's compensation insurance and other
expenses applicable to the directors, officers and
employees, except the Fund will not pay any fees or
expenses of any person who is an officer or employee
of American Express Financial Corporation or its
affiliates.

(k) Filing fees and charges incurred by the Fund in
connection with filing any amendment to its articles
of incorporation, or incurred in filing any other
document with the State of Minnesota or its political
subdivisions.

(l) Organizational expenses of the Fund.

(m) Expenses incurred in connection with lending
portfolio securities of the Fund.

(n) Expenses properly payable by the Fund, approved by
the Board.

(2) American Express Financial Corporation agrees to pay all expenses associated
with the services it provides under the terms of this Agreement. Further,
American Express Financial Corporation agrees that if, at the end of any month,
the expenses of the Fund under this Agreement and any other agreement between
the Fund and American Express Financial Corporation, but excluding those
expenses set forth in (1)(b) and (1)(c) of this Part Three, exceed the most
restrictive applicable state expenses limitation, the Fund shall not pay those
expenses set forth in (1)(a) and (d) through (n) of this Part Three to the
extent necessary to keep the Fund's expenses from exceeding the limitation, it
being understood that American Express Financial Corporation will assume all
unpaid expenses and bill the Fund for them in subsequent months but in no event
can the accumulation of unpaid expenses or billing be carried past the end of
the Fund's fiscal year.

<PAGE>

Part Four: MISCELLANEOUS

(1) American Express Financial Corporation shall be deemed to be an independent
contractor and, except as expressly provided or authorized in this Agreement,
shall have no authority to act for or represent the Fund.

(2) A "full business day" shall be as defined in the By-laws.

(3) The Fund recognizes that American Express Financial Corporation now renders
and may continue to render investment advice and other services to other
investment companies and persons which may or may not have investment policies
and investments similar to those of the Fund and that American Express Financial
Corporation manages its own investments and/or those of its subsidiaries.
American Express Financial Corporation shall be free to render such investment
advice and other services and the Fund hereby consents thereto.

(4) Neither this Agreement nor any transaction had pursuant hereto shall be
invalidated or in any way affected by the fact that directors, officers, agents
and/or shareholders of the Fund are or may be interested in American Express
Financial Corporation or any successor or assignee thereof, as directors,
officers, stockholders or otherwise; that directors, officers, stockholders or
agents of American Express Financial Corporation are or may be interested in the
Fund as directors, officers, shareholders, or otherwise; or that American
Express Financial Corporation or any successor or assignee, is or may be
interested in the Fund as shareholder or otherwise, provided, however, that
neither American Express Financial Corporation, nor any officer, director or
employee thereof or of the Fund, shall sell to or buy from the Fund any property
or security other than shares issued by the Fund, except in accordance with
applicable regulations or orders of the SEC.

(5) Any notice under this Agreement shall be given in writing, addressed, and
delivered, or mailed postpaid, to the party to this Agreement entitled to
receive such, at such party's principal place of business in Minneapolis,
Minnesota, or to such other address as either party may designate in writing
mailed to the other.

(6) American Express Financial Corporation agrees that no officer, director or
employee of American Express Financial Corporation will deal for or on behalf of
the Fund with himself as principal or agent, or with any corporation or
partnership in which he may have a financial interest, except that this shall
not prohibit:

(a) Officers, directors or employees of American Express Financial Corporation
from having a financial interest in the Fund or in American Express
Financial Corporation.

(b) The purchase of securities for the Fund, or the sale of securities owned by
the Fund, through a security broker or dealer, one or more of whose
partners, officers, directors or employees is an officer, director or
employee of American Express Financial Corporation, provided such
transactions are handled in the capacity of broker only and provided
commissions charged do not exceed customary brokerage charges for such
services.
(c) Transactions with the Fund by a broker-dealer affiliate of American Express
Financial Corporation as may be allowed by rule or order of the SEC, and if
made pursuant to procedures adopted by the Fund's Board.

<PAGE>

(7) American Express Financial Corporation agrees that, except as herein
otherwise expressly provided or as may be permitted consistent with the use of a
broker-dealer affiliate of American Express Financial Corporation under
applicable provisions of the federal securities laws, neither it nor any of its
officers, directors or employees shall at any time during the period of this
Agreement, make, accept or receive, directly or indirectly, any fees, profits or
emoluments of any character in connection with the purchase or sale of
securities (except shares issued by the Fund) or other assets by or for the
Fund.

