<PAGE>
PAGE 1
FINANCIAL PLANNING
IDS Insured Tax-Exempt Fund
1994 annual report
(prospectus enclosed)
(Icon of) Eagle head inside a shield
The goals of IDS Insured Tax-Exempt Fund, a part of IDS Special
Tax-Exempt Series Trust, are to provide a high level of income
generally exempt from federal income tax and preservation of
shareholders' capital. The fund invests primarily in securities
that are insured as to their scheduled payment of principal and
interest for at least as long as the securities are held in the
fund.
IDS
An American Express company
AMERICAN
EXPRESS
Distributed by IDS Financial Services Inc.
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PAGE 2
(Icon of) Eagle head inside a shield
No-default insurance
Any investment involves risks. For a municipal bond investor,
there's the risk that the bond issuer could default on its
payments. But there are bonds that are insured against default,
and these are the ones that Insured Tax-Exempt Fund invests in.
While this doesn't mean that shareholders are insulated from
fluctuations in bond market values, it does ensure that all
principal and interest due to investors will be paid. Along the
way, shareholders enjoy regular income that is generally free from
federal income tax.
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PAGE 3
Contents
(Icon of) One book inside of another and their both being opened
together.
The purpose of this annual report is to tell investors how the fund
performed.
The prospectus, which is bound into the middle of this annual
report, describes the fund in detail.
1994 annual report
From the president 4
From the portfolio manager 4
Ten largest holdings 6
Making the most of your fund 7
Long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 17
IDS mutual funds 27
Federal income tax information 30
1994 prospectus
The fund in brief
Goals 3p
Types of fund investments 3p
Manager and distributor 3p
Portfolio manager 3p
Sales charge and fund expenses
Sales charge 4p
Operating expenses 4p
Performance
Financial highlights 5p
Total returns 6p
Yield 7p
Key terms 8p
Investment policies and risks
Facts about investments and their risks 9p
Valuing assets 15p
How to buy, exchange or sell shares
How to buy shares 16p
How to exchange shares 18p
How to sell shares 19p
Reductions of the sales charge 24p
Waivers of the sales charge 25p
Special shareholder services
Services 26p
Quick telephone reference 26p
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PAGE 4
Distributions and taxes
Dividend and capital gain distributions 27p
Reinvestments 28p
Taxes 29p
How the fund is organized
Shares 32p
Voting rights 33p
Shareholder meetings 33p
Trustees and officers 33p
Investment manager and transfer agent 35p
Distributor 35p
About IDS
General information 37p
Appendix
Tax-exempt income vs. taxable income 38p
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PAGE 5
To our shareholders
(Photo of) William R. Pearce, President of the fund
(Photo of) Paul B. Hylle, Portfolio manager
From the president
As you read this report, you'll find it very different from those
you've received from us in the past. We've made substantial
changes in the design and organization to make the information
easier to find and understand.
The annual report and prospectus are combined into a single
document, and each provides information important to you. The
annual report gives you the fund's performance information and a
snapshot of its investments. A good place to begin is with the
portfolio manager's letter, which describes the events and
investment strategies that most influenced the fund's performance
during the year. The prospectus includes essential data such as
the fund's investment policies and service information.
In redesigning our reports, we asked IDS financial planners and
some of you for suggestions and recommendations. We believe that
you'll find the results of our work worthwhile.
William R. Pearce
From the portfolio manager
A roller-coaster bond market during the past fiscal year resulted
in considerable excitement but, in most cases, a loss in security
values for fixed-income investors. But while shareholders of this
fund were among those seeing a lower net asset value, the fund's
steady dividend offset the price decline and enabled the fund to
show a slightly positive total return for the fiscal year.
The period certainly began well enough. As we expected, interest
rates continued to ease downward during July, August and September
of 1993, adding further fuel to a lengthy bond market rally.
(Falling rates generally improve bond market values, while rising
rates have the opposite effect.) Although rates rose slightly in
October due to indications of a strengthening economy and
accompanying fears of higher inflation, the effect on the market
was minor. Rates settled down by November, and for the next two
months, the bond market again enjoyed a relatively positive
environment.
In order to take advantage of market opportunities, we maintained a
longer-than-average portfolio maturity, a position that benefits
from a declining interest-rate environment. We also stayed
virtually fully invested - keeping nearly all the assets in bonds
and holding only a small amount of cash reserves.
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PAGE 6
Rate rise rocks market
The environment changed dramatically in early February, however,
when the Federal Reserve began raising short-term interest rates to
head off a potential spike in the inflation rate. In response to
Federal Reserve's action, the bond market began a significant
retreat, dragging down the fund's value.
