<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. 21 (File No. 2-93801)
and/or
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 22 (File No. 811-4133)
------------------------
IDS MANAGED RETIREMENT FUND, 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)
/X/ on March 20, 1995 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / on (date) pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(ii)
/ / on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
/X/ This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
------------------------
THE REGISTRANT HAS REGISTERED AN INDEFINITE NUMBER OR AMOUNT OF SECURITIES UNDER
THE SECURITIES ACT OF 1933 PURSUANT TO SECTION 24F-2 OF THE INVESTMENT COMPANY
ACT OF 1940. REGISTRANT'S RULE 24F-2 NOTICE FOR ITS MOST RECENT FISCAL YEAR WAS
FILED ON OR ABOUT JANUARY 27, 1995.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION IN THE PROSPECTUS AND THE STATEMENT OF
ADDITIONAL INFORMATION CALLED FOR BY THE ITEMS
ENUMERATED IN PART A AND PART B OF FORM N-1A.
Negative answers omitted from Part A or Part B are so indicated.
<TABLE>
<CAPTION>
PART A
- ----------------------------------------------------------------------------------------------------------------------
ITEM NO. SECTION IN PROSPECTUS
- ---------------- ----------------------------------------------------------------------------------------------------
<C> <S>
1 Cover page of prospectus
2 The fund in brief; Sales charge and fund expenses
3(a) Financial highlights
(b) NA
(c) Performance
(d) Financial highlights
4(a) The fund in brief; Investment policies and risks; How the fund is organized
(b) Investment policies and risks
(c) Investment policies and risks
5(a) Directors and officers; Directors and officers of the fund (listing)
(b) How the fund is organized; About American Express Financial Corporation
(b)(i) About American Express Financial Corporation -- General information
(b)(ii) Investment manager and transfer agent
(b)(iii) Investment manager and transfer agent
(c) Portfolio manager
(d) The fund in brief
(e) Investment manager and transfer agent
(f) Distributor
(g) Investment manager and transfer agent
5A(a) *
(b) *
6(a) Shares; Voting rights
(b) NA
(c) NA
(d) Voting rights
(e) Cover page; Special shareholder services
(f) Dividends and capital gain distributions; Reinvestments
(g) Taxes
7(a) Distributor
(b) Key terms; Valuing assets
(c) How to buy, exchange or sell shares
(d) How to buy shares
(e) NA
(f) Distributor
8(a) How to sell shares
(b) NA
(c) How to buy shares: Three ways to invest
(d) How to buy, exchange or sell shares: Redemption policies -- "Important..."
9 None
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PART B
- ----------------------------------------------------------------------------------------------------------------------
ITEM NO. SECTION IN SAI
- ---------------- ----------------------------------------------------------------------------------------------------
<C> <S>
10 Cover page of SAI
11 Table of Contents
12 NA
13(a) Additional Investment Policies; all appendices except Dollar-Cost Averaging
(b) Additional Investment Policies
(c) Additional Investment Policies
(d) Portfolio Transactions
14(a) Directors and officers of the fund;** Directors and Officers
(b) Directors and Officers
(c) Directors and Officers
15(a) NA
(b) NA
(c) Directors and Officers
16(a)(i) How the fund is organized; About American Express Financial Corporation**
(a)(ii) Agreements: Investment Management Services Agreement, Plan and Agreement of Distribution
(a)(iii) Agreements: Investment Management Services Agreement
(b) Agreements: Investment Management Services Agreement
(c) NA
(d) Agreements: Administrative Services Agreement, Shareholder Service Agreement
(e) NA
(f) Agreements: Distribution Agreement
(g) NA
(h) Custodian; Independent Auditors
(i) Agreements: Transfer Agency Agreement; Custodian
17(a) Portfolio Transactions
(b) Brokerage Commissions Paid to Brokers Affiliated with American Express Financial Corporation
(c) Portfolio Transactions
(d) Portfolio Transactions
(e) Portfolio Transactions
18(a) Shares and Voting rights**
(b) NA
19(a) Investing in the Fund
(b) Valuing Fund Shares; Investing in the Fund
(c) NA
20 Taxes
21(a) Agreements: Distribution Agreement
(b) Agreements: Distribution Agreement
(c) NA
22(a) Performance Information (for money market funds only)
(b) Performance Information (for all funds except money market funds)
23 Financial Statements
<FN>
- ------------------------
*Designates information is located in annual report.
**Designates page number in prospectus.
</TABLE>
<PAGE>
This prospectus IDS
contains facts that can MANAGED
help you decide if the RETIREMENT FUND
fund is the right
investment for you. PROSPECTUS
Read it before you MARCH 20, 1995
invest and keep it for
future reference. [GRAPHIC]
Additional facts about THE GOAL OF IDS
the fund are in a MANAGED RETIREMENT
Statement of Additional FUND, INC. IS TO
Information (SAI), MAXIMIZE TOTAL RETURN
filed with the THROUGH A COMBINATION
Securities and Exchange OF GROWTH OF CAPITAL
Commission. The SAI, AND CURRENT INCOME.
dated March 20, 1995,
is incorporated here by American Express
reference. For a free Shareholder Service
copy, contact American P.O. Box 534
Express Shareholder Minneapolis, MN
Service. 55440-0534
612-671-3733
THESE SECURITIES HAVE TTY: 800-846-4852
NOT BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE
SECURITIES COMMISSION,
NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES
COMMISSION PASSED UPON
THE ACCURACY OR
ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
SHARES IN THE FUND
ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR
GUARANTEED OR
ENDORSED BY, ANY
BANK, AND SHARES ARE
NOT FEDERALLY INSURED
BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION,
THE FEDERAL RESERVE
BOARD, OR ANY
OTHER AGENCY.
<PAGE>
- ------------------------------------------
TABLE OF CONTENTS
- ------------------------------------------
THE FUND IN BRIEF
Goal 3P
Types of fund investments 3P
Manager and distributor 3P
Portfolio manager 3P
Alternative sales arrangements 4P
- ------------------------------------------
SALES CHARGE AND FUND EXPENSES
- ------------------------------------------
PERFORMANCE
Financial highlights 7P
Total returns 8P
Key terms 10P
- ------------------------------------------
INVESTMENT POLICIES AND RISKS
Facts about investments and their
risks 12P
Alternative investment option 16P
Valuing assets 16P
- ------------------------------------------
HOW TO BUY, EXCHANGE OR SELL SHARES
Alternative sales arrangements 17P
How to buy shares 20P
How to exchange shares 23P
How to sell shares 23P
Reductions and waivers of the
sales charge 28P
- ------------------------------------------
SPECIAL SHAREHOLDER SERVICES
Services 33P
Quick telephone reference 33P
- ------------------------------------------
DISTRIBUTIONS AND TAXES
Dividend and capital gain
distributions 34P
Reinvestments 35P
Taxes 36P
- ------------------------------------------
HOW THE FUND IS ORGANIZED
Shares 39P
Voting rights 39P
Shareholder meetings 40P
Directors and officers 40P
Investment manager and transfer
agent 42P
Distributor 44P
- ------------------------------------------
ABOUT AMERICAN EXPRESS FINANCIAL CORPORATION
General information 46P
- ------------------------------------------
APPENDIX
Descriptions of derivative
instruments 47P
2P
<PAGE>
----------------------------------------------------------
The fund in brief
GOAL
IDS Managed Retirement Fund seeks to provide shareholders maximum
total return through a combination of growth of capital and
current income. Because any investment involves risk, achieving
this goal cannot be guaranteed. Only shareholders can change the
goal.
TYPES OF FUND INVESTMENTS
The fund is a diversified mutual fund that invests in common and
preferred stocks, convertible securities, debt securities,
derivative instruments and money market instruments. The
investments are both U.S. and foreign. Under normal market
conditions, at least 50% of the fund's total assets will be in
common stocks. Some of the fund's investments may be considered
speculative and involve additional investment risks.
MANAGER AND DISTRIBUTOR
The fund is managed by American Express Financial Corporation, a
provider of financial services since 1894. American Express
Financial Corporation currently manages more than $37 billion in
assets for the IDS MUTUAL FUND GROUP. Shares of the fund are sold
through American Express Financial Advisors Inc., a wholly
owned subsidiary of American Express Financial Corporation.
PORTFOLIO MANAGER
Richard Lazarchic joined American Express Financial Corporation
in 1979 and serves as portfolio manager. He has managed this fund
since 1993. He was associate portfolio manager of IDS Mutual from
1988 through 1989 and served as portfolio manager of IDS
Utilities Income Fund from 1989 through mid 1993. He also serves
as portfolio manager of IDS Life Series International Equity
Portfolio.
3P
<PAGE>
- ---------------------------------------------------------------------------
The fund in brief
ALTERNATIVE SALES ARRANGEMENTS
The fund offers its shares in three classes. Class A shares are
subject to a sales charge at the time of purchase. Class B shares
are subject to a contingent deferred sales charge (CDSC) on
redemptions made within six years of purchase and an annual
distribution (12b-1) fee. Class Y shares are sold without a sales
charge to qualifying institutional investors. Other differences
between the classes include the fees paid by each class. The fund
offers these alternatives so you may choose the method of
purchasing shares that is most beneficial given the amount of
purchase, length of time you expect to hold the shares and other
circumstances.
4P
<PAGE>
----------------------------------------------------------
Sales Charge and fund expenses
When you buy Class A shares, you pay a maximum sales charge of 5%
of the public offering price. This charge can be reduced,
depending on your total investments in IDS funds. See "Reductions
of the sales charge." No sales charge applies at the time of
purchase of Class B shares, although Class B shares may be
subject to a CDSC on redemptions made within six years and are
subject to annual distribution (12b-1) fees. Class Y shares are
sold without a sales charge to qualifying institutional
investors. Shareholder transaction expenses are incurred directly
by an investor on the purchase or redemption of fund shares. Fund
operating expenses are paid out of fund assets for each class of
shares. Operating expenses are reflected in the fund's daily
share price and dividends, and are not charged directly to
shareholder accounts.
-------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS Y
<S> <C> <C> <C>
Maximum sales charge on
purchases (as a percentage of
offering price)............... 5% 0% 0%
Maximum deferred sales charge
imposed on redemptions (as a
percentage of original
purchase price)............... 0% 5% 0%
-----------------------------------------------------------
</TABLE>
-------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES*
(% OF AVERAGE DAILY NET ASSETS):
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS Y
<S> <C> <C> <C>
-----------------------------------------------------------
Management fee............... 0.50% 0.50% 0.50%
-----------------------------------------------------------
12b-1 fee.................... 0.00% 0.75% 0.00%
-----------------------------------------------------------
Other expenses**............. 0.46% 0.47% 0.28%
-----------------------------------------------------------
Total........................ 0.96% 1.72% 0.78%
<FN>
*Expenses for Class A are based on actual expenses for the
last fiscal year, restated to reflect current fees. Expenses
for Class B and Class Y are estimated based on the restated
expenses for Class A, except that the 12b-1 fee and transfer
agent fee (under other expenses) for Class B are based on
agreements for that class.
**Other expenses include an administrative services fee, a
shareholder services fee, a transfer agent fee and other
non-advisory expenses.
</TABLE>
5P
<PAGE>
----------------------------------------------------------
Sales charge and fund expenses
EXAMPLE: Suppose for each year for the next 10 years, fund
expenses are as above and annual return is 5%. If you sold your
shares at the end of the following years, for each $1,000
invested, you would pay total expenses of:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years**
<S> <C> <C> <C> <C>
------------------------------------------------------------------------
Class A...................... $59 $79 $101 $162
------------------------------------------------------------------------
Class B...................... $67 $94 $113 $183
------------------------------------------------------------------------
Class B*..................... $17 $54 $93 $183
------------------------------------------------------------------------
Class Y...................... $8 $25 $43 $97
<FN>
*Assuming Class B shares are not redeemed at the end of the
period.
**Based on conversion of Class B shares to Class A shares after
8 years.
</TABLE>
THIS EXAMPLE DOES NOT REPRESENT ACTUAL EXPENSES, PAST OR FUTURE.
ACTUAL EXPENSES MAY BE HIGHER OR LOWER THAN THOSE SHOWN. Because
Class B pays annual distribution (12b-1) fees, long-term
shareholders of Class B may indirectly pay an equivalent of more
than a 6.25% sales charge, the maximum permitted by the National
Association of Securities Dealers.
6P
<PAGE>
----------------------------------------------------------
Performance
FINANCIAL HIGHLIGHTS
FISCAL PERIOD ENDED NOV. 30,
- --------------------------------------------------------------
PER SHARE INCOME AND CAPITAL CHANGES*
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------
Net asset value $12.16 $11.91 $11.08 $9.01 $10.05 $7.48 $6.82 $6.95 $5.61 $5.00
beginning of period
INCOME FROM INVESTMENT OPERATIONS:
-----------------------------------------------------------------------------------
Net investment .13 .17 .21 .20 .27 .26 .16 .13 .16 .15
income
-----------------------------------------------------------------------------------
Net gains (losses) .03 1.07 2.04 2.45 (.39) 2.51 .66 (.13) 1.61 .62
(both realized and
unrealized)
-----------------------------------------------------------------------------------
Total from .16 1.24 2.25 2.65 (.12) 2.77 .82 -- 1.77 .77
investment
operations
LESS DISTRIBUTIONS:
-----------------------------------------------------------------------------------
Dividends from net (.12) (.19) (.21) (.27) (.25) (.20) (.16) (.13) (.16) (.14)
investment income
-----------------------------------------------------------------------------------
Distributions from (.90) (.80) (1.20) (.31) (.67) -- -- -- (.27) (.02)
realized
gains
-----------------------------------------------------------------------------------
Excess distributions (.01) -- (.01) -- -- -- -- -- -- --
of realized gains
-----------------------------------------------------------------------------------
Total distributions (1.03) (.99) (1.42) (.58) (.92) (.20) (.16) (.13) (.43) (.16)
-----------------------------------------------------------------------------------
Net asset value, end $11.29 $12.16 $11.91 $11.08 $9.01 $10.05 $7.48 $6.82 $6.95 $5.61
of period
</TABLE>
- --------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------
Net assets, end of $2,252 $1,845 $1,425 $1,007 $715 $700 $644 $673 $318 $84
period (in millions)
-----------------------------------------------------------------------------------
Ratio of expenses to .85% .83% .85% .90% .90% .92% .88% .88% .99% 1.08%***
average daily net
assets
-----------------------------------------------------------------------------------
Ratio of net income 1.13% 1.46% 1.94% 1.98% 2.94% 2.82% 2.07% 1.83% 2.78% 3.09%***
to average daily net
assets
-----------------------------------------------------------------------------------
Portfolio turnover 66% 61% 46% 81% 78% 73% 102% 87% 127% 89%
rate (excluding
short-term
securities)
-----------------------------------------------------------------------------------
Total return+ 1.0% 11.2% 22.3% 30.9% (1.2%) 37.3% 12.0% (0.3%) 31.8% 15.6%++
<FN>
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Commencement of operations. Period from Jan. 23, 1985 to Nov. 30, 1985.
***Adjusted to an annual basis.
+Total return does not reflect payment of a sales charge.
++For the fiscal period ended Nov. 30, 1985, the annualized total return is
18.5%.
</TABLE>
The information in this table has been audited by KPMG Peat Marwick LLP,
independent auditors. The independent auditors' report and additional
information about the performance of the fund are contained in the fund's annual
report which, if not included with this prospectus, may be obtained without
charge. Information on Class B and Class Y shares is not included because no
shares of those classes were outstanding for the periods shown.
7P
<PAGE>
- ---------------------------------------------------------------------------
Performance
TOTAL RETURNS
-------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
AS OF NOV. 30, 1994
<TABLE>
<CAPTION>
1 YEAR 5 YEARS SINCE
PURCHASE MADE AGO AGO INCEPTION*
<S> <C> <C> <C>
Managed Retirement:
--------------------------------------------------------------
Class A -4.02% +11.03% +14.94%
--------------------------------------------------------------
S&P 500 +1.06% 8.92% 13.57%
--------------------------------------------------------------
Lipper Growth and Income Fund
Index +1.08% 8.90% 12.42%
<FN>
*Jan. 23, 1985
</TABLE>
-------------------------------------------------------------
CUMULATIVE TOTAL RETURNS
AS OF NOV. 30, 1994
<TABLE>
<CAPTION>
1 YEAR 5 YEARS SINCE
PURCHASE MADE AGO AGO INCEPTION*
<S> <C> <C> <C>
Managed Retirement:
-----------------------------------------------------------
Class A -4.02% +68.75% +294.21%
-----------------------------------------------------------
S&P 500 +1.06% +53.33% +250.53%
-----------------------------------------------------------
Lipper Growth and Income Fund
Index 1.08% 53.15% 216.41%
<FN>
*Jan. 23, 1985
</TABLE>
These examples show total returns from hypothetical investments
in Class A shares of the fund. These returns are compared to
those of popular indexes for the same periods. No shares for
Class B and Class Y were outstanding during the periods
presented.
For purposes of calculation, information about the fund assumes:
- a sales charge of 5% for Class A shares
- no adjustments for taxes an investor may have paid on the
reinvested income and capital gains
- a period of widely fluctuating securities prices. Returns shown
should not be considered a representation of the fund's future
performance.
8P
<PAGE>
- --------------------------------------------------------------------------------
The fund invests in common stocks that may be different from
those in the indexes. The indexes reflect reinvestment of all
distributions and changes in market prices, but exclude brokerage
commissions or other fees.
Standard & Poor's 500 Stock Index (S&P 500), an unmanaged list of
common stocks, is frequently used as a general measure of market
performance. However, the S&P 500 companies are generally larger
than those in which the fund invests.
Lipper Growth and Income Fund Index, published by Lipper
Analytical Services, Inc., includes 30 funds that are generally
similar to the fund, although some funds in the index may have
somewhat different investment policies or objectives.
9P
<PAGE>
- ---------------------------------------------------------------------------
Performance
-------------------------------------------------------------
KEY TERMS
NET ASSET VALUE (NAV)
Value of a single fund share. For each class, it is the total
market value of all of a fund's investments and other assets
attributable to that class, less any liabilities attributable to
that class, divided by the number of shares of that class
outstanding.
When you buy shares, you pay the NAV plus any applicable sales
charge. When you sell shares, the price you receive is the NAV
minus any applicable sales charge. The NAV usually changes daily,
and is calculated at the close of business, normally 3 p.m.
Central time, each business day (any day the New York Stock
Exchange is open).
PUBLIC
OFFERING PRICE
Price at which you buy shares. It is the NAV plus the sales
charge for Class A. It is the NAV for Class B and Class Y. NAVs
and public offering prices of IDS funds are listed each day in
major newspapers and financial publications for classes of funds
large enough to be listed.
INVESTMENT INCOME
Dividends and interest earned on securities held by the fund.
CAPITAL GAINS OR LOSSES
Increase or decrease in value of the securities the fund holds.
Gains or losses are realized when securities that have increased
or decreased in value are sold. A fund also may have unrealized
gains or losses when securities increase or decrease in value but
are not sold.
DISTRIBUTIONS
Payments to shareholders of two types: investment income
(dividends) and realized net long-term capital gains (capital
gains distributions).
TOTAL RETURN
Sum of all of your returns for a given period, assuming you
reinvest all distributions. Calculated by taking the total value
of shares you own at the end of the period (including shares
acquired by reinvestment), less the price of shares you purchased
at the beginning of the period.
AVERAGE ANNUAL TOTAL RETURN
The annually compounded rate of return over a given time period
(usually two or more years) -- total return for the period
converted to an equivalent annual figure.
10P
<PAGE>
----------------------------------------------------------
Investment policies and risks
The fund invests in common and preferred stocks, convertible
securities, debt securities, derivative instruments and money
market instruments. The investments are both U.S. and foreign.
Under normal market conditions, at least 50% of the fund's total
assets will be invested in common stocks. Stocks and debt
securities will be selected for capital appreciation, income or
both, based on the portfolio manager's assessment of market
conditions.
The various types of investments the portfolio manager uses to
achieve investment performance are described in more detail in
the next section and in the SAI.
11P
<PAGE>
- ---------------------------------------------------------------------------
Investment policies and risks
FACTS ABOUT INVESTMENTS AND THEIR RISKS
COMMON STOCKS: Common stocks are subject to market fluctuations.
Stocks of larger, established companies that pay dividends may be
less volatile than the stock market as a whole.
PREFERRED STOCKS: If a company earns a profit, it generally must
pay its preferred stockholders a dividend at a pre-established
rate.
CONVERTIBLE SECURITIES: These securities generally are preferred
stocks or bonds that can be exchanged for other securities,
usually common stock, at prestated prices. When the trading price
of the common stock makes the exchange likely, the convertible
securities trade more like common stock.
DEBT SECURITIES: The price of an investment-grade bond fluctuates
as interest rates change or if its credit rating is upgraded or
downgraded. The fund only invests in bonds given the four highest
ratings by Moody's Investors Service, Inc. or by Standard &
Poor's Corporation or in bonds of comparable quality in the
judgment of the fund's portfolio manager. Securities that are
subsequently downgraded in quality may continue to be held by the
fund, and will be sold only if the fund's portfolio manager
believes it is advantageous to do so.
12P
<PAGE>
- --------------------------------------------------------------------------------
FOREIGN INVESTMENTS: Securities of foreign companies and
governments may be traded in the United States, but often they
are traded only on foreign markets. Frequently, there is less
information about foreign companies and less government
supervision of foreign markets. Foreign investments are subject
to political and economic risks of the countries in which the
investments are made, including the possibility of seizure or
nationalization of companies, imposition of withholding taxes on
income, establishment of exchange controls or adoption of other
restrictions that might affect an investment adversely. If an
investment is made in a foreign market, the local currency must
be purchased. This is done by using a forward contract in which
the price of the foreign currency in U.S. dollars is established
on the date the trade is made, but delivery of the currency is
not made until the securities are received. As long as the fund
holds foreign currencies or securities valued in foreign
currencies, the price of a fund share will be affected by changes
in the value of the currencies relative to the U.S. dollar.
Because of the limited trading volume in some foreign markets,
efforts to buy or sell a security may change the price of the
security, and it may be difficult to complete the transaction.
The fund may invest up to 25% of its total assets in foreign
investments.
13P
<PAGE>
- ---------------------------------------------------------------------------
Investment policies and risks
DERIVATIVE INSTRUMENTS: The portfolio manager may use derivative
instruments in addition to securities to achieve investment
performance. Derivative instruments include futures, options and
forward contracts. Such instruments may be used to maintain cash
reserves while remaining fully invested, to offset anticipated
declines in values of investments, to facilitate trading, to
reduce transaction costs, or to pursue higher investment returns.
Derivative instruments are characterized by requiring little or
no initial payment and a daily change in price based on or
derived from a security, a currency, a group of securities or
currencies, or an index. A number of strategies or combination of
instruments can be used to achieve the desired investment
performance characteristics. A small change in the value of the
underlying security, currency or index will cause a sizable gain
or loss in the price of the derivative instrument. Derivative
instruments allow the portfolio manager to change the investment
performance characteristics very quickly and at lower costs.
Risks include losses of premiums, rapid changes in prices,
defaults by other parties, and inability to close such
instruments. The fund will use derivative instruments only to
achieve the same investment performance characteristics it could
achieve by directly holding those securities and currencies
permitted under the investment policies. The fund will designate
cash or appropriate liquid assets to cover its portfolio
obligations. No more than 5% of the fund's net assets can be used
at any one time for good faith deposits on futures and premiums
for options on futures that do not offset existing investment
positions. For further information, see the Appendix to this
prospectus.
14P
<PAGE>
- --------------------------------------------------------------------------------
SECURITIES AND DERIVATIVE INSTRUMENTS THAT ARE ILLIQUID: Illiquid
means the security or derivative instrument cannot be sold
quickly in the normal course of business. Some investments cannot
be resold to the U.S. public because of their terms or government
regulations. All securities and derivative instruments, however,
can be sold in private sales, and many may be sold to other
institutions and qualified buyers or on foreign markets. The
portfolio manager will follow guidelines established by the board
of directors and consider relevant factors such as the nature of
the security and the number of likely buyers when determining
whether a security is illiquid. No more than 10% of the fund's
net assets will be held in securities and derivative instruments
that are illiquid.
MONEY MARKET INSTRUMENTS: Short-term debt securities rated in the
top two grades are used to meet daily cash needs and at various
times to hold assets until better investment opportunities arise.
Generally less than 25% of the fund's total assets are in these
money market instruments. However, for temporary defensive
purposes these investments could exceed that amount for a limited
period of time.
The investment policies described above may be changed by the
board of directors.
LENDING PORTFOLIO SECURITIES: The fund may lend its securities to
earn income so long as borrowers provide collateral equal to the
market value of the loans. The risks are that borrowers will not
provide collateral when required or return securities when due.
Unless shareholders approve otherwise, loans may not exceed 30%
of the fund's net assets.
15P
<PAGE>
- ---------------------------------------------------------------------------
Investment policies and risks
ALTERNATIVE INVESTMENT OPTION
In the future, the board of the fund may determine for operating
efficiencies to use a master/feeder structure. Under that
structure, the fund's investment portfolio would be managed by
another investment company with the same goal as the fund, rather
than investing directly in a portfolio of securities.
VALUING ASSETS
- Securities (except bonds) and assets with available market
values are valued on that basis.
- Securities maturing in 60 days or less are valued at amortized
cost.
- Bonds and assets without readily available market values are
valued according to methods selected in good faith by the board
of directors.
16P
<PAGE>
----------------------------------------------------------
How to buy, exchange or sell shares
ALTERNATIVE SALES ARRANGEMENTS
The fund offers three different classes of shares -- Class A,
Class B and Class Y. 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. You may
choose the class that best suits your circumstances and
objectives.
<TABLE>
<CAPTION>
SERVICE FEE
SALES CHARGE AND DISTRIBUTION (AS A % OF AVERAGE
(12B-1) FEE DAILY NET ASSETS) OTHER INFORMATION
<S> <C> <C> <C>
----------------------------------------------------------
Class A Maximum initial sales charge Service fee of 0.175% Initial sales charge waived or
of 5% reduced for certain purchases
----------------------------------------------------------
Class B No initial sales charge; Service fee of 0.175% Shares convert to Class A
distribution fee of 0.75% of after eight years; CDSC waived
daily net assets; maximum CDSC in certain circumstances
of 5% declines to 0% after six
years
----------------------------------------------------------
Class Y None None Available only to certain
qualifying institutional
investors
</TABLE>
CONVERSION OF CLASS B SHARES TO CLASS A SHARES -- Eight calendar
years after Class B shares were originally purchased, Class B
shares will convert to Class A shares and will no longer be
subject to a distribution fee. The conversion will be on the
basis of relative net asset values of the two classes, without
the imposition of any sales charge. Class B shares purchased
through reinvested dividends and distributions will convert to
Class A shares in a pro-rata portion as the Class B shares
purchased other than through reinvestment.
17P
<PAGE>
- ---------------------------------------------------------------------------
How to buy, exchange or sell shares
CONSIDERATIONS IN DETERMINING WHETHER TO PURCHASE CLASS A OR CLASS B SHARES --
You should consider the information below in determining whether to purchase
Class A or Class B shares.
SALES CHARGES ON PURCHASE OR REDEMPTION
IF YOU PURCHASE CLASS A SHARES IF YOU PURCHASE CLASS B SHARES
- - You will not have all of your purchase - All of your money is invested in
price invested. Part of your purchase shares of stock. However, you
price will go to pay the sales charge. will pay a sales charge if you
You will not pay a sales charge when redeem your shares within six
you redeem your shares. years of purchase.
- - You will be able to take advantage of - No reductions of the sales charge
reductions in the sales charge. If are available for large
your investments in IDS funds total purchases.
$250,000 or more, you are better off
paying the reduced sales charge in
Class A than paying the higher fees in
Class B. If you qualify for a waiver
of the sales charge, you should
purchase Class A shares.
- - The sales charges and distribution fee are structured so that you will have
approximately the same total return at the end of eight years regardless of
which class you chose.
ONGOING EXPENSES
- - Your shares will have a lower expense - The distribution and transfer
ratio than Class B shares because agent fees for Class B will cause
Class A does not pay a distribution your shares to have a higher
fee and the transfer agent fee for expense ratio and to pay lower
Class A is lower than the fee for dividends than Class A shares.
Class B. As a result, Class A shares After eight years, Class B shares
will pay higher dividends than Class B will convert to Class A shares
shares. and will no longer be subject to
higher fees.
You should consider how long you plan to hold your shares and whether the
accumulated higher fees and CDSC on Class B shares prior to conversion would be
less than the initial sales charge on Class A shares. Also consider to what
extent the difference would be offset by the lower expenses on Class A shares.
To help you in this analysis, the Example in the "Sales charge and fund
expenses" section of the prospectus illustrates the charges applicable to each
class of shares.
18P
<PAGE>
- --------------------------------------------------------------------------------
CLASS Y SHARES -- Class Y shares are offered to certain
institutional investors. Class Y shares are sold without a
front-end sales charge or a CDSC and are not subject to either a
service fee or a distribution fee. The following investors are
eligible to purchase Class Y shares:
- Qualified employee benefit plans* if the plan:
-- uses a daily transfer recordkeeping service offering
participants daily access to IDS funds and has
-- at least $10 million in plan assets or
-- 500 or more participants; or
-- does not use daily transfer recordkeeping and has
-- at least $3 million invested in funds of the IDS MUTUAL
FUND GROUP or
-- 500 or more participants.
- Trust companies or similar institutions, and charitable
organizations that meet the definition in Section 501(c)(3) of
the Internal Revenue Code.* These must have at least $10 million
invested in funds of the IDS MUTUAL FUND GROUP.
- Nonqualified deferred compensation plans* whose participants
are included in a qualified employee benefit plan described
above.
* Eligibility must be determined in advance by American
Express Financial Advisors. To do so, contact your
financial advisor.
Financial advisors may receive different compensation for selling
Class A, Class B and Class Y shares.
19P
<PAGE>
- ---------------------------------------------------------------------------
How to buy, exchange or sell shares
HOW TO BUY SHARES
If you're investing in this fund for the first time, you'll need
to set up an account. Your financial advisor will help you fill
out and submit an application. Once your account is set up, you
can choose among several convenient ways to invest.
IMPORTANT: When opening an account, you must provide your correct
Taxpayer Identification Number (Social Security or Employer
Identification number). See "Distributions and taxes."
When you buy shares for a new or existing account, the price you
pay per share is determined at the close of business on the day
your investment is received and accepted at the Minneapolis
headquarters.
20P
<PAGE>
- --------------------------------------------------------------------------------
PURCHASE POLICIES:
- Investments must be received and accepted in the Minneapolis
headquarters on a business day before 3 p.m. Central time to be
included in your account that day and to receive that day's
share price. Otherwise your purchase will be processed the next
business day and you will pay the next day's share price.
- The minimums allowed for investment may change from time to
time.
- Wire orders can be accepted only on days when your bank,
American Express Financial Corporation, the fund and Norwest
Bank Minneapolis are open for business.
- Wire purchases are completed when wired payment is received and
the fund accepts the purchase.
- American Express Financial Corporation and the fund are not
responsible for any delays that occur in wiring funds, including
delays in processing by the bank.
- You must pay any fee the bank charges for wiring.
- The fund reserves the right to reject any application for any
reason.
- If your application does not specify which class of share you
are purchasing, it will be assumed that you are investing in
Class A shares.
21P
<PAGE>
- ---------------------------------------------------------------------------
How to buy, exchange or sell shares
THREE WAYS TO INVEST
- --------------------------------------------------------------
- --
1
BY REGULAR Send your check and MINIMUM AMOUNTS
ACCOUNT application (or your name and Initial investment: $2,000
account number if you have an Additional investments: $100
established account) to: Account balances: $300 *
American Express Qualified retirement
Financial Advisors Inc. accounts: none
P.O. Box 74
Minneapolis, MN 55440-0074
Your financial advisor will
help you with this process.
- --------------------------------------------------------------
- --
2
BY Contact your financial advisor MINIMUM AMOUNTS
SCHEDULED to set up one of the following Initial investments: $100
INVESTMENT scheduled plans: Additional investments: $100 /mo.
PLAN - automatic payroll deduction Account balances: none
- bank authorization (on active plans of
- direct deposit of Social monthly payments)
Security check
- other plan approved by the
fund
- --------------------------------------------------------------
- --
3
BY WIRE If you have an established If this information is not
account, you may wire money included, the order may be
to: rejected and all money received by
Norwest Bank Minneapolis the fund, less any costs the fund
Routing No. 091000019 or American Express Financial
Minneapolis, MN Corporation incurs, will be
Attn: Domestic Wire Dept. returned promptly.
Give these instructions: MINIMUM AMOUNTS
Credit IDS Account #00-30-015 Each wire investment: $1,000
for personal account # (your
account number) for (your
name).
*If your account balance falls below $300, you will be asked
in writing to bring it up to $300 or establish a scheduled
investment plan. If you don't do so within 30 days, your
shares can be redeemed and the proceeds mailed to you.