Part Five: RENEWAL AND TERMINATION

(1) This Agreement shall continue in effect until June 30, 2001, or until a new
agreement is approved by a vote of the majority of the outstanding shares of the
Fund and by vote of the Fund's Board, including the vote required by (b) of this
paragraph, and if no new agreement is so approved, this Agreement shall continue
from year to year thereafter unless and until terminated by either party as
hereinafter provided, except that such continuance shall be specifically
approved at least annually (a) by the Board of the Fund or by a vote of the
majority of the outstanding shares of the Fund and (b) by the vote of a majority
of the directors who are not parties to this Agreement or interested persons of
any such party, cast in person at a meeting called for the purpose of voting on
such approval. As used in this paragraph, the term "interested person" shall
have the same meaning as set forth in the Investment Company Act of 1940, as
amended (the "1940 Act").

(2) This Agreement may be terminated by either the Fund or American Express
Financial Corporation at any time by giving the other party 60 days written
notice of such intention to terminate, provided that any termination shall be
made without the payment of any penalty, and provided further that termination
may be effected either by the Board of the Fund or by a vote of the majority of
the outstanding voting shares of the Fund. The vote of the majority of the
outstanding voting shares of the Fund for the purpose of this Part Five shall be
the vote at a shareholders' regular meeting, or a special meeting duly called
for the purpose, of 67% or more of the Fund's shares present at such meeting if
the holders of more than 50% of the outstanding voting shares are present or
represented by proxy, or more than 50% of the outstanding voting shares of the
Fund, whichever is less.

(3) This Agreement shall terminate in the event of its assignment, the term
"assignment" for this purpose having the same meaning as set forth in the 1940
Act.

IN WITNESS THEREOF, the parties hereto have executed the foregoing
Agreement as of the day and year first above written.

AXP MONEY MARKET SERIES, INC.
AXP Cash Management Fund

By ____________________
Leslie L. Ogg
Vice President

AMERICAN EXPRESS FINANCIAL CORPORATION

By ______________________
Pamela J. Moret
Vice President

<PAGE>

TRANSFER AGENCY AGREEMENT

AGREEMENT dated as of February 1, 1999, between IDS Money Market Series, Inc.
(the "Company"), a Minnesota corporation, on behalf of its underlying series
fund (the "Fund"), and American Express Client Service Corporation (the
"Transfer Agent"), a Minnesota corporation.

In consideration of the mutual promises set forth below, the Company and the
Transfer Agent agree as follows:

1. Appointment of the Transfer Agent. The Company hereby appoints the
Transfer Agent, as transfer agent for its shares and as shareholder
servicing agent for the Company, and the Transfer Agent accepts such
appointment and agrees to perform the duties set forth below.

2. Compensation. The Company will compensate the Transfer Agent for the
performance of its obligations as set forth in Schedule A. Schedule A
does not include out-of-pocket disbursements of the Transfer Agent for
which the Transfer Agent shall be entitled to bill the Company
separately.

The Transfer Agent will bill the Company monthly. The fee provided for
hereunder shall be paid in cash by the Company to the Transfer Agent
within five (5) business days after the last day of each month.

Out-of-pocket disbursements shall include, but shall not be limited to,
the items specified in Schedule B. Reimbursement by the Company for
expenses incurred by the Transfer Agent in any month shall be made as
soon as practicable after the receipt of an itemized bill from the
Transfer Agent.

Any compensation jointly agreed to hereunder may be adjusted from time
to time by attaching to this Agreement a revised Schedule A, dated and
signed by an officer of each party.

3. Documents. The Company will furnish from time to time such
certificates, documents or opinions as the Transfer Agent deems to be
appropriate or necessary for the proper performance of its duties.

4. Representations of the Company and the Transfer Agent.

(a) The Company represents to the Transfer Agent that all
outstanding shares are validly issued, fully paid and
non-assessable by the Company. When shares are hereafter
issued in accordance with the terms of the Company's Articles
of Incorporation and its By-laws, such shares shall be validly
issued, fully paid and non-assessable by the Company.

