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Prospectus Supplement - Oct. 26, 1999*
AXP Federal Income Fund (July 30, 1999) S-6042 P (7/99)
(Formerly known as IDS Federal Income Fund)
The first paragraph of the Investment Strategy section is revised as follows
(changes are underlined):
The Fund's assets primarily are invested in debt obligations. Under normal
market conditions, at least 65% of the Fund's total assets are invested in
securities issued or guaranteed as to principal and interest by the U.S.
government, its agencies or instrumentalities. Although the Fund may invest in
any U.S. government securities, it is anticipated that U.S. government
securities representing part ownership in pools of mortgage loans
(mortgage-backed securities) will comprise a large percentage of the Fun d's
investments. The Fund will utilize forward sale commitments for hedging
purposes. Additionally, the Fund will aggressively utilize derivative
instruments and when-issued securities to produce incremental earnings, to hedge
existing positions and to increase flexibility. The Fund's potential losses from
the use of these instruments could extend beyond its initial investment.
S-6042- 11 A (10/99)
*Valid until next prospectus update
Destroy July 28, 2000