22P
<PAGE>
- --------------------------------------------------------------------------------
HOW TO EXCHANGE SHARES
You can exchange your shares of the fund at no charge for shares
of the same class of any other publicly offered fund in the IDS
MUTUAL FUND GROUP available in your state. Exchanges into IDS
Tax-Free Money Fund must be made from Class A shares. For
complete information, including fees and expenses, read the
prospectus carefully before exchanging into a new fund.
If your exchange request arrives at the Minneapolis headquarters
before the close of business, your shares will be redeemed at the
net asset value set for that day. The proceeds will be used to
purchase new fund shares the same day. Otherwise, your exchange
will take place the next business day at that day's net asset
value.
For tax purposes, an exchange represents a sale and purchase and
may result in a gain or loss. However, you cannot create a tax
loss (or reduce a taxable gain) by exchanging from the fund
within 91 days of your purchase. For further explanation, see the
SAI.
HOW TO SELL SHARES
You can sell (redeem) your shares at any time. American Express
Shareholder Service will mail payment within seven days after
receiving your request.
When you sell shares, the amount you receive may be more or less
than the amount you invested. Your shares will be redeemed at net
asset value, minus any applicable sales charge, at the close of
business on the day your request is accepted at the Minneapolis
headquarters. If your request arrives after the close of
business, the price per share will be the net asset value, minus
any applicable sales charge, at the close of business on the next
business day.
A redemption is a taxable transaction. If the fund's net asset
value when you sell shares is more or less than the cost of your
shares, you will have a gain or loss, which can affect your tax
liability. Redeeming shares held in an IRA or qualified
retirement account may subject you to certain federal taxes,
penalties and reporting requirements. Consult your tax advisor.
23P
<PAGE>
- ---------------------------------------------------------------------------
How to buy, exchange or sell shares
TWO WAYS TO REQUEST AN EXCHANGE OR SALE OF SHARES
- --------------------------------------------------------------
- --
1
BY LETTER Include in your letter: REGULAR MAIL:
- the name of the fund(s) American Express Shareholder
- the class of shares to be Service
exchanged or redeemed Attn: Redemptions
- your account number(s) (for P.O. Box 534
exchanges, both funds must be Minneapolis, MN 55440-0534
registered in the same EXPRESS MAIL:
ownership) American Express Shareholder
- your Taxpayer Identification Service
Number (TIN) Attn: Redemptions
- the dollar amount or number 733 Marquette Ave.
of shares you want to Minneapolis, MN 55402
exchange or sell
- signature of all registered
account owners
- for redemptions, indicate how
you want your sales proceeds
delivered to you
- any paper certificates of
shares you hold
- --------------------------------------------------------------
- --
2
BY PHONE - The fund and American Express American Express Shareholder
American Financial Corporation will Service. Each registered owner
Express honor any telephone exchange must sign the request.
Telephone or redemption request - American Express Financial
Transaction believed to be authentic and Corporation answers phone
Service: will use reasonable requests promptly, but you
800-437-3133 procedures to confirm that may experience delays when
or they are. This includes or call volume is high. If you
612-671-3800 asking identifying questions are unable to get through,
and tape recording calls. So use mail procedure as an
long as reasonable procedures alternative.
are followed, neither the - Phone privileges may be
fund nor American Express modified or discontinued at
Financial Corporation will be any time.
liable for any loss resulting MINIMUM AMOUNT
from fraudulent requests. Redemption: $100
- Phone exchange and redemption MAXIMUM AMOUNT
privileges automatically Redemption: $50,000
apply to all accounts except
custodial, corporate or
qualified retirement accounts
unless you request these
privileges NOT apply by
writing
24P
<PAGE>
- --------------------------------------------------------------------------------
EXCHANGE POLICIES:
- You may make up to three exchanges within any 30-day period,
with each limited to $300,000. These limits do not apply to
scheduled exchange programs and 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.
- Exchanges must be made into the same class in the new fund.
- If your exchange creates a new account, it must satisfy the
minimum investment amount for new purchases.
- Once we receive your exchange request, you cannot cancel it.
- Shares of the new fund may not be used on the same day for
another exchange.
- If your shares are pledged as collateral, the exchange will be
delayed until written approval is obtained from the secured
party.
- American Express Financial Corporation 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.
25P
<PAGE>
- ---------------------------------------------------------------------------
How to buy, exchange or sell shares
REDEMPTION POLICIES:
- A "change of mind" option allows you to change your mind after
requesting a redemption and to use all or part of the proceeds
to buy new shares in the same account at the net asset value,
rather than the offering price on the date of a new purchase. If
you reinvest in this manner, any CDSC you paid on the amount you
are reinvesting also will be reinvested in the fund. To take
advantage of this option, send a written request within 30 days
of the date your redemption request was received. Include your
account number and mention this option. This privilege may be
limited or withdrawn at any time, and it may have tax
consequences.
- A telephone redemption request will not be allowed within 30
days of a phoned-in address change.
IMPORTANT: If you request a redemption of shares you recently
purchased by a check or money order that is not guaranteed, the
fund will wait for your check to clear. Please expect a minimum
of 10 days from the date of purchase before a check is mailed to
you. (A check may be mailed earlier if your bank provides
evidence satisfactory to the fund and American Express Financial
Corporation that your check has cleared.)
26P
<PAGE>
- --------------------------------------------------------------------------------
THREE WAYS TO RECEIVE PAYMENT WHEN YOU SELL SHARES
- --------------------------------------------------------------
- --
1
BY REGULAR - Mailed to the address on
OR EXPRESS record.
MAIL - 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 - Minimum wire redemption:
$1,000.
- Request that money be wired to
your bank.
- Bank account must be in the
same ownership as the IDS fund
account.
NOTE: Pre-authorization required.
For instructions, contact your
financial advisor or American
Express Shareholder Service.
- --------------------------------------------------------------
- --
3
BY - Minimum payment: $50.
SCHEDULED - Contact your financial advisor
PAYOUT or American Express Shareholder
PLAN Service to set up regular
payments to you on a monthly,
bimonthly, quarterly,
semiannual or annual basis.
- Buying new shares while under a
payout plan may be
disadvantageous because of the
sales charges.
27P
<PAGE>
- --------------------------------------------------------------------------------
How to buy, exchange or sell shares
REDUCTIONS AND WAIVERS OF THE SALES CHARGE
CLASS A -- INITIAL SALES CHARGE ALTERNATIVE
On purchases of Class A shares, you pay a 5% sales charge on the
first $50,000 of your total investment and less on investments
after the first $50,000:
-------------------------------------------------------------
TOTAL INVESTMENT SALES CHARGE AS A PERCENT OF:*
<TABLE>
<CAPTION>
PUBLIC OFFERING NET AMOUNT
PRICE INVESTED
<S> <C> <C> <C>
----------------------------------------------------------------------------------
Up to $50,000 5.0% 5.26%
----------------------------------------------------------------------------------
Next $50,000 4.5 4.71
----------------------------------------------------------------------------------
Next $400,000 3.8 3.95
----------------------------------------------------------------------------------
Next $500,000 2.0 2.04
----------------------------------------------------------------------------------
More than $1,000,000 0.0 0.00
<FN>
*To calculate the actual sales charge on an investment greater
than $50,000, amounts for each applicable increment must be
totaled. See the SAI.
</TABLE>
REDUCTIONS OF THE SALES CHARGE ON CLASS A SHARES
Your sales charge may be reduced, depending on the totals of:
- the amount you are investing in this fund now,
- the amount of your existing investment in this fund, if any,
and
- the amount you and your immediate family (spouse or unmarried
children under 21) are investing or have in other funds in the
IDS MUTUAL FUND GROUP that carry a sales charge.
Other policies that affect your sales charge:
- IDS Tax-Free Money Fund and Class A shares of IDS Cash
Management Fund do not carry sales charges. However, you may
count investments in these funds if you acquired shares in them
by exchanging shares from IDS funds that carry sales charges.
28P
<PAGE>
- --------------------------------------------------------------------------------
- IRA purchases or other employee benefit plan purchases made
through a payroll deduction plan or through a plan sponsored by
an employer, association of employers, employee organization or
other similar entity, may be added together to reduce sales
charges for all shares purchased through that plan.
For more details, see the SAI.
WAIVERS OF THE SALES CHARGE FOR CLASS A SHARES
Sales charges do not apply to:
- Current or retired trustees, directors, officers or employees
of the fund or American Express Financial Corporation or its
subsidiaries, their spouses and unmarried children under 21.
- Current or retired American Express financial advisors, their
spouses and unmarried children under 21.
- Qualified employee benefit plans* using a daily transfer
recordkeeping system offering participants daily access to IDS
funds.
(Participants in certain qualified plans for which the initial
sales charge is waived may be subject to a deferred sales charge
of up to 4% on certain redemptions. For more information, see the
SAI.)
- Shareholders who have at least $1 million invested in funds of
the IDS MUTUAL FUND GROUP. If the investment is redeemed in the
first year after purchase, a CDSC of 1% will be charged on the
redemption.
- Purchases made within 30 days after a redemption of shares (up
to the amount redeemed):
-- of a product distributed by American Express Financial
Advisers in a qualified plan subject to a deferred sales charge
or
-- in a qualified plan where American Express Trust Company acts
as trustee or recordkeeper.
29P
<PAGE>
- ---------------------------------------------------------------------------
How to buy, exchange or sell shares
Send the fund a written request along with your payment,
indicating the amount of the redemption and the date on which it
occurred.
- Purchases made with dividend or capital gain distributions from
another fund in the IDS MUTUAL FUND GROUP that has a sales
charge.
* Eligibility must be determined in advance by American Express
Financial Advisors. To do so, contact your financial advisor.
30P
<PAGE>
- --------------------------------------------------------------------------------
CLASS B -- CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE
Where a CDSC is imposed on a redemption, it is based on the
amount of the redemption and the number of calendar years,
including the year of purchase, between purchase and redemption.
The following table shows the declining scale of percentages that
apply to redemptions during each year after a purchase:
<TABLE>
<CAPTION>
IF A REDEMPTION THE PERCENTAGE
IS MADE RATE FOR THE
DURING THE CDSC IS:
<S> <C>
-----------------------------------------------------------------
First year 5%
-----------------------------------------------------------------
Second year 4%
-----------------------------------------------------------------
Third year 4%
-----------------------------------------------------------------
Fourth year 3%
-----------------------------------------------------------------
Fifth year 2%
-----------------------------------------------------------------
Sixth year 1%
-----------------------------------------------------------------
Seventh year 0%
</TABLE>
If the amount you are redeeming reduces the current net asset
value of your investment in Class B shares below the total dollar
amount of all your purchase payments during the last six years
(including the year in which your redemption is made), the CDSC
is based on the lower of the redeemed purchase payments or market
value.
The following example illustrates how the CDSC is applied. 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 dividend and capital gain distributions. You
could redeem any amount up to $2,000 without paying a CDSC
($12,000 current value less $10,000 purchase amount). If you
redeemed $2,500, the CDSC would apply only to the $500 that
represented part of your original purchase price. The CDSC rate
would be 4% because a redemption after 15 months would take place
during the second year after purchase.
31P
<PAGE>
- ---------------------------------------------------------------------------
How to buy, exchange or sell shares
Because the CDSC is imposed only on redemptions that reduce the
total of your purchase payments, you never have to pay a CDSC on
any amount you redeem that represents appreciation in the value
of your shares, income earned by your shares or capital gains. In
addition, when determining the rate of any CDSC, your redemption
will be made from the oldest purchase payment you made. Of
course, once a purchase payment is considered to have been
redeemed, the next amount redeemed is the next oldest purchase
payment. By redeeming the oldest purchase payments first, lower
CDSCs are imposed than would otherwise be the case.
WAIVERS OF THE SALES CHARGE FOR CLASS B SHARES
The CDSC on Class B shares will be waived on redemptions of
shares:
- In the event of the shareholder's death,
- Purchased by any trustee, director, officer or employee of a
fund or American Express Financial Corporation or its
subsidiaries,
- Purchased by any American Express financial advisor,
- Held in a trusteed employee benefit plan,
- Held in IRAs or certain qualified plans for which American
Express Trust Company acts as 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 redemption is part of
a transfer to an IRA or qualified plan in a product distributed
by American Express Financial Advisors, or a
custodian-to-custodian transfer to a product not distributed by
American Express Financial Advisors, the CDSC will not be
waived), or
-- redeeming under an approved substantially equal periodic
payment arrangement.
32P
<PAGE>
----------------------------------------------------------
Special shareholder services
SERVICES
To help you track and evaluate the performance of your
investments, American Express Financial Corporation provides
these services:
QUARTERLY STATEMENTS listing all of your holdings and
transactions during the previous three months.
YEARLY TAX STATEMENTS featuring average-cost-basis reporting of
capital gains or losses if you redeem your shares along with
distribution information -- which simplifies tax calculations.
A PERSONALIZED MUTUAL FUND PROGRESS REPORT detailing returns on
your initial investment and cash-flow activity in your account.
It calculates a total return to reflect your individual history
in owning fund shares. This report is available from your
financial advisor.
-------------------------------------------------------------
QUICK TELEPHONE REFERENCE
AMERICAN Redemptions and exchanges, National/Minnesota:
EXPRESS dividend payments or 800-437-3133
TELEPHONE reinvestments and automatic Mpls./St. Paul area:
TRANSACTION payment arrangements 671-3800
SERVICE
----------------------------------------------------
AMERICAN Fund performance, objectives 612-671-3733
EXPRESS and account inquiries
SHAREHOLDER
SERVICE
----------------------------------------------------
TTY SERVICE For the hearing impaired 800-846-4852
----------------------------------------------------
AMERICAN Automated account information National/Minnesota:
EXPRESS (TouchTone-Registered Trademark- 800-272-4445
INFOLINE phones only), including Mpls./St. Paul area:
current fund prices and 671-1630
performance, account values
and recent account
transactions
----------------------------------------------------
33P
<PAGE>
----------------------------------------------------------
Distributions and taxes
The fund distributes to shareholders investment income and net
capital gains. It does so to qualify as a regulated investment
company and to avoid paying corporate income and excise taxes.
Dividend and capital gains distributions will have tax
consequences you should know about.
DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS
The fund distributes its net investment income (dividends and
interest earned on securities held by the fund, less operating
expenses) to shareholders of record at the end of each calendar
quarter. Short-term capital gains distributed are included in net
investment income. Net realized capital gains, if any, from
selling securities are distributed at the end of the calendar
year. Before they're distributed, both net investment income and
net capital gains are included in the value of each share. After
they're distributed, the value of each share drops by the
per-share amount of the distribution. (If your distributions are
reinvested, the total value of your holdings will not change.)
Dividends paid by each class will be calculated at the same time,
in the same manner and in the same amount, except the expenses
attributable solely to Class A, Class B and Class Y will be paid
exclusively by that class. Class B shareholders will receive
lower per share dividends than Class A and Class Y shareholders
because expenses for Class B are higher than for Class A or Class
Y. Class A shareholders will receive lower per share dividends
than Class Y shareholders because expenses for Class A are higher
than for Class Y.
34P
<PAGE>
- --------------------------------------------------------------------------------
REINVESTMENTS
Dividends and capital gain distributions are automatically
reinvested in additional shares in the same class of the fund,
unless:
- you request the fund in writing or by phone to pay
distributions to you in cash, or
- you direct the fund to invest your distributions in any
publicly available IDS fund for which you've previously opened
an account. You pay no sales charge on shares purchased through
reinvestment from this fund into any IDS fund.
The reinvestment price is the net asset value at close of
business on the day the distribution is paid. (Your quarterly
statement will confirm the amount invested and the number of
shares purchased.)
If you choose cash distributions, you will receive only those
declared after your request has been processed.
If the U.S. Postal Service cannot deliver the checks for the cash
distributions, we will reinvest the checks into your account at
the then-current net asset value and make future distributions in
the form of additional shares.
35P
<PAGE>
- ---------------------------------------------------------------------------
Distributions and taxes
TAXES
Distributions are subject to federal income tax and also may be
subject to state and local taxes. Distributions are taxable in
the year the fund pays them regardless of whether you take them
in cash or reinvest them.
Each January, you will receive a statement showing the kinds and
total amount of all distributions you received during the
previous year. You must report all distributions on your tax
returns, even if they are reinvested in additional shares.
"Buying a dividend" creates a tax liability. This means buying
shares shortly before a net investment income or a capital gain
distribution. You pay the full pre-distribution price for the
shares, then receive a portion of your investment back as a
distribution, which is taxable.
Redemptions and exchanges subject you to a tax on any capital
gain. If you sell shares for more than their cost, the difference
is a capital gain. Your gain may be either short term (for shares
held for one year or less) or long term (for shares held for more
than one year).
36P
<PAGE>
- --------------------------------------------------------------------------------
YOUR TAXPAYER IDENTIFICATION NUMBER (TIN) IS IMPORTANT. As with
any financial account you open, you must list your current and
correct Taxpayer Identification Number (TIN) -- either your
Social Security or Employer Identification number. The TIN must
be certified under penalties of perjury on your application when
you open an account at American Express Financial Corporation.
If you don't provide the TIN, or the TIN you report is incorrect,
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:
- a $50 penalty for each failure to supply your correct TIN
- a civil penalty of $500 if you make a false statement that
results in no backup withholding
- criminal penalties for falsifying information
You also could be subject to backup withholding because you
failed to report interest or dividends on your tax return as
required.
37P
<PAGE>
- ---------------------------------------------------------------------------
Distributions and taxes
-------------------------------------------------------------
HOW TO DETERMINE THE CORRECT TIN
FOR THIS TYPE OF ACCOUNT USE THE SOCIAL SECURITY
OR
EMPLOYER IDENTIFICATION
NUMBER OF
----------------------------------------------------
Individual or joint The individual or first
account person listed on the
account
----------------------------------------------------
Custodian account of a The minor
minor (Uniform
Gifts/Transfers to Minors
Act)
----------------------------------------------------
A living trust The grantor-trustee (the
person who puts the money
into the trust)
----------------------------------------------------
An irrevocable trust, The legal entity (not the
pension trust or estate personal representative
or trustee, unless no
legal entity is
designated in the account
title)
----------------------------------------------------
Sole proprietorship or The owner or partnership
partnership
----------------------------------------------------
Corporate The corporation
----------------------------------------------------
Association, club or The organization
tax-exempt organization
----------------------------------------------------
For details on TIN requirements, ask your financial advisor or
local American Express Financial Advisors office for Federal Form
W-9, "Request for Taxpayer Identification Number and
Certification."
IMPORTANT: This information is a brief and selective summary of
certain federal tax rules that apply to this fund. Tax matters
are highly individual and complex, and you should consult a
qualified tax advisor about your personal situation.
38P
<PAGE>
----------------------------------------------------------
How the fund is organized
The fund is a diversified, open-end management investment
company, as defined in the Investment Company Act of 1940. It was
incorporated on Oct. 9, 1984 in Minnesota. The fund headquarters
are at 901 S. Marquette Ave., Suite 2810, Minneapolis, MN
55402-3268.
SHARES
The fund is owned by its shareholders. The fund issues shares in
three classes -- Class A, Class B and Class Y. Each class has
different sales arrangements and bears different expenses. Each
class represents interests in the assets of the fund. Par value
is 1 cent per share. Both full and fractional shares can be
issued.
The fund no longer issues stock certificates.
VOTING RIGHTS
As a shareholder, 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 has exclusive voting rights
with respect to the provisions of the fund's distribution plan
that pertain to a particular class and other matters for which
separate class voting is appropriate under applicable law.
39P
<PAGE>
- ---------------------------------------------------------------------------
How the fund is organized
SHAREHOLDER MEETINGS
The fund does not hold annual shareholder meetings. However, the
directors may call meetings at their discretion, or on demand by
holders of 10% or more of the outstanding shares, to elect or
remove directors.
DIRECTORS AND OFFICERS
Shareholders elect a board of directors that oversees the
operations of the fund and chooses its officers. Its officers are
responsible for day-to-day business decisions based on policies
set by the board. The board has named an executive committee that
has authority to act on its behalf between meetings. The
directors also serve on the boards of all of the other funds in
the IDS MUTUAL FUND GROUP, except for Mr. Dudley, who is a
director of all publicly offered funds.
40P
<PAGE>
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------
DIRECTORS AND OFFICERS OF THE FUND
President and WILLIAM R. PEARCE
interested director President of all funds in the IDS MUTUAL FUND GROUP.
- ------------------------------------------------------------------
Independent LYNNE V. CHENEY
directors Distinguished fellow, American Enterprise Institute for
Public Policy Research.
ROBERT F. FROEHLKE
Former president of all funds in the IDS MUTUAL FUND
GROUP.
HEINZ F. HUTTER
Former president and chief operating officer, Cargill,
Inc.
ANNE P. JONES
Attorney and telecommunications consultant.
DONALD M. KENDALL
Former chairman and chief executive officer, PepsiCo,
Inc.
MELVIN R. LAIRD
Senior counsellor for national and international
affairs,
The Reader's Digest Association, Inc.
LEWIS W. LEHR
Former chairman and chief executive officer, Minnesota
Mining and Manufacturing Company (3M).
EDSON W. SPENCER
Former chairman and chief executive officer, Honeywell,
Inc.
WHEELOCK WHITNEY
Chairman, Whitney Management Company.
C. ANGUS WURTELE
Chairman of the board and chief executive officer,
The Valspar Corporation.
- ------------------------------------------------------------------
Interested directors WILLIAM H. DUDLEY
who are officers Executive vice president, American Express Financial
and/or employees Corporation.
of American Express DAVID R. HUBERS
Financial President and chief executive officer, American Express
Corporation Financial Corporation.
JOHN R. THOMAS
Senior vice president, American Express Financial
Corporation.
- ------------------------------------------------------------------
Other officer LESLIE L. OGG
Vice president of all funds in the IDS MUTUAL FUND
GROUP and general counsel and treasurer of the publicly
offered funds.
Refer to the SAI for the directors' and officers' biographies.
41P
<PAGE>
- ---------------------------------------------------------------------------
How the fund is organized
INVESTMENT MANAGER AND TRANSFER AGENT
The fund pays American Express Financial Corporation for managing
its portfolio, providing administrative services and serving as
transfer agent (handling shareholder accounts).
Under its Investment Management Services Agreement, American
Express Financial Corporation determines which securities will be
purchased, held or sold (subject to the direction and control of
the fund's board of directors). Effective March 1995, the fund
pays American Express Financial Corporation a fee for these
services based on the average daily net assets of the fund, as
follows:
<TABLE>
<CAPTION>
ASSETS ANNUAL RATE
(BILLIONS) AT EACH ASSET VALUE
<S> <C> <C>
----------------------------------------
First $ 0.50 0.530%
----------------------------------------
Next 0.50 0.505
----------------------------------------
Next 1.0 0.480
----------------------------------------
Next 1.0 0.455
----------------------------------------
Next 3.0 0.430
----------------------------------------
Over 6.0 0.400
</TABLE>
42P
<PAGE>
- --------------------------------------------------------------------------------
This fee may be increased or decreased by a performance
adjustment based on a comparison of performance of Class A shares
of the fund to the Lipper Small Company Growth Fund Index. The
maximum adjustment is 0.08% of the fund's average daily net
assets on an annual basis.
For the fiscal year ended Nov. 30, 1994, under a prior agreement,
the fund paid American Express Financial Corporation a total
investment management fee of 0.54% of its average daily net
assets. Under the Agreement, the fund also pays taxes, brokerage
commissions and nonadvisory expenses.
Under an Administrative Services Agreement, the fund pays
American Express Financial Corporation for administration and
accounting services at an annual rate of 0.04% decreasing in
gradual percentages to 0.02% as assets increase.
In addition, under a separate Transfer Agency Agreement, American
Express Financial Corporation maintains shareholder accounts and
records. The fund pays American Express Financial Corporation an
annual fee per shareholder account for this service as follows:
- Class A $15
- Class B $16
- Class Y $15
43P
<PAGE>
- ---------------------------------------------------------------------------
How the fund is organized
DISTRIBUTOR
The fund sells shares through American Express Financial
Advisors, a wholly owned subsidiary of American Express Financial
Corporation, under a Distribution Agreement. Financial advisors
representing American Express Financial Advisors provide
information to investors about individual investment programs,
the fund and its operations, new account applications, exchange
and redemption requests. The cost of these services is paid
partially by the fund's sales charge.
Portions of sales charges may be paid to securities dealers who
have sold the fund's shares, or to banks and other financial
institutions. The proceeds paid to others range from 0.8% to 4%
of the fund's offering price depending on the monthly sales
volume.
For Class B shares, to help defray costs not covered by sales
charges, including costs for marketing, sales administration,
training, overhead, direct marketing programs, advertising and
related functions, the fund pays American Express Financial
Advisors a distribution fee, also known as a 12b-1 fee. This fee
is paid under a Plan and Agreement of Distribution that follows
the terms of Rule 12b-1 of the Investment Company Act of 1940.
Under this Agreement, the fund pays a distribution fee at an
annual rate of 0.75% of the fund's average daily net assets
attributable to Class B shares for distribution-related services.
The total 12b-1 fee paid by the fund under a prior agreement for
the fiscal year ended Nov. 30, 1994 was 0.06% of its average
daily net assets. This fee will not cover all of the costs
incurred by American Express Financial Advisors.
44P
<PAGE>
- --------------------------------------------------------------------------------
Under a Shareholder Service Agreement, the fund also pays a fee
for service provided to shareholders by financial advisors and
other servicing agents. The fee is calculated at a rate of 0.175%
of the fund's average daily net assets attributable to Class A
and Class B shares.
Total expenses paid by the fund in the fiscal year ended Nov. 30,
1994 were 0.85% of its average daily net assets.
Total fees and expenses (excluding taxes and brokerage
commissions) cannot exceed the most restrictive applicable state
expense limitation.
45P
<PAGE>
----------------------------------------------------------
About American Express Financial Corporation
GENERAL INFORMATION
The American Express Financial Corporation family of companies
offers not only mutual funds but also insurance, annuities,
investment certificates and a broad range of financial management
services.
Besides managing investments for all publicly offered funds in
the IDS MUTUAL FUND GROUP, American Express Financial Corporation
also manages investments for itself and its subsidiaries, IDS
Certificate Company and IDS Life Insurance Company. Total assets
under management on Nov. 30, 1994 were more than $104 billion.
American Express Financial Advisors serves individuals and
businesses through its nationwide network of more than 175
offices and more than 7,800 advisors.
Other American Express Financial Corporation subsidiaries provide
investment management and related services for pension, profit
sharing, employee savings and endowment funds of businesses and
institutions.
American Express Financial Corporation is located at IDS Tower
10, Minneapolis, MN 55440-0010. It 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. The fund may pay brokerage commissions to
broker-dealer affiliates of American Express and American Express
Financial Corporation.
46P
<PAGE>
----------------------------------------------------------
Appendix
-------------------------------------------------------------
DESCRIPTIONS OF DERIVATIVE INSTRUMENTS
What follows are brief descriptions of derivative instruments the
fund may use. At various times the fund 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 fund's investment goal and policies. For more
information on these instruments, see the Statement of Additional
Information.
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 fund 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 fund's
investments against price fluctuations or to increase market
exposure.
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES. Asset-backed and
mortgage-backed securities include interests in pools of consumer
loans or mortgages, such as collateralized mortgage obligations
and stripped mortgage-backed securities. Interest and principal
payments depend on payment of the underlying loans or mortgages.
The value of these securities may also be affected by changes in
interest rates, the market's perception of the issuers and the
creditworthiness of the parties involved. Stripped
mortgage-backed securities include interest only (IO) and
principal only (PO) securities. Cash flows and yields on IOs and
POs are extremely sensitive to the rate of principal payments on
the underlying mortgage loans or mortgage-backed securities.
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.
INVERSE FLOATERS. Inverse floaters are created using the interest
payment on securities. A portion of the interest received is paid
to holders of instruments based on current interest rates for
short-term securities. The remainder, minus a servicing fee, is
paid to holders of inverse floaters. Inverse floaters are
extremely sensitive to changes in interest rates.
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.
47P
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
FOR
IDS MANAGED RETIREMENT FUND
March 20, 1995
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 Annual Report which 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.
This SAI is dated March 20, 1995, and it is to be used with the
prospectus dated March 20, 1995, and the Annual Report for the
fiscal year ended November 30, 1994.
<PAGE>
TABLE OF CONTENTS
Goal and Investment Policies.........................See Prospectus
Additional Investment Policies................................p.
Portfolio 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.
Redeeming Shares..............................................p.
Pay-out Plans.................................................p.
Exchanges.....................................................p.
Taxes.........................................................p.
Agreements....................................................p.
Directors and Officers........................................p.
Custodian.....................................................p.
Independent Auditors..........................................p.
Financial Statements..............................See Annual Report
Prospectus....................................................p.
Appendix A: Description of the Four Highest Corporate
Bond Ratings and Additional Information on
Investment Policies..............................p.
Appendix B: Foreign Currency Transactions....................p.
Appendix C: Options and Futures Contracts ...................p.
Appendix D: Mortgage-Backed Securities.......................p.
Appendix E: Dollar-Cost Averaging............................p.
-2-
<PAGE>
ADDITIONAL INVESTMENT POLICIES
These are investment policies in addition to those presented in the
prospectus. Unless holders of a majority of the outstanding shares
agree to make the change the fund will not:
'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.
'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. The fund has not borrowed in the past and has
no present intention to borrow.
'Make cash loans if the total commitment amount exceeds 5% of the
fund's total assets.
'Concentrate in any one industry. According to the present
interpretation by the Securities and Exchange Commission (SEC),
this means no more than 25% of the fund's total assets, based on
current market value at time of purchase, can be invested in any
one industry.
'Purchase more than 10% of the outstanding voting securities of an
issuer.
'Invest more than 5% of its total assets, at market value, 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, and except that up to 25% of the fund's total
assets may be invested without regard to this limitation.
'Buy or sell real estate, unless acquired as a result of ownership
of securities or other instruments, except this shall not prevent
the fund from investing in securities or other instruments backed
by real estate or securities of companies engaged in the real
estate business. For purposes of this policy, real estate includes
real estate limited partnerships.
'Buy or sell physical commodities unless acquired as a result of
ownership of securities or other instruments, except this shall not
prevent the fund from buying or selling options and futures
contracts or from investing in securities or other instruments
backed by, or whose value is derived from, physical commodities.
'Make a loan of any part of its assets to American Express
Financial Corporation, to the directors and officers of American
Express Financial Corporation or to its own directors and officers.
'Purchase securities of an issuer if the directors and officers of
the fund and of American Express Financial Corporation hold
more than a certain percentage of the issuer's outstanding
securities. If the holdings of all directors and officers of the
-3-
<PAGE>
fund and of American Express Financial Corporation who own more than
0.5% of an issuer's securities are added together, and if in total they
own more than 5%, the fund will not purchase securities of that issuer.
'Lend portfolio securities in excess of 30% of its net assets.
This policy may not be changed without shareholder approval. The
current policy of the fund's board of directors is to make these
loans, either long- or short-term, to broker-dealers. In making
such loans the fund gets 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 of
directors. 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. A loan will not be made unless the investment manager
believes the opportunity for additional income outweighs the risks.
'Issue senior securities, except this restriction shall not be
deemed to prohibit the fund from borrowing from banks, using
options or futures contracts, lending its securities or entering
into repurchase agreements.
Unless changed by the board of directors, the fund will not:
'Buy on margin or sell short, except it may make margin payments in
connection with transactions in futures contracts.
'Pledge or mortgage its assets beyond 15% of total assets. If the
fund were ever to do so, valuation of the pledged or mortgaged assets
would be based on market values. For purposes of this restriction,
collateral arrangements for margin deposits on futures contracts are
not deemed to be a pledge of assets.
'Invest more than 5% of its total assets in securities of companies,
including any predecessors, that have a record of less than three years
continuous operations.
'Invest more than 10% of its assets in securities of other investment
companies.
'Invest in a company to control or manage it.
'Invest in exploration or development programs, such as oil, gas or
mineral programs.
'Invest in a company if the fund's investments would result in the
total holdings of all the funds in the IDS MUTUAL FUND GROUP being
in excess of 15% of that company's issued shares.
-4-
<PAGE>
'Invest more than 5% of its net assets in warrants. Under one
state's law no more than 2% of the fund's net assets may be
invested in warrants not listed on an Exchange.
'Invest more than 10% of its net assets in securities and
derivative instruments that are illiquid. For purposes of this
policy illiquid securities include some privately placed
securities, public securities and Rule 144A securities that for one
reason or another may no longer have a readily available market,
repurchase agreements with maturities greater than seven days, non-
negotiable fixed-time deposits and over-the-counter options.
In determining the liquidity of Rule 144A securities, which are
unregistered securities offered to qualified institutional buyers,
and interest-only and principal-only fixed mortgage-backed
securities (IOs and POs) issued by the United States government or
its agencies and instrumentalities, the investment manager, under
guidelines established by the board of directors, will consider any
relevant factors including the frequency of trades, the number of
dealers willing to purchase or sell the security and the nature of
marketplace trades.