Neither the move by the Fed nor the market's negative reaction were
surprising, but the degree and rapidity of the reaction was much
more severe than expected. The interest-rate rise, which continued
through April and proved to be the most dramatic three-month rate
surge in recent history, was accompanied by tremendous selling
pressure on bonds. By the time the dust had settled, the fund had
given back all of the gains earned since the previous summer.
During the turmoil, we took some actions to position the portfolio
for what we believe will be greater current income and less
vulnerability to potential interest-rate swings. The changes
centered on selling bonds that appeared to be over-valued and
replacing them with under-valued bonds. Beyond that, we sold some
securities at a loss to strengthen the portfolio and counter the
tax consequences created by our profitable sales.
Pick-up provides encouragement
The period concluded on a calmer note, as interest rates fluctuated
far less during May and June, allowing the fund to even gain back a
bit of ground. While we expect some ongoing market volatility in
the months ahead, we do think the worst of the storm has passed.
Our reasoning is based on a fundamental factor: the economy is
continuing to grow but not at a rapid rate. In fact, the interest
rate increases initiated by the Federal Reserve earlier this year
should eventually result in a tempering of economic growth. That's
important to fixed-income investors because, in such an economic
environment, inflation is unlikely to increase significantly. And
well-behaved inflation usually means that long-term interest rates,
which have the greatest effect on this fund's value, should
eventually reach a relatively stable point. Adding to our longer-
term optimism is the ongoing decline in the number of new municipal
bonds being issued coupled with strong demand - a positive
prescription for any security.
If that outlook proves to be essentially accurate, then the
remaining months of 1994 may well represent a good time to initiate
or add to an investment in municipal bonds.
Paul B. Hylle
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1994 $5.35
June 30, 1993 $5.63
Decrease $0.28
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PAGE 7
Distributions
July 1, 1993 - June 30, 1994
From income $0.30
Total return* +0.3%
*If you purchased shares in the fund during this period, your
return also would have been affected by the sales charge, as
described in the prospectus.
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PAGE 8
IDS Insured Tax-Exempt Fund
Your fund's ten largest holdings
<TABLE>
<CAPTION>
(Pie chart)
The ten holdings listed here make up 20.89% of the fund's net assets
_________________________________________________________________________________________
Percent Value
(of fund's net assets) (as of June 30, 1994)
_________________________________________________________________________________________
<S> <C> <C>
Brazo River Texas Authority Collateralized Pollution
Control Refunding Revenue Bonds Texas Utility Electric
Series 1992C
6.70% 2022 2.89% $15,187,402
Snohomish County Washington Public Utility District #1
General System Revenue Bonds Series 1993
6.00% 2013 2.35 12,364,052
Pittsburg Pennsylvania Water & Sewer Authority
Water & Sewer System Pre-Refunded Revenue Bonds
Series 1991A
6.50% 2014 2.07 10,894,600
Burlington Kansas Pollution Control
Refunding Revenue Bonds Kansas Gas & Electric
Series 1991
7.00% 2031 2.05 10,750,500
Economic Development Pollution Control
Refunding Revenue Bonds Delaware Power & Light
Series 1992B
6.75% 2019 2.00 10,519,700
Washington Public Power Supply System Nuclear Project #1
Refunding Revenue Bonds Series 1992A
6.25% 2017 1.95 10,237,605
Montgomery County Pennsylvania Industrial Development
Authority Pollution Control Refunding Revenue Bonds
Philadelphia Electric Series 1991B
6.70% 2021 1.95 10,237,300
Illinois Regional Transportation Authority
General Obligation Bonds Series 1992A
6.50% 2015 1.93 10,108,300
Brazos River Texas Authority Collateralized Pollution
Control Refunding Revenue Bonds Texas Utility Electric
Series 1992
6.75% 2022 1.89 9,943,830
Colorado River Texas Municipal Water District
Water System Pre-Refunded Revenue Bonds Series A
6.625% 2021 1.81 9,531,366
</TABLE>
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PAGE 9
Making the most of your fund
Average annual total return
(as of June 30, 1994)
1 year 5 years Since inception*
- -4.71% +6.43% +6.54%
*Period from Aug. 18, 1986 to June 30, 1994.
Your investment and return value fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Figures include the effect of the maximum 5% sales charge. This
was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.