(b) The Transfer Agent represents that it is registered under
Section 17A(c) of the Securities Exchange Act of 1934. The
Transfer Agent agrees to maintain the necessary facilities,
equipment and personnel to perform its duties and obligations
under this agreement and to comply with all applicable laws.

<PAGE>

5. Duties of the Transfer Agent. The Transfer Agent shall be responsible,
separately and through its subsidiaries or affiliates, for the
following functions:

(a) Sale of Fund Shares.

(1) On receipt of an application and payment, wired
instructions and payment, or payment identified as
being for the account of a shareholder, the Transfer
Agent will deposit the payment, prepare and present
the necessary report to the Custodian and record the
purchase of shares in a timely fashion in accordance
with the terms of the Fund's prospectus. All shares
shall be held in book entry form and no certificate
shall be issued unless the Fund is permitted to do so
by its prospectus and the purchaser so requests.

(2) On receipt of notice that payment was dishonored, the
Transfer Agent shall stop redemptions of all shares
owned by the purchaser related to that payment, place
a stop payment on any checks that have been issued to
redeem shares of the purchaser and take such other
action as it deems appropriate.

(b) Redemption of Fund Shares. On receipt of instructions to
redeem shares in accordance with the terms of the Fund's
prospectus, the Transfer Agent will record the redemption of
shares of the Fund, prepare and present the necessary report
to the Custodian and pay the proceeds of the redemption to the
shareholder, an authorized agent or legal representative upon
the receipt of the monies from the Custodian.

(c) Transfer or Other Change Pertaining to Fund Shares. On receipt
of instructions or forms acceptable to the Transfer Agent to
transfer the shares to the name of a new owner, change the
name or address of the present owner or take other legal
action, the Transfer Agent will take such action as is
requested.

(d) Exchange of Fund Shares. On receipt of instructions to
exchange the shares of the Fund for the shares of another fund
in the IDS MUTUAL FUND GROUP or other American Express
Financial Corporation product in accordance with the terms of
the prospectus, the Transfer Agent will process the exchange
in the same manner as a redemption and sale of shares.

(e) Right to Seek Assurance. The Transfer Agent may refuse to
transfer, exchange or redeem shares of the Fund or take any
action requested by a shareholder until it is satisfied that
the requested transaction or action is legally authorized or
until it is satisfied there is no basis for any claims adverse
to the transaction or action. It may rely on the provisions of
the Uniform Act for the Simplification of Fiduciary Security
Transfers or the Uniform Commercial Code. The Company shall
indemnify the Transfer Agent for any act done or omitted to be
done in reliance on such laws or for refusing to transfer,
exchange or redeem shares or taking any requested action if it
acts on a good faith belief that the transaction or action is
illegal or unauthorized.

<PAGE>

(f) Shareholder Records, Reports and Services.

(1) The Transfer Agent shall maintain all shareholder
accounts, which shall contain all required tax,
legally imposed and regulatory information; shall
provide shareholders, and file with federal and state
agencies, all required tax and other reports
pertaining to shareholder accounts; shall prepare
shareholder mailing lists; shall cause to be printed
and mailed all required prospectuses, annual reports,
semiannual reports, statements of additional
information (upon request), proxies and other
mailings to shareholders; and shall cause proxies to
be tabulated.

(2) The Transfer Agent shall respond to all valid
inquiries related to its duties under this Agreement.

(3) The Transfer Agent shall create and maintain all
records in accordance with all applicable laws, rules
and regulations, including, but not limited to, the
records required by Section 31(a) of the Investment
Company Act of 1940.

(g) Dividends and Distributions. The Transfer Agent shall prepare
and present the necessary report to the Custodian and shall
cause to be prepared and transmitted the payment of income
dividends and capital gains distributions or cause to be
recorded the investment of such dividends and distributions in
additional shares of the Fund or as directed by instructions
or forms acceptable to the Transfer Agent.

(h) Confirmations and Statements. The Transfer Agent shall confirm
each transaction either at the time of the transaction or
through periodic reports as may be legally permitted.

(i) Lost or Stolen Checks. The Transfer Agent will replace lost or
stolen checks issued to shareholders upon receipt of proper
notification and will maintain any stop payment orders against
the lost or stolen checks as it is economically desirable to
do.