In determining the liquidity of commercial paper issued in
transactions not involving a public offering under Section 4(2) of
the Securities Act of 1933, the investment manager, under
guidelines established by the board of directors, will evaluate
relevant factors such as the issuer and the size and nature of its
commercial paper programs, the willingness and ability of the
issuer or dealer to repurchase the paper, and the nature of the
clearance and settlement procedures for the paper.
The fund may invest a portion of its assets in cash and cash-
equivalent investments. The cash-equivalent investments the fund
may use are 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. Any cash-equivalent investments in foreign securities
will be subject to the limitations on foreign investments described
in the prospectus. The fund also may purchase short-term corporate
notes and obligations rated in the top two classifications by
Moody's Investors Service, Inc. or Standard & Poor's Corporation or
the equivalent and may use repurchase agreements with broker-
dealers registered under the Securities Exchange Act of 1934 and
with commercial banks. A risk of a repurchase agreement is that if
the seller seeks the protection of bankruptcy laws, the fund's
ability to liquidate the security involved could be impaired.
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.
-5-
<PAGE>
For a description of the four highest corporate bond ratings and
additional information concerning investment policies, see Appendix
A. For a discussion about foreign currency transactions, see
Appendix B. For a discussion on options and futures contracts, see
Appendix C. For a discussion on mortgage-backed securities, see
Appendix D.
PORTFOLIO TRANSACTIONS
Subject to policies set by the board of directors, American Express
Financial Corporation 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, American Express Financial Corporation 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 of directors.
In selecting broker-dealers to execute transactions, American Express
Financial Corporation 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.
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 of directors has
adopted a policy authorizing American Express Financial Corporation
to do so to the extent authorized by law, if American Express Financial
Corporation 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 American Express Financial Corporation's overall
responsibilities to the funds in the IDS MUTUAL FUND GROUP and other
funds for which it acts as investment advisor.
Research provided by brokers supplements American Express Financial
Corporation'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. American Express Financial Corporation 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 Securities and Exchange Commission.
-6-
<PAGE>
When paying a commission that might not otherwise be charged or a
commission in excess of the amount another broker might charge,
American Express Financial Corporation must follow procedures authorized
by the board of directors. To date, three procedures have been authorized.
One procedure permits American Express Financial Corporation 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 American Express Financial Corporation, 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 American Express Financial Corporation, 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. American
Express Financial Corporation has advised the fund 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 American Express Financial Corporation believes it may obtain better
overall execution. American Express Financial Corporation has assured the
fund 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.
All other transactions shall 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 American Express Financial Corporation in providing
advice to all the funds in the IDS MUTUAL FUND GROUP even though
it is not possible to relate the benefits to any particular fund
or account.
Each investment decision made for the fund is made independently
from any decision made for another fund in the IDS MUTUAL FUND
GROUP or other account advised by American Express Financial
Corporation or any of its subsidiaries. When the fund buys or sells
the same security as another fund or account, American Express
Financial Corporation 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.
American Express Financial Corporation has assured the fund it will
continue to seek ways to reduce brokerage costs.
On a periodic basis, American Express Financial Corporation 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 $6,063,293 for the
fiscal year ended November 30, 1994, $ 4,997,592 for fiscal year
1993, and $1,071,766 for fiscal year 1992. Substantially all firms
-7-
<PAGE>
through whom transactions were executed provide research services.
In fiscal year 1994, transactions amounting to $380,001,000, on which
$2,181,966 in commissions were imputed or paid, were specifically
directed to firms.
On Nov. 30, 1994, at the end of the fiscal year, the fund
held 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 presented below:
Value of Securities
Owned at End of
Name of Issuer Fiscal Year
BankAmerica $41,000,000
First Chicago 9,300,000
Nations Bank 8,975,000
The portfolio turnover rate was 66% in the fiscal year ended
November 30, 1994, and 61% in fiscal year 1993.
BROKERAGE COMMISSIONS PAID TO BROKERS AFFILIATED WITH AMERICAN
EXPRESS FINANCIAL CORPORATION
Affiliates of American Express Company (American Express) (of which
American Express Financial Corporation is a wholly owned subsidiary)
may engage in brokerage and other securities transactions on behalf
of the fund according to procedures adopted by the fund's board of
directors and to the extent consistent with applicable provisions of
the federal securities laws. American Express Financial Corporation
will use an American Express affiliate only if (i) American Express
Financial Corporation 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.
American Express Financial Corporation may direct brokerage to compensate
an affiliate. American Express Financial Corporation will receive research on
South Africa from New Africa Advisers a wholly-owned subsidiary of Sloan
Financial Group. American Express Financial Corporation owns 100% of IDS
Capital Holdings Inc. which in turn owns 40% of Sloan Financial Group.
New Africa Advisers will send research to American Express Financial
Corporation and in turn American Express Financial Corporation will direct
trades to a particular broker. The broker will have an agreement to pay
New Africa Advisers. All transactions will be on a best execution basis.
Compensation received will be reasonable for the services rendered.
Information about brokerage commissions paid by the fund for the
last three fiscal years to brokers affiliated with American Express
Financial Corporation is contained in the following table:
<TABLE>
<CAPTION>
For the Fiscal Year Ended November 30,
1994 1993 1992
--------------------------------------------- ----------- -----------
Aggregate Percent of Aggregate Aggregate
Dollar Aggregate Dollar Dollar Dollar
Amount of Percent of Amount of Amount of Amount of
Nature Commissions Aggregate Transactions Commissions Commissions
of Paid to Brokerage Involving Payment Paid to Paid to
Broker Affiliation Broker Commissions of Commissions Broker Broker
------ ----------- -------- ----------- -------------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Lehman
Brothers, Inc. (1) $162,840 2.68% 2.76% $222,684 $ 78,270
The Robinson-
Humphrey
Company, Inc. (2) 1,440 .02 .02 -0- 12,600
American Express
Investment
Services Inc. (3) 181,479 2.99 7.87 158,591 248,408
<FN>
(1) Until May 31, 1994, under common control with American Express Financial
Corporation as a subsidiary of American Express. As of May 31, 1994 is
no longer a subsidiary of American Express.
(2) Under common control with American Express Financial Corporation as
an indirect subsidiary of American Express until July 30, 1993.
(3) Wholly owned subsidiary of American Express Financial Corporation.
</TABLE>
-8-
<PAGE>
PERFORMANCE INFORMATION
The fund may quote various performance figures to illustrate past
performance. An explanation of these and any other 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:
n
P(1+T) = 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)
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, Donoghue's Money Market Fund Report, Financial Services Week,
Financial Times, Financial World, Forbes, Fortune, Global Investor,
Institutional Investor, Investor's Daily, Kiplinger's Personal
Finance, Lipper Analytical Services, Money, Mutual Fund Forecaster,
Newsweek, The New York Times, Personal Investor, Stanger Report,
-9-
<PAGE>
Sylvia Porter's Personal Finance, USA Today, U.S. News and World
Report, The Wall Street Journal and Wiesenberger Investment
Companies Service.
VALUING FUND SHARES
The value of an individual share for each class is determined by
using the net asset value before shareholder transactions for the
day. On December 1, 1994, the first business day following the end
of the fiscal year, the computation looked like this:
<TABLE>
<CAPTION>
Net assets before Shares outstanding Net asset value
shareholder transactions at end of previous day of one share
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A* $2,227,283,471 divided by 199,439,995 equals $11.17
<FN>
*Shares of Class B and Class Y were not outstanding on that date.
</TABLE>
In determining net assets before shareholder transactions, the
fund's portfolio securities are valued as follows as of the close
of business of the New York Stock Exchange:
'Securities, except bonds other than convertibles, traded on a
securities exchange for which a last-quoted sales price is readily
available are valued at the last-quoted sales price on the exchange
where such security is primarily traded.
'Securities traded on a securities exchange for which a last-quoted
sales price is not readily available are valued at the mean of the
closing bid and asked prices, looking first to the bid and asked
prices on the exchange where the security is primarily traded and,
if none exist, to the over-the-counter market.
'Securities included in the NASDAQ National Market System are
valued at the last-quoted sales price in this market.
'Securities included in the NASDAQ National Market System for which
a last-quoted sales price is not readily available, and other
securities traded over-the-counter but not included in the NASDAQ
National Market System are valued at the mean of the closing bid
and asked prices.
'Futures and options traded on major exchanges are valued at the
last-quoted sales price on their primary exchange.
'Foreign securities traded outside the United States are generally
valued as of the time their trading is complete, which is usually
different from the close of the New York Stock Exchange (the
"Exchange"). Foreign securities quoted in foreign currencies are
translated into U.S. dollars at the current rate of exchange.
Occasionally, events affecting the value of such securities may
occur between such times and the close of the Exchange that will
not be reflected in the computation of the fund's net asset value.
If events materially affecting the value of such securities occur
during such period, these securities will be valued at their fair
value according to procedures decided upon in good faith by the
fund's board of directors (the "board").
-10-
<PAGE>
'Short-term securities maturing more than 60 days from the
valuation date are valued at the readily available market price or
approximate market value based on current interest rates. Short-
term securities maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at
amortized cost using the market value on the 61st day before
maturity. Short-term securities maturing in 60 days or less at
acquisition date are valued at amortized cost. Amortized cost 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.
'Securities without a readily available market price, bonds other
than convertibles and other assets are valued at fair value as
determined in good faith by the board. The board is responsible
for selecting methods it believes provide fair value. When
possible, bonds are valued by a pricing service
independent from the fund. If a valuation of a bond is not
available from a pricing service, the bond will be valued by a
dealer knowledgeable about the bond if such a dealer is available.
The New York Stock Exchange, American Express Financial Corporation
and the fund will be closed on the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
INVESTING IN THE FUND
Sales Charge
Shares of the fund are sold at the public offering price determined
at the close of business on the day an application is accepted.
The public offering price is the net asset value of one share plus
a sales charge, if applicable. For Class B and Class Y, there is
no initial sales charge so the public offering price is the same as
the net asset value. For Class A, the public offering price for an
investment of less than $50,000, made December 1, 1994, was
determined by dividing the net asset value of one share, $11.17,
by 0.95 (1.00-0.05 for a maximum 5% sales charge) for a public
offering price of $11.76. The sales charge is paid to American
Express Financial Advisors by the person buying the shares.
-11-
<PAGE>
Class A - Calculation of the Sales Charge
Sales charges are determined as follows:
<TABLE>
<CAPTION>
Within each increment,
sales charge as a
percentage of:
----------------------------------------
Public Net
Amount of Investment Offering Price Amount Invested
- -------------------- -------------- ---------------
<S> <C> <C>
First $ 50,000 5.0% 5.26%
Next 50,000 4.5 4.71
Next 400,000 3.8 3.95
Next 500,000 2.0 2.04
More than 1,000,000 0.0 0.00
</TABLE>
Sales charges on an investment greater than $50,000 are calculated
for each increment separately and then totaled. The resulting
total sales charge, expressed as a percentage of the public
offering price and of the net amount invested, will vary depending
on the proportion of the investment at different sales charge
levels.
For example, compare an investment of $60,000 with an investment of
$85,000. The $60,000 investment is composed of $50,000 that incurs
a sales charge of $2,500 (5.0% x $50,000) and $10,000 that incurs a
sales charge of $450 (4.5% x $10,000). The total sales charge of
$2,950 is 4.92% of the public offering price and 5.17% of the net
amount invested.
In the case of the $85,000 investment, the first $50,000 also
incurs a sales charge of $2,500 (5.0% x $50,000) and $35,000 incurs
a sales charge of $1,575 (4.5% x $35,000). The total sales charge
of $4,075 is 4.79% of the public offering price and 5.04% of the
net amount invested.
The following table shows the range of sales charges as a
percentage of the public offering price and of the net amount
invested on total investments at each applicable level.
<TABLE>
<CAPTION>
On total investment, sales
charge as a percentage of
-------------------------------------------
Public Net
Offering Price Amount Invested
-------------- ---------------
Amount of Investment ranges from:
- -------------------- --------------------------------------------
<S> <C> <C>
First $ 50,000 5.00% 5.26%
More than 50,000 to 100,000 5.00-4.50 5.26-4.71
More than 100,000 to 500,000 4.50-3.80 4.71-3.95
More than 500,000 to 1,000,000 3.80-2.00 3.95-2.04
More than 1,000,000 0.00 0.00
</TABLE>
The initial sales charge is waived for certain qualified plans that
meet the requirements described in the prospectus. Participants in
these qualified plans may be subject to a deferred sales charge on
certain redemptions. The deferred sales charge on certain
redemptions will be waived if the redemption is a result of a
participant's death, disability, retirement, attaining age 59 1/2,
loans or hardship withdrawals. The deferred sales charge varies
depending on the number of participants in the qualified plan and
total plan assets as follows:
-12-
<PAGE>
Deferred Sales Charge
<TABLE>
<CAPTION>
Number of Participants
----------------------
Total Plan Assets 1-99 100 or more
- ----------------- ---- -----------
<S> <C> <C>
Less than $1 million 4% 0%
$1 million or more 0% 0%
- ---------------------------------------------------------
</TABLE>
Class A - Reducing the Sales Charge
Sales charges are based on the total amount of your investments in
the fund. The amount of all prior investments plus any new
purchase is referred to as your "total amount invested." For
example, suppose you have made an investment of $20,000 and later
decide to invest $40,000 more. Your total amount invested would be
$60,000. As a result, $10,000 of your $40,000 investment qualifies
for the lower 4.5% sales charge that applies to investments of more
than $50,000 to $100,000.
The total amount invested includes any shares held in the fund in
the name of a member of your immediate family (spouse and unmarried
children under 21). For instance, if your spouse already has
invested $20,000 and you want to invest $40,000, your total amount
invested will be $60,000 and therefore you will pay the lower
charge of 4.5% on $10,000 of the $40,000.
Until a spouse remarries, the sales charge is waived for spouses
and unmarried children under 21 of deceased trustees, directors,
officers or employees of the fund or American Express Financial
Corporation or its subsidiaries and deceased advisors.
The total amount invested also includes any investment you or your
immediate family already have in the other publicly offered funds
in the IDS MUTUAL FUND GROUP where the investment is subject to a
sales charge. For example, suppose you already have an investment
of $25,000 in IDS Growth Fund and $5,000 in this fund. If you
invest $40,000 more in this fund, your total amount invested in the
funds will be $70,000 and therefore $20,000 of your $40,000
investment will incur a 4.5% sales charge.
Finally, Individual Retirement Account (IRA) purchases, or other
employee benefit plan purchases made through a payroll deduction
plan or through a plan sponsored by an employer, association of
employers, employee organization or other similar entity, may be
added together to reduce sales charges for shares purchased through
that plan.
Class A - Letter of Intent
You can reduce the sales charges in Class A by filing a letter-of-
intent stating that you intend to invest $1 million over a period
of 13 months. The agreement can start at any time and will remain
in effect for 13 months. Your investment will be charged normal
-13-
<PAGE>
sales charges until you have invested $1 million. At that time,
the sales charges previously paid will be reversed. If you do not
invest $1 million by the end of 13 months, there is no penalty,
you'll just miss out on the sales charge adjustment. A letter-of-
intent is not an option (absolute right) to buy shares.
Here's an example. You file a letter-of-intent to invest $1
million and make an investment of $100,000 at that time. You pay
the normal 5% sales charge on the first $50,000 and 4.5% sales
charge on the next $50,000 of this investment. Let's say you make
a second investment of $900,000 (bringing the total up to $1
million) one month before the 13-month period is up. What sales
charge do you pay? American Express Financial Corporation makes an
adjustment on your last purchase so that there's no sales charge on
the total $1 million investment, just as if you had invested $1 million
all at once.
Systematic Investment Programs
After you make your initial investment of $2,000 or more, you can
arrange to make additional payments of $100 or more on a regular
basis. 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. If there is no obligation, why do it? Putting money
aside is an important part of financial planning. With a
systematic investment program, you have a goal to work for.
How does this work? Your regular investment amount will purchase
more shares when the net asset value per share decreases, and fewer
shares when the net asset value per share increases. Each purchase
is a separate transaction. After each purchase your new shares
will be added to your account. Shares bought through these
programs are exactly the same as any other fund shares. They can
be bought and sold at any time. A systematic investment program is
not an option or an absolute right to buy shares.
The systematic investment program itself cannot ensure a profit,
nor can it protect against a loss in a declining market. If you
decide to discontinue the program and redeem your shares when their
net asset value is less than what you paid for them, you will incur
a loss.
Automatic Directed Dividends
Dividends, including capital gain distributions, paid by another
fund in the IDS MUTUAL FUND GROUP subject to a sales charge, may be
used to automatically purchase shares in the same class of this
fund without paying a sales charge. 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
one fund but cannot be split to make purchases in two or more
funds. Automatic directed dividends are available between accounts
of any ownership EXCEPT:
-14-
<PAGE>
'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;
'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);
'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 its
prospectus. You will receive a confirmation that the automatic
directed dividend service has been set up for your account.
REDEEMING SHARES
You have a right to redeem your shares at any time. For an
explanation of redemption procedures, please see the prospectus.
DURING AN EMERGENCY, the board can suspend the computation of net
asset value, 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:
'The New York Stock Exchange closes for reasons other than the usual
weekend and holiday closings or trading on the Exchange is restricted, or
'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
'The SEC, under the provisions of the Investment Company Act of
1940, as amended, 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.
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,
-15-
<PAGE>
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 or call American Express
Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534, 612-
671-3733. 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 American Express Financial Corporation
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'll 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.
-16-
<PAGE>
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.
EXCHANGES
If you buy shares in the fund and then exchange into another fund,
it is considered a sale 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.
Retirement Accounts
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 sale 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.
TAXES
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
-17-
<PAGE>
dividends the fund received from domestic (U.S.) securities. For
the fiscal year ended Nov. 30, 1994, 21.99% of the fund's net
investment income dividends qualified for the corporate deduction.
Capital gain distributions received by individual and corporate
shareholders, if any, should be treated as long-term capital gains
regardless of how long they owned their shares. Short-term capital
gains earned by the fund are paid to shareholders as part of their
ordinary income dividend and are taxable.
Under federal tax law and an election made by the fund under
federal tax regulations, 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 Nov. 30 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.
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 if 50% or more of the average value of its
assets consists of assets that produce or could produce passive
income.
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.
AGREEMENTS
Investment Management Services Agreement
The fund has an Investment Management Services Agreement with
American Express Financial Corporation. For its services, American
Express Financial Corporation is paid a fee based on the following
schedule:
<TABLE>
<CAPTION>
Assets Annual rate at
(billions) each asset level
- ----------- ----------------
<S> <C>
First $0.50 0.530%
Next 0.50 0.505
Next 1.0 0.480
Next 1.0 0.455
Next 3.0 0.430
Over 6.0 0.400
</TABLE>
In March 1995, the daily rate applied to the fund's assets is
expected to be approximately 0.50% 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.
-18-
<PAGE>
Before the fee based on the asset charge is paid, it is adjusted
for investment performance. The adjustment, determined monthly,
will be calculated using the percentage point difference between
the change in the net asset value of one Class A share of the fund
and the change in the Lipper Growth and Income Fund Index (Index).
The performance of one Class A share of the fund is measured by
computing the percentage difference between the opening and closing
net asset value of one Class A share of the fund, as of the last business
day of the period selected for comparison, adjusted for dividend or
capital gain distributions which are treated as reinvested at the
end of the month during which the distribution was made. The
performance of the Index for the same period is established by
measuring the percentage difference between the beginning and
ending Index for the comparison period. The performance is
adjusted for dividend or capital gain distributions (on the
securities which comprise the Index), which are treated as
reinvested at the end of the month during which the distribution
was made. One percentage point will be subtracted from the
calculation to help assure that incentive adjustments are
attributable to American Express Financial Corporation's management
abilities rather than random fluctuations and the result multiplied
by 0.01%. That number will be multiplied times the fund's average
net assets for the comparison period and then divided by the number
of months in the comparison period to determine the monthly adjustment.
Where the fund's Class A share performance exceeds that of the Index, the
base fee will be increased. Where the performance of the Index exceeds
the performance of Class A shares, the base fee will be decreased. The
maximum monthly increase or decrease will be 0.08% of the fund's
average net assets on an annual basis.
The 12 month comparison period rolls over with each succeeding
month, so that it always equals 12 months, ending with the month
for which the performance adjustment is being computed. The
adjustment increased the fee by $107,288 for the fiscal year
ended November 30, 1994.
The management fee is paid monthly. Under a prior agreement, the
total amount paid was $11,307,904 for the fiscal year ended
November 30, 1994, $8,806,035 for fiscal year 1993, and $6,757,910
for fiscal year 1992.
Under the current Agreement, the fund also pays taxes, brokerage
commissions and nonadvisory expenses, that include custodian fees;
audit and certain legal fees; fidelity bond premiums; registration
fees for shares; fund office expenses; consultants' fees;
compensation of directors, officers and employees; corporate filing
fees; organizational expenses; expenses incurred in connection with
lending portfolio securities of the fund; and expenses properly
payable by the fund, approved by the board of directors. Under a
prior agreement, the fund paid nonadvisory expenses of $1,960,263
for the fiscal year ended November 30, 1994, $1,074,758 for fiscal
year 1993, and $561,904 for fiscal year 1992.
-19-
<PAGE>
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:
<TABLE>
<CAPTION>
Assets Annual rate
(billions) each asset level
---------- ----------------
<S> <C>
First $0.50 0.040%
Next 0.50 0.035
Next 1.0 0.030
Next 1.0 0.025
Next 3.0 0.020
Over 6.0 0.020
</TABLE>
Transfer Agency Agreement
The fund has a Transfer Agency Agreement with American Express
Financial Corporation. This agreement governs American Express
Financial Corporation'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, American Express Financial
Corporation 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 and for Class Y is $15 per year. The rate for Class B is $16
per year. The fees paid to American Express Financial Corporation may be
changed from time to time upon agreement of the parties without shareholder
approval. The fund paid fees of $3,281,422 for the fiscal year ended
November 30, 1994.
Distribution Agreement
Under a Distribution Agreement, sales charges deducted for
distributing fund shares are paid to American Express Financial
Advisors daily. These charges amounted to $12,140,380 for the
fiscal year ended November 30, 1994. After paying commissions to
personal financial advisors, and other expenses, the amount
retained was $4,302,131. The amounts were $10,164,983 and
$3,601,639 for fiscal year 1993, and $7,705,173 and $2,727,338 for
fiscal year 1992.
Additional information about commissions and compensation for the
fiscal year ended November 30, 1994 is contained in the following
table:
-20-
<PAGE>
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Net Compensation
Name of Underwriting on Redemption
Principal Discounts and and Brokerage Other
Underwriter Commissions Repurchases Commissions Compensation
- ----------- ------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
American
Express
Financial
Corporation None None $181,479* $1,316,703**
American
Express
Financial
Advisors Inc. $12,140,380 None None None
<FN>
*For further information see "Brokerage Commissions Paid to Brokers
Affiliated with American Express Financial Corporation."
**Distribution fees paid pursuant to the Plan and Supplemental
Agreement of Distribution.
</TABLE>
Shareholder Service Agreement
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 0.175% of the fund's average daily net
assets attributable to Class A and Class B shares.
Plan and Agreement of Distribution
For Class B shares, to help American Express Financial Advisors
defray the cost of distribution and servicing, not covered by the
sales charges received under the Distribution Agreement, the fund
and American Express Financial Advisors entered into a Plan and
Agreement of Distribution (Plan). These costs cover almost all
aspects of distributing the fund's shares except compensation to
the sales force. A substantial portion of the costs are not
specifically identified to any one fund in the IDS MUTUAL FUND
GROUP. Under the Plan, American Express Financial Advisors is paid
a fee at an annual rate of 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 directors, 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 directors
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 or by American Express
Financial Advisors. The Plan (or any agreement related to it) will
terminate in the event of its assignment, as that term is defined
in the Investment Company Act of 1940, as amended. 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 directors, including a
-21-
<PAGE>
majority of the directors 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 directors is the responsibility of the
other disinterested directors. No interested person of the fund,
and no director who is not an interested person, has any direct or
indirect financial interest in the operation of the Plan or any
related agreement.
Total fees and nonadvisory expenses cannot exceed the most
restrictive applicable state limitation. Currently, the most
restrictive applicable state expense limitation, subject to
exclusion of certain expenses, is 2.5% of the first $30 million of
the fund's average daily net assets, 2% of the next $70 million and
1.5% of average daily net assets over $100 million, on an annual
basis. At the end of each month, if the fees and expenses of the
fund exceed this limitation for the fund's fiscal year in progress,
American Express Financial Corporation will assume all expenses in
excess of the limitation. American Express Financial Corporation then
may bill the fund for such expenses in subsequent months up to the end
of that fiscal year, but not after that date. No interest charges are
assessed by American Express Financial Corporation for expenses it assumes.
DIRECTORS AND OFFICERS
The following is a list of the fund's directors who, except for Mr.
Dudley, also are directors of all other funds in the IDS MUTUAL
FUND GROUP. Mr. Dudley is a director of all publicly offered
funds. All shares have cumulative voting rights when voting on the
election of directors.
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 Corp., and the Interpublic Group of Companies, Inc.
(advertising).
WILLIAM H. DUDLEY+**
Born in 1932.
2900 IDS Tower
Minneapolis, MN
Executive vice president and director of American Express Financial Corporation.
ROBERT F. FROEHLKE+
Born in 1922.
1201 Yale Place
Minneapolis, MN
Former president of all funds in the IDS MUTUAL FUND GROUP.
Director, the ICI Mutual Insurance Co., Institute for Defense
Analyses, Marshall Erdman and Associates, Inc. (architectural
engineering) and Public Oversight Board of the American Institute
of Certified Public Accountants.
-22-
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DAVID R. HUBERS**
Born in 1943.
2900 IDS Tower
Minneapolis, MN
President, chief executive officer and director of American Express
Financial Corporation. Previously, senior vice president, finance and
chief financial officer of American Express Financial Corporation.
HEINZ F. HUTTER+
Born in 1929.
P.O. Box 5724
Minneapolis, MN
President and chief operating officer, Cargill, Incorporated
(commodity merchants and processors) from February 1991 to
September 1994. Executive vice president from 1981 to February
1991.
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. and
C-Cor Electronics, Inc.
DONALD M. KENDALL'
Born in 1921.
PepsiCo, Inc.
Purchase, NY
Former chairman and chief executive officer, PepsiCo, Inc.
MELVIN R. LAIRD+
Born in 1922.
Reader's Digest Association, Inc.
1730 Rhode Island Ave., N.W.
Washington, D.C.
Senior counsellor for national and international affairs, The
Reader's Digest Association, Inc. Chairman of the board, COMSAT
Corporation, former nine-term congressman, secretary of defense and
presidential counsellor. Director, Martin Marietta Corp.,
Metropolitan Life Insurance Co., The Reader's Digest Association,
Inc., Science Applications International Corp., Wallace Reader's
Digest Funds and Public Oversight Board (SEC Practice Section,
American Institute of Certified Public Accountants).
LEWIS W. LEHR'
Born in 1921.
3050 Minnesota World Trade Center
30 E. Seventh St.
St. Paul, MN
Former chairman of the board and chief executive officer, Minnesota
Mining and Manufacturing Company (3M). Director, Jack Eckerd
Corporation (drugstores). Advisory Director, Peregrine Inc.
(microelectronics).
-23-
<PAGE>
WILLIAM R. PEARCE+*
Born in 1927.
901 S. Marquette Ave.
Minneapolis, MN
President of all funds in the IDS MUTUAL FUND GROUP since June
1993. Former vice chairman of the board, Cargill, Incorporated
(commodity merchants and processors).
EDSON W. SPENCER
Born in 1926.
4900 IDS Center
80 S. 8th St.
Minneapolis, MN
President, Spencer Associates Inc. (consulting). Chairman of the
board, Mayo Foundation (healthcare). Former chairman of the board
and chief executive officer, Honeywell Inc. Director, Boise
Cascade Corporation (forest products) and CBS Inc. Member of
International Advisory Councils, Robert Bosch (Germany) and NEC
(Japan).
JOHN R. THOMAS**
Born in 1937.
2900 IDS Tower
Minneapolis, MN
Senior vice president and director of American Express Financial Corporation.
WHEELOCK WHITNEY+
Born in 1926.
1900 Foshay Tower
821 Marquette Ave.
Minneapolis, MN
Chairman, Whitney Management Company (manages family assets).
C. ANGUS WURTELE
Born in 1934.
1101 S. 3rd St.
Minneapolis, MN
Chairman of the board and chief executive officer, The Valspar
Corporation (paints). Director, Bemis Corporation (packaging),
Donaldson Company (air cleaners & mufflers) and General Mills, Inc.
(consumer foods).
+ Member of executive committee.
' Member of joint audit committee.
* Interested person by reason of being an officer and employee of
the fund.
**Interested person by reason of being an officer, director,
employee and/or shareholder of American Express Financial Corporation
or American Express.
The board also has appointed officers who are responsible for day-
to-day business decisions based on policies it has established.
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<PAGE>
Besides Mr. Pearce, who is president, the fund's other officer is:
LESLIE L. OGG
Born in 1938.
901 S. Marquette Ave.
Minneapolis, MN
Vice president of all funds in the IDS MUTUAL FUND GROUP and
general counsel and treasurer of the publicly offered funds.
Members who are not officers of the fund or officers or directors of American
Express Financial Corporation receive an annual base fee of $3,000. They
receive a fee for all board and committee meetings they attend. The fee is
shared equally among each fund in the IDS MUTUAL FUND GROUP holding concurrent
meetings. The fees are $500 for Board, Executive, Audit and Investment Review
committees, $750 for Personnel with out-of-state members receiving an
additional $500 if an extra day of travel is required. The Chair of Contracts
receives an additional $5000. In addition members who retire after age 70 or
earlier for health reasons receive monthly retirement benefits of 1/2 of the
base fee on the date they retire divided by 12 for each month of service up
to 120 months.
During the fiscal year that ended November 30, 1994, the members of
the board, for attending up to 51 meetings, received the following
compensation, in total, from all funds in the IDS MUTUAL FUND
GROUP.
<TABLE>
<CAPTION>
Board compensation
Aggregate Retirement Estimated Total Cash
compensation benefits annual compensation
from the accrued as benefit on from the IDS
Board member fund fund expenses retirement MUTUAL FUND GROUP
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lynne V. Cheney $2,292 $ 397 $1,375 $54,600
(part of year)
Robert F. Froehlke 3,103 3,104 1,375 74,800
Heinz F. Hutter 249 -- 665 11,300
(part of year)
Anne P. Jones 3,020 764 1,375 71,300
Donald M. Kendall 2,941 2,793 1,375 68,000
Melvin R. Laird 3,015 2,517 1,375 71,100
Lewis W. Lehr 3,036 3,517 1,341 72,000
William R. Pearce -- 1,314 1,375 --
(part of year)
Edson W. Spencer 3,005 1,678 733 70,700
Wheelock Whitney 3,060 1,464 1,375 73,300
C. Angus Wurtele 241 -- 1,364 11,000
(part of year)
</TABLE>
On November 30, 1994, the fund's directors and officers as a group
owned less than 1% of the outstanding shares. During the fiscal
year ended November 30, 1994, no director or officer earned more
than $60,000 from this fund. All directors and officers as a group
earned $66,304, including $19,451 of retirement plan expense, from
this fund.
CUSTODIAN
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.
The custodian has entered into a sub-custodian arrangement with the
Morgan Stanley Trust Company (Morgan Stanley), One Pierrepont
Plaza, 8th Floor, Brooklyn, NY 11201-2775. As part of this
arrangement, portfolio securities purchased outside the United
States are maintained in the custody of various foreign branches of
Morgan Stanley or in such other financial institutions as may be
permitted by law and by the fund's sub-custodian agreement.
INDEPENDENT AUDITORS
The financial statements contained in the Annual Report to
shareholders, for the fiscal year ended November 30, 1994, were
audited by independent auditors, KPMG Peat Marwick 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.
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<PAGE>
FINANCIAL STATEMENTS
The Independent Auditors' Report and the Financial Statements,
including Notes to the Financial Statements and the Schedule of
Investments in Securities, contained in the 1994 Annual Report to
shareholders, pursuant to Section 30(d) of the Investment Company
Act of 1940, as amended, are hereby incorporated in this SAI by
reference. No other portion of the Annual Report however, is
incorporated by reference.
PROSPECTUS
The prospectus for IDS Managed Retirement Fund dated March 20, 1995,
is hereby incorporated in this SAI by reference.
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<PAGE>
APPENDIX A
DESCRIPTION OF THE FOUR HIGHEST CORPORATE BOND RATINGS AND
ADDITIONAL INFORMATION ON INVESTMENT POLICIES
The ratings concern the quality of the issuing corporation. They
are not an opinion of the market value of the security. Such
ratings are opinions on whether the principal and interest will be
repaid when due. A security's rating may change which could affect
its price. The four highest ratings by Moody's Investors Service,
Inc. are Aaa, Aa, A and Baa. The four highest by Standard & Poor's
Corporation are AAA, AA, A and BBB.