Build your assets systematically
To keep your assets growing steadily, one of the best ways to
invest in the fund is by dollar-cost averaging -- a time-tested
strategy that can make market fluctuations work for you. To
dollar-cost average, simply invest a fixed amount of money
regularly. You'll automatically buy more shares when the fund's
share price is low, fewer shares when it is high.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00
Feb 100 18 5.56
Mar 100 17 5.88
Apr 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
Sept 100 21 4.76
Oct 100 20 5.00
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more
shares when the per share market price is low
(arrow in table pointing to September) and fewer shares when the
per share market price is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
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PAGE 10
Your fund's long-term performance
Three ways to benefit from a mutual fund:
o your shares increase in value when the fund's investments do
well
o you receive capital gains when the gains on investments sold
by the fund exceed losses
o you receive income when the fund's interest and short-term
gains exceed its expenses.
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gain distributions to buy additional shares
of the fund or another fund.
How your $10,000 has grown in IDS Insured Tax-Exempt Fund
Average annual total return
(as of June 30, 1994)
Since
1 year 5 years 8/18/86 $16,420
- -4.71% +6.43% +6.54% Insured Tax-Exempt Fund
Lehman Total Return
Muni Index
$10,000
$9,500
'86 '87 '88 '89 '90 '91 '92 '93 '94
Assumes: Holding period from 9/1/86 to 6/30/94. Returns do not
reflect taxes payable on distributions. Also see "Performance" in
the fund's current prospectus. Reinvestment of all income and
capital gain distributions for the fund, with a value of $6,289.
The Lehman Total Return Muni Index is an unmanaged list of
municipal bonds used as a general measure of market performance.
On the chart above you can see how the fund's total return compared
to a widely cited performance index, the Lehman Total Return Muni
Index. In comparing Insured Tax-Exempt Fund to this index, you
should take into account the fact that the fund's performance
reflects the maximum sales charge of 5%, while such charges are not
reflected in the performance of the indexes. If you were actually
to buy individual bonds, any sales charges that you pay would
reduce your total return as well.
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.
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PAGE 11
Independent auditors' report
___________________________________________________________________
The board of trustees and shareholders
IDS Special Tax-Exempt Series Trust:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments in securities,
of IDS Insured Tax-Exempt Fund (a fund within IDS Special Tax-
Exempt Series Trust) as of June 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
June 30, 1994, and the financial highlights for each of the years
in the five-year period ended June 30, 1994, the six months ended
June 30, 1989, each of the years in the two-year period ended
December 31, 1988, and the period from August 18, 1986
(commencement of operations), to December 31, 1986. 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, 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
Insured Tax-Exempt Fund at June 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 June 30,
1994, and the financial highlights for the periods stated in the
first paragraph above, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick
Minneapolis, Minnesota
August 5, 1994
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PAGE 12
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Insured Tax-Exempt Fund
June 30, 1994
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $513,738,663) $526,088,252
Accrued interest receivable 10,212,400
Receivable for investment securities sold 8,184,070
_____________________________________________________________________________________________________________
Total assets 544,484,722
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 9,578,692
Dividends payable to shareholders 242,446
Payable for investment securities purchased 8,848,298
Accrued investment management and services fee 230,956
Accrued distribution fee 8,994
Accrued transfer agency fee 23,036
Other accrued expenses 112,776
_____________________________________________________________________________________________________________
Total liabilities 19,045,198
_____________________________________________________________________________________________________________
Net assets applicable to outstanding shares $525,439,524
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Shares of beneficial interest - $.01 par value, unlimited number of shares authorized;
outstanding 98,163,126 shares $ 981,631
Additional paid-in capital 514,868,773
Undistributed net investment income 5,013
Accumulated net realized loss (Note 1) (2,765,482)
Unrealized appreciation 12,349,589
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding shares $525,439,524
_____________________________________________________________________________________________________________
Net asset value per share $ 5.35
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
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PAGE 13
<TABLE>
<CAPTION>
Financial statements
Statement of operations
IDS Insured Tax-Exempt Fund
Year ended June 30, 1994
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
<S> <C>
Income:
Interest $31,350,502
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 2,772,357
Distribution fee 103,301
Transfer agency fee 261,820
Compensation of trustees 10,049
Compensation of officers 5,139
Custodian fees 16,963
Postage 46,524
Registration fees 121,315
Reports to shareholders 22,873
Audit fees 15,500
Administrative 6,599
Portfolio insurance 130
Other 7,533
_____________________________________________________________________________________________________________
Total expenses 3,390,103
_____________________________________________________________________________________________________________
Investment income -- net 27,960,399
_____________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________
Net realized loss on security transactions (Note 3) (2,099,384)
Net realized gain on closed interest rate futures contracts 1,468,000
