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MISSOURI PROSPECTUS SUPPLEMENT August 23, 1996*
IDS Research Opportunities Fund Prospectus (Aug. 5, 1996) S-6356A
(8/96)
The prospectus has been revised to add:
Descriptions of derivative instruments
What follows are brief descriptions of derivative instruments the
Portfolio may use. At various times the Portfolio may use some or
all of these instruments and is not limited to these instruments.
It may use other similar types of instruments if they are
consistent with the Portfolio's investment goal and policies. For
more information on these instruments, see the SAI.
Options and futures contracts. An option is an agreement to buy or
sell an instrument at a set price during a certain period of time.
A futures contract is an agreement to buy and sell an instrument
for a set price on a future date. The Portfolio may buy and sell
options and futures contracts to manage its exposure to changing
interest rates, security prices and currency exchange rates.
Options and futures may be used to hedge the Portfolio's
investments against price fluctuations or to increase market
exposure.
Indexed securities. The value of indexed securities is linked to
currencies, interest rates, commodities, indexes or other financial
indicators. Most indexed securities are short- to intermediate-
term fixed income securities whose values at maturity or interest
rates rise or fall according to the change in one or more specified
underlying instruments. Indexed securities may be more volatile
than the underlying instrument itself.
Structured products. Structured products are over-the-counter
financial instruments created specifically to meet the needs of one
or a small number of investors. The instrument may consist of a
warrant, an option or a forward contract embedded in a note or any
of a wide variety of debt, equity and/or currency combinations.
Risks of structured products include the inability to close such
instruments, rapid changes in the market and defaults by other
parties.
The section "Special considerations regarding master/feeder
structure" has been revised to add:
To date, AEFC has sponsored and advised only traditionally
structured funds that invest directly in a portfolio of securities
and retain their own investment manager. Funds that invest all
their assets in interests in a separate investment company are a
relatively new development in the mutual fund industry and may be
subject to additional regulations and risks.
*Valid until next prospectus update
Form No. S-6356-2 (8/96)