Bonds rated Aaa and AAA are judged to be of the best quality.
Capacity to pay interest and repay principal is extremely strong.
Prices are responsive only to interest rate fluctuations.
Bonds rated Aa and AA are also judged to be high grade although
margins of protection for interest and principal may not be quite
as good as the Aaa or AAA group. Long-term risk may appear greater
than the Aaa or AAA group. Prices are primarily responsive to
interest rate fluctuations.
Bonds rated A are considered upper-medium grade. Protection for
interest and principal are deemed adequate but susceptible to
future impairment. The market prices of such obligations move
primarily with interest rate fluctuations but also with changing
economic or trade conditions.
Bonds rated Baa or BBB are considered medium-grade obligations.
Protection for interest and principal is adequate over the short-
term; however, these obligations have certain speculative
characteristics. They are susceptible to changing economic
conditions and require constant review. Such bonds are more
responsive to business and trade conditions than to interest rate
fluctuations.
WHEN-ISSUED SECURITIES
The fund may purchase some securities in advance of when they are
issued. Price and rate of interest are set on the date the
commitments are given but no payment is made or interest earned
until the date the securities are issued, usually within two
months, but other terms may be negotiated. The commitment requires
the fund to buy the security when it is issued so the commitment is
valued daily the same way as owning a security would be valued.
The fund designates cash or liquid high-grade debt securities to at
least equal the amount of its commitment. [Under normal market
conditions, the fund does not intend to commit more than 5% of its
total assets to these practices.] The fund may sell the commitment
just like it can sell a security. Frequently, the fund has the
opportunity to sell the commitment back to the institution.
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<PAGE>
INVERSE FLOATERS
The fund may invest in securities called "inverse floaters."
Inverse floaters are created by underwriters using the interest
payments on securities. A portion of the interest received is paid
to holders of instruments based on current interest rates for
short-term securities. What is left over, less a servicing fee, is
paid to holders of the inverse floaters. As interest rates go
down, the holders of the inverse floaters receive more income and
an increase in the price for the inverse floaters. As interest
rates go up, the holders of the inverse floaters receive less
income and a decrease in the price for the inverse floaters.
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<PAGE>
APPENDIX B
FOREIGN CURRENCY TRANSACTIONS
Since investments in foreign countries usually involve currencies
of foreign countries, and since the fund may hold cash and cash-
equivalent investments in foreign currencies, the value of the
fund's assets as measured in U.S. dollars may be affected favorably
or unfavorably by changes in currency exchange rates and exchange
control regulations. Also, the fund may incur costs in connection
with conversions between various currencies.
SPOT RATES AND FORWARD CONTRACTS. The fund conducts its foreign
currency exchange transactions either at the spot (cash) rate
prevailing in the foreign currency exchange market or by entering
into forward currency exchange contracts (forward contracts) as a
hedge against fluctuations in future foreign exchange rates. A
forward contract involves an obligation to buy or sell a specific
currency at a future date, which may be any fixed number of days
from the contract date, at a price set at the time of the contract.
These contracts are traded in the interbank market conducted
directly between currency traders (usually large commercial banks)
and their customers. A forward contract generally has no deposit
requirements. No commissions are charged at any stage for trades.
The fund may enter into forward contracts to settle a security
transaction or handle dividend and interest collection. When the
fund enters into a contract for the purchase or sale of a security
denominated in a foreign currency or has been notified of a
dividend or interest payment, it may desire to lock in the price of
the security or the amount of the payment in dollars. By entering
into a forward contract, the fund will be able to protect itself
against a possible loss resulting from an adverse change in the
relationship between different currencies from the date the
security is purchased or sold to the date on which payment is made
or received or when the dividend or interest is actually received.
The fund also may enter into forward contracts when management of
the fund believes the currency of a particular foreign country may
suffer a substantial decline against another currency. It may
enter into a forward contract to sell, for a fixed amount of
dollars, the amount of foreign currency approximating the value of
some or all of the fund's portfolio securities denominated in such
foreign currency. The precise matching of forward contract amounts
and the value of securities involved generally will not be possible
since the future value of such securities in foreign currencies
more than likely will change between the date the forward contract
is entered into and the date it matures. The projection of short-
term currency market movements is extremely difficult and
successful execution of a short-term hedging strategy is highly
uncertain. The fund will not enter into such forward contracts or
maintain a net exposure to such contracts when consummating the
contracts would obligate the fund to deliver an amount of foreign
currency in excess of the value of the fund's portfolio securities
or other assets denominated in that currency.
-29-
<PAGE>
The fund will designate cash or securities in an amount equal to
the value of the fund's total assets committed to consummating
forward contracts entered into under the second circumstance set
forth above. If the value of the securities declines, additional
cash or securities will be designated on a daily basis so that the
value of the cash or securities will equal the amount of the fund's
commitments on such contracts.
At maturity of a forward contract, the fund may either sell the
portfolio security and make delivery of the foreign currency or
retain the security and terminate its contractual obligation to
deliver the foreign currency by purchasing an offsetting contract
with the same currency trader obligating it to buy, on the same
maturity date, the same amount of foreign currency.
If the fund retains the portfolio security and engages in an
offsetting transaction, the fund will incur a gain or a loss (as
described below) to the extent there has been movement in forward
contract prices. If the fund engages in an offsetting transaction,
it may subsequently enter into a new forward contract to sell the
foreign currency. Should forward prices decline between the date
the fund enters into a forward contract for selling foreign
currency and the date it enters into an offsetting contract for
purchasing the foreign currency, the fund will realize a gain to
the extent that the price of the currency it has agreed to sell
exceeds the price of the currency it has agreed to buy. Should
forward prices increase, the fund will suffer a loss to the extent
the price of the currency it has agreed to buy exceeds the price of
the currency it has agreed to sell.
It is impossible to forecast what the market value of portfolio
securities will be at the expiration of a contract. Accordingly,
it may be necessary for the fund to buy additional foreign currency
on the spot market (and bear the expense of such purchase) if the
market value of the security is less than the amount of foreign
currency the fund is obligated to deliver and a decision is made to
sell the security and make delivery of the foreign currency.
Conversely, it may be necessary to sell on the spot market some of
the foreign currency received on the sale of the portfolio security
if its market value exceeds the amount of foreign currency the fund
is obligated to deliver.
The fund's dealing in forward contracts will be limited to the
transactions described above. This method of protecting the value
of the fund's portfolio securities against a decline in the value
of a currency does not eliminate fluctuations in the underlying
prices of the securities. It simply establishes a rate of exchange
that can be achieved at some point in time. Although such forward
contracts tend to minimize the risk of loss due to a decline in
value of hedged currency, they tend to limit any potential gain
that might result should the value of such currency increase.
Although the fund values its assets each business day in terms of
U.S. dollars, it does not intend to convert its foreign currencies
into U.S. dollars on a daily basis. It will do so from time to
time, and shareholders should be aware of currency conversion
costs. Although foreign exchange dealers do not charge a fee for
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<PAGE>
conversion, they do realize a profit based on the difference
(spread) between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency to the fund at one rate, while offering a lesser rate of
exchange should the fund desire to resell that currency to the
dealer.
OPTIONS ON FOREIGN CURRENCIES. The fund may buy put and write
covered call options on foreign currencies for hedging purposes.
For example, a decline in the dollar value of a foreign currency in
which portfolio securities are denominated will reduce the dollar
value of such securities, even if their value in the foreign
currency remains constant. In order to protect against such
diminutions in the value of portfolio securities, the fund may buy
put options on the foreign currency. If the value of the currency
does decline, the fund will have the right to sell such currency
for a fixed amount in dollars and will thereby offset, in whole or
in part, the adverse effect on its portfolio which otherwise would
have resulted.
As in the case of other types of options, however, the benefit to
the fund derived from purchases of foreign currency options will be
reduced by the amount of the premium and related transaction costs.
In addition, where currency exchange rates do not move in the
direction or to the extent anticipated, the fund could sustain
losses on transactions in foreign currency options which would
require it to forego a portion or all of the benefits of
advantageous changes in such rates.
The fund may write options on foreign currencies for the same types
of hedging purposes. For example, when the fund anticipates a
decline in the dollar value of foreign-denominated securities due
to adverse fluctuations in exchange rates, it could, instead of
purchasing a put option, write a call option on the relevant
currency. If the expected decline occurs, the option will most
likely not be exercised and the diminution in value of portfolio
securities will be fully or partially offset by the amount of the
premium received.
As in the case of other types of options, however, the writing of a
foreign currency option will constitute only a partial hedge up to
the amount of the premium, and only if rates move in the expected
direction. If this does not occur, the option may be exercised and
the fund would be required to buy or sell the underlying currency
at a loss which may not be offset by the amount of the premium.
Through the writing of options on foreign currencies, the fund also
may be required to forego all or a portion of the benefits which
might otherwise have been obtained from favorable movements on
exchange rates.
All options written on foreign currencies will be covered. An
option written on foreign currencies is covered if the fund holds
currency sufficient to cover the option or has an absolute and
immediate right to acquire that currency without additional cash
consideration upon conversion of assets denominated in that
currency or exchange of other currency held in its portfolio. An
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<PAGE>
option writer could lose amounts substantially in excess of its
initial investments, due to the margin and collateral requirements
associated with such positions.
Options on foreign currencies are traded through financial
institutions acting as market-makers, although foreign currency
options also are traded on certain national securities exchanges,
such as the Philadelphia Stock Exchange and the Chicago Board
Options Exchange, subject to SEC regulation. In an over-the-
counter trading environment, many of the protections afforded to
exchange participants will not be available. For example, there
are no daily price fluctuation limits, and adverse market movements
could therefore continue to an unlimited extent over a period of
time. Although the purchaser of an option cannot lose more than
the amount of the premium plus related transaction costs, this
entire amount could be lost.
Foreign currency option positions entered into on a national
securities exchange are cleared and guaranteed by the OCC, thereby
reducing the risk of counterparty default. Further, a liquid
secondary market in options traded on a national securities
exchange may be more readily available than in the over-the-counter
market, potentially permitting the fund to liquidate open positions
at a profit prior to exercise or expiration, or to limit losses in
the event of adverse market movements.
The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of availability of a liquid
secondary market described above, as well as the risks regarding
adverse market movements, margining of options written, the nature
of the foreign currency market, possible intervention by
governmental authorities and the effects of other political and
economic events. In addition, exchange-traded options on foreign
currencies involve certain risks not presented by the over-the-
counter market. For example, exercise and settlement of such
options must be made exclusively through the OCC, which has
established banking relationships in certain foreign countries for
the purpose. As a result, the OCC may, if it determines that
foreign governmental restrictions or taxes would prevent the
orderly settlement of foreign currency option exercises, or would
result in undue burdens on OCC or its clearing member, impose
special procedures on exercise and settlement, such as technical
changes in the mechanics of delivery of currency, the fixing of
dollar settlement prices or prohibitions on exercise.
FOREIGN CURRENCY FUTURES AND RELATED OPTIONS. The fund may enter
into currency futures contracts to sell currencies. It also may
buy put and write covered call options on currency futures.
Currency futures contracts are similar to currency forward
contracts, except that they are traded on exchanges (and have
margin requirements) and are standardized as to contract size and
delivery date. Most currency futures call for payment of delivery
in U.S. dollars. The fund may use currency futures for the same
purposes as currency forward contracts, subject to CFTC
limitations, including the limitation on the percentage of assets
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<PAGE>
that may be used, described in the prospectus. All futures
contracts are aggregated for purposes of the percentage
limitations.
Currency futures and options on futures values can be expected to
correlate with exchange rates, but will not reflect other factors
that may affect the values of the fund's investments. A currency
hedge, for example, should protect a Yen-denominated bond against a
decline in the Yen, but will not protect the fund against price
decline if the issuer's creditworthiness deteriorates. Because the
value of the fund's investments denominated in foreign currency
will change in response to many factors other than exchange rates,
it may not be possible to match the amount of a forward contract to
the value of the fund's investments denominated in that currency
over time.
The fund will not use leverage in its currency options and futures
strategies. The fund will hold securities or other options or
futures positions whose values are expected to offset its
obligations. The fund will not enter into an option or futures
position that exposes the fund to an obligation to another party
unless it owns either (i) an offsetting position in securities or
(ii) cash, receivables and short-term debt securities with a value
sufficient to cover its potential obligations.
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<PAGE>
APPENDIX C
OPTIONS AND FUTURES CONTRACTS
The fund may buy or write options traded on any U.S. or foreign
exchange or in the over-the-counter market. The fund may enter
into interest rate futures contracts and stock index futures
contracts traded on any U.S. or foreign exchange. The fund also
may buy or write put and call options on these futures and on stock
indexes. Bond options in the over-the-counter market will be
purchased only when the investment manager believes a liquid
secondary market exists for the options and only from dealers and
institutions the investment manager believes present a minimal
credit risk. Some options are exercisable only on a specific date.
In that case, or if a liquid secondary market does not exist, the
fund could be required to buy or sell securities at disadvantageous
prices, thereby incurring losses.
OPTIONS. An option is a contract. A person who buys a call option
for a security has the right to buy the security at a set price for
the length of the contract. A person who sells a call option is
called a writer. The writer of a call option agrees to sell the
security at the set price when the buyer wants to exercise the
option, no matter what the market price of the security is at that
time. A person who buys a put option has the right to sell a
security at a set price for the length of the contract. A person
who writes a put option agrees to buy the security at the set price
if the purchaser wants to exercise the option, no matter what the
market price of the security is at that time. An option is covered
if the writer owns the security (in the case of a call) or sets
aside the cash or securities of equivalent value (in the case of a
put) that would be required upon exercise.
The price paid by the buyer for an option is called a premium. In
addition, the buyer generally pays a broker a commission. The
writer receives a premium, less another commission, at the time the
option is written. The cash received is retained by the writer
whether or not the option is exercised. A writer of a call option
may have to sell the security for a below-market price if the
market price rises above the exercise price. A writer of a put
option may have to pay an above-market price for the security if
its market price decreases below the exercise price. The risk of
the writer is potentially unlimited, unless the option is covered.
Options can be used to produce incremental earnings, protect gains
and facilitate buying and selling securities for investment
purposes. The use of options and futures contracts may benefit the
fund and its shareholders by improving the fund's liquidity and by
helping to stabilize the value of its net assets.
BUYING OPTIONS. Put and call options may be used as a trading
technique to facilitate buying and selling securities for
investment reasons. They also may be for investment. Options are
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<PAGE>
used as a trading technique to take advantage of any disparity
between the price of the underlying security in the securities
market and its price on the options market. It is anticipated the
trading technique will be utilized only to effect a transaction
when the price of the security plus the option price will be as
good or better than the price at which the security could be bought
or sold directly. When the option is purchased, the fund pays a
premium and a commission. It then pays a second commission on the
purchase or sale of the underlying security when the option is
exercised. For record keeping and tax purposes, the price obtained
on the purchase of the underlying security will be the combination
of the exercise price, the premium and both commissions. When
using options as a trading technique, commissions on the option
will be set as if only the underlying securities were traded.
Put and call options also may be held by the fund for investment
purposes. Options permit the fund to experience the change in the
value of a security with a relatively small initial cash
investment.
The risk the fund assumes when it buys an option is the loss of the
premium. To be beneficial to the fund, the price of the underlying
security must change within the time set by the option contract.
Furthermore, the change must be sufficient to cover the premium
paid, the commissions paid both in the acquisition of the option
and in a closing transaction or in the exercise of the option and
subsequent sale (in the case of a call) or purchase (in the case of
a put) of the underlying security. Even then, the price change in
the underlying security does not ensure a profit since prices in
the option market may not reflect such a change.
WRITING COVERED OPTIONS. The fund will write covered options when
it feels it is appropriate and will follow these guidelines:
'Underlying securities will continue to be bought or sold solely on
the basis of investment considerations consistent with the fund's
goal.
'All options written by the fund will be covered. For covered call
options, if a decision is made to sell the security, or for put
options if a decision is made to buy the security, the fund will
attempt to terminate the option contract through a closing purchase
transaction.
'The fund will write options only as permitted under federal or
state laws or regulations, such as those that limit the amount of
total assets subject to the options. While no limit has been set
by the fund, it will conform to the requirements of those states.
For example, California limits the writing of options to 50% of the
assets of a fund.
Net premiums on call options closed or premiums on expired call
options are treated as short-term capital gains. Since the fund is
taxed as a regulated investment company under the Internal Revenue
Code, any gains on options and other securities held less than
three months must be limited to less than 30% of its annual gross
income.
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<PAGE>
If a covered call option is exercised, the security is sold by the
fund. The premium received upon writing the option is added to the
proceeds received from the sale of the security. The fund will
recognize a capital gain or loss based upon the difference between
the proceeds and the security's basis. Premiums received from
writing outstanding options are included as a deferred credit in
the Statement of Assets and Liabilities and adjusted daily to the
current market value.
Options on many securities are listed on options exchanges. If the
fund writes listed options, it will follow the rules of the options
exchange. Options are valued at the close of the New York Stock
Exchange. An option listed on a national exchange, CBOE or NASDAQ
will be valued at the last-quoted sales price or, if such a price
is not readily available, at the mean of the last bid and ask
prices.
Options on certain securities are not actively traded on any
exchange, but may be entered into directly with a dealer. When the
fund writes such an option, the Custodian will segregate assets as
appropriate to cover the option. These options may be more
difficult to close. If the fund is unable to effect a closing
purchase transaction, it will not be able to sell the underlying
security until the call written by the fund expires or is
exercised.
FUTURES CONTRACTS. A futures contract is an agreement between two
parties to buy and sell a security for a set price on a future
date. Futures contracts trade in a manner similar to the way a
stock trades on a stock exchange and the commodity exchanges,
through their clearing corporations, guarantee performance of the
contracts. Futures contracts are commodity contracts listed on
commodity exchanges. They include contracts based on U.S. Treasury
bonds and on Standard and Poor's 500 Index (S&P 500 Index). In the
case of S&P 500 index futures contracts, the specified multiple is
$500. Thus, if the value of the S&P 500 Index were 150, the value
of one contract would be $75,000 (150 x $500).
Unlike other futures contracts, a stock index futures contract
specifies that no delivery of the actual stocks making up the index
will take place. Instead, settlement in cash must occur upon the
termination of the contract. For example, excluding any
transaction costs, if the fund enters into one futures contract to
buy the S&P 500 Index at a specified future date at a contract
value of 150 and the S&P 500 Index is at 154 on that future date,
the fund will gain $500 x (154-150) or $2,000. If the fund enters
into one futures contract to sell the S&P 500 Index at a specified
future date at a contract value of 150 and the S&P 500 Index is at
152 on that future date, the fund will lose $500 x (152-150) or
$1,000.
Generally, a futures contract is terminated by entering into an
offsetting transaction. An offsetting transaction is effected by
the fund taking an opposite position. At the time a futures
contract is made, a good faith deposit called initial margin is set
up within a segregated account at the fund's custodian bank. Daily
-36-
<PAGE>
thereafter, the futures contract is valued and the payment of
variation margin is required so that each day the fund would pay
out cash in an amount equal to any decline in the contract's value
or receive cash equal to any increase. At the time a futures
contract is closed out, a nominal commission is paid, which is
generally lower than the commission on a comparable transaction in
the cash markets.
The purpose of a futures contract is to allow the fund to gain
rapid exposure to or protect itself from changes in the market
without actually buying or selling securities. For example, if the
fund owned long-term bonds and interest rates were expected to
increase, it might enter into futures contracts to sell securities
which would have much the same effect as selling some of the long-
term bonds it owned. If interest rates did increase, the value of
the debt securities in the portfolio would decline, but the value
of the fund's futures contracts would increase at approximately the
same rate, thereby keeping the net asset value of the fund from
declining as much as it otherwise would have. If, on the other
hand, the fund held cash reserves and interest rates were expected
to decline, the fund might enter into interest rate futures
contracts for the purchase of securities. If short-term rates were
higher than long-term rates, the ability to continue holding these
cash reserves would have a very beneficial impact on the fund's
earnings. Even if short-term rates were not higher, the fund would
still benefit from the income earned by holding these short-term
investments. At the same time, by entering into futures contracts
for the purchase of securities, the fund could take advantage of
the anticipated rise in the value of long-term bonds without
actually buying them until the market had stabilized. At that
time, the futures contracts could be liquidated and the fund's cash
reserves could then be used to buy long-term bonds on the cash
market. The fund could accomplish similar results by selling bonds
with long maturities and investing in bonds with short maturities
when interest rates are expected to increase or by buying bonds
with long maturities and selling bonds with short maturities when
interest rates are expected to decline. But by using futures
contracts as an investment tool, given the greater liquidity in the
futures market than in the cash market, it might be possible to
accomplish the same result more easily and more quickly.
RISKS OF TRANSACTIONS IN FUTURES CONTRACTS. The fund may elect to
close some or all of its contracts prior to expiration. Although
the fund intends to enter into futures contracts only on exchanges
or boards of trade where there appears to be an active secondary
market, there is no assurance that a liquid secondary market will
exist for any particular contract at any particular time. In such
event, it may not be possible to close a futures contract position,
and in the event of adverse price movements, the fund would have to
make daily cash payments of variation margin. Such price
movements, however, will be offset all or in part by the price
movements of the securities owned by the fund. Of course, there is
no guarantee the price of the securities will correlate with the
price movements in the futures contract and thus provide an offset
to losses on a futures contract.
-37-
<PAGE>
Another risk in employing futures contracts to protect against the
price volatility of portfolio securities is that the prices of
securities subject to futures contracts may not correlate perfectly
with the behavior of the cash prices of the fund's portfolio
securities. The correlation may be distorted because the futures
market is dominated by short-term traders seeking to profit from
the difference between a contract or security price and their cost
of borrowed funds. Such distortions are generally minor and would
diminish as the contract approached maturity.
In addition, the fund's investment manager could be incorrect in
its expectations as to the direction or extent of various interest
rate or market movements or the time span within which the
movements take place. For example, if the fund sold futures
contracts for the sale of securities in anticipation of an increase
in interest rates, and interest rates declined instead, the fund
would lose money on the sale.
OPTIONS ON FUTURES CONTRACTS. Options give the holder a right to
buy or sell futures contracts in the future. Unlike a futures
contract, which requires the parties to the contract to buy and
sell a security on a set date, an option on a futures contract
merely entitles its holder to decide on or before a future date
(within nine months of the date of issue) whether to enter into
such a contract. If the holder decides not to enter into the
contract, all that is lost is the amount (premium) paid for the
option. Further, because the value of the option is fixed at the
point of sale, there are not daily payments of cash to reflect the
change in the value of the underlying contract. However, since an
option gives the buyer the right to enter into a contract at a set
price for a fixed period of time, its value does change daily and
that change is reflected in the net asset value of the fund.
The risk the fund assumes when it buys an option is the loss of the
premium paid for the option. The risk involved in writing options
on futures contracts the fund owns, or on securities held in its
portfolio, is that there could be an increase in the market value
of such contracts or securities. If that occurred, the option
would be exercised and the asset sold at a lower price than the
cash market price. To some extent, the risk of not realizing a
gain could be reduced by entering into a closing transaction. The
fund could enter into a closing transaction by purchasing an option
with the same terms as the one it had previously sold. The cost to
close the option and terminate the fund's obligation, however,
might be more or less than the premium received when it originally
wrote the option. Further, the fund might not be able to close the
option because of insufficient activity in the options market.
Purchasing options also limits the use of monies that might
otherwise be available for long-term investments.
OPTIONS ON STOCK INDEXES. Options on stock indexes are securities
traded on national securities exchanges. An option on a stock
index is similar to an option on a futures contract except all
settlements are in cash. A fund exercising a put, for example,
-38-
<PAGE>
would receive the difference between the exercise price and the
current index level. Such options would be used in the same manner
as options on futures contracts.
TAX TREATMENT. As permitted under federal income tax laws, the
fund intends to identify futures contracts as mixed straddles and
not mark them to market, that is, not treat them as having been
sold at the end of the year at market value. Such an election may
result in the fund being required to defer recognizing losses
incurred by entering into futures contracts and losses on
underlying securities identified as being hedged against.
Federal income-tax treatment of gains or losses from transactions
in options on futures contracts and indexes is presently unclear,
although the fund's tax advisors currently believe marking to
market is not required. Depending on developments, and although no
assurance is given, the fund may seek Internal Revenue Service
(IRS) rulings clarifying questions concerning such treatment.
Certain provisions of the Internal Revenue Code may also limit the
fund's ability to engage in futures contracts and related options
transactions. For example, at the close of each quarter of the
fund's taxable year, at least 50% of the value of its assets must
consist of cash, government securities and other securities,
subject to certain diversification requirements. Less than 30% of
its gross income must be derived from sales of securities held less
than three months.
The IRS has ruled publicly that an exchange-traded call option is a
security for purposes of the 50%-of-assets test and that its issuer
is the issuer of the underlying security, not the writer of the
option, for purposes of the diversification requirements. In order
to avoid realizing a gain within the three-month period, the fund
may be required to defer closing out a contract beyond the time
when it might otherwise be advantageous to do so. The fund also
may be restricted in purchasing put options for the purpose of
hedging underlying securities because of applying the short sale
holding period rules with respect to such underlying securities.
Accounting for futures contracts will be according to generally
accepted accounting principles. Initial margin deposits will be
recognized as assets due from a broker (the fund's agent in
acquiring the futures position). During the period the futures
contract is open, changes in value of the contract will be
recognized as unrealized gains or losses by marking to market on a
daily basis to reflect the market value of the contract at the end
of each day's trading. Variation margin payments will be made or
received depending upon whether gains or losses are incurred. All
contracts and options will be valued at the last-quoted sales price
on their primary exchange.
-39-
<PAGE>
APPENDIX D
MORTGAGE-BACKED SECURITIES
A mortgage pass through certificate is one that represents an
interest in a pool, or group, of mortgage loans assembled by the
Government National Mortgage Association (GNMA), Federal Home Loan
Mortgage Corporation (FHLMC), Federal National Mortgage Association
(FNMA) or non-governmental entities. In pass-through certificates,
both principal and interest payments, including prepayments, are
passed through to the holder of the certificate. Prepayments on
underlying mortgages result in a loss of anticipated interest, and
the actual yield (or total return) to the fund, which is influenced
by both stated interest rates and market conditions, may be
different than the quoted yield on certificates. Some U.S.
government securities may be purchased on a "when-issued" basis,
which means that it may take as long as 45 days after the purchase
before the securities are delivered to the fund.
STRIPPED MORTGAGE-BACKED SECURITIES. The fund may invest in
stripped mortgage-backed securities. 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 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.
MORTGAGE-BACKED SECURITY SPREAD OPTIONS. The fund may purchase
mortgage-backed security (MBS) put spread options and write covered
MBS call spread options. MBS spread options are based upon the
changes in the price spread between a specified mortgage-backed
security and a like-duration Treasury security. MBS spread options
are traded in the OTC market and are of short duration, typically
one to two months. The fund would buy or sell covered MBS call
spread options in situations where mortgage-backed securities are
expected to under perform like-duration Treasury securities.
-40-
<PAGE>
APPENDIX E
DOLLAR-COST AVERAGING
A 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 in a fund to meet long term goals.
DOLLAR-COST AVERAGING
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
REGULAR MARKET PRICE SHARES
INVESTMENT OF A SHARE ACQUIRED
- -------------------------------------------------------------------
<S> <C> <C>
$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
</TABLE>
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).
-41-
<PAGE>
Independent auditors' report
The board of directors and shareholders
IDS Managed Retirement Fund, Inc.:
We have audited the accompanying statement of assets
and liabilities, including the schedule of investments
in securities, of IDS Managed Retirement Fund, Inc. as
of November 30, 1994, and the related statement of
operations for the year then ended and the statements
of changes in net assets for each of the years in the
two-year period ended November 30, 1994, and the
financial highlights for each of the years in the
nine-year period ended November 30, 1994, and for the
period from January 23, 1985 (commencement of
operations), to November 30, 1985. These financial
statements and the financial highlights are the
responsibility of fund management. Our responsibility
is to express an opinion on these financial statements
and the financial highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements and the financial highlights are free of
material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and
disclosures in the financial statements. Investment
securities held in custody are confirmed to us by the
custodian. As to securities purchased and sold but not
received or delivered, and securities on loan, we
request confirmations from brokers, and where replies
are not received, we carry out other appropriate
auditing procedures. An audit also includes assessing
the accounting principles used and significant
estimates made by management, as well as evaluating
the overall financial statement presentation. We
believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of IDS Managed Retirement Fund,
Inc. at November 30, 1994, and the results of its
operations for the year then ended and the changes in
its net assets for each of the years in the two-year
period ended November 30, 1994, and the financial
highlights for the periods stated in the first
paragraph above, in conformity with generally accepted
accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
January 6, 1995
<PAGE>
<TABLE>
Financial statements
Statement of assets and liabilities
IDS Managed Retirement Fund, Inc.
Nov. 30, 1994
<CAPTION>
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
Investments in securities of unaffiliated issuers
(identified cost $2,051,806,935) $2,195,401,387
Investments in securities of affiliated issuer (identified cost $6,108,130) 5,475,000
Cash in bank on demand deposit 4,489,766
Receivable for investment securities sold 139,931,271
Dividends and accrued interest receivable 4,294,624
Receivable for foreign currency contracts held, at value (Notes 1 and 4) 60,996,678
U.S. government securities held as collateral (Note 5) 22,237,024
_____________________________________________________________________________________________________________
Total assets 2,432,825,750
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Payable for investment securities purchased 51,514,660
Payable for foreign currency contracts held, at value (Notes 1 and 4) 60,038,803
Payable upon return of securities loaned (Note 5) 67,395,024
Accrued investment management and services fee 1,003,965
Accrued distribution fee 118,728
Accrued transfer agency fee 296,055
Other accrued expenses 579,815
Open option contracts written, at value
(premium received $637,477)(Note 7) 282,200
_____________________________________________________________________________________________________________
Total liabilities 181,229,250
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $2,251,596,500
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 199,439,995 shares $ 1,994,400
Additional paid-in capital 1,939,765,091
Undistributed net investment income 5,699,238
Accumulated net realized gain (Note 1) 159,863,297
Unrealized appreciation (Note 4) 144,274,474
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $2,251,596,500
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 11.29
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statement of operations
IDS Managed Retirement Fund, Inc.
Year ended Nov. 30, 1994
Investment income
_____________________________________________________________________________________________________________
<S> <C>
Income:
Dividends (net of foreign taxes withheld of $516,113) $31,161,622
Interest 10,369,966
_____________________________________________________________________________________________________________
Total income 41,531,588
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 11,307,904
Distribution fee 1,316,703
Transfer agency fee 3,281,422
Compensation of directors 40,355
Compensation of officers 25,949
Custodian fees 1,190,704
Postage 275,181
Registration fees 257,082
Reports to shareholders 90,639
Audit fees 30,500
Administrative 22,206
Other 27,647
_____________________________________________________________________________________________________________
Total expenses 17,866,292
_____________________________________________________________________________________________________________
Investment income -- net 23,665,296
_____________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions
(including gain of $1,302,096 from foreign currency transactions) (Note 3) 158,086,230
Net realized gain on closed stock index futures contracts 2,084,172
Net realized gain on closed or expired options written (Note 7) 1,074,231
_____________________________________________________________________________________________________________
Net realized gain on investments and foreign currency 161,244,633
Net change in unrealized appreciation or depreciation (173,232,646)
_____________________________________________________________________________________________________________
Net loss on investments and foreign currency (11,988,013)
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $11,677,283
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statements of changes in net assets
IDS Managed Retirement Fund, Inc.
Year ended Nov. 30,
<CAPTION>
_____________________________________________________________________________________________________________
Operations and distributions 1994 1993
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 23,665,296 $ 23,878,221
Net realized gain on investments and foreign currency 161,244,633 138,631,701
Net change in unrealized appreciation or depreciation (173,232,646) 11,572,135
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations 11,677,283 174,082,057
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (21,173,864) (25,829,748)
Net realized gain (137,757,653) (97,315,857)
Excess distribution of realized gain (Note 1) (1,302,096) (55,002)
_____________________________________________________________________________________________________________
Total distributions (160,233,613) (123,200,607)
_____________________________________________________________________________________________________________
Capital share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
52,780,284 and 33,898,181 shares (Note 2) 612,687,152 394,118,183
Net asset value of 13,541,661 and 10,877,169 shares
issued in reinvestment of distributions 159,258,078 122,472,864
Payments for redemptions of
18,632,894 and 12,690,556 shares (216,560,194) (147,340,355)
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions
representing net addition of
47,689,051 and 32,084,794 shares 555,385,036 369,250,692
_____________________________________________________________________________________________________________
Total increase in net assets 406,828,706 420,132,142
_____________________________________________________________________________________________________________
Net assets at beginning of year 1,844,767,794 1,424,635,652
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$5,699,238 and $3,180,521) $2,251,596,500 $1,844,767,794
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
IDS Managed Retirement Fund, Inc.