_____________________________________________________________________________________________________________
Net realized loss on investments (631,384)
Net change in unrealized appreciation or depreciation (28,613,958)
_____________________________________________________________________________________________________________
Net loss on investments (29,245,342)
_____________________________________________________________________________________________________________
Net decrease in net assets resulting from operations $(1,284,943)
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
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PAGE 14
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Insured Tax-Exempt Fund
Year ended June 30, 1994
_____________________________________________________________________________________________________________
Operations and distributions 1994 1993
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 27,960,399 $ 21,102,522
Net realized loss on investments (631,384) (894,550)
Net change in unrealized appreciation or depreciation (28,613,958) 22,786,464
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations (1,284,943) 42,994,436
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (27,955,386) (21,103,569)
Net realized gain on investments (129,500) --
_____________________________________________________________________________________________________________
Total distributions (28,084,886) (21,103,569)
_____________________________________________________________________________________________________________
Share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
27,036,137 and 30,509,841 shares (Note 2) 153,720,129 166,631,848
Net asset value of 3,605,846 and 2,691,805 shares
issued in reinvestment of distributions 20,296,120 14,717,222
Payments for redemptions of
14,841,541 and 8,624,410 shares (83,052,989) (47,103,860)
_____________________________________________________________________________________________________________
Increase in net assets from share transactions
representing net addition of
15,800,442 and 24,577,236 shares 90,963,260 134,245,210
_____________________________________________________________________________________________________________
Total increase in net assets 61,593,431 156,136,077
Net assets at beginning of year 463,846,093 307,710,016
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$5,013 and $0) $525,439,524 $463,846,093
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
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PAGE 15
Notes to financial statements
IDS Insured Tax-Exempt Fund
___________________________________________________________________
1. Summary of significant accounting policies
IDS Special Tax-Exempt Series Trust was organized as a
Massachusetts business trust April 7, 1986. IDS Special Tax-Exempt
Series Trust is a "series fund" that is presently comprised of six
individual funds, including IDS Insured Tax-Exempt Fund. 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 for which market quotations are not readily available
are valued at fair value according to methods selected in good
faith by the board of trustees. 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.
Futures transactions
In order to gain exposure to or protect itself from changes in the
market, the fund may buy and sell interest rate futures contracts.
Risks of entering into futures contracts include the possibility
that there may be an illiquid market and that a change in the value
of the contract may not 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.
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.
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PAGE 16
Notes to financial statements
IDS Insured Tax-Exempt Fund
___________________________________________________________________
1. Summary of significant accounting policies
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. Also, due to the timing of dividend distributions, the
fiscal year in which amounts are distributed may differ from the
year that the income or realized gains (losses) were recorded
by the fund.
Dividends to shareholders
Dividends from net investment income, declared daily and payable
monthly, are reinvested in additional shares of the fund at net
asset value or payable in cash. 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. Interest income, including level-yield
amortization of premium and discount, is accrued daily. Portfolio
insurance expense is recognized over the premium period.
___________________________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991, the fund pays IDS
Financial Corporation (IDS) 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 0.13% of
average daily net assets.
The fund also pays IDS a distribution fee at an annual rate of $6
per shareholder account and a transfer agency fee at an annual rate
of $15.50 per shareholder account. The transfer agency fee is
reduced by earnings on monies pending shareholder redemptions.
IDS will assume and pay any expenses (except taxes and brokerage
commissions) that exceed the most restrictive applicable state
expense limitation.
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PAGE 17
Notes to financial statements
IDS Insured Tax-Exempt Fund
___________________________________________________________________
2. Expenses and sales charges
Sales charges by IDS Financial Services Inc. for distributing fund
shares were $5,617,954 for the year ended June 30, 1994.
The fund has a retirement plan for its independent trustees. Upon
retirement, trustees receive monthly payments equal to one-half of
the retainer fee for as many months as they served as trustees 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
trustees serve on the board. The retirement plan expense amounted
to $6,057 for the year ended June 30, 1994.
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $288,656,727 and $187,291,824,
respectively, for the year ended June 30, 1994. Realized gains and
losses are determined on an identified cost basis.
___________________________________________________________________
4. Capital loss carryover
For federal income tax purposes, the fund has a capital loss
carryover of $2,130,102 at June 30, 1994, that will expire in 2002
if not offset by subsequent capital gains. It is unlikely the board
of trustees will authorize a distribution of any net realized
capital gains until the available capital loss carryover has been
offset or expires.