(j) Reports to Company. The Transfer Agent will provide reports
pertaining to the services provided under this Agreement as
the Company may request to ascertain the quality and level of
services being provided or as required by law.

(k) Other Duties. The Transfer Agent may perform other duties for
additional compensation if agreed to in writing by the parties
to this Agreement.

6. Ownership and Confidentiality of Records. The Transfer Agent agrees
that all records prepared or maintained by it relating to the services
to be performed by it under the terms of this Agreement are the
property of the Company and may be inspected by the Company or any
person retained by the Company at reasonable times. The Company and
Transfer Agent agree to protect the confidentiality of those records.

<PAGE>

7. Action by Board and Opinion of Counsel. The Transfer Agent may rely on
resolutions of the Board of Directors (the "Board") or the Executive
Committee of the Board and on opinion of counsel for the Company.

8. Duty of Care. It is understood and agreed that, in furnishing the Company
with the services as herein provided, neither the Transfer Agent, nor any
officer, director or agent thereof shall be held liable for any loss
arising out of or in connection with their actions under this Agreement so
long as they act in good faith and with due diligence, and are not
negligent or guilty of any willful misconduct. It is further understood and
agreed that the Transfer Agent may rely upon information furnished to it
reasonably believed to be accurate and reliable. In the event the Transfer
Agent is unable to perform its obligations under the terms of this
Agreement because of an act of God, strike or equipment or transmission
failure reasonably beyond its control, the Transfer Agent shall not be
liable for any damages resulting from such failure.

9. Term and Termination. This Agreement shall become effective on the date
first set forth above (the "Effective Date") and shall continue in effect
from year to year thereafter as the parties may mutually agree; provided
that either party may terminate this Agreement by giving the other party
notice in writing specifying the date of such termination, which shall be
not less than 60 days after the date of receipt of such notice. In the
event such notice is given by the Company, it shall be accompanied by a
vote of the Board, certified by the Secretary, electing to terminate this
Agreement and designating a successor transfer agent or transfer agents.
Upon such termination and at the expense of the Company, the Transfer Agent
will deliver to such successor a certified list of shareholders of the Fund
(with name, address and taxpayer identification or Social Security number),
a historical record of the account of each shareholder and the status
thereof, and all other relevant books, records, correspondence, and other
data established or maintained by the Transfer Agent under this Agreement
in the form reasonably acceptable to the Company, and will cooperate in the
transfer of such duties and responsibilities, including provisions for
assistance from the Transfer Agent's personnel in the establishment of
books, records and other data by such successor or successors.

10. Amendment. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties.

11. Subcontracting. The Company agrees that the Transfer Agent may subcontract
for certain of the services described under this Agreement with the
understanding that there shall be no diminution in the quality or level of
the services and that the Transfer Agent remains fully responsible for the
services. Except for out-of-pocket expenses identified in Schedule B, the
Transfer Agent shall bear the cost of subcontracting such services, unless
otherwise agreed by the parties.

<PAGE>

12. Miscellaneous.

(a) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable
without the written consent of the other party.

(b) This Agreement shall be governed by the laws of the
State of Minnesota.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers as of the day and year written above.

IDS MONEY MARKET SERIES, INC.

By: _____________________________________________
Leslie L. Ogg
Vice President

AMERICAN EXPRESS CLIENT SERVICE CORPORATION

By: _____________________________________________
Barry J. Murphy
President

<PAGE>

Schedule A

IDS MONEY MARKET SERIES, INC.

FEE

The annual per account fee for services under this agreement, accrued daily and
payable monthly, is as follows:

Class A Class B Class Y
IDS Cash Management Fund $24.00 $25.00 $22.00

<PAGE>

Schedule B

OUT-OF-POCKET EXPENSES

The Company shall reimburse the Transfer Agent monthly for the following
out-of-pocket expenses:

o typesetting, printing, paper, envelopes, postage and return postage for
proxy soliciting material, and proxy tabulation costs

o printing, paper, envelopes and postage for dividend notices, dividend
checks, records of account, purchase confirmations, exchange
confirmations and exchange prospectuses, redemption confirmations,
redemption checks, confirmations on changes of address and any other
communication required to be sent to shareholders