______________________________________________________________________________
1. Summary of significant accounting policies
The fund is registered under the Investment Company
Act of 1940 (as amended) as a diversified, open-end
management investment company. Significant accounting
policies followed by the fund are summarized below:
Valuation of securities
All securities are valued at the close of each
business day. Securities traded on national
securities exchanges or included in national market
systems are valued at the last quoted sales price;
securities for which market quotations are not
readily available, including illiquid securities, are
valued at fair value according to methods selected in
good faith by the board of directors. Determination
of fair value involves, among other things, reference
to market indexes, matrixes and data from independent
brokers. Short-term securities maturing in more than
60 days from the valuation date are valued at the
market price or approximate market value based on
current interest rates; those maturing in 60 days or
less are valued at amortized cost.
Option transactions
In order to produce incremental earnings, protect
gains, and facilitate buying and selling of
securities for investment purposes, the fund may buy
or write options traded on any U.S. or foreign
exchange or in the over-the-counter market where the
completion of the obligation is dependent upon the
credit standing of the other party. The fund also may
buy and sell put and call options and write covered
call options on portfolio securities and may write
cash secured put options. The risk in writing a call
option is that the fund gives up the opportunity of
profit if the market price of the security increases.
The risk in writing a put option is that the fund may
incur a loss if the market price of the security
decreases and the option is exercised. The risk in
buying an option is that the fund pays a premium
whether or not the option is exercised. The fund also
has the additional risk of not being able to enter
into a closing transaction if a liquid secondary
market does not exist.
<PAGE>
Option contracts are valued daily at the closing
prices on their primary exchanges and unrealized
appreciation or depreciation is recorded. The fund
will realize a gain or loss upon expiration or
closing of the option transaction. When an option is
exercised, the proceeds on sales for a written call
option, the purchase cost for a written put option or
the cost of a security for a purchased put or call
option is adjusted by the amount of premium received
or paid.
Futures transactions
In order to gain exposure to or protect itself from
changes in the market, the fund may buy and sell
futures contracts traded on any U.S. or foreign
exchange. The fund also may buy or write put and call
options on these futures contracts. Risks of entering
into futures contracts and related options include
the possibilitiy that there may be an illiquid market
and that a change in the value of the contract or
option may no correlate with changes in the value of
the underlying securities.
Upon entering into a futures contract, the fund is
required to deposit either cash or securities in an
amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation
margin) are made or received by the fund each day.
The variation margin payments are equal to the daily
changes in the contract value and are recorded as
unrealized gains and losses. The fund recognizes a
realized gain or loss when the contract is closed or
expires.
<PAGE>
Foreign currency translations and
foreign currency contracts
Securities and other assets and liabilities
denominated in foreign currencies are translated
daily into U.S. dollars at the closing rate of
exchange. Foreign currency amounts related to the
purchase or sale of securities and income and
expenses are translated at the exchange rate on the
transaction date. The effect of changes in foreign
exchange rates on realized and unrealized security
gains or losses is reflected as a component of such
gains or losses. In the statement of operations, net
realized gains or losses from foreign currency
transactions may arise from sales of foreign
currency, closed forward contracts, exchange gains or
losses realized between the trade date and settlement
dates on securities transactions, and other
translation gains or losses on dividends, interest
income and foreign withholding taxes.
The fund may enter into forward foreign currency
exchange contracts for operational purposes and to
protect against adverse exchange rate fluctuation.
The net U.S. dollar value of foreign currency
underlying all contractual commitments held by the
fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency
exchange rates from an independent pricing service.
The fund is subject to the credit risk that the other
party will not complete the obligations of the
contract.
<PAGE>
Federal taxes
Since the fund's policy is to comply with all
sections of the Internal Revenue Code applicable to
regulated investment companies and to distribute all
of its taxable income to shareholders, no provision
for income or excise taxes is required.
Net investment income (loss) and net realized gains
(losses) may differ for financial statement and tax
purposes primarily because of the deferral of losses
on certain futures contracts, the recognition of
certain foreign currency gains (losses) as ordinary
income (loss) for tax purposes, and losses deferred
due to "wash sale" transactions. The character of
distributions made during the year from net
investment income or net realized gains may differ
from their ultimate characterization for federal
income tax purposes. The effect on dividend
distributions of certain book-to-tax differences is
presented as "excess distributions" in the statement
of changes in net assets. Also, due to the timing of
dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that
the income or realized gains (losses) were recorded
by the fund.
On the statement of assets and liabilities, as a
result of permanent book-to-tax difference,
undistributed net investment income has been
increased by $27,285, resulting in a net
reclassification adjustment to decrease paid-in-
capital by $27,285.
Dividends to shareholders
Dividends declared and paid each calendar quarter
from net investment income are reinvested in
additional shares of the fund at net asset value or
payable in cash. Capital gains, when available, are
distributed along with the last income dividend of
the calendar year.
Other
Security transactions are accounted for on the date
securities are purchased or sold. Dividend income is
recognized on the ex-dividend date and interest
income, including level-yield amortization of premium
and discount is accrued daily.
<PAGE>
______________________________________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991, the
fund pays American Express Financial Corporation a
fee for managing its investments, recordkeeping and
other specified services. The fee is a percentage of
the fund's average daily net assets consisting of a
group asset charge in reducing percentages from 0.46%
to 0.32% annually on the combined net assets of all
non-money market funds in the IDS MUTUAL FUND GROUP
and an individual annual asset charge of 0.14% of
average daily net assets. The fee is adjusted upward
or downward by a performance incentive adjustment
based on the fund's average daily net assets over a
rolling 12-month period as measured against the
change in the Lipper Growth and Income Fund Index.
The maximum adjustment is 0.08% of the fund's average
daily net assets after deducting 1% from the
performance difference. If the performance difference
is less than 1%, the adjustment will be zero. The
adjustment increased the fee by $107,288 for the year
ended Nov. 30, 1994.
The fund also pays American Express Financial
Corporation a distribution fee at an annual rate of
$6 per shareholder account and a transfer agency fee
at an annual rate of $15 per shareholder account. The
transfer agency fee is reduced by earnings on monies
pending shareholder redemptions.
American Express Financial Corporation will assume
and pay any expenses (except taxes and brokerage
commissions) that exceed the most restrictive
applicable state expense limitation.
Sales charges by American Express Financial Advisors
Inc. for distributing fund shares were $12,140,380
for the year ended Nov. 30, 1994. The fund also pays
custodian fees to American Express Trust Company, an
affiliate of IDS.
The fund has a retirement plan for its independent
directors. Upon retirement, directors receive monthly
payments equal to one-half of the retainer fee for as
many months as they served as directors up to 120
months. There are no death benefits. The plan is not
funded but the fund recognizes the cost of payments
during the time the directors serve on the board.
The retirement plan expense amounted to $19,451 for
the year ended Nov. 30, 1994.
<PAGE>
______________________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of
securities (other than short-term obligations)
aggregated $1,476,883,391 and $1,294,202,462,
respectively, for the year ended Nov. 30, 1994.
Realized gains and losses are determined on an
identified cost basis.
Brokerage commissions paid to brokers affiliated with
American Express Financial Corporation were $345,759
for the year ended Nov. 30, 1994.
______________________________________________________________________________
4. Foreign currency contracts
At Nov. 30, 1994, the fund had entered into 25
foreign currency exchange contracts that obligate the
fund to deliver currencies at specified future dates.
The net unrealized appreciation of $957,875 on these
contracts is included in the accompanying financial
statements. The terms of the open contracts are as
follows:
<TABLE>
<CAPTION>
U.S. Dollar value U.S. Dollar value
Currency to be as of Currency to be as of
Exchange date delivered Nov. 30, 1994 received Nov. 30, 1994
____________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Dec. 1, 1994 350,140 $ 350,140 892,928 $ 349,373
U.S. Dollar Malaysian Dollar
Dec. 1, 1994 307,204 12,881 12,779 12,779
Philippine Peso U.S. Dollar
Dec. 2, 1994 416,020 17,443 17,305 17,305
Philippine Peso U.S. Dollar
<PAGE>
Dec. 5, 1994 7,220,189 7,220,189 9,627,431 7,403,014
U.S. Dollar Australian Dollar
Dec. 5, 1994 4,191,560 4,191,560 5,604,814 4,309,822
U.S. Dollar Australian Dollar
Dec. 5, 1994 442,103 442,103 4,842,884 437,973
U.S. Dollar Austrian Schilling
Dec. 5, 1994 398,978 398,978 4,363,026 394,576
U.S. Dollar Austrian Schilling
Dec. 5, 1994 88,074 88,074 960,730 86,885
U.S. Dollar Austrian Schilling
Dec. 5, 1994 585,346 585,346 6,420,393 580,637
U.S. Dollar Austrian Schilling
Dec. 5, 1994 23,254 17,881 17,721 17,721
Australian Dollar U.S. Dollar
Dec. 5, 1994 2,063,983 1,500,751 1,498,408 1,498,408
Canadian Dollar U.S. Dollar
Dec. 5, 1994 98,700 4,138 4,118 4,118
Philippine Peso U.S. Dollar
Dec. 6, 1994 193,137 148,512 147,485 147,485
Australian Dollar U.S. Dollar
Dec. 7, 1994 233,765 179,754 179,555 179,555
Australian Dollar U.S. Dollar
<PAGE>
Dec. 12, 1994 474,190 474,190 5,219,220 472,007
U.S. Dollar Austrian Schilling
Dec. 12, 1994 377,884 377,884 4,155,399 375,799
U.S. Dollar Austrian Schilling
Dec. 30, 1994 100,067 100,067 535,416 99,520
U.S. Dollar French Franc
Dec. 30, 1994 1,017,314 1,017,314 5,446,290 1,012,321
U.S. Dollar French Franc
Dec. 30, 1994 254,518 254,518 1,365,766 253,860
U.S. Dollar French Franc
Dec. 30, 1994 188,619 188,619 1,014,867 188,637
U.S. Dollar French Franc
Feb. 1, 1995 3,700,000 5,799,935 5,997,238 5,997,238
British Pound U.S. Dollar
Feb. 1, 1995 15,500,000 2,884,011 2,995,169 2,995,169
French Franc U.S. Dollar
Feb. 1, 1995 920,000,000 7,012,195 6,997,794 6,997,794
Spanish Peseta U.S. Dollar
Feb. 1, 1995 115,000,000 15,217,014 15,179,514 15,179,514
Swedish Krona U.S. Dollar
Feb. 1, 1995 18,100,000 11,555,306 11,985,168 11,985,168
Deutsch Mark ___________ U.S. Dollar ___________
$60,038,803 $60,996,678
</TABLE>
______________________________________________________________________________
5. Lending of portfolio securities
At Nov. 30, 1994, securities valued at $64,421,407
were on loan to brokers. For collateral, the fund
received $45,158,000 in cash and U.S. government
securities valued at $22,237,024. Income from
securities lending amounted to $587,847 for the year
ended Nov. 30, 1994. The risks to the fund of
securities lending are that the borrower may not
provide additional collateral when required or return
the securities when due.
<PAGE>
______________________________________________________________________________
6. Illiquid securities
At Nov. 30, 1994, investments in securities included
issues that are illiquid. The fund currently limits
investments in illiquid securities to 10% of the net
assets, at market value, at the time of purchase. The
aggregate value of such securites at Nov. 30, 1994,
was $8,010,400 which represents 0.4% of net assets.
Pursuant to guidelines adopted by the fund's board of
directors, certain unregistered securities are
determined to be liquid and are not included within
the 10% limitation specified above.
______________________________________________________________________________
7. Option contracts written
The number of contracts and premium amounts
associated with options written is as follows:
Year ended Nov. 30, 1994
____________________________________
Puts Calls
Contracts Premium Contracts Premium
_____________________________________________________________________
Balance Nov. 30, 1993 -- $ -- -- $ --
Opened 4,000 283,278 37,040 2,878,143
Closed -- -- (11,366) (1,033,233)
Exercised (500) (43,061) (10,097) (953,576)
Expired (2,000) (158,095) (7,503) (335,979)
____________________________________________________________________
Balance Nov. 30, 1994 1,500 $ 82,122 8,074 $ 555,355
____________________________________________________________________
<PAGE>
<TABLE>
Investment in securities
IDS Managed Retirement Fund, Inc. (Percentages represent value of
Nov. 30, 1994 investments compared to net assets)
<CAPTION>
Investments in securities of unaffiliated issuers
_____________________________________________________________________________________________________________________________
Common stocks (83.5%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Aerospace & defense (1.3%)
AlliedSignal 300,000 $ 9,787,500
Raytheon 300,000 18,862,500
______________
Total 28,650,000
_____________________________________________________________________________________________________________________________
Automotive & related (0.8%)
Automotive Inds 655,000 (b) 11,790,000
Hayes Wheels Intl 300,000 6,112,500
______________
Total 17,902,500
_____________________________________________________________________________________________________________________________
Banks and savings & loans (0.8%)
First Chicago 200,000 9,300,000
NationsBank 200,000 8,975,000
______________
Total 18,275,000
_____________________________________________________________________________________________________________________________
Beverages & tobacco (0.9%)
PepsiCo 600,000 21,225,000
_____________________________________________________________________________________________________________________________
Building materials (3.8%)
C Brewer Homes 140,000 (b) 1,400,000
Ferro 300,000 7,275,000
Georgia Pacific 300,000 (c) 21,450,000
Martin Marietta 175,000 3,150,000
Masco 1,000,000 22,250,000
Weyerhaeuser 750,000 28,781,250
______________
Total 84,306,250
_____________________________________________________________________________________________________________________________
Chemicals (4.3%)
Air Products & Chemicals 600,000 26,625,000
Crompton & Knowles 600,000 9,300,000
Dow Chemical 750,000 48,000,000
Georgia Gulf 150,000 (b,g) 5,325,000
Lyondell Petrochem 300,000 7,275,000
______________
Total 96,525,000
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Communications equipment (3.3%)
Airtouch Communications 800,000 (b) 21,700,000
Alltell 800,000 22,500,000
Raychem 300,000 10,387,500
Scientific Atlanta 1,000,000 19,750,000
______________
Total 74,337,500
_____________________________________________________________________________________________________________________________
Computers & office equipment (3.3%)
Cisco Systems 1,600,000 (b) 51,600,000
Pitney Bowes 700,000 23,275,000
______________
Total 74,875,000
_____________________________________________________________________________________________________________________________
Electronics (4.5%)
Amphenol 250,000 (b) 5,968,750
Intel 650,000 41,031,250
Motorola 550,000 31,006,250
Vishay Intertechnology 500,000 (b) 23,937,500
______________
Total 101,943,750
_____________________________________________________________________________________________________________________________
Energy (3.5%)
Amoco 300,000 18,225,000
Cross Timber 170,900 2,499,412
Devon Energy 240,000 4,620,000
Enron 530,000 14,310,000
HS Resources 530,000 (b) 9,142,500
Occidental Petroleum 1,100,000 (c) 21,587,500
Sun 250,000 7,281,250
______________
Total 77,665,662
_____________________________________________________________________________________________________________________________
Energy equipment & services (0.2%)
Camco 250,000 4,750,000
_____________________________________________________________________________________________________________________________
Financial services (3.4%)
BankAmerica 1,000,000 (g) 41,000,000
Federal Natl Mtge 400,000 28,450,000
TIG Holdings 350,000 6,125,000
______________
Total 75,575,000
_____________________________________________________________________________________________________________________________
Furniture & appliances (0.4%)
Black & Decker 400,000 9,600,000
_____________________________________________________________________________________________________________________________
<PAGE>
Health care (7.6%)
Abbott Laboratories 500,000 15,937,500
Amgen 500,000 (b) 29,187,500
Colgate-Palmolive 500,000 30,000,000
Johnson & Johnson 300,000 16,012,500
Medtronic 300,000 15,900,000
Merck 2,193 81,689
Pfizer 500,000 38,687,500
Schering-Plough 350,000 26,206,250
______________
Total 172,012,939
_____________________________________________________________________________________________________________________________
Industrial equipment & services (0.5%)
Caterpillar 99,900 5,394,600
General Signal 200,000 6,450,000
______________
Total 11,844,600
_____________________________________________________________________________________________________________________________
Industrial transportation (2.5%)
CSX 450,000 31,275,000
Southwest Airlines 750,000 15,843,750
Union Pacific 200,000 9,300,000
______________
Total 56,418,750
_____________________________________________________________________________________________________________________________
Insurance (1.2%)
EW Blanch 500,000 9,562,500
Tempest Reinsurance Private 80,000 (b,f) 8,010,400
UNUM 250,000 9,125,000
______________
Total 26,697,900
_____________________________________________________________________________________________________________________________
Leisure time & entertainment (1.6%)
Bally Gaming Intl 325,000 (b) 2,965,625
Caesars World 450,000 (b) 19,575,000
Intl Game Technology 800,000 13,300,000
______________
Total 35,840,625
_____________________________________________________________________________________________________________________________
Media (1.2%)
Spelling Entertainment Group 500,000 5,687,500
Time Warner 600,000 20,250,000
______________
Total 25,937,500
_____________________________________________________________________________________________________________________________
Metals (0.7%)
Magma Copper Cl B 278,900 (b,g) 4,497,263
Reynolds Metals 250,000 11,781,250
______________
Total 16,278,513
_____________________________________________________________________________________________________________________________
<PAGE>
Multi-industry conglomerates (2.8%)
Emerson Electric 550,000 32,450,000
General Electric 600,000 27,600,000
Minnesota Mining & Manufacturing 50,000 2,562,500
______________
Total 62,612,500
_____________________________________________________________________________________________________________________________
Natural gas (0.2%)
Equitable Resources 171,000 4,617,000
_____________________________________________________________________________________________________________________________
Paper & packaging (1.1%)
Crown Cork & Seal 400,000 (b) 15,100,000
Jefferson Smurfit 670,000 (b) 10,720,000
______________
Total 25,820,000
_____________________________________________________________________________________________________________________________
Retail (7.3%)
Best Buy 300,000 (b) 13,237,500
Broadway Stores 2,000,000 (b,c) 20,500,000
Dillard Dept Store Cl A 500,000 14,062,500
Duracell Intl 500,000 22,500,000
Federated Dept Stores 500,000 (b) 10,250,000
Gap 400,000 14,100,000
Home Depot 500,000 23,125,000
Limited 700,000 13,562,500
Meyer (Fred) 300,000 (b) 9,712,500
Office Depot 900,000 (b,c) 21,375,000
______________
Total 162,425,000
_____________________________________________________________________________________________________________________________
Utilities-telephone (1.0%)
MCI Communications 1,200,000 23,400,000
_____________________________________________________________________________________________________________________________
Foreign (25.4%)(d)
Australia (0.6%)
James Hardie Inds 1,519,300 2,254,641
News Corp 3,000,000 10,425,000
_____________
Total 12,679,641
_____________________________________________________________________________________________________________________________
Austria (0.6%)
Maculan Holdings 84,300 7,341,687
Wienerberger Baustoffindustr 15,000 5,167,080
______________
Total 12,508,767
_____________________________________________________________________________________________________________________________
Brazil (0.2%)
Usiminas Siderurg Minas ADR 350,000 (b,e) 5,600,000
_____________________________________________________________________________________________________________________________
<PAGE>
Canada (3.1%)
American Barrick Resources 301,800 (b) 6,300,075
Inco 481,600 13,244,000
Magna Intl Cl A 200,000 6,750,000
Methanex 600,000 (b) 8,925,000
Royal Plastics Group 1,230,000 (b,e) 10,061,400
Sceptre Resources 1,000,000 (b) 7,180,300
Singer 400,000 (b) 11,750,000
Tarragon Oil & Gas 500,000 (b) 5,089,800
______________
Total 69,300,575
_____________________________________________________________________________________________________________________________
Chile (0.2%)
Provida ADR 290,000 5,401,250
_____________________________________________________________________________________________________________________________
China (0.3%)
Huaneng Power Intl ADR 400,000 (b) 6,900,000
_____________________________________________________________________________________________________________________________
Denmark (0.6%)
Tele Danmark ADR 525,000 (b) 13,584,375
_____________________________________________________________________________________________________________________________
Finland (0.3%)
Kemira ADR 450,000 (b,c) 6,985,710
_____________________________________________________________________________________________________________________________
France (0.4%)
Clarins 58,270 5,307,115
Renault 100,000 (b,e) 3,368,000
_____________
Total 8,675,115
_____________________________________________________________________________________________________________________________
Germany (0.9%)
Henkel 13,500 4,682,030
Lufthansa 125,000 (b,c) 15,802,750
_____________
Total 20,484,780
_____________________________________________________________________________________________________________________________
Hong Kong (1.0%)
Dao Heng Bank Group 2,800,000 (b) 8,579,200
Henderson Land Development 1,600,000 (c) 8,604,800
Luks Industrial 25,000,000 4,100,000
Tian An China Investment 10,000,000 (b) 2,100,000
______________
Total 23,384,000
_____________________________________________________________________________________________________________________________
<PAGE>
India (2.0%)
Century Textile & Inds 39,410 (b,e) 7,724,360
Grasim Inds 200,000 (b,c,e) 5,250,000
India Cements 335,000 (b,e) 3,098,750
JCT GDR 300,000 (b,e) 5,250,000
JK Inds 687,500 (b,e) 4,967,187
Larsen & Toubro 100,000 (b,e) 1,687,500
Raymond Woollen Mills 315,000 (b) 4,961,250
Tata Engineering & Locom GDR 714,000 (b,e) 12,138,000
______________
Total 45,077,047
_____________________________________________________________________________________________________________________________
Indonesia (0.8%)
Indosat ADR 46,200 (b) 1,755,600
Jaya Real Properties 2,500,000 10,041,083
Tri Polyta ADR 250,000 (b) 6,593,750
______________
Total 18,390,433
_____________________________________________________________________________________________________________________________
Malaysia (4.3%)
Aokam Perdana 2,500,000 18,485,000
Berjaya South Island 500,000 3,775,500
Golden Plus Holding 2,500,000 10,075,000
Hong Leong Credit 2,995,999 15,354,495
Hume Inds 3,500,000 15,200,500
Idris Hydraulic 3,167,000 (b) 5,301,558
Malaysian Resources 5,000,000 (b) 9,660,000
MBF Capital 4,500,000 4,999,500
Multi-Purpose Holdings 2,249,000 3,290,287
United Engineers 1,800,000 9,507,600
______________
Total 95,649,440
_____________________________________________________________________________________________________________________________
Mexico (2.4%)
Banco Osorno Y La Union ADR 225,000 (b) 2,925,000
Desc Sociedad Inds 200,000 (b,c) 5,850,000
Grupo Financial Banamex 775,000 (b) 5,453,598
Grupo Financial Bancomer 4,500,000 (b) 5,469,750
Grupo Sidek ADR 500,000 (b,c) 8,500,000
Grupo Televisa GDR 300,000 (b,g) 13,575,000
Hylsamex 69,000 (b,e) 1,661,296
Panamerican Beverages 200,000 7,000,000
Posadas de Mexico L 3,646,500 3,721,618
______________
Total 54,156,262
_____________________________________________________________________________________________________________________________
Netherlands (0.5%)
EVC Intl 251,800 (b,e) 11,013,228
_____________________________________________________________________________________________________________________________
New Zealand (0.4%)
Carter Holt Harvey 4,000,000 8,864,000
_____________________________________________________________________________________________________________________________
<PAGE>
Philippines (0.8%)
Aboitiz Equity Ventures Inca 70,120 (b) 1,595,230
Intl Container Term Services 4,460,400 (b) 3,600,114
Philippine Long Distance 263,600 (c) 13,583,276
______________
Total 18,778,620
_____________________________________________________________________________________________________________________________
Singapore (1.8%)
China North Inds 15,000,000 (b) 14,700,000
Hotel Properties 10,400,000 14,756,200
Straits Steamship Land 3,000,000 9,999,000
______________
Total 39,455,200
_____________________________________________________________________________________________________________________________
South Africa (0.1%)
DeBeers Consolidated Mines 125,000 (b) 2,693,359
_____________________________________________________________________________________________________________________________
South Korea (0.2%)
Korea Electric Power 125,000 (b) 4,530,500
_____________________________________________________________________________________________________________________________
Spain (0.6%)
Telefonica de Espana 350,000 13,518,750
_____________________________________________________________________________________________________________________________
Sweden (1.3%)
Autoliv 250,000 (b) 8,759,000
Ericsson LM Tel ADR 10,000,000 19,687,500
______________
Total 28,446,500
_____________________________________________________________________________________________________________________________
Switzerland (0.4%)
Holderbank Finan Glarus 12,250 9,510,520
_____________________________________________________________________________________________________________________________
Thailand (0.4%)
Shinawatra Computer 349,912 9,273,368
_____________________________________________________________________________________________________________________________
United Kingdom (0.9%)
Bush Boake Allen 300,000 (b) 6,825,000
Telewest Communications 150,000 (b,c) 4,368,750
TLG 1,950,000 (b,e) 4,048,200
Woodside Petroleum 1,500,000 (b) 5,374,500
______________
Total 20,616,450
_____________________________________________________________________________________________________________________________
Venezuela (0.2%)
Andina de Foment 200,000 (b) 5,475,000
_____________________________________________________________________________________________________________________________
Total common stocks of unaffiliated issuers
(Cost: $1,731,505,800) $1,880,488,879
_____________________________________________________________________________________________________________________________
<PAGE>
_____________________________________________________________________________________________________________________________
<CAPTION>
Preferred stocks & other (0.9%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Equitable
6% Cv 270,000 (e) $ 12,015,000
LSB Inds
3.25% Cv 100,000 3,500,000
Luks Ind
Warrants 2,400,000 (d) 43,200
Philippine Long Distance
3.50% Cv 100,000 (d) 4,987,501
_____________________________________________________________________________________________________________________________
Total preferred stocks & other
(Cost: $23,500,002) $ 20,545,701
_____________________________________________________________________________________________________________________________
<PAGE>
_____________________________________________________________________________________________________________________________
<CAPTION>
Bonds (2.4%)
_____________________________________________________________________________________________________________________________
Issuer and coupon rate Principal Value(a)
amount
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Domestic (0.8%)
Costco Wholesale
5.75% Cv 2002 $15,000,000 $ 12,675,000
Medical Care Intl
6.75% 2006 6,500,000 (e) 5,525,000
______________
Total 18,200,000
_____________________________________________________________________________________________________________________________
Foreign (1.6%)(d)
Banco Nacional de Mexico
7% Cv 1999 10,000,000 (e) 10,750,000
Cemex
4.25% Cv 1997 10,000,000 (c) 10,437,500
Liberty Life Inds
6.50% Euro 2004 2,000,000 (e) 1,975,000
Rainy River Forest
8% 2004 2,799,000 1,989,400
Renong
2.50% Cv 2005 10,000,000 9,550,000
______________
Total 34,701,900
_____________________________________________________________________________________________________________________________
Total bonds
(Cost: $55,294,191) $ 52,901,900
_____________________________________________________________________________________________________________________________
<PAGE>
_____________________________________________________________________________________________________________________________
<CAPTION>
Short-term securities (10.7%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (0.3%)
Federal Home Loan Bank
Disc Nt
12-02-94 4.93% $ 3,300,000 $ 3,299,550
Federal Natl Mtge Assn
Disc Nt
12-01-94 4.92 2,600,000 2,600,000
______________
5,899,550
_____________________________________________________________________________________________________________________________
Commercial paper (10.2%)
Amer General Finance
12-16-94 5.38 10,000,000 9,977,708
AT&T
02-24-95 5.89 13,000,000 12,810,561
Banc One Diversified Services
12-06-94 5.15 6,900,000 6,894,587
Beneficial
12-21-94 5.53 6,000,000 5,981,667
12-28-94 5.53 6,500,000 6,473,188
Cafco
12-06-94 5.01 6,400,000 6,395,564
01-19-95 5.81 7,000,000 6,945,215
Cargill
12-09-94 5.17 5,900,000 5,893,248
CIT Group Holdings
01-23-95 5.81 7,500,000 7,433,207
Chevron Oil Finance
12-01-94 4.93 2,100,000 2,100,000
Commercial Credit
12-21-94 5.53 6,800,000 6,779,222
Commerzbank U.S. Finance
12-01-94 4.97 20,000,000 20,000,000
Consolidated Rail
01-18-95 5.67 7,300,000 (h) 7,240,491
02-14-95 5.85 1,300,000 (h) 1,283,259
Ford Motor Credit
12-02-94 5.04 6,400,000 6,399,108
<PAGE>
Gateway Fuel
12-02-94 4.97 7,500,000 7,498,969
GE Capital
01-18-95 5.81 6,900,000 6,845,087
01-27-95 5.81 5,400,000 5,350,837
Lilly (Eli)
12-13-94 5.50 7,000,000 6,987,213
Metlife Funding
12-08-94 5.17 7,000,000 6,992,990
12-20-94 5.40 5,100,000 5,085,532
01-25-95 5.81 6,600,000 6,539,004
Natl Bank
Detroit Canada
01-24-95 5.79 6,600,000 6,540,163
Nestle Capital
12-01-94 5.01 2,100,000 2,100,000
Penney (JC) Funding
12-12-94 5.32 7,500,000 7,487,854
Pioneer Hi-Bred Intl
12-05-94 4.95 3,600,000 3,598,028
12-06-94 5.02 4,600,000 4,596,806
Southwestern Bell Capital
12-12-94 5.08 2,500,000 (h) 2,496,142
St. Paul Companies
12-05-94 4.94 5,200,000 (h) 5,197,157
Sandoz
01-24-95 5.54 8,100,000 8,026,564
SmithKline Beecham
12-13-94 5.03 6,500,000 6,489,167
Sysco
12-02-94 4.97 5,100,000 (h) 5,099,299
01-17-95 5.76 6,800,000 (h) 6,747,200
01-20-95 5.81 6,600,000 (h) 6,547,292
USAA Capital
12-02-94 4.93 7,000,000 6,999,047
_______________
Total 229,831,376
_____________________________________________________________________________________________________________________________
Letter of credit (0.2%)
First Natl Bank Chicago-
Commed Fuel
01-06-95 5.53 5,769,000 5,733,981
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $241,506,942) $ 241,464,907
_____________________________________________________________________________________________________________________________
Total investments in securities of unaffiliated issuers
(Cost: $2,051,806,935) $2,195,401,387
_____________________________________________________________________________________________________________________________
<PAGE>
Investment in securities of affiliated issuer (i)
_____________________________________________________________________________________________________________________________
<CAPTION>
Common stock (0.2%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Sybron Chemicals 300,000 (b) $ 5,475,000
_____________________________________________________________________________________________________________________________
Total investments in securities of affiliated issuer
(Cost: $6,108,130) $ 5,475,000
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $2,057,915,065)(j) $2,200,876,387
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
_______________________________________________________________________________
Notes to investments in securities
_______________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Presently non-income producing.
(c) Security is partially or fully on loan. See Note 5 to the
financial statements.
(d) Foreign security values and principal amounts are stated in
U.S. dollars.
(e) Represents securities sold under Rule 144A and are exempt from
registration under the Securities Act of 1933, as amended.
These securities have been determined to be liquid under guidelines
established by the board of directors.
(f) Identifies issues considered to be illiquid (see Note 6 to
the financial statements). Information concerning such security holdings
at Nov. 30, 1994, is as follows:
<TABLE>
<CAPTION>
Acquisition
Security date Cost
______________________________________________________________________
<S> <C> <C>
Tempest Reinsurance Private 09-13-93 $8,000,000
</TABLE>
(g) At Nov. 30, 1994, securities valued at $26,615,763 were held to cover open
call options written as follows:
<TABLE>
<CAPTION>
Number of Exercise Expiration
Issuer contracts price date Value(a)
__________________________________________________________________________________
<S> <C> <C> <C> <C>
BankAmerica 785 $45 Dec. 1994 $ 4,906
Georgia Gulf 1,500 40 Dec. 1994 28,125
Grupo Televisa 3,000 50 Dec. 1994 150,000
Magma Copper 2,789 17 Dec. 1994 52,294
</TABLE>
At Nov. 30, 1994, cash or short-term securities were designated to cover
open put options written as follows:
Number of Exercise Expiration
Issuer contracts price date Value(a)
___________________________________________________________________________
Kellogg 1,500 $55 Dec. 1994 $ 46,875
(h) Commercial paper sold within terms of a private placement memorandum,
exempt from registration under Section 4(2) of the Securities Act of
1933, as amended, and may be sold only to dealers in that program or
other "accredited investors." These securities have been determined
to be liquid under guidelines established by the board of directors.
(i) Investments representing 5% or more of the outstanding voting securities
of the issuer.
(j) At Nov 30. 1994, the cost of securities for federal income tax
purposes was $2,058,169,297 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
Unrealized appreciation $251,353,209
Unrealized depreciation (108,646,119)
_____________________________________________________________
Net unrealized appreciation $142,707,090
_____________________________________________________________
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<C> <C> <S>
(a) FINANCIAL STATEMENTS:
List of financial statements filed as part of this Post-Effective Amendment to the
Registration Statement:
- Independent Auditors' Report dated January 6, 1995
- Statement of Assets and Liabilities, November 30, 1994
- Statement of Operations, Year ended November 30, 1994
- Statement of Changes in Net Assets, for the two-year period ended November 30,
1993 and November 30, 1994
- Notes to Financial Statements
- Investments in Securities, November 30, 1994
- Notes to Investments in Securities
(b) EXHIBITS:
1. Copy of Articles of Incorporation, as amended December 13, 1988, filed
electronically as Exhibit 1 to Registrant's Post-Effective Amendment No. 9 to
Registration Statement No. 2-93801, is incorporated herein by reference.