___________________________________________________________________
5. Financial highlights
"Financial highlights" showing per share data and selected
information is presented on page 5 of the prospectus.
<PAGE>
PAGE 18
<TABLE>
<CAPTION>
Investments in securities
IDS Insured Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (97.8%)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c)(e) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Alabama (0.6%)
Mobile General Obligation Capital Improvement Warrants Convention Center
Pre-Refunded Series 1990 (AMBAC Insured) 7.125% 2020 $ 3,000,000 $ 3,353,250
_____________________________________________________________________________________________________________________________
Arizona (0.7%)
Chandler Water & Sewer Refunding Revenue Bonds
Series 1991 (FGIC Insured) 7.00 2012 1,250,000 1,349,663
Health Facilities Authority Hospital System Refunding Revenue Bonds
Phoenix Baptist Hospital Series 1992 (MBIA Insured) 6.25 2011 2,150,000 2,167,630
____________
Total 3,517,293
_____________________________________________________________________________________________________________________________
California (9.2%)
Adelanto Improvement Agency Tax Allocation Refunding Bonds
Adelanto Improvement Series B (FGIC Insured) 5.50 2023 2,000,000 1,765,100
Alameda County Certificate of Participation Refunding Bonds
Santa Rita Jail (MBIA Insured) 5.00 2015 3,250,000 2,710,045
Eastern Municipal Water District Riverside County Water & Sewer
Pre-Refunded Revenue Certificates of Participation Series 1991
(FGIC Insured) 6.50 2020 5,460,000 5,965,323
Los Angeles County Metropolitan Transportation Authority Sales Tax
Refunding Revenue Bonds Series A (FGIC Insured) 5.00 2021 1,500,000 1,220,250
Los Angeles Wastewater System Refunding Revenue Bonds Series A
(MBIA Insured) 5.70 2020 4,690,000 4,260,443
Los Angeles Wastewater System Revenue Bonds Series A (MBIA Insured) 5.875 2024 2,500,000 2,318,750
Los Angeles Wastewater System Revenue Bonds Series B (MBIA Insured) 5.60 2020 2,000,000 1,791,740
Orange County Redevelopment Agency Tax Allocation
Refunding Revenue Bonds Southwest Redevelopment Series A
(AMBAC Insured) 5.70 2023 3,000,000 2,712,510
Pittsburg Public Financing Authority Wastewater Refunding Revenue Bonds
Series A (FGIC Insured) 5.125 2015 2,895,000 2,469,493
Pittsburg Redevelopment Agency Los Medanos Development Tax Allocation
Refunding Bonds Series A (AMBAC Insured) 5.25 2015 2,225,000 1,928,630
Pittsburg Redevelopment Agency Los Medanos Development Tax Allocation
Refunding Bonds Series 1993A (AMBAC Insured) 5.00 2017 2,800,000 2,312,800
Rancho Cucamonga Redevelopment Agency Rancho Redevelopment Tax Allocation
Refunding Bonds Series 1994 (MBIA Insured) 5.00 2015 3,485,000 2,919,698
San Jose Redevelopment Agency Merged Area Redevelopment
Tax Allocation Bonds Series 1993 (MBIA Insured) 5.25 2016 1,250,000 1,078,537
San Marcos Public Facility Authority Tax Allocation
Refunding Revenue Bonds Series A (Capital Guaranty Insured) 5.50 2023 3,000,000 2,606,580
San Mateo County Joint Power Financing Authority Lease Revenue Bonds
San Mateo County Health Center Series 1994A (FSA Insured) 5.75 2022 1,500,000 1,369,995
Southern Public Power Authority Transmission Refunding Revenue Bonds
Series 1994B (MBIA Insured) 5.00 2022 1,500,000 1,216,470
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 19
Investments in securities
IDS Insured Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c)(e) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
State Public Works Board Lease Revenue Bonds
Department of Corrections California State Prison
Series B (MBIA Insured) 5.375% 2019 $ 1,230,000 $ 1,065,733
Statewide Community Development Authority Revenue
Certificate of Participation Sutter Health Obligated Group
(MBIA Insured) 5.50 2023 2,750,000 2,414,968
Stockton Certificate of Participation Refunding
Wastewater System (AMBAC Insured) 5.50 2015 2,250,000 2,028,758
Stockton Health Facility Revenue Bonds St. Joseph Medical Center
Series A (MBIA Insured) 5.50 2023 3,000,000 2,649,720
Suisun City Redevelopment Agency Tax Allocation Refunding Bonds