o typesetting, printing, paper, envelopes and postage for prospectuses,
annual and semiannual reports, statements of additional information,
supplements for prospectuses and statements of additional information
and other required mailings to shareholders

o stop orders

o outgoing wire charges

o other expenses incurred at the request or with the consent of the
Company

<PAGE>

Plan under Section 18f-3(d)
April 1999

Filed pursuant to Item 23(o) of Form N-1A

Separate Arrangements

Each class of shares will represent interests in the same portfolio of
investments of the Fund and be identical except those differences that relate to
(a) the impact of the disproportionate payments made under the Rule 12b-1 plan;;
(b) the differences in class expenses including transfer agent fees and any
other expense determined by the board to be a class expense; and (c) the
difference in voting rights on the 12b-1 plan, exchange privileges and class
designations. The current classes of shares are as follows:

Class A shares - no sales charge.

Class B shares - contingent deferred sales charge ranging from 5% down
to 0% after six years.

Class Y shares - no sales charge.

Expense Allocation Procedures

American Express Financial Corporation, as the Fund's administrator, on a daily
basis shall allocate the income, expenses, and realized and unrealized gains and
losses of the Fund on the basis of the relative percentage of net assets of each
class of shares, except class specific expenses for 12b-1 distribution fees and
transfer agent fees which shall be paid directly by each class as follows:

12b-1 fee:

Class B: 75 basis points

Transfer agent fee:

Class A: an additional $2 for each shareholder account
Class B: an additional $3 for each shareholder account

Should at any time an expense of a class be waived or reimbursed, American
Express Financial Corporation first shall determine that such waiver or
reimbursement would not result in another class subsidizing the class, is fair
and equitable to all classes and does not operate to the detriment of another
class and then shall monitor the implementation and operation to assure the
waiver or reimbursement operates consistent with the determination. The board
shall monitor the actions of American Express Financial Corporation.

Exchange Privileges

Shares of a class may be exchanged for shares of the same class of another fund
in the IDS MUTUAL FUND GROUP.

Conversion Privileges

Class B shares including a proportionate amount of shares acquired through
reinvestment of distributions shall convert in the ninth year of ownership into
Class A shares at relative net asset values without the imposition of any fee.

<PAGE>

DIRECTORS/TRUSTEES POWER OF ATTORNEY

City of Minneapolis
State of Minnesota

Each of the undersigned, as directors and trustees of the below listed
open-end, diversifed investment companies that previously have filed
registration statements and amendments thereto pursuant to the requirements of
the Securities Act of 1933 and the Investment Company Act of 1940 with the
Securities and Exchange Commission:

1933 Act 1940 Act
Reg. Number Reg. Number

IDS Bond Fund, Inc. 2-51586 811-2503
IDS California Tax-Exempt Trust 33-5103 811-4646
IDS Discovery Fund, Inc. 2-72174 811-3178
IDS Equity Select Fund, Inc. 2-13188 811-772
IDS Extra Income Fund, Inc. 2-86637 811-3848
IDS Federal Income Fund, Inc. 2-96512 811-4260
IDS Global Series, Inc. 33-25824 811-5696
IDS Growth Fund, Inc. 2-38355 811-2111
IDS High Yield Tax-Exempt Fund, Inc. 2-63552 811-2901
IDS International Fund, Inc. 2-92309 811-4075
IDS Investment Series, Inc. 2-11328 811-54
IDS Managed Retirement Fund, Inc. 2-93801 811-4133
IDS Market Advantage Series, Inc. 33-30770 811-5897
IDS Money Market Series, Inc. 2-54516 811-2591
IDS New Dimensions Fund, Inc. 2-28529 811-1629
IDS Precious Metals Fund, Inc. 2-93745 811-4132
IDS Progressive Fund, Inc. 2-30059 811-1714
IDS Selective Fund, Inc. 2-10700 811-499
IDS Special Tax-Exempt Series Trust 33-5102 811-4647
IDS Stock Fund, Inc. 2-11358 811-498
IDS Strategy Fund, Inc. 2-89288 811-3956
IDS Tax-Exempt Bond Fund, Inc. 2-57328 811-2686
IDS Tax-Free Money Fund, Inc. 2-66868 811-3003
IDS Utilities Income Fund, Inc. 33-20872 811-5522

hereby constitutes and appoints William R. Pearce, Arne H. Carlson and Leslie
L. Ogg or either one of them, as her or his attorney-in-fact and agent, to sign
for her or him in her or his name, place and stead any and all further
amendments to said registration statements filed pursuant to said Acts and any
rules and regulations thereunder, and to file such amendments with all exhibits
thereto and

<PAGE>

other documents in connection with the Securities and Exchange Commission,
granting to either of them the full power and authority to do and perform each
and every act required and necessary to be done in connection therewith.