2. Copy of By-laws, as amended January 12, 1989, filed electronically as Exhibit
2 to Registrant's Post-Effective Amendment No. 10 to Registration Statement
No. 2-93801, is incorporated herein by reference.
3. Not Applicable.
4. Form of Stock Certificate for common stock, filed as Exhibit No. 4 to
Registration Statement No. 2-93801, is incorporated herein by reference.
5. Form of Investment Management Services Agreement between Registrant and
American Express Financial Corporation, dated March 20, 1995, is filed
electronically herewith.
6. Form of Distribution Agreement between Registrant and American Express
Financial Advisors Inc., dated March 20, 1995, is filed electronically
herewith.
7. 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.
8. (a) Form of Custodian Agreement between Registrant and American Express Trust
Company, dated March 20, 1995, is filed electronically herewith.
(b) Copy of Sub-Custodian Agreement, dated July 1, 1992, between Boston Safe
Deposit and Trust Company and IDS Bank and Trust, filed as Exhibit 8(c) to
Post-Effective Amendment No. 16 to Registration Statement No. 2-93801, is
incorporated herein by reference.
9(a). Form of Transfer Agency Agreement between Registrant and American Express
Financial Corporation, dated March 20, 1995, is filed electronically herewith.
9(b). Form of Shareholder Service Agreement between Registrant and American Express
Financial Advisors Inc., dated March 20, 1995, is filed electronically
herewith.
9(c). Form of Administrative Services Agreement between Registrant and American
Express Financial Corporation, dated March 20, 1995, is filed electronically
herewith.
10. Opinion and Consent of Counsel, filed as Exhibit 10 to Pre-Effective Amendment
No. 1 to Registration Statement No. 2-93801, is incorporated herein by
reference.
11. Independent Auditors' Consent is filed electronically herewith.
12. None.
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <C> <S>
13. Letter of IDS/American Express Inc. as sole shareholder, filed as Exhibit 13
to Pre-Effective Amendment No. 1 to Registration Statement No. 2-93801, is
incorporated herein by reference.
14. Forms of Keogh, IRA and other retirement plans, filed as Exhibits 14(a)
through 14(n) to IDS Growth Fund, Inc., Post-Effective Amendment No. 19 to
Registration Statement No. 2-54516, are incorporated herein by reference.
15. Form of Plan and Agreement of Distribution between Registrant and American
Express Financial Advisors Inc., dated March 20, 1995, is filed electronically
herewith.
16. Schedule for computation of each performance quotation provided in the
Registration Statement in response to Item 22(b), filed as Exhibit 16 to
Post-Effective Amendment No. 16 to Registration Statement No. 2-93801, is
incorporated herein by reference.
17. Financial Data Schedule is filed electronically herewith.
18(a). Directors' Power of Attorney, dated November 10, 1994, to sign amendments to
this Registration Statement, filed electronically as Exhibit 18(a) to
Registrant's Post-Effective Amendment No. 20, is incorporated herein by
reference.
18(b). Officers' Power of Attorney, dated June 1, 1993, to sign amendments to this
Registration Statement, filed electronically as Exhibit 17(b) to
Post-Effective Amendment No. 17 to Registration Statement No. 2-93801, is
incorporated herein by reference.
</TABLE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
<TABLE>
<CAPTION>
(1) (2)
NUMBER OF
RECORD
AS OF
JANUARY 23,
TITLE OF CLASS 1995
- -------------- -------------
<S> <C>
Common Stock 219,818
</TABLE>
II-2
<PAGE>
Item 27. 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.
<PAGE>
<PAGE>
PAGE 1
<TABLE><CAPTION>
Item 28. 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>
Ronald G. Abrahamson, Vice President--Service Quality and Reengineering
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Service Quality
and Reengineering
American Express Service Corporation Vice President
Douglas A. Alger, Vice President--Total Compensation
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Total Compensation
Jerome R. Amundson, Vice President and Controller--Investment Accounting
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller-Investment
Accounting
Peter J. Anderson, Director and Senior Vice President--Investments
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Investments
IDS Advisory Group Inc. Director and Chairman
of the Board
IDS Capital Holdings Inc. Director and President
IDS Fund Management Limited Director
IDS International, Inc. Director, Chairman of the
Board and Executive Vice
President
IDS Securities Corporation Executive Vice President-
Investments
NCM Capital Management Group, Inc. 2 Mutual Plaza Director
501 Willard Street
Durham, NC 27701
Ward D. Armstrong, Vice President-Sales and Marketing, American Express Institutional Services
American Express Financial Advisors IDS Tower 10 Vice President-Sales and
Minneapolis, MN 55440 Marketing, American
Express Institutional
Services
Kent L. Ashton, Vice President--Financial Education Services
American Express Financial Advisors IDS Tower 10 Vice President-Financial
Minneapolis, MN 55440 Education Services
<PAGE>
PAGE 2
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Joseph M. Barsky III, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
IDS Advisory Group Inc. Vice President
Robert C. Basten, Vice President--Tax and Business Services
American Express Financial Advisors IDS Tower 10 Vice President-Tax
Minneapolis, MN 55440 and Business Services
American Express Tax & Business Director, President and
Services Inc. Chief Executive Officer
Timothy V. Bechtold, Vice President--Insurance Product Development
American Express Financial Advisors IDS Tower 10 Vice President-Insurance
Minneapolis, MN 55440 Product Development
IDS Life Insurance Company Vice President-Insurance
Product Development
Carl E. Beihl, Vice President--Strategic Technology Planning
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Strategic Technology
Planning
Alan F. Bignall, Vice President--Financial Planning Systems
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Financial Planning
Systems
American Express Service Corporation Vice President
John C. Boeder, Vice President--Mature Market Group
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Mature Market Group
IDS Life Insurance Company of New York Box 5144 Director
Albany, NY 12205
Karl J. Breyer, Director and Senior Vice President--Corporate Affairs and General Counsel
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Corporate Affairs and
Special Counsel
American Express Minnesota Foundation Director
IDS Aircraft Services Corporation Director and President
<PAGE>
PAGE 3
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Harold E. Burke, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
American Express Service Corporation Vice President
Daniel J. Candura, Vice President--Marketing Support
American Express Financial Advisors IDS Tower 10 Vice President-Marketing
Minneapolis, MN 55440 Support
Cynthia M. Carlson, Vice President--American Express Securities Services
American Enterprise Investment IDS Tower 10 Director, President and
Services Inc. Minneapolis, MN 55440 Chief Executive Officer
American Express Financial Advisors Vice President-IDS
Securities Services
Orison Y. Chaffee III, Vice President--Field Real Estate
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Real Estate
James E. Choat, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Minnesota Foundation Director
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President--North
Central Region
IDS Insurance Agency of Arkansas Inc. Vice President--North
Central Region
IDS Insurance Agency of Massachusetts Inc. Vice President--North
Central Region
IDS Insurance Agency of Nevada Inc. Vice President--North
Central Region
IDS Insurance Agency of New Mexico Inc. Vice President--North
Central Region
IDS Insurance Agency of North Carolina Inc. Vice President--North
Central Region
IDS Insurance Agency of Ohio Inc. Vice President--North
Central Region
IDS Insurance Agency of Wyoming Inc. Vice President-- North
Central Region
IDS Property Casualty Insurance Co. Director
<PAGE>
PAGE 4
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Kenneth J. Ciak, Vice President and General Manager--IDS Property Casualty
American Express Financial Advisors IDS Tower 10 Vice President and General
Minneapolis, MN 55440 Manager-IDS Property
Casualty
IDS Property Casualty Insurance Co. I WEG Blvd. Director and President
DePere, Wisconsin 54115
Alan R. Dakay, Vice President--Institutional Insurance Marketing
American Enterprise Life Insurance Co. IDS Tower 10 Director and President
Minneapolis, MN 55440
American Express Financial Advisors Vice President -
Institutional Insurance
Marketing
American Partners Life Insurance Co. Director and President
IDS Life Insurance Company Vice President -
Institutional Insurance
Marketing
Regenia David, Vice President--Systems Services
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Systems Services
William H. Dudley, Director and Executive Vice President--Investment Operations
American Express Financial Advisors IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Investment Operations
IDS Advisory Group Inc. Director
IDS Capital Holdings Inc. Director
IDS Futures Corporation Director
IDS Futures III Corporation Director
IDS International, Inc. Director
IDS Securities Corporation Director, Chairman of the
Board, President and
Chief Executive Officer
Roger S. Edgar, Director and Senior Vice President--Information Systems
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Information Systems
<PAGE>
PAGE 5
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Gordon L. Eid, Director, Senior Vice President and Deputy General Counsel
American Express Financial Advisors IDS Tower 10 Senior Vice President and
Minneapolis, MN 55440 General Counsel
IDS Insurance Agency of Alabama Inc. Director and Vice President
IDS Insurance Agency of Arkansas Inc. Director and Vice President
IDS Insurance Agency of Massachusetts Inc. Director and Vice President
IDS Insurance Agency of Nevada Inc. Director and Vice President
IDS Insurance Agency of New Mexico Inc. Director and Vice President
IDS Insurance Agency of North Carolina Inc. Director and Vice President
IDS Insurance Agency of Ohio Inc. Director and Vice President
IDS Insurance Agency of Wyoming Inc. Director and Vice President
IDS Real Estate Services, Inc. Vice President
Investors Syndicate Development Corp. Director
Robert M. Elconin, Vice President--Government Relations
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Government Relations
IDS Life Insurance Company Vice President
Mark A. Ernst, Vice President--Retail Services
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Vice President-
Retail Services
American Express Tax & Business Director and Chairman of
Services Inc. the Board
Gordon M. Fines, Vice President--Mutual Fund Equity Investments
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Mutual Fund Equity
Investments
IDS Advisory Group Inc. Executive Vice President
IDS International, Inc. Vice President and
Portfolio Manager
<PAGE>
PAGE 6
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Louis C. Fornetti, Director, Senior Vice President and Chief Financial Officer
American Enterprise Investment IDS Tower 10 Vice President
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Senior Vice President and
Chief Financial Officer
American Express Tax & Business Director
Services Inc.
American Express Trust Company Director
IDS Cable Corporation Director
IDS Cable II Corporation Director
IDS Capital Holdings Inc. Senior Vice President
IDS Certificate Company Vice President
IDS Insurance Agency of Alabama Inc. Vice President
IDS Insurance Agency of Arkansas Inc. Vice President
IDS Insurance Agency of Massachusetts Inc. Vice President
IDS Insurance Agency of Nevada Inc. Vice President
IDS Insurance Agency of New Mexico Inc. Vice President
IDS Insurance Agency of North Carolina Inc. Vice President
IDS Insurance Agency of Ohio Inc. Vice President
IDS Insurance Agency of Wyoming Inc. Vice President
IDS Life Insurance Company Director
IDS Life Series Fund, Inc. Vice President
IDS Life Variable Annuity Funds A&B Vice President
IDS Property Casualty Insurance Co. Director and Vice President
IDS Real Estate Services, Inc. Vice President
IDS Sales Support Inc. Director
IDS Securities Corporation Vice President
Investors Syndicate Development Corp. Vice President
Robert G. Gilbert, Vice President--Real Estate
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Real Estate
John J. Golden, Vice President--Field Compensation Development
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Compensation Development
Harvey Golub, Director
American Express Company American Express Tower Chairman and Chief
World Financial Center Executive Officer
New York, New York 10285
American Express Travel Chairman and Chief
Related Services Company, Inc. Executive Officer
National Computer Systems, Inc. 11000 Prairie Lakes Drive Director
Minneapolis, MN 55440
<PAGE>
PAGE 7
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Morris Goodwin Jr., Vice President and Corporate Treasurer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Treasurer
American Enterprise Life Insurance Vice President and
Company Treasurer
American Express Financial Advisors Vice President and
Corporate Treasurer
American Express Minnesota Foundation Director, Vice President
and Treasurer
American Express Service Corporation Vice President and
Treasurer
American Express Tax & Business Vice President and
Services Inc. Treasurer
IDS Advisory Group Inc. Vice President and
Treasurer
IDS Aircraft Services Corporation Vice President and
Treasurer
IDS Cable Corporation Vice President and
Treasurer
IDS Cable II Corporation Vice President and
Treasurer
IDS Capital Holdings Inc. Vice President and
Treasurer
IDS Certificate Company Vice President and
Treasurer
IDS Deposit Corp. Director, President
and Treasurer
IDS Insurance Agency of Alabama Inc. Vice President and
Treasurer
IDS Insurance Agency of Arkansas Inc. Vice President and
Treasurer
IDS Insurance Agency of Massachusetts Inc. Vice President and
Treasurer
IDS Insurance Agency of Nevada Inc. Vice President and
Treasurer
IDS Insurance Agency of New Mexico Inc. Vice President and
Treasurer
IDS Insurance Agency of North Carolina Inc. Vice President and
Treasurer
IDS Insurance Agency of Ohio Inc. Vice President and
Treasurer
IDS Insurance Agency of Wyoming Inc. Vice President and
Treasurer
IDS International, Inc. Vice President and
Treasurer
IDS Life Insurance Company Vice President and
Treasurer
IDS Life Series Fund, Inc. Vice President and
Treasurer
<PAGE>
PAGE 8
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
IDS Life Variable Annuity Funds A&B Vice President and
Treasurer
IDS Management Corporation Vice President and
Treasurer
IDS Partnership Services Corporation Vice President and
Treasurer
IDS Plan Services of California, Inc. Vice President and
Treasurer
IDS Property Casualty Insurance Co. Vice President and
Treasurer
IDS Real Estate Services, Inc Vice President and
Treasurer
IDS Realty Corporation Vice President and
Treasurer
IDS Sales Support Inc. Director, Vice President
and Treasurer
IDS Securities Corporation Vice President and
Treasurer
Investors Syndicate Development Corp. Vice President and
Treasurer
NCM Capital Management Group, Inc. 2 Mutual Plaza Director
501 Willard Street
Durham, NC 27701
Sloan Financial Group, Inc. Director
Suzanne Graf, Vice President--Systems Services
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Systems Services
David A. Hammer, Vice President and Marketing Controller
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Marketing Controller
IDS Plan Services of California, Inc. Director and Vice President
Lorraine R. Hart, Vice President--Insurance Investments
American Enterprise Life IDS Tower 10 Vice President-Investments
Insurance Company Minneapolis, MN 55440
American Express Financial Advisors Vice President-Insurance
Investments
American Partners Life Insurance Co. Director and Vice
President-Investments
IDS Certificate Company Vice President-Investments
IDS Life Insurance Company Vice President-Investments
IDS Property Casualty Insurance Company Vice President-Investment
Officer
Investors Syndicate Development Corp. Vice President-Investments
<PAGE>
PAGE 9
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Scott A. Hawkinson, Vice President--Assured Assets Product Development and Management
American Express Financial Advisors IDS Tower 10 Vice President-Assured
Minneapolis, MN 55440 Assets Product
Development & Management
Raymond E. Hirsch, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
IDS Advisory Group Inc. Vice President
James G. Hirsh, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
IDS Securities Corporation Director, Vice President
and General Counsel
Darryl G. Horsman, Vice President--Product Development and Technology, American Express
Institutional Services
American Express Trust Company IDS Tower 10 Vice President
Minneapolis, MN 55440
Kevin P. Howe, Vice President--Government and Customer Relations and Chief Compliance Officer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Compliance Officer
American Express Financial Advisors Vice President-
Government and
Customer Relations
American Express Service Corporation Vice President
IDS Securities Corporation Vice President and Chief
Compliance Officer
David R. Hubers, Director, President and Chief Executive Officer
American Express Financial Advisors IDS Tower 10 Chairman, Chief Executive
Minneapolis, MN 55440 Officer and President
American Express Service Corporation Director and President
IDS Aircraft Services Corporation Director
IDS Certificate Company Director
IDS Life Insurance Company Director
IDS Plan Services of California, Inc. Director and President
IDS Property Casualty Insurance Co. Director
Marietta L. Johns, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
<PAGE>
PAGE 10
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Douglas R. Jordal, Vice President--Taxes
American Express Financial Advisors IDS Tower 10 Vice President-Taxes
Minneapolis, MN 55440
IDS Aircraft Services Corporation Vice President
Craig A. Junkins, Vice President--IDS 1994 Implementation Planning and Financial Planning
Development
American Express Financial Advisors IDS Tower 10 Vice President-IDS 1994
Minneapolis, MN 55440 Implementation Planning
and Financial Planning
Development
American Express Service Corporation Vice President
James E. Kaarre, Vice President--Marketing Information
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Marketing Information
Linda B. Keene, Vice President--Market Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Market Development
G. Michael Kennedy, Vice President--Investment Services and Investment Research
American Express Financial Advisors IDS Tower 10 Vice President-Investment
Minneapolis, MN 55440 Services and Investment
Research
Susan D. Kinder, Director and Senior Vice President--Human Resources
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Human Resources
American Express Minnesota Foundation Director
American Express Service Corporation Vice President
<PAGE>
PAGE 11
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Richard W. Kling, Director and Senior Vice President--Risk Management Products
American Enterprise Life Insurance Co. IDS Tower 10 Director and Chairman of
Minneapolis, MN 55440 the Board
American Express Financial Advisors Senior Vice President-
Risk Management Products
American Partners Life Insurance Co. Director and Chairman of
the Board
IDS Insurance Agency of Alabama Inc. Director and President
IDS Insurance Agency of Arkansas Inc. Director and President
IDS Insurance Agency of Massachusetts Inc. Director and President
IDS Insurance Agency of Nevada Inc. Director and President
IDS Insurance Agency of New Mexico Inc. Director and President
IDS Insurance Agency of North Carolina Inc. Director and President
IDS Insurance Agency of Ohio Inc. Director and President
IDS Insurance Agency of Wyoming Inc. Director and President
IDS Life Insurance Company Director and President
IDS Life Series Fund, Inc. Director and President
IDS Life Variable Annuity Funds A&B Member of Board of
Managers, Chairman of the
Board and President
IDS Property Casualty Insurance Co. Director and Chairman of
the Board
IDS Life Insurance Company P.O. Box 5144 Director, Chairman of the
of New York Albany, NY 12205 Board and President
Harold D. Knutson, Vice President--System Services
American Express Financial Advisors IDS Tower 10 Vice President--
Minneapolis, MN 55440 System Services
Paul F. Kolkman, Vice President--Actuarial Finance
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Actuarial Finance
IDS Life Insurance Company Director and Executive
Vice President
IDS Life Series Fund, Inc. Vice President and Chief
Actuary
Claire Kolmodin, Vice President--Service Quality
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Service Quality
Steven C. Kumagai, Director and Senior Vice President--Field Management and Business Systems
American Express Financial Advisors IDS Tower 10 Director and Senior Vice
Minneapolis, MN 55440 President-Field
Management and Business
Systems
American Express Service Corporation Vice President
<PAGE>
PAGE 12
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Edward Labenski, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio
Manager
IDS Advisory Group Inc. Senior Vice President
Kurt A. Larson, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio Manager
Lori J. Larson, Vice President--Variable Assets Product Development
American Express Financial Advisors IDS Tower 10 Vice President-Variable
Minneapolis, MN 55440 Assets Product
Development
IDS Cable Corporation Director and Vice President
IDS Cable II Corporation Director and Vice President
IDS Futures Brokerage Group Assistant Vice President-
General Manager/Director
IDS Futures Corporation Director and Vice President
IDS Futures III Corporation Director and Vice President
IDS Management Corporation Director and Vice President
IDS Partnership Services Corporation Director and Vice President
IDS Realty Corporation Director and Vice President
Ryan R. Larson, Vice President--IPG Product Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 IPG Product Development
IDS Life Insurance Company Vice President-
Annuity Product
Development
Daniel E. Laufenberg, Vice President and Chief U.S. Economist
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Chief U.S. Economist
Richard J. Lazarchic, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
<PAGE>
PAGE 13
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Peter A. Lefferts, Director, Senior Vice President and Chief Marketing Officer
American Express Financial Advisors IDS Tower 10 Senior Vice President and
Minneapolis, MN 55440 Chief Marketing Officer
American Express Trust Company Director and Chairman of
the Board
IDS Life Insurance Company Director and Executive
Vice President-Marketing
IDS Plan Services of California, Inc. Director
Investors Syndicate Development Corp. Director
Douglas A. Lennick, Director and Executive Vice President--Private Client Group
American Express Financial Advisors IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-Private
Client Group
American Express Service Corporation Vice President
Mary J. Malevich, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio
Manager
IDS International, Inc. Vice President and
Portfolio Manager
Fred A. Mandell, Vice President--Field Marketing Readiness
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Marketing Readiness
William J. McKinney, Vice President--Field Management Support
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management Support
Thomas W. Medcalf, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
William C. Melton, Vice President-International Research and Chief International Economist
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 International Research
and Chief International
Economist
<PAGE>
PAGE 14
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Janis E. Miller, Vice President--Variable Assets
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Variable Assets
IDS Cable Corporation Director and President
IDS Cable II Corporation Director and President
IDS Futures Corporation Director and President
IDS Futures III Corporation Director and President
IDS Life Insurance Company Director and Executive
Vice President-Variable
Assets
IDS Life Series Fund, Inc. Director
IDS Life Variable Annuity Funds A&B Director
IDS Management Corporation Director and President
IDS Partnership Services Corporation Director and President
IDS Realty Corporation Director and President
IDS Life Insurance Company of New York Box 5144 Executive Vice President
Albany, NY 12205
James A. Mitchell, Director and Executive Vice President--Marketing and Products
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Executive Vice President-
Marketing and Products
IDS Certificate Company Director and Chairman of
the Board
IDS Life Insurance Company Director, Chairman of
the Board and Chief
Executive Officer
IDS Plan Services of California, Inc. Director
IDS Property Casualty Insurance Co. Director
Pamela J. Moret, Vice President--Corporate Communications
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Communications
American Express Minnesota Foundation Director and President
Barry J. Murphy, Director and Senior Vice President--Client Service
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Client Service
IDS Life Insurance Company Director and Executive
Vice President-Client
Service
<PAGE>
PAGE 15
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Robert J. Neis, Vice President--Information Systems Operations
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Information Systems
Operations
James R. Palmer, Vice President--Insurance Operations
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Insurance Operations
IDS Life Insurance Company Vice President-Taxes
Carla P. Pavone, Vice President--Specialty Service Teams and Emerging Business
American Express Financial Advisors IDS Tower 10 Vice President-Specialty
Minneapolis, MN 55440 Service Teams and
Emerging Business
Judith A. Pennington, Vice President--Field Technology
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Field Technology
George M. Perry, Vice President--Corporate Strategy and Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Strategy
and Development
IDS Property Casualty Insurance Co. Director
Susan B. Plimpton, Vice President--Segmentation Development and Support
American Express Financial Advisors IDS Tower 10 Vice President--
Minneapolis, MN 55440 Segmentation Development
and Support
Ronald W. Powell, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant 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 Corporation Vice President and
Assistant Secretary
IDS Plan Services of California, Inc. Vice President and
Assistant Secretary
IDS Realty Corporation Vice President and
Assistant Secretary
<PAGE>
PAGE 16
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
James M. Punch, Vice President--TransAction Services
American Express Financial Advisors IDS Tower 10 Vice President-Trans
Minneapolis, MN 55440 Action Services
Frederick C. Quirsfeld, Vice President--Taxable Mutual Fund Investments
American Express Financial Advisors IDS Tower 10 Vice President--
Minneapolis, MN 55440 Taxable Mutual Fund
Investments
IDS Advisory Group Inc. Vice President
ReBecca K. Roloff, Vice President--1994 Program Director
American Express Financial Advisors IDS Tower 10 Vice President-1994
Minneapolis, MN 55440 Program Director
Stephen W. Roszell, Vice President--Advisory Institutional Marketing
American Express Financial Advisors IDS Tower 10 Vice President-Advisory
Minneapolis, MN 55440 Institutional Marketing
IDS Advisory Group Inc. President and Chief
Executive Officer
Robert A. Rudell, Vice President--American Express Institutional Services
American Express Financial Advisors IDS Tower 10 Vice President-American
Minneapolis, MN 55440 Express Institutional
Services
American Express Trust Company Director
IDS Sales Support Inc. Director and President
John P. Ryan, Vice President and General Auditor
American Express Financial Advisors IDS Tower 10 Vice President and General
Minneapolis, MN 55440 Auditor
<PAGE>
PAGE 17
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Erven A. Samsel, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President-
New England Region
IDS Insurance Agency of Arkansas Inc. Vice President-
New England Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
New England Region
IDS Insurance Agency of Nevada Inc. Vice President-
New England Region
IDS Insurance Agency of New Mexico Inc. Vice President-
New England Region
IDS Insurance Agency of North Carolina Inc. Vice President-
New England Region
IDS Insurance Agency of Ohio Inc. Vice President-
New England Region
IDS Insurance Agency of Wyoming Inc. Vice President-
New England Region
Stuart A. Sedlacek, Vice President--Assured Assets
American Enterprise Life Insurance Co. IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President, Assured
Assets
American Express Financial Advisors Vice President-
Assured Assets
IDS Certificate Company Director and President
IDS Life Insurance Company Director and Executive
Vice President, Assured
Assets
Investors Syndicate Development Corp. Chairman of the Board
and President
Donald K. Shanks, Vice President--Property Casualty
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Property Casualty
IDS Property Casualty Insurance Co. Senior Vice President
<PAGE>
PAGE 18
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
F. Dale Simmons, Vice President--Senior Portfolio Manager, Insurance Investments
American Enterprise Life Insurance Co. IDS Tower 10 Vice President-Real
Minneapolis, MN 55440 Estate Loan Management
American Express Financial Advisors Vice President-Senior
Portfolio Manager
Insurance Investments
American Partners Life Insurance Co. Vice President-Real
Estate Loan Management
IDS Certificate Company Vice President-Real
Estate Loan Management
IDS Life Insurance Company Vice President-Real
Estate Loan Management
IDS Partnership Services Corporation Vice President
IDS Real Estate Services Inc. Director and Vice President
IDS Realty Corporation Vice President
IDS Life Insurance Company of New York Box 5144 Vice President and
Albany, NY 12205 Assistant Treasurer
Judy P. Skoglund, Vice President--Human Resources and Organization Development
American Express Financial Advisors IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources and
Organization Development
Ben C. Smith, Vice President--Workplace Marketing
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Workplace Marketing
William A. Smith, Vice President and Controller--Private Client Group
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller-Private
Client Group
Bridget Sperl, Vice President--Human Resources Management Services
American Express Financial Advisors IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources Management
Services
Jeffrey E. Stiefler, Director
American Express Company American Express Tower Director and President
World Financial Center
New York, NY 10285
<PAGE>
PAGE 19
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
William A. Stoltzmann, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
American Partners Life Insurance Co. Director, Vice President,
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 Funds A&B General Counsel and
Assistant Secretary
American Enterprise Life Insurance P.O. Box 534 Director, Vice President,
Company Minneapolis, MN 55440 General Counsel
and Secretary
James J. Strauss, Vice President--Corporate Planning and Analysis
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Planning and
Analysis
Jeffrey J. Stremcha, Vice President--Information Resource Management/ISD
American Express Financial Advisors IDS Tower 10 Vice President-Information
Minneapolis, MN 55440 Resource Management/ISD
Fenton R. Talbott, Director
ACUMA Ltd. ACUMA House President and Chief
The Glanty, Egham Executive Officer
Surrey TW 20 9 AT
UK
<PAGE>
PAGE 20
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
John R. Thomas, Director and Senior Vice President--Information and Technology
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Information and
Technology
IDS Bond Fund, Inc. Director
IDS California Tax-Exempt Trust Trustee
IDS Discovery Fund, Inc. Director
IDS Equity Select Fund, Inc. Director
IDS Extra Income Fund, Inc. Director
IDS Federal Income Fund, Inc. Director
IDS Global Series, Inc. Director
IDS Growth Fund, Inc. Director
IDS High Yield Tax-Exempt Fund, Inc. Director
IDS Investment Series, Inc. Director
IDS Managed Retirement Fund, Inc. Director
IDS Market Advantage Series, Inc. Director
IDS Money Market Series, Inc. Director
IDS New Dimensions Fund, Inc. Director
IDS Precious Metals Fund, Inc. Director
IDS Progressive Fund, Inc. Director
IDS Selective Fund, Inc. Director
IDS Special Tax-Exempt Series Trust Trustee
IDS Stock Fund, Inc. Director
IDS Strategy Fund, Inc. Director
IDS Tax-Exempt Bond Fund, Inc. Director
IDS Tax-Free Money Fund, Inc. Director
IDS Utilities Income Fund, Inc. Director
Melinda S. Urion, Vice President and Corporate Controller
American Enterprise Life IDS Tower 10 Vice President and
Insurance Company Minneapolis, MN 55440 Controller
American Express Financial Advisors Vice President and
Corporate Controller
American Partners Life Insurance Co. Director, Vice President,
Controller and Treasurer
IDS Life Insurance Company Director, Executive Vice
President and Controller
IDS Life Series Fund, Inc. Vice President and
Controller
Wesley W. Wadman, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio Manager
IDS Advisory Group Inc. Executive Vice President
IDS Fund Management Limited Director and Chairman
IDS International, Inc. Senior Vice President
<PAGE>
PAGE 21
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Norman Weaver, Jr., Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President-
Pacific Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Pacific Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Pacific Region
IDS Insurance Agency of Nevada Inc. Vice President-
Pacific Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Pacific Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Pacific Region
IDS Insurance Agency of Ohio Inc. Vice President-
Pacific Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Pacific Region
Michael L. Weiner, Vice President--Corporate Tax Operations
American Express Financial Advisors IDS Tower 10 Vice President-Corporate
Minneapolis, MN 55440 Tax Operations
IDS Capital Holdings Inc. Vice President
IDS Futures Brokerage Group Vice President
IDS Futures Corporation Vice President, Treasurer
and Secretary
IDS Futures III Corporation Vice President, Treasurer
and Secretary
Lawrence J. Welte, Vice President--Investment Administration
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Investment Administration
IDS Securities Corporation Director, Executive Vice
President and Chief
Operating Officer
Jeffry F. Welter, Vice President--Equity and Fixed Income Trading
American Express Financial Advisors IDS Tower 10 Vice President-Equity
Minneapolis, MN 55440 and Fixed Income Trading
<PAGE>
PAGE 22
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
William N. Westhoff, Director, Senior Vice President and Global Chief Investment Officer
American Enterprise Life Insurance IDS Tower 10 Director
Company Minneapolis, MN 55440
American Express Financial Advisors Senior Vice President and
Global Chief Investment
Officer
IDS International, Inc. Director
IDS Partnership Services Corporation Director and Vice President
IDS Real Estate Services Inc. Director, Chairman of the
Board and President
IDS Realty Corporation Director and Vice President
Investors Syndicate Development Corp. Director
Edwin M. Wistrand, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
Michael R. Woodward, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President-
North Region
IDS Insurance Agency of Arkansas Inc. Vice President-
North Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
North Region
IDS Insurance Agency of Nevada Inc. Vice President-
North Region
IDS Insurance Agency of New Mexico Inc. Vice President-
North Region
IDS Insurance Agency of North Carolina Inc. Vice President-
North Region
IDS Insurance Agency of Ohio Inc. Vice President-
North Region
IDS Insurance Agency of Wyoming Inc. Vice President-
North Region
IDS Life Insurance Company Box 5144 Director
of New York Albany, NY 12205
</TABLE>
<PAGE>
PAGE 23
Item 29. Principal Underwriters.
(a) American Express Financial Advisors acts as principal
underwriter for the following investment companies:
IDS Bond Fund, Inc.; IDS California Tax-Exempt Trust; IDS
Discovery Fund, Inc.; IDS Equity Select Fund, Inc.; IDS Extra
Income Fund, Inc.; IDS Federal Income Fund, Inc.; IDS Global
Series, Inc.; IDS Growth Fund, Inc.; IDS High Yield Tax-Exempt
Fund, Inc.; IDS International Fund, Inc.; IDS Investment
Series, Inc.; IDS Managed Retirement Fund, Inc.; IDS Market
Advantage Series, Inc.; IDS Money Market Series, Inc.; IDS New
Dimensions Fund, Inc.; IDS Precious Metals Fund, Inc.; IDS
Progressive Fund, Inc.; IDS Selective Fund, Inc.; IDS Special
Tax-Exempt Series Trust; IDS Stock Fund, Inc.; IDS Strategy
Fund, Inc.; IDS Tax-Exempt Bond Fund, Inc.; IDS Tax-Free Money
Fund, Inc.; IDS Utilities Income Fund, Inc. and IDS
Certificate Company.
(b) As to each director, officer or partner of the principal
underwriter:
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Ronald G. Abrahamson Vice President- None
IDS Tower 10 Service Quality and
Minneapolis, MN 55440 Reengineering
Douglas A. Alger Vice President-Total None
IDS Tower 10 Compensation
Minneapolis, MN 55440
Jerome R. Amundson Vice President and None
IDS Tower 10 Controller-Investment
Minneapolis, MN 55440 Accounting
Peter J. Anderson Senior Vice President- None
IDS Tower 10 Investments
Minneapolis, MN 55440
Ward D. Armstrong Vice President- None
IDS Tower 10 Sales and Marketing,
Minneapolis, MN 55440 American Express
Institutional Services
Alvan D. Arthur Group Vice President- None
IDS Tower 10 Central California/
Minneapolis, MN 55440 Western Nevada
Kent L. Ashton Vice President- None
IDS Tower 10 Financial Education
Minneapolis, MN 55440 Services
<PAGE>
PAGE 24
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Joseph M. Barsky III Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
Robert C. Basten Vice President-Tax None
IDS Tower 10 and Business Services
Minneapolis, MN 55440
Timothy V. Bechtold Vice President-Insurance None
IDS Tower 10 Product Development
Minneapolis, MN 55440
John D. Begley Group Vice Presdient- None
Olentangy Valley Center Ohio/Indiana
Suite 300
7870 Olentangy River Rd.
Columbus, OH 43235
Carl E. Beihl Vice President- None
IDS Tower 10 Strategic Technology
Minneapolis, MN 55440 Planning
Jack A. Benjamin Group Vice President- None
Greater Pennsylvania
Alan F. Bignall Vice President- None
IDS Tower 10 Financial Planning
Minneapolis, MN 55440 Systems
Brent L. Bisson Group Vice President- None
Seafirst Financial Los Angeles Metro
Center, Suite 1730
601 W. Riverside Ave.
Spokane, WA 99201
John C. Boeder Vice President- None
IDS Tower 10 Mature Market Group
Minneapolis, MN 55440
Bruce J. Bordelon Group Vice President- None
Gulf States
Charles R. Branch Group Vice President- None
Northwest
Karl J. Breyer Senior Vice President- None
IDS Tower 10 Corporate Affairs and
Minneapolis, MN 55440 Special Counsel
Harold E. Burke Vice President None
IDS Tower 10 and Assistant
Minneapolis, MN 55440 General Counsel<PAGE>
PAGE 25
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Daniel J. Candura Vice President- None
IDS Tower 10 Marketing Support
Minneapolis, MN 55440
Cynthia M. Carlson Vice President- None
IDS Tower 10 American Express
Minneapolis, MN 55440 Securities Services
Orison Y. Chaffee III Vice President-Field None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
James E. Choat Senior Vice President- None
Suite 124 Field Management
6210 Campbell Rd.
Dallas, TX 75248
Kenneth J. Ciak Vice President and None
IDS Property Casualty General Manager-
1400 Lombardi Avenue IDS Property Casualty
Green Bay, WI 54304
Roger C. Corea Group Vice President- None
345 Woodcliff Drive Upstate New York
Fairport, NY 14450
Henry J. Cormier Group Vice President- None
Connecticut
John M. Crawford Group Vice President- None
Arkansas/Springfield/Memphis
Kevin F. Crowe Group Vice President- None
IDS Tower 10 Carolinas/Eastern Georgia
Minneapolis, MN 55440
Alan R. Dakay Vice President- None
IDS Tower 10 Institutional Insurance
Minneapolis, MN 55440 Marketing
Regenia David Vice President- None
Systems Services
Scott M. Digiammarino Group Vice President- None
Washington/Baltimore
Bradford L. Drew Group Vice President- None
Eastern Florida
<PAGE>
PAGE 26
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
William H. Dudley Director and Executive Director/
IDS Tower 10 Vice President- Trustee
Minneapolis MN 55440 Investment Operations
Roger S. Edgar Senior Vice President- None
IDS Tower 10 Information Systems
Minneapolis, MN 55440
Gordon L. Eid Senior Vice President None
IDS Tower 10 and General Counsel
Minneapolis, MN 55440
Robert M. Elconin Vice President- None
IDS Tower 10 Government Relations
Minneapolis, MN 55440
Mark A. Ernst Vice President- None
IDS Tower 10 Retail Services
Minneapolis, MN 55440
Joseph Evanovich Jr. Group Vice President- None
Nebraska/Iowa/Dakotas
Louise P. Evenson Group Vice President- None
San Francisco Bay Area
Gordon M. Fines Vice President- None
IDS Tower 10 Mutual Fund Equity
Minneapolis MN 55440 Investments
Louis C. Fornetti Senior Vice President None
IDS Tower 10 and Chief Financial
Minneapolis, MN 55440 Officer
Douglas L. Forsberg Group Vice President- None
IDS Tower 10 Portland/Eugene
Minneapolis, MN 55440
William P. Fritz Group Vice President- None
Northern Missouri
Carl W. Gans Group Vice President- None
IDS Tower 10 Twin City Metro
Minneapolis, MN 55440
Bruce M. Gaurino Group Vice President- None
Hawaii
<PAGE>
PAGE 27
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Robert G. Gilbert Vice President- None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
John J. Golden Vice President- None
IDS Tower 10 Field Compensation
Minneapolis, MN 55440 Development
Morris Goodwin Jr. Vice President and None
IDS Tower 10 Corporate Treasurer
Minneapolis, MN 55440
Suzanne Graf Vice President- None
IDS Tower 10 Systems Services
Minneapolis, MN 55440
Bruce M. Guarino Group Vice President- None
Hawaii
David A. Hammer Vice President None
IDS Tower 10 and Marketing
Minneapolis, MN 55440 Controller
Teresa A. Hanratty Group Vice President- None
Northern New England
John R. Hantz Group Vice President- None
Detroit Metro
Robert L. Harden Group Vice President- None
Suite 403 Boston Metro
8500 Leesburg Pike
Vienna, VA 22180
Lorraine R. Hart Vice President- None
IDS Tower 10 Insurance Investments
Minneapolis, MN 55440
Scott A. Hawkinson Vice President-Assured None
IDS Tower 10 Assets Product Development
Minneapolis, MN 55440 and Management
Brian M. Heath Group Vice President- None
IDS Tower 10 North Texas
Minneapolis, MN 55440
Raymond E. Hirsch Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
<PAGE>
PAGE 28
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
James G. Hirsh Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
David J. Hockenberry Group Vice President- None
Eastern Tennessee
Kevin P. Howe Vice President- None
IDS Tower 10 Government and
Minneapolis, MN 55440 Customer Relations
David R. Hubers Chairman, Chief None
IDS Tower 10 Executive Officer and
Minneapolis, MN 55440 President
Marietta L. Johns Senior Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440
Douglas R. Jordal Vice President-Taxes None
IDS Tower 10
Minneapolis, MN 55440
Craig A. Junkins Vice President - IDS 1994 None
IDS Tower 10 Implementation Planning
Minneapolis, MN 55440 and Financial Planning
Development
James E. Kaarre Vice President- None
IDS Tower 10 Marketing Information
Minneapolis, MN 55440
Linda B. Keene Vice President- None
Market Development
G. Michael Kennedy Vice President-Investment None
IDS Tower 10 Services and Investment
Minneapolis, MN 55440 Research
Susan D. Kinder Senior Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440
Richard W. Kling Senior Vice President- None
IDS Tower 10 Risk Management Products
Minneapolis, MN 55440
<PAGE>
PAGE 29
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Harold D. Knutson Vice President- None
IDS Tower 10 System Services
Minneapolis, MN 55440
Paul F. Kolkman Vice President- None
IDS Tower 10 Actuarial Finance
Minneapolis, MN 55440
Claire Kolmodin Vice President- None
IDS Tower 10 Service Quality
Minneapolis, MN 55440
David S. Kreager Group Vice President- None
IDS Tower 10 Greater Michigan
Minneapolis, MN 55440
Steven C. Kumagai Director and Senior None
IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management and Business
Systems
Mitre Kutanovski Group Vice President- None
IDS Tower 10 Chicago Metro
Minneapolis, MN 55440
Edward Labenski Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Kurt A. Larson Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Lori J. Larson Vice President- None
IDS Tower 10 Variable Assets Product
Minneapolis, MN 55440 Development
Ryan R. Larson Vice President- None
IDS Tower 10 IPG Product Development
Minneapolis, MN 55440
Daniel E. Laufenberg Vice President and None
IDS Tower 10 Chief U.S. Economist
Minneapolis, MN 55440
Richard J. Lazarchic Vice President- None
IDS Tower 10 Senior Portfolio
MInneapolis, MN 55440 Manager
Peter A. Lefferts Senior Vice President and None
IDS Tower 10 Chief Marketing Officer
Minneapolis, MN 55440<PAGE>
PAGE 30
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Douglas A. Lennick Director and Executive None
IDS Tower 10 Vice President-Private
Minneapolis, MN 55440 Client Group
Mary J. Malevich Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Fred A. Mandell Vice President- None
IDS Tower 10 Field Marketing Readiness
Minneapolis, MN 55440
Daniel E. Martin Group Vice President- None
Pittsburgh Metro
William J. McKinney Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440 Support
Thomas W. Medcalf Vice President- None
IDS Tower 10 Senior Portfolio Manager
Minneapolis, MN 55440
William C. Melton Vice President- None
IDS Tower 10 International Research
Minneapolis, MN 55440 and Chief International
Economist
Janis E. Miller Vice President- None
IDS Tower 10 Variable Assets
Minneapolis, MN 55440
James A. Mitchell Executive Vice President- None
IDS Tower 10 Marketing and Products
Minneapolis, MN 55440
John P. Moraites Group Vice President- None
Kansas/Oklahoma
Pamela J. Moret Vice President- None
IDS Tower 10 Corporate Communications
Minneapolis, MN 55440
Barry J. Murphy Senior Vice President- None
IDS Tower 10 Client Service
Minneapolis, MN 55440
Robert J. Neis Vice President- None
IDS Tower 10 Information Systems
Minneapolis, MN 55440 Operations<PAGE>
PAGE 31
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Ronald E. Newton Group Vice President- None
Rhode Island/Central
Massachusetts
Thomas V. Nicolosi Group Vice President- None
New York Metro Area
Vernon F. Palen Region Vice President- None
Suite D-222 Rocky Mountain Region
7100 E. Lincoln Drive
Scottsdale, AZ 85253
James R. Palmer Vice President- None
IDS Tower 10 Insurance Operations
Minneapolis, MN 55440
Carla P. Pavone Vice President- None
IDS Tower 10 Specialty Service Teams
Minneapolis, MN 55440 and Emerging Business
Judith A. Pennington Vice President- None
IDS Tower 10 Field Technology
Minneapolis, MN 55440
George M. Perry Vice President- None
IDS Tower 10 Corporate Strategy
Minneapolis, MN 55440 and Development
Susan B. Plimpton Vice President- None
IDS Tower 10 Segmentation Development
Minneapolis, MN 55440 and Support
Larry M. Post Group Vice President- None
Philadelphia Metro
Ronald W. Powell Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
James M. Punch Vice President- None
IDS Tower 10 TransAction Services
Minneapolis, MN 55440
Frederick C. Quirsfeld Vice President-Taxable None
IDS Tower 10 Mutual Fund Investments
Minneapolis, MN 55440
R. Daniel Richardson Group Vice President- None
Southern Texas
<PAGE>
PAGE 32
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Roger B. Rogos Group Vice President- None
Suite 15, Parkside Pl. Western Florida
945 Boardman-Canfield Rd
Youngstown, Ohio 44512
ReBecca K. Roloff Vice President-1994 None
IDS Tower 10 Program Director
Minneapolis, MN 55440
Stephen W. Roszell Vice President- None
IDS Tower 10 Advisory Institutional
Minneapolis, MN 55440 Marketing
Max G. Roth Group Vice President- None
Wisconsin/Upper Michigan
Robert A. Rudell Vice President- None
IDS Tower 10 American Express
Minneapolis, MN 55440 Institutional Services
John P. Ryan Vice President and None
IDS Tower 10 General Auditor
Minneapolis, MN 55440
Erven A. Samsel Senior Vice President- None
45 Braintree Hill Park Field Management
Braintree, MA 02184
Russell L. Scalfano Group Vice President- None
Illinois/Indiana/Kentucky
William G. Scholz Group Vice President- None
Arizona/Las Vegas
Stuart A. Sedlacek Vice President- None
IDS Tower 10 Assured Assets
Minneapolis, MN 55440
Donald K. Shanks Vice President- None
IDS Tower 10 Property Casualty
Minneapolis, MN 55440
F. Dale Simmons Vice President-Senior None
IDS Tower 10 Portfolio Manager,
Minneapolis, MN 55440 Insurance Investments
Judy P. Skoglund Vice President- None
IDS Tower 10 Human Resources and
Minneapolis, MN 55440 Organization Development<PAGE>
PAGE 33
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Julian W. Sloter Group Vice Presidnet- None
9040 Roswell Rd. Orlando/Jacksonville
River Ridge-Suite 600
Atlanta, GA 30350
Ben C. Smith Vice President- None
IDS Tower 10 Workplace Marketing
Minneapolis, MN 55440
William A. Smith Vice President and None
IDS Tower 10 Controller-Private
Minneapolis, MN 55440 Client Group
James B. Solberg Group Vice President- None
IDS Tower 10 Eastern Iowa Area
Minneapolis, MN 55440
Bridget Sperl Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440 Management Services
Paul J. Stanislaw Group Vice President- None
Southern California
Lois A. Stilwell Group Vice President- None
IDS Tower 10 Outstate Minnesota Area/
Minneapolis, MN 55440 North Dakota/Western Wisconsin
William A. Stoltzmann Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
James J. Strauss Vice President- None
IDS Tower 10 Corporate Planning
Minneapolis, MN 55440 and Analysis
Jeffrey J. Stremcha Vice President-Information None
IDS Tower 10 Resource Management/ISD
Minneapolis, MN 55440
Neil G. Taylor Group Vice President- None
IDS Tower 10 Seattle/Tacoma
Minneapolis, MN 55440
John R. Thomas Senior Vice President- Director/
IDS Tower 10 Information and Trustee
Minneapolis, MN 55440 Technology
Melinda S. Urion Vice President and None
IDS Tower 10 Corporate Controller
Minneapolis, MN 55440<PAGE>
PAGE 34
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Peter S. Velardi Group Vice President- None
Atlanta/Birmingham
Charles F. Wachendorfer Group Vice President- None
Denver/Salt Lake City/
Albuquerque
Wesley W. Wadman Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Norman Weaver Jr. Senior Vice President- None
Suite 215 Field Management
1501 Westcliff Drive
Newport Beach, CA 92660
Michael L. Weiner Vice President- None
IDS Tower 10 Corporate Tax
Minneapolis, MN 55440 Operations
Lawrence J. Welte Vice President- None
IDS Tower 10 Investment Administration
Minneapolis, MN 55440
Jeffry M. Welter Vice President- None
IDS Tower 10 Equity and Fixed Income
Minneapolis, MN 55440 Trading
William N. Westhoff Senior Vice President and None
IDS Tower 10 Global Chief Investment
Minneapolis, MN 55440 Officer
Thomas L. White Group Vice President- None
Cleveland Metro
Eric S. Williams Group Vice President- None
Virginia
Edwin M. Wistrand Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
Michael R. Woodward Senior Vice President- None
Suite 815 Field Management
8585 Broadway
Merrillville, IN 46410
<PAGE>
PAGE 35
Item 29(c). Not applicable.
Item 30. Location of Accounts and Records
IDS Financial Corporation
IDS Tower 10
Minneapolis, MN 55440
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant undertakes to furnish each person
to whom a prospectus is delivered with a copy of
the Registrant's latest annual report to
shareholders, upon request and without charge.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, IDS Managed Retirement Fund,
Inc. certifies that it meets the requirements for the effectiveness of this
Amendment to its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and 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 27th day of
February, 1995.
IDS MANAGED RETIREMENT FUND, INC.
By /s/ WILLIAM R. PEARCE**
------------------------------------
William R. Pearce,
PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following persons in
the capacities indicated on the 27th day of February, 1995.
SIGNATURE CAPACITY
- ----------------------------------- -------------------------
/s/ WILLIAM R. PEARCE** President and Principal
- ----------------------------------- Executive Officer and
William R. Pearce Director
Treasurer, Principal
/s/ LESLIE L. OGG** Financial Officer, and
- ----------------------------------- Principal Accounting
Leslie L. Ogg Officer
/s/ LYNNE V. CHENEY*
- ----------------------------------- Director
Lynne V. Cheney
/s/ WILLIAM H. DUDLEY*
- ----------------------------------- Director
William H. Dudley
/s/ ROBERT F. FROEHLKE*
- ----------------------------------- Director
Robert F. Froehlke
/s/ DAVID R. HUBERS*
- ----------------------------------- Director
David R. Hubers
/s/ HEINZ F. HUTTER*
- ----------------------------------- Director
Heinz F. Hutter
II-3
<PAGE>
SIGNATURE CAPACITY
- ----------------------------------- -------------------------
/s/ ANNE P. JONES*
- ----------------------------------- Director
Anne P. Jones
/s/ DONALD M. KENDALL*
- ----------------------------------- Director
Donald M. Kendall
/s/ MELVIN R. LAIRD*
- ----------------------------------- Director
Melvin R. Laird
/s/ LEWIS W. LEHR*
- ----------------------------------- Director
Lewis W. Lehr
/s/ EDSON W. SPENCER*
- ----------------------------------- Director
Edson W. Spencer
/s/ JOHN R. THOMAS*
- ----------------------------------- Director
John R. Thomas
/s/ WHEELOCK WHITNEY*
- ----------------------------------- Director
Wheelock Whitney
/s/ C. ANGUS WURTELE*
- ----------------------------------- Director
C. Angus Wurtele
*Signed pursuant to Directors' Power of Attorney dated November 10, 1994, filed
electronically as Exhibit 18(a) to Registrant's Post-Effective Amendment No.
20, by:
/s/ LESLIE L. OGG
- -------------------------------------------
Leslie L. Ogg
**Signed pursuant to Officers' Power of Attorney dated June 1, 1993, filed as
Exhibit 17(b) to Post-Effective Amendment No. 17 to Registration Statement No.
2-93801 by:
/s/ LESLIE L. OGG
- -------------------------------------------
Leslie L. Ogg
II-4
<PAGE>
CONTENTS OF THIS
POST-EFFECTIVE AMENDMENT NO. 21
TO REGISTRATION STATEMENT NO. 2-93801
This Post-Effective Amendment comprises the following papers and documents:
The facing sheet.
Cross reference sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Part C.
Financial Statements.
Other information.
Exhibits.
The signatures.
<PAGE>
PAGE 1
IDS Managed Retirement Fund, Inc.
Registration Number 2-93801/811-4133
EXHIBIT INDEX
<TABLE>
<S> <C> <C>
Exhibit 5: Form of Investment Management Services Agreement between
Registrant and American Express Financial Corporation,
dated March 20, 1995.
Exhibit 6: Form of Distribution Agreement between Registrant and
American Express Financial Advisors Inc., dated March 20,
1995.
Exhibit 8a: Form of Custodian Agreement between Registrant and American
Express Trust Company, dated March 20, 1995.
Exhibit 9a: Form of Transfer Agency Agreement between Registrant and
American Express Financial Corporation, dated March 20,
1995.
Exhibit 9b: Form of Shareholder Service Agreement between Registrant and
American Express Financial Advisors Inc., dated March 20,
1995.
Exhibit 9c: Form of Administrative Services Agreement between Registrant
and American Express Financial Corporation, dated March 20,
1995.
Exhibit 11: Independent Auditors' Consent.
Exhibit 15: Form of Plan and Agreement of Distribution between
Registrant and American Express Financial Advisors Inc.,
dated March 20, 1995.
Exhibit 17: Financial Data Schedule.
</TABLE>
<PAGE>
FORM OF
INVESTMENT MANAGEMENT SERVICES AGREEMENT
AGREEMENT made the 20th day of March, 1995, by and between IDS Managed
Retirement Fund, Inc. (the "Fund"), a Minnesota corporation, 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 all 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.
(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 composed of an asset
charge and a performance incentive adjustment.
<PAGE>
(a) The asset charge
(i) The asset charge for each calendar day of each year shall be equal
to the total of 1/365th (1/366th in each leap year) of the amount computed in
accordance with paragraph (ii) below. The computation shall be made 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.
(ii) The asset charge shall be based on the net assets of the Fund
as set forth in the following table.
ASSET CHARGE
<TABLE>
<CAPTION>
ASSETS ANNUAL RATE AT
(BILLIONS) EACH ASSET LEVEL
---------- ----------------
<S> <C>
First $0.5 0.530%
Next $0.5 0.505
Next $1 0.480
Next $1 0.455
Next $3 0.430
Over $6 0.400
</TABLE>
(b) The performance incentive adjustment
(i) The performance incentive adjustment, determined monthly, shall be
computed by measuring the percentage point difference between the performance of
one Class A share of the Fund and the performance of the Lipper Growth and
Income Fund Index (the "Index"). The performance of one Class A share of the
Fund shall be measured by computing the percentage difference, carried to two
decimal places, between the opening net asset value of one share of the Fund and
the closing net asset value of such share as of the last business day of the
period selected for comparison, adjusted for dividends or capital gain
distributions treated as reinvested at the end of the month during which the
distribution was made but without adjustment for expenses related to a
particular class of shares. The performance of the Index will then be
established by measuring the percentage difference, carried to two decimal
places, between the beginning and ending Index for the comparison period, with
dividends or capital gain distributions on the securities which comprise the
Index being treated as reinvested at the end of the month during which the
distribution was made.
(ii) In computing the adjustment, one percentage point shall be deducted
from the difference, as determined in (b)(i) above. The result shall be
converted to a decimal value (e.g., 2.38% to 0.0238), multiplied by .01 and then
multiplied by the Fund's average net assets for the comparison period. This
product next shall be divided by 12 to put the adjustment on a monthly basis.
Where the performance of the Fund exceeds the Index, the amount so determined
shall be an increase in fees as computed under paragraph (a). Where Fund
performance is exceeded by the Index, the amount so determined shall be a
decrease in such fees. The percentage point difference between the performance
of the Fund and that of the Index, as determined above, is limited to a maximum
of 0.0008 per year.
(iii) The 12 month comparison period will roll over with each succeeding
month, so that it always equals 12 months, ending with the month for which the
performance adjustment is being computed.
(iv) If the Index ceases to be published for a period of more than 90
days, changes in any material respect or otherwise becomes impracticable to use
for purposes of the adjustment, no adjustment will be made under this paragraph
(b) until such time as the Board approves a substitute index.
(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.
<PAGE>
(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.
(c) Brokerage commissions and charges in connection with the purchase
and sale of assets.
(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 IDS, 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.
(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 March 19, 1997, 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
<PAGE>
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.
IDS MANAGED RETIREMENT FUND, INC.
By:
-----------------------------------
AMERICAN EXPRESS FINANCIAL CORPORATION
By:
-----------------------------------
<PAGE>
DISTRIBUTION AGREEMENT
Agreement made as of the 20th day of March, 1995, by and between
IDS Managed Retirement Fund, Inc. (the "Fund"), a Minnesota
corporation, for and on behalf of each class of the Fund and
American Express Financial Advisors Inc., a Delaware corporation.
Part One: DISTRIBUTION OF SECURITIES
(1) The Fund covenants and agrees that, during the term of this
agreement and any renewal or extension, American Express Financial
Advisors shall have the exclusive right to act as principal
underwriter for the Fund and to offer for sale and to distribute
either directly or through any affiliate any and all shares of each
class of capital stock issued or to be issued by the Fund.
(2) American Express Financial Advisors hereby covenants and
agrees to act as the principal underwriter of each class of capital
shares issued and to be issued by the Fund during the period of
this agreement and agrees during such period to offer for sale such
shares as long as such shares remain available for sale, unless
American Express Financial Advisors is unable or unwilling to make
such offer for sale or sales or solicitations therefor legally
because of any federal, state, provincial or governmental law, rule
or agency or for any financial reason.
(3) With respect to the offering for sale and sale of shares of
each class to be issued by the Fund, it is mutually understood and
agreed that such shares are to be sold on the following terms:
(a) All sales shall be made by means of an application, and
every application shall be subject to acceptance or rejection by
the Fund at its principal place of business. Shares are to be sold
for cash, payable at the time the application and payment for such
shares are received at the principal place of business of the Fund.
(b) No shares shall be sold at less than the asset value
(computed in the manner provided by the currently effective
prospectus or Statement of Additional Information and the
Investment Company Act of 1940, and rules thereunder). The number
of shares or fractional shares to be acquired by each applicant
shall be determined by dividing the amount of each accepted
application by the public offering price of one share of the
capital stock of the appropriate class as of the close of business
on the day when the application, together with payment, is received
by the Fund at its principal place of business. The computation as
to the number of shares and fractional shares shall be carried to
three decimal points of one share with the computation being
carried to the nearest 1/1000th of a share. If the day of receipt
of the application and payment is not a full business day, then the
asset value of the share for use in such computation shall be
determined as of the close of business on the next succeeding full
business day. In the event of a period of emergency, the
computation of the asset value for the purpose of determining the
number of shares or fractional shares to be acquired by the
applicant may be deferred until the close of business on the first
full business day following the termination of the period of
<PAGE>
emergency. A period of emergency shall have the definition given
thereto in the Investment Company Act of 1940, and rules
thereunder.
(4) The Fund agrees to make prompt and reasonable effort to do
any and all things necessary, in the opinion of American Express
Financial Advisors, to have and to keep the Fund and the shares
properly registered or qualified in all appropriate jurisdictions
and, as to shares, in such amounts as American Express Financial
Advisors may from time to time designate in order that the Fund's
shares may be offered or sold in such jurisdictions.
(5) The Fund agrees that it will furnish American Express
Financial Advisors with information with respect to the affairs and
accounts of the Fund, and in such form, as American Express
Financial Advisors may from time to time reasonably require and
further agrees that American Express Financial Advisors, at all
reasonable times, shall be permitted to inspect the books and
records of the Fund.
(6) American Express Financial Advisors or its agents may prepare
or cause to be prepared from time to time circulars, sales
literature, broadcast material, publicity data and other
advertising material to be used in the sales of shares issued by
the Fund, including material which may be deemed to be a prospectus
under rules promulgated by the Securities and Exchange Commission
(each separate promotional piece is referred to as an "Item of
Soliciting Material"). At its option, American Express Financial
Advisors may submit any Item of Soliciting Material to the Fund for
its prior approval. Unless a particular Item of Soliciting
Material is approved in writing by the Fund prior to its use,
American Express Financial Advisors agrees to indemnify the Fund
and its directors and officers against any and all claims, demands,
liabilities and expenses which the Fund or such persons may incur
arising out of or based upon the use of any Item of Soliciting
Material. The term "expenses" includes amounts paid in
satisfaction of judgments or in settlements. The foregoing right
of indemnification shall be in addition to any other rights to
which the Fund or any director or officer may be entitled as a
matter of law. Notwithstanding the foregoing, such indemnification
shall not be deemed to abrogate or diminish in any way any right or
claim American Express Financial Advisors may have against the Fund
or its officers or directors in connection with the Fund's
registration statement, prospectus, Statement of Additional
Information or other information furnished by or caused to be
furnished by the Fund.
(7) American Express Financial Advisors agrees to submit to the
Fund each application for shares immediately after the receipt of
such application and payment therefor by American Express Financial
Advisors at its principal place or business.
(8) American Express Financial Advisors agrees to cause to be
delivered to each person submitting an application a prospectus or
circular to be furnished by the Fund in the form required by the
applicable federal laws or by the acts or statutes of any
applicable state, province or country.
<PAGE>
(9) The Fund shall have the right to extend to shareholders of
each class the right to use the proceeds of any cash dividend paid
by the Fund to that shareholder to purchase shares of the same
class at the net asset value at the close of business upon the day
of purchase, to the extent set forth in the currently effective
prospectus or Statement of Additional Information.
(10) Shares of each class issued by the Fund may be offered and
sold at their asset value to the shareholders of the same class of
other funds in the IDS MUTUAL FUND GROUP who wish to exchange their
investments in shares of the other funds in the IDS MUTUAL FUND
GROUP to investments in shares of the Fund, to the extent set forth
in the currently effective prospectus or Statement of Additional
Information, such asset value to be computed as of the close of
business on the day of sale of such shares of the Fund.
(11) American Express Financial Advisors and the Fund agree to use
their best efforts to conform with all applicable state and federal
laws and regulations relating to any rights or obligations under
the term of this agreement.
Part Two: ALLOCATION OF EXPENSES
Except as provided by any other agreements between the parties,
American Express Financial Advisors covenants and agrees that
during the period of this agreement it will pay or cause or be paid
all expenses incurred by American Express Financial Advisors, or
any of its affiliates, in the offering for sale or sale of each
class of the Fund's shares.
Part Three: COMPENSATION
(1) It is covenanted and agreed that American Express Financial
Advisors shall be paid:
(i) for a class of shares imposing a front-end sales charge,
by the purchasers of Fund shares in an amount equal to the
difference between the total amount received upon each sale of
shares issued by the Fund and the asset value of such shares at the
time of such sale; and
(ii) for a class of shares imposing a deferred sales charge,
by owners of Fund shares at the time the sales charge is imposed in
an amount equal to any deferred sales charge, as described in the
Fund's prospectus.
Such sums as are received by the Fund shall be received as Agent
for American Express Financial Advisors and shall be remitted to
American Express Financial Advisors daily as soon as practicable
after receipt.
(2) The asset value of any share of each class of the Fund shall
be determined in the manner provided by the classes currently
effective prospectus and Statement of Additional Information and
the Investment Company Act of 1940, and rules thereunder.
<PAGE>
Part Four: MISCELLANEOUS
(1) American Express Financial Advisors 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) American Express Financial Advisors shall be free to render
to others services similar to those rendered under this agreement.
(3) 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 Advisors as
directors, officers, shareholders or otherwise; that directors,
officers, shareholders or agents of American Express Financial
Advisors are or may be interested in the Fund as directors,
officers, shareholders or otherwise; or that American Express
Financial Advisors is or may be interested in the Fund as
shareholder or otherwise, provided, however, that neither American
Express Financial Advisors nor any officer or director of American
Express Financial Advisors or any officers or directors of the Fund
shall sell to or buy from the Fund any property or security other
than a security issued by the Fund, except in accordance with a
rule, regulation or order of the federal Securities and Exchange
Commission.
(4) For the purposes of this agreement, a "business day" shall
have the same meaning as is given to the term in the By-laws of the
Fund.
(5) Any notice under this agreement shall be given in writing,
addressed and delivered, or mailed postpaid, to the parties to this
agreement at each company'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 Advisors agrees that no officer,
director or employee of American Express Financial Advisors 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 and employees of American Express
Financial Advisors from having a financial interest in the Fund or
in American Express Financial Advisors.
(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
Advisors, provided such transactions are handled in the capacity of
broker only and provided commissions charged do not exceed
customary brokerage charges for such services.
<PAGE>
(c) Transactions with the Fund by a broker-dealer affiliate
of American Express Financial Advisors if allowed by rule or order
of the Securities and Exchange Commission and if made pursuant to
procedures adopted by the Fund's Board of Directors.
(7) American Express Financial Advisors agrees that, except as
otherwise provided in this agreement, or as may be permitted
consistent with the use of a broker-dealer affiliate of American
Express Financial Advisors 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 securities issued by the
Fund) or other assets by or for the Fund.
Part Five: TERMINATION
(1) This agreement shall continue from year to year unless and
until terminated by American Express Financial Advisors or the
Fund, except that such continuance shall be specifically approved
at least annually by a vote of a majority of the Board of 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, and by a majority of the Board of
Directors or by vote of a majority of the outstanding voting
securities of the Fund. As used in this paragraph, the term
"interested person" shall have the meaning as set forth in the
Investment Company Act of 1940, as amended.
(2) This agreement may be terminated by American Express
Financial Advisors or the Fund at any time by giving the other
party sixty (60) days written notice of such intention to
terminate.
(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 Investment Company Act of 1940, as
amended.
IN WITNESS WHEREOF, The parties hereto have executed the foregoing
agreement on the date and year first above written.
IDS MANAGED RETIREMENT FUND, INC.
By
-------------------------------------
Leslie L. Ogg
Vice President
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
By
------------------------------------
Vice President
<PAGE>
CUSTODIAN AGREEMENT
THIS CUSTODIAN AGREEMENT dated March 20, 1995, between IDS Managed
Retirement Fund, Inc., a Minnesota Corporation (the "Corporation")
and American Express Trust Company, a corporation organized under
the laws of the State of Minnesota with its principal place of
business at Minneapolis, Minnesota (the "Custodian").