Dated the 14th day of January, 1999.

/s/ H. Brewster Atwater, Jr. /s/ William R. Pearce
H. Brewster Atwater, Jr. William R. Pearce

/s/ Arne H. Carlson /s/ Alan K. Simpson
Arne H. Carlson Alan K. Simpson

/s/ Lynne V. Cheney /s/ Edson W. Spencer
Lynne V. Cheney Edson W. Spencer

/s/ William H. Dudley /s/ John R. Thomas
William H. Dudley John R. Thomas

/s/ David R. Hubers /s/ Wheelock Whitney
David R. Hubers Wheelock Whitney

/s/ Heinz F. Hutter /s/ C. Angus Wurtele
Heinz F. Hutter C. Angus Wurtele

/s/ Anne P. Jones
Anne P. Jones

<PAGE>

Officers' Power of Attorney

City of Minneapolis

State of Minnesota

Each of the undersigned, as officers of the below listed open-end, diversified
investment companies that previously have filed registration statements and
amendments thereto pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940 with the Securities and Exchange
Commission:

1933 Act 1940 Act
Reg. Number Reg. Number

IDS Bond Fund, Inc. 2-51586 811-2503
IDS California Tax-Exempt Trust 33-5103 811-4646
IDS Discovery Fund, Inc. 2-72174 811-3178
IDS Equity Select Fund, Inc. 2-13188 811-772
IDS Extra Income Fund, Inc. 2-86637 811-3848
IDS Federal Income Fund, Inc. 2-96512 811-4260
IDS Global Series, Inc. 33-25824 811-5696
IDS Growth Fund, Inc. 2-38355 811-2111
IDS High Yield Tax-Exempt Fund, Inc. 2-63552 811-2901
IDS International Fund, Inc. 2-92309 811-4075
IDS Investment Series, Inc. 2-11328 811-54
IDS Life Investment Series, Inc. 2-73115 811-3218
IDS Life Managed Fund, Inc. 2-96367 811-4252
IDS Life Moneyshare Fund, Inc. 2-72584 811-3190
IDS Life Special Income Fund, Inc. 2-73113 811-3219
IDS Managed Retirement Fund, Inc. 2-93801 811-4133
IDS Market Advantage Series, Inc. 33-30770 811-5897
IDS Money Market Series, Inc. 2-54516 811-2591
IDS New Dimensions Fund, Inc. 2-28529 811-1629
IDS Precious Metals Fund, Inc. 2-93745 811-4132
IDS Progressive Fund, Inc. 2-30059 811-1714
IDS Selective Fund, Inc. 2-10700 811-499
IDS Special Tax-Exempt Series Trust 33-5102 811-4647
IDS Stock Fund, Inc. 2-11358 811-498
IDS Strategy Fund, Inc. 2-89288 811-3956
IDS Tax-Exempt Bond Fund, Inc. 2-57328 811-2686
IDS Tax-Free Money Fund, Inc. 2-66868 811-3003
IDS Utilities Income Fund, Inc. 33-20872 811-5522

hereby constitutes and appoints the other as his attorney-in-fact and agent, to
sign for him in his name, place and stead any and all further amendments to said
registration statement filed pursuant to said Acts and any rules and regulations
thereunder, and to file such amendments with all exhibits thereto and other
documents in connection therewith with the Securities and Exchange Commission,
granting to either of them the full power and authority to do and perform each
and every act required and necessary to be done in connection therewith.

Dated the 1st day of March, 1999

/s/ Arne H. Carlson /s/ Leslie L. Ogg
Arne H. Carlson Leslie L. Ogg

/s/ John R. Thomas /s/ Peter J. Anderson
John R. Thomas Peter J. Anderson

/s/ Frederick C. Quirsfeld /s/ John M. Knight
Frederick C. Quirsfeld John M. Knight