WHEREAS, the Corporation desires that its securities and cash be
hereafter held and administered by Custodian pursuant to the terms
of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
made, the Corporation and the Custodian agree as follows:
SECTION 1. DEFINITIONS
The word "securities" as used herein shall be construed to include,
without being limited to, shares, stocks, treasury stocks,
including any stocks of this Corporation, notes, bonds, debentures,
evidences of indebtedness, options to buy or sell stocks or stock
indexes, certificates of interest or participation in any profit-
sharing agreements, collateral trust certificates, preorganization
certificates or subscriptions, transferable shares, investment
contracts, voting trust certificates, certificates of deposit for a
security, fractional or undivided interests in oil, gas or other
mineral rights, or any certificates of interest or participation
in, temporary or interim certificates for, receipts for, guarantees
of, or warrants or rights to subscribe to or purchase any of the
foregoing, acceptances and other obligations and any evidence of
any right or interest in or to any cash, property or assets and any
interest or instrument commonly known as a security. In addition,
for the purpose of this Custodian Agreement, the word "securities"
also shall include other instruments in which the Corporation may
invest including currency forward contracts and commodities such as
interest rate or index futures contracts, margin deposits on such
contracts or options on such contracts.
The words "custodian order" shall mean a request or direction,
including a computer printout, directed to the Custodian and signed
in the name of the Corporation by any two individuals designated in
the current certified list referred to in Section 2.
The word "facsimile" shall mean an exact copy or likeness which is
electronically transmitted for instant reproduction.
SECTION 2. NAMES, TITLES AND SIGNATURES OF AUTHORIZED PERSONS
The Corporation will certify to the Custodian the names and
signatures of its present officers and other designated persons
authorized on behalf of the Corporation to direct the Custodian by
custodian order as herein before defined. The Corporation agrees
<PAGE>
that whenever any change occurs in this list it will file with the
Custodian a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Corporation as having been duly adopted
by the Board of Directors or the Executive Committee of the Board
of Directors of the Corporation designating those persons currently
authorized on behalf of the Corporation to direct the Custodian by
custodian order, as herein before defined, and upon such filing (to
be accompanied by the filing of specimen signatures of the
designated persons) the persons so designated in said resolution
shall constitute the current certified list. The Custodian is
authorized to rely and act upon the names and signatures of the
individuals as they appear in the most recent certified list from
the Corporation which has been delivered to the Custodian as herein
above provided.
SECTION 3. USE OF SUBCUSTODIANS
The Custodian may make arrangements, where appropriate, with other
banks having not less than two million dollars aggregate capital,
surplus and undivided profits for the custody of securities. Any
such bank selected by the Custodian to act as subcustodian shall be
deemed to be the agent of the Custodian.
The Custodian also may enter into arrangements for the custody of
securities entrusted to its care through foreign branches of United
States banks; through foreign banks, banking institutions or trust
companies; through foreign subsidiaries of United States banks or
bank holding companies, or through foreign securities depositories
or clearing agencies (hereinafter also called, collectively, the
"Foreign Subcustodian" or indirectly through an agent, established
under the first paragraph of this section, if and to the extent
permitted by Section 17(f) of the Investment Company Act of 1940
and the rules promulgated by the Securities and Exchange Commission
thereunder, any order issued by the Securities and Exchange
Commission, or any "no-action" letter received from the staff of
the Securities and Exchange Commission. To the extent the existing
provisions of the Custodian Agreement are consistent with the
requirements of such Section, rules, order or no-action letter,
they shall apply to all such foreign custodianships. To the extent
such provisions are inconsistent with or additional requirements
are established by such Section, rules, order or no-action letter,
the requirements of such Section, rules, order or no-action letter
will prevail and the parties will adhere to such requirements;
provided, however, in the absence of notification from the
Corporation of any changes or additions to such requirements, the
Custodian shall have no duty or responsibility to inquire as to any
such changes or additions.
SECTION 4. RECEIPT AND DISBURSEMENT OF MONEY
(1) The Custodian shall open and maintain a separate account or
accounts in the name of the Corporation or cause its agent to open
and maintain such account or accounts subject only to checks,
drafts or directives by the Custodian pursuant to the terms of this
Agreement. The Custodian or its agent shall hold in such account
or accounts, subject to the provisions hereof, all cash received by
<PAGE>
it from or for the account of the Corporation. The Custodian or
its agent shall make payments of cash to or for the account of the
Corporation from such cash only:
(a) for the purchase of securities for the portfolio of the
Corporation upon the receipt of such securities by the
Custodian or its agent unless otherwise instructed on
behalf of the Corporation;
(b) for the purchase or redemption of shares of capital
stock of the Corporation;
(c) for the payment of interest, dividends, taxes,
management fees, or operating expenses (including,
without limitation thereto, fees for legal, accounting
and auditing services);
(d) for payment of distribution fees, commissions, or
redemption fees, if any;
(e) for payments in connection with the conversion,
exchange or surrender of securities owned or subscribed
to by the Corporation held by or to be delivered to the
Custodian;
(f) for payments in connection with the return of
securities loaned by the Corporation upon receipt of
such securities or the reduction of collateral upon
receipt of proper notice;
(g) for payments for other proper corporate purposes;
(h) or upon the termination of this Agreement.
Before making any such payment for the purposes permitted under the
terms of items (a), (b), (c), (d), (e), (f) or (g) of paragraph (1)
of this section, the Custodian shall receive and may rely upon a
custodian order directing such payment and stating that the payment
is for such a purpose permitted under these items (a), (b), (c),
(d), (e), (f) or (g) and that in respect to item (g), a copy of a
resolution of the Board of Directors or of the Executive Committee
of the Board of Directors of the Corporation signed by an officer
of the Corporation and certified by its Secretary or an Assistant
Secretary, specifying the amount of such payment, setting forth the
purpose to be a proper corporate purpose, and naming the person or
persons to whom such payment is made. Notwithstanding the above,
for the purposes permitted under items (a) or (f) of paragraph (1)
of this section, the Custodian may rely upon a facsimile order.
(2) The Custodian is hereby appointed the attorney-in-fact of the
Corporation to endorse and collect all checks, drafts or other
orders for the payment of money received by the Custodian for the
account of the Corporation and drawn on or to the order of the
Corporation and to deposit same to the account of the Corporation
pursuant to this Agreement.
<PAGE>
SECTION 5. RECEIPT OF SECURITIES
Except as permitted by the second paragraph of this section, the
Custodian or its agent shall hold in a separate account or
accounts, and physically segregated at all times from those of any
other persons, firms or corporations, pursuant to the provisions
hereof, all securities received by it for the account of the
Corporation. The Custodian shall record and maintain a record of
all certificate numbers. Securities so received shall be held in
the name of the Corporation, in the name of an exclusive nominee
duly appointed by the Custodian or in bearer form, as appropriate.
Subject to such rules, regulations or guidelines as the Securities
and Exchange Commission may adopt, the Custodian may deposit all or
any part of the securities owned by the Corporation in a securities
depository which includes any system for the central handling of
securities established by a national securities exchange or a
national securities association registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, or
such other person as may be permitted by the Commission, pursuant
to which system all securities of any particular class or series of
any issuer deposited within the system are treated as fungible and
may be transferred or pledged by bookkeeping entry without physical
delivery of such securities.
All securities are to be held or disposed of by the Custodian for,
and subject at all times to the instructions of, the Corporation
pursuant to the terms of this Agreement. The Custodian shall have
no power or authority to assign, hypothecate, pledge or otherwise
dispose of any such securities, except pursuant to the directive of
the Corporation and only for the account of the Corporation as set
forth in Section 6 of this Agreement.
SECTION 6. TRANSFER EXCHANGE, DELIVERY, ETC. OF SECURITIES
The Custodian shall have sole power to release or deliver any
securities of the Corporation held by it pursuant to this
Agreement. The Custodian agrees to transfer, exchange or deliver
securities held by it or its agent hereunder only:
(a) for sales of such securities for the account of the
Corporation, upon receipt of payment therefor;
(b) when such securities are called, redeemed, retired or
otherwise become payable;
(c) for examination upon the sale of any such securities in
accordance with "street delivery" custom which would include
delivery against interim receipts or other proper delivery
receipts;
(d) in exchange for or upon conversion into other securities
alone or other securities and cash whether pursuant to any
plan of
(e) merger, consolidation, reorganization, recapitalization or
readjustment, or otherwise;
<PAGE>
(f) for the purpose of exchanging interim receipts or temporary
certificates for permanent certificates;
(g) upon conversion of such securities pursuant to their terms
into other securities;
(h) upon exercise of subscription, purchase or other similar
rights represented by such securities; for loans of such
securities by the Corporation upon receipt of collateral; or
(i) for other proper corporate purposes.
As to any deliveries made by the Custodian pursuant to items (a),
(b), (c), (d), (e), (f), (g) and (h), securities or cash received
in exchange therefore shall be delivered to the Custodian, its
agent, or to a securities depository. Before making any such
transfer, exchange or delivery, the Custodian shall receive a
custodian order or a facsimile from the Corporation requesting such
transfer, exchange or delivery and stating that it is for a purpose
permitted under Section 6 (whenever a facsimile is utilized, the
Corporation will also deliver an original signed custodian order)
and, in respect to item (i), a copy of a resolution of the Board of
Directors or of the Executive Committee of the Board of Directors
of the Corporation signed by an officer of the Corporation and
certified by its Secretary or an Assistant Secretary, specifying
the securities, setting forth the purpose for which such payment,
transfer, exchange or delivery is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person or
persons to whom such transfer, exchange or delivery of such
securities shall be made.
SECTION 7. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until the Custodian receives a contrary custodian order
from the Corporation, the Custodian shall or shall cause its agent
to:
(a) present for payment all coupons and other income items held
by the Custodian or its agent for the account of the
Corporation which call for payment upon presentation and hold
all cash received by it upon such payment for the account of
the Corporation;
(b) present for payment all securities held by it or its agent
which mature or when called, redeemed, retired or otherwise
become payable;
(c) ascertain all stock dividends, rights and similar securities
to be issued with respect to any securities held by the
Custodian or its agent hereunder, and to collect and hold for
the account of the Corporation all such securities; and
(d) ascertain all interest and cash dividends to be paid to
security holders with respect to any securities held by the
Custodian or its agent, and to collect and hold such interest
and cash dividends for the account of the Corporation.
<PAGE>
SECTION 8. VOTING AND OTHER ACTION
Neither the Custodian nor any nominee of the Custodian shall vote
any of the securities held hereunder by or for the account of the
Corporation. The Custodian shall promptly deliver to the
Corporation all notices, proxies and proxy soliciting materials
with relation to such securities, such proxies to be executed by
the registered holder of such securities (if registered otherwise
than in the name of the Corporation), but without indicating the
manner in which such proxies are to be voted.
Custodian shall transmit promptly to the Corporation all written
information (including, without limitation, pendency of calls and
maturities of securities and expirations of rights in connection
therewith) received by the Custodian from issuers of the securities
being held for the Corporation. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Corporation
all written information received by the Custodian from issuers of
the securities whose tender or exchange is sought and from the
party (or his agents) making the tender or exchange offer.
SECTION 9. TRANSFER TAXES
The Corporation shall pay or reimburse the Custodian for any
transfer taxes payable upon transfers of securities made hereunder,
including transfers resulting from the termination of this
Agreement. The Custodian shall execute such certificates in
connection with securities delivered to it under this Agreement as
may be required, under any applicable law or regulation, to exempt
from taxation any transfers and/or deliveries of any such
securities which may be entitled to such exemption.
SECTION 10. CUSTODIAN'S REPORTS
The Custodian shall furnish the Corporation as of the close of
business each day a statement showing all transactions and entries
for the account of the Corporation. The books and records of the
Custodian pertaining to its actions as Custodian under this
Agreement and securities held hereunder by the Custodian shall be
open to inspection and audit by officers of the Corporation,
internal auditors employed by the Corporation's investment adviser,
and independent auditors employed by the Corporation. The
Custodian shall furnish the Corporation in such form as may
reasonably be requested by the Corporation a report, including a
list of the securities held by it in custody for the account of the
Corporation, identification of any subcustodian, and identification
of such securities held by such subcustodian, as of the close of
business of the last business day of each month, which shall be
certified by a duly authorized officer of the Custodian. It is
further understood that additional reports may from time to time be
requested by the Corporation. Should any report ever be filed with
any governmental authority pertaining to lost or stolen securities,
the Custodian will concurrently provide the Corporation with a copy
of that report.
<PAGE>
The Custodian also shall furnish such reports on its systems of
internal accounting control as the Corporation may reasonably
request from time to time.
SECTION 11. CONCERNING CUSTODIAN
For its services hereunder the Custodian shall be paid such
compensation at such times as may from time to time be agreed on in
writing by the parties hereto in a Custodian Fee Agreement.
The Custodian shall not be liable for any action taken in good
faith upon any custodian order or facsimile herein described or
certified copy of any resolution of the Board of Directors or of
the Executive Committee of the Board of Directors of the
Corporation, and may rely on the genuineness of any such document
which it may in good faith believe to have been validly executed.
The Corporation agrees to indemnify and hold harmless Custodian and
its nominee from all taxes, charges, expenses, assessments, claims
and liabilities (including counsel fees) incurred or assessed
against it or its nominee in connection with the performance of
this Agreement, except such as may arise from the Custodian's or
its nominee's own negligent action, negligent failure to act or
willful misconduct. Custodian is authorized to charge any account
of the Corporation for such items. In the event of any advance of
cash for any purpose made by Custodian resulting from orders or
instructions of the Corporation, or in the event that Custodian or
its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the
performance of this Agreement, except such as may arise from its or
its nominee's own negligent action, negligent failure to act or
willful misconduct, any property at any time held for the account
of the Corporation shall be security therefor.
The Custodian shall maintain a standard of care equivalent to that
which would be required of a bailee for hire and shall not be
liable for any loss or damage to the Corporation resulting from
participation in a securities depository unless such loss or damage
arises by reason of any negligence, misfeasance, or willful
misconduct of officers or employees of the Custodian, or from its
failure to enforce effectively such rights as it may have against
any securities depository or from use of an agent, unless such loss
or damage arises by reason of any negligence, misfeasance, or
willful misconduct of officers or employees of the Custodian, or
from its failure to enforce effectively such rights as it may have
against any agent.
SECTION 12. TERMINATION AND AMENDMENT OF AGREEMENT
The Corporation and the Custodian mutually may agree from time to
time in writing to amend, to add to, or to delete from any
provision of this Agreement.
<PAGE>
The Custodian may terminate this Agreement by giving the
Corporation ninety days' written notice of such termination by
registered mail addressed to the Corporation at its principal place
of business.
The Corporation may terminate this Agreement at any time by written
notice thereof delivered, together with a copy of the resolution of
the Board of Directors authorizing such termination and certified
by the Secretary of the Corporation, by registered mail to the
Custodian.
Upon such termination of this Agreement, assets of the Corporation
held by the Custodian shall be delivered by the Custodian to a
successor custodian, if one has been appointed by the Corporation,
upon receipt by the Custodian of a copy of the resolution of the
Board of Directors of the Corporation certified by the Secretary,
showing appointment of the successor custodian, and provided that
such successor custodian is a bank or trust company, organized
under the laws of the United States or of any State of the United
States, having not less than two million dollars aggregate capital,
surplus and undivided profits. Upon the termination of this
Agreement as a part of the transfer of assets, either to a
successor custodian or otherwise, the Custodian will deliver
securities held by it hereunder, when so authorized and directed by
resolution of the Board of Directors of the Corporation, to a duly
appointed agent of the successor custodian or to the appropriate
transfer agents for transfer of registration and delivery as
directed. Delivery of assets on termination of this Agreement
shall be effected in a reasonable, expeditious and orderly manner;
and in order to accomplish an orderly transition from the Custodian
to the successor custodian, the Custodian shall continue to act as
such under this Agreement as to assets in its possession or
control. Termination as to each security shall become effective
upon delivery to the successor custodian, its agent, or to a
transfer agent for a specific security for the account of the
successor custodian, and such delivery shall constitute effective
delivery by the Custodian to the successor under this Agreement.
In addition to the means of termination herein before authorized,
this Agreement may be terminated at any time by the vote of a
majority of the outstanding shares of the Corporation and after
written notice of such action to the Custodian.
SECTION 13. GENERAL
Nothing expressed or mentioned in or to be implied from any
provision of this Agreement is intended to, or shall be construed
to give any person or corporation other than the parties hereto,
any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any covenant, condition or provision herein
contained, this Agreement and all of the covenants, conditions and
provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective
successors and assigns.
<PAGE>
This Agreement shall be governed by the laws of the State of
Minnesota.
This Agreement supersedes all prior agreements between the parties.
IDS MANAGED RETIREMENT FUND, INC.
By:
----------------------------------
Leslie L. Ogg
Vice President
AMERICAN EXPRESS TRUST COMPANY
By:
----------------------------------
Vice President
<PAGE>
TRANSFER AGENCY AGREEMENT
AGREEMENT dated as of March 20, 1995, between IDS Managed
Retirement Fund, Inc. (the "Fund"), a Minnesota corporation, and
American Express Financial Corporation (the "Transfer Agent"), a
Delaware corporation.
In consideration of the mutual promises set forth below, the Fund
and the Transfer Agent agree as follows:
1. Appointment of the Transfer Agent. The Fund hereby appoints the
Transfer Agent, as transfer agent for its shares and as shareholder
servicing agent for the Fund, and the Transfer Agent accepts such
appointment and agrees to perform the duties set forth below.
2. Compensation. The Fund 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 Fund separately.
The Transfer Agent will bill the Fund monthly. The fee provided
for hereunder shall be paid in cash by the Fund to American Express
Financial Corporation 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 Fund
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 Fund 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 Fund and the Transfer Agent.
(a) The Fund represents to the Transfer Agent that all outstanding
shares are validly issued, fully paid and non-assessable by the
Fund. When shares are hereafter issued in accordance with the
terms of the Fund's Articles of Incorporation and its prospectus,
such shares shall be validly issued, fully paid and non-assessable
by the Fund.
(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 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 the 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 Fund 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.
(f) Shareholder Records, Reports and Services.
<PAGE>
(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 Fund. The Transfer Agent will provide reports
pertaining to the services provided under this Agreement as the
Fund 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 Fund and may be inspected by the
Fund or any person retained by the Fund at reasonable times. The
Fund and Transfer Agent agree to protect the confidentiality of
those records.
7. Action by Board and Opinion of Fund's Counsel. The Transfer
Agent may rely on resolutions of the Board of Directors or the
Executive Committee of the Board of Directors and on opinion of
counsel for the Fund.
<PAGE>
8. Duty of Care. It is understood and agreed that, in furnishing
the Fund 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 Fund, it shall be accompanied by a vote of the
Board of Directors, 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 Fund, 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 Fund, 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 Fund 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.
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.
<PAGE>
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 MANAGED RETIREMENT FUND, INC.
By:
----------------------------------
Leslie L. Ogg
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By:
----------------------------------
Vice President
<PAGE>
SCHEDULE A
IDS MANAGED RETIREMENT FUND, INC.
TRANSFER AGENT FEE
Effective the 20th day of March, 1995, the Annual Per Account
Fee accrued daily and payable monthly is revised as follows:
CLASS FEE
----- ---
A $ 15
B 16
Y 15
<PAGE>
SCHEDULE B
OUT-OF-POCKET EXPENSES
The Fund shall reimburse the Transfer Agent monthly for the
following out-of-pocket expenses:
- - typesetting, printing, paper, envelopes, postage and return
postage for proxy soliciting material, and proxy tabulation costs
- - 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
- - 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
- - stop orders
- - outgoing wire charges
- - other expenses incurred at the request or with the consent of the
Fund
<PAGE>
SHAREHOLDER SERVICE AGREEMENT
This agreement is between IDS Managed Retirement Fund, Inc. (the
"Fund") and American Express Financial Advisors Inc., the principal
underwriter of the Fund, for services to be provided to
shareholders by personal financial advisors and other servicing
agents. It is effective on the first day the Fund offers multiple
classes of shares.
American Express Financial Advisors represents that shareholders
consider their financial advisor or servicing agent a significant
factor in their satisfaction with their investment and, to help
retain financial advisors or servicing agents, it is necessary for
the Fund to pay annual servicing fees to financial advisors and
other servicing agents.
American Express Financial Advisors represents that fees paid to
financial advisors will be used by financial advisors to help
shareholders thoughtfully consider their investment goals and
objectively monitor how well the goals are being achieved. As
principal underwriter, American Express Financial Advisors will use
its best efforts to assure that other distributors provide
comparable services to shareholders for the servicing fees
received.
American Express Financial Advisors agrees to monitor the services
provided by financial advisors and servicing agents, to measure the
level and quality of services provided, to provide training and
support to financial advisors and servicing agents and to devise
methods for rewarding financial advisors and servicing agents who
achieve an exemplary level and quality of services.
The Fund agrees to pay American Express financial advisors and
other servicing agents 0.15 percent of the net asset value for each
shareholder account assigned to a financial advisor or servicing
agent that holds either Class A or Class B shares. In addition,
the Fund agrees to pay American Express Financial Advisors' costs
to monitor, measure, train and support services provided by
financial advisors or servicing agents up to 0.025 percent of the
net asset value for each shareholder account assigned to a
financial advisor or servicing agent that holds either Class A or
Class B shares. The Fund agrees to pay American Express Financial
Advisors in cash within five (5) business days after the last day
of each month.
American Express Financial Advisors agrees to provide the Fund,
prior to the beginning of the calendar year, a budget covering its
expected costs to monitor, measure, train and support services and
a quarterly report of its actual expenditures. American Express
Financial Advisors agrees to meet with representatives of the Fund
at their request to provide information as may be reasonably
necessary to evaluate its performance under the terms of this
agreement.
American Express Financial Advisors agrees that if, at the end of
any month, the expenses of the Fund, including fees under this
agreement and any other agreement between the Fund and American
<PAGE>
Express Financial Advisors or American Express Financial
Corporation, but excluding taxes, brokerage commissions and charges
in connection with the purchase and sale of assets exceed the most
restrictive applicable state expense limitation for the Fund's
current fiscal year, the Fund shall not pay fees and expenses under
this agreement to the extent necessary to keep the Fund's expenses
from exceeding the limitation, it being understood that American
Express Financial Advisors 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.
This agreement shall continue in effect for a period of more than
one year so long as it is reapproved at least annually at a meeting
called for the purpose of voting on the agreement by a vote, in
person, of the members of the Board who are not interested persons
of the Fund and have no financial interest in the operation of the
agreement, and of all the members of the Board.
This agreement may be terminated at any time without payment of any
penalty by a vote of a majority of the members of the Board who are
not interested persons of the Fund and have no financial interest
in the operation of the agreement or by American Express Financial
Advisors. The agreement will terminate automatically in the event
of its assignment as that term is defined in the Investment Company
Act of 1940. This agreement may be amended at any time provided
the amendment is approved in the same manner the agreement was
initially approved and the amendment is agreed to by American
Express Financial Advisors.
Approved this 20th day of March, 1995.
IDS MANAGED RETIREMENT FUND, INC.
- ----------------------------------
Leslie L. Ogg
Vice President
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
- ----------------------------------
Vice President
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the 20th day of March, 1995, by and between IDS
Managed Retirement Fund, Inc. (the "Fund"), a Minnesota
corporation, and American Express Financial Corporation, a Delaware
corporation.
PART ONE: 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 all
administrative, accounting, clerical, statistical, correspondence,
corporate and all other services of whatever nature required in
connection with the administration of the Fund as provided under
this Agreement; and to pay such expenses as may be provided for in
Part Three hereof; subject always to the direction and control of
the Board of Directors, 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 of Directors deems appropriate
for the purpose of reviewing American Express Financial
Corporation's performance under this Agreement.
(2) 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.
(3) 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 FOR SERVICES
(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, based on the net assets of the Fund as set forth in the
following table:
<PAGE>
Assets Annual Rate At
(Billions) Each Asset Level
---------- ----------------
First $0.50 0.040%
Next 0.50 0.035
Next 1 0.030
Next 1 0.025
Next 3 0.020
Over 6 0.020
The administrative fee for each calendar day of each year shall be
equal to 1/365th (1/366th in each leap year) of the total amount
computed. The computation shall be made for each such 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 administrative fee 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. As used herein, "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.
(2) The administrative fee shall be paid on a monthly basis and, in
the event of the termination of this Agreement, the administrative
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 administrative fee provided for hereunder shall be paid in
cash by the Fund to American Express Financial Corporation within
five (5) business days after the last day of each month.
PART THREE: ALLOCATION OF EXPENSES
(1) The Fund agrees to pay:
(a) Administrative fees payable to American Express Financial
Corporation for its services under the terms of this Agreement.
(b) Taxes.
(c) Fees and charges of its independent certified public
accountants for services the Fund requests.
(d) 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 of Directors 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.
<PAGE>
(e) 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.
(f) Office expenses which shall include a charge for occupancy,
insurance on the premises, furniture and equipment, telephone,
telegraph, electronic information services, books, periodicals,
published services, and office supplies used by the Fund, equal to
the cost of such incurred by American Express Financial
Corporation.
(g) Fees of consultants employed by the Fund.
(h) 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.
(i) 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.
(j) Organizational expenses of the Fund.
(k) One-half of the Investment Company Institute membership dues
charged jointly to the IDS MUTUAL FUND GROUP and American Express
Financial Corporation.
(l) Expenses properly payable by the Fund, approved by the Board of
Directors.
(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) 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 (c) through (m) 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 anyway 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 United
States Securities and Exchange Commission.
(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 officers,
directors or employees of American Express Financial Corporation
from having a financial interest in the Fund or in American Express
Financial Corporation.
(7) The Fund agrees that American Express Financial Corporation 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 American Express
Financial Corporation remains fully responsible for the services.
<PAGE>
(8) 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. This Agreement
shall be governed by the laws of the State of Minnesota.
PART FIVE: RENEWAL AND TERMINATION
(1) 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.
(2) This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties.
IN WITNESS THEREOF, the parties hereto have executed the foregoing
Agreement as of the day and year first above written.
IDS MANAGED RETIREMENT FUND, INC.
By:
----------------------------------
Leslie L. Ogg
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By:
----------------------------------
Vice President
<PAGE>
INDEPENDENT AUDITORS' CONSENT
________________________________________________________
The Board of Directors and Shareholders
IDS Managed Retirement Fund, Inc.:
The audits referred to in our report dated January 6, 1995
included the related supplementary financial
statement data in Schedule III on pages___ of Part C of
this Registration Statement. The supplementary
financial statement data is the responsibility of Fund
Management. Our responsibility is to express an opinion
on this supplementary financial statement data based on
our audit. In our opinion, such supplementary financial
statement data, when considered with the basic financial
statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.
We consent to the use of our report incorporated herein
by reference and to the references to our Firm under the
headings "Financial Highlights" in Part A and
"INDEPENDENT AUDITORS" in Part B of the Registration
Statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
February 27, 1995
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
IDS MANAGED RETIREMENT FUND, INC.
INVESTMENTS IN AFFILIATES
(AS DEFINED IN SECTION 2 (a) OF THE INVESTMENT COMPANY ACT OF 1940)
YEAR ENDED NOVEMBER 30, 1994
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
________________________________________________________________________________________________________________
Amount of equity in
Name of issuer and Number of shares held net profit and loss Amount of Value at
title of issuer at close of year for the year dividend income Nov. 30, 1994
________________________________________________________________________________________________________________
Common stocks:
<S> <C> <C> <C> <C>
Sybron Chemicals 300,000 N/A (a) $5,475,000
<FN>
Note:
(a) Non-income producing.
</TABLE>
<PAGE>
SCHEDULE III (CONT'D)
<TABLE>
<CAPTION>
IDS MANAGED RETIREMENT FUND, INC.
CHANGES IN INVESTMENTS IN AFFILIATES
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1994
Gross Gross
Shares held purchases sales Shares held Market value Amount of
Name of issuer at beginning and and at close at dividend
and title of issuer of year additions reductions of year Nov. 30, 1994 income
_____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Common stock:
Sybron Chemicals 272,500 27,500 -- 300,000 $5,475,000 (a)
_________ _________ _______ _________ __________ _______
272,500 27,500 -- 300,000 $5,475,000 --
========= ========= ======= ========= ========== =======
<FN>
Note:
(a) Non-income producing.
</TABLE>
<PAGE>
PLAN AND AGREEMENT OF DISTRIBUTION
This plan and agreement is between IDS Managed Retirement Fund,
Inc. (the "Fund") and American Express Financial Advisors Inc., the
principal underwriter of the Fund, for distribution services to the
Fund. It is effective on the first day the Fund offers multiple
classes of shares.
The plan and agreement has been approved by members of the Board of
Directors (the "Board") of the Fund who are not interested persons
of the Fund and have no direct or indirect financial interest in
the operation of the plan or any related agreement, and all of the
members of the Board, in person, at a meeting called for the
purpose of voting on the plan and agreement.
The plan and agreement provides that:
1. The Fund will reimburse American Express Financial Advisors
for all sales and promotional expenses attributable to the sale of
Class B shares, including sales commissions, business and employee
expenses charged to distribution of Class B shares, and corporate
overhead appropriately allocated to the sale of Class B shares.
2. The amount of the reimbursement shall be equal on an annual
basis to 0.75% of the average daily net assets of the Fund
attributable to Class B shares. The amount so determined shall be
paid to American Express Financial Advisors in cash within five (5)
business days after the last day of each month. American Express
Financial Advisors agrees that if, at the end of any month, the
expenses of the Fund, including fees under this agreement and any
other agreement between the Fund and American Express Financial
Advisors or American Express Financial Corporation, but excluding
taxes, brokerage commissions and charges in connection with the
purchase and sale of assets exceed the most restrictive applicable
state expense limitation for the Fund's current fiscal year, the
Fund shall not pay fees and expenses under this agreement to the
extent necessary to keep the Fund's expenses from exceeding the
limitation, it being understood that American Express Financial
Advisors 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.
3. For each purchase of Class B shares, after eight years the
Class B shares will be converted to Class A shares and those assets
will no longer be included in determining the reimbursement amount.
4. The Fund understands that if a shareholder redeems Class B
shares before they are converted to Class A shares, American
Express Financial Advisors will impose a sales charge directly on
the redemption proceeds to cover those expenses it has previously
incurred on the sale of those shares.
5. American Express Financial Advisors agrees to provide at
least quarterly an analysis of distribution expenses and to meet
with representatives of the Fund as reasonably requested to provide
additional information.
<PAGE>
6.The plan and agreement shall continue in effect for a period
of more than one year provided it is reapproved at least annually
in the same manner in which it was initially approved.
7. The plan and agreement may not be amended to increase
materially the amount that may be paid by the Fund without the
approval of a least a majority of the outstanding shares of Class
B. Any other amendment must be approved in the manner in which the
plan and agreement was initially approved.
8. This agreement may be terminated at any time without payment
of any penalty by a vote of a majority of the members of the Board
who are not interested persons of the Fund and have no financial
interest in the operation of the plan and agreement, or by vote of
a majority of the outstanding Class B shares, or by American
Express Financial Advisors. The plan and agreement will terminate
automatically in the event of its assignment as that term is
defined in the Investment Company Act of 1940.
Approved this 20th day of March, 1995.
IDS MANAGED RETIREMENT FUND, INC.
- ----------------------------------
Leslie L. Ogg
Vice President
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
- ----------------------------------
Vice President
<PAGE>
[ARTICLE] 6
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] NOV-30-1994
[PERIOD-END] NOV-30-1994
[INVESTMENTS-AT-COST] 2057915065
[INVESTMENTS-AT-VALUE] 2200876387
[RECEIVABLES] 205222573
[ASSETS-OTHER] 26726790
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 2432825750
[PAYABLE-FOR-SECURITIES] 51514660
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 129714590
[TOTAL-LIABILITIES] 181229250
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 1941759491
[SHARES-COMMON-STOCK] 199439995
[SHARES-COMMON-PRIOR] 151750944
[ACCUMULATED-NII-CURRENT] 5699238
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 159863297
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 144274474
[NET-ASSETS] 2251596500
[DIVIDEND-INCOME] 31161622
[INTEREST-INCOME] 10369966
[OTHER-INCOME] 0
[EXPENSES-NET] 17866292
[NET-INVESTMENT-INCOME] 23665296
[REALIZED-GAINS-CURRENT] 161244633
[APPREC-INCREASE-CURRENT] (173232646)
[NET-CHANGE-FROM-OPS] 11677283
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (22475960)
[DISTRIBUTIONS-OF-GAINS] (137757653)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 52780284
[NUMBER-OF-SHARES-REDEEMED] (18632894)
[SHARES-REINVESTED] 13541661
[NET-CHANGE-IN-ASSETS] 406828706
[ACCUMULATED-NII-PRIOR] 23878221
[ACCUMULATED-GAINS-PRIOR] 138631701
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 11307904
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 17866292
[AVERAGE-NET-ASSETS] 2094508759
[PER-SHARE-NAV-BEGIN] 12.16
[PER-SHARE-NII] .13
[PER-SHARE-GAIN-APPREC] .03
[PER-SHARE-DIVIDEND] (.13)
[PER-SHARE-DISTRIBUTIONS] (.90)
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 11.29
[EXPENSE-RATIO] .85
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