Suisun City Redevelopment (MBIA Insured) 5.50 2023 1,700,000 1,492,532
____________
Total 48,298,075
_____________________________________________________________________________________________________________________________
Colorado (1.1%)
Metro Wastewater Reclamation District Sewer Refunding Bonds
Series 1993B (AMBAC Insured) 4.75 2012 1,750,000 1,465,712
State Board of Trustees of Colleges in Colorado Auxiliary
Facility System Enterprise Revenue Bonds Western State College
Series 1994C (MBIA Insured) 5.625 2015 2,250,000 2,117,003
State Health Facility Authority Hospital Refunding Revenue Bonds
Boulder Community Hospital Series 1994B (MBIA Insured) 5.875 2023 2,370,000 2,226,852
____________
Total 5,809,567
_____________________________________________________________________________________________________________________________
Delaware (2.2%)
Economic Development Pollution Control Refunding Revenue Bonds
Delaware Power & Light Series 1992B (AMBAC Insured) 6.75 2019 10,000,000 10,519,700
Health Facilities Authority Refunding Revenue Bonds
Medical Center of Delaware Series 1989 (MBIA Insured) 7.00 2015 1,000,000 1,071,640
____________
Total 11,591,340
_____________________________________________________________________________________________________________________________
District of Columbia (4.0%)
General Obligation Bonds Series 1992B (MBIA Insured) 6.30 2010 3,840,000 3,879,168
Howard University Revenue Bonds Series A (MBIA Insured) 8.00 2017 1,500,000 1,649,400
Metropolitan Washington Airports Authority Airport System
Revenue Bonds AMT Series 1992A (MBIA Insured) 6.625 2019 8,670,000 8,781,236
Metropolitan Washington Airports Authority Airport System
Revenue Bonds AMT Series 1994A (MBIA Insured) 5.75 2020 7,500,000 6,874,200
____________
Total 21,184,004
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 20
Investments in securities
IDS Insured Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c)(e) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Florida (2.8%)
Alachua County Health Facilities Authority Pre-Refunded Revenue Bonds
Shands Hospital Series 1985A (MBIA Insured) 8.00% 2015 $ 500,000 $ 519,950
Dade County Seaport Authority Revenue Bonds (MBIA Insured) 6.75 2015 5,000,000 5,171,600
Department of Transportation Turnpike Revenue Bonds Series 1991A
(AMBAC Insured) 6.25 2020 1,250,000 1,249,975
Fort Myers Utility System Refunding Revenue Bonds Series 1989A
(BIG Insured) 6.00 2019 2,000,000 1,936,640
Gulf Breeze Local Government Loan Program Boca Raton Series 1985E
(FGIC Insured) 7.75 2015 2,000,000 2,244,100
Lee County Transportation Facilities Pre-Refunded Revenue Bonds
Series 1987 (AMBAC Insured) 8.25 2017 1,500,000 1,610,730
Osceola County Transportation Pre-Refunded Revenue Bonds
Series 1988A (FGIC Insured) 7.70 2013 1,215,000 1,350,011
Palm Beach County Solid Waste Authority Revenue Bonds Series 1984
(BIG Insured) 8.375 2010 500,000 558,840
____________
Total 14,641,846
_____________________________________________________________________________________________________________________________
Georgia (1.9%)
Atlanta Metropolitan Rapid Transit Authority Sales Tax
Pre-Refunded Revenue Bonds Series L (AMBAC Insured) 7.20 2020 3,000,000 3,330,150
Chatham County Hospital Authority Revenue Bonds Memorial Medical Center
Series 1990A (MBIA Insured) 7.00 2021 4,500,000 4,835,880
Municipal Electrical Authority Power Revenue Bonds Series M (BIG Insured) 8.10 2012 1,080,000 1,178,788
Municipal Electrical Authority Special Obligation Refunding Bonds
2nd Crossover Series (AMBAC Insured) 7.80 2020 500,000 549,495
____________
Total 9,894,313
_____________________________________________________________________________________________________________________________
Illinois (4.4%)
Chicago O'Hare International Airport General Revenue Bonds Series 1990A
(AMBAC Insured) 7.50 2016 2,000,000 2,201,340
Chicago O'Hare International Airport Terminal Revenue Bonds (MBIA Insured) 7.625 2010 3,000,000 3,348,180
Chicago Public Building Commission Pre-Refunded Revenue Bonds
(MBIA Insured) 7.70 2008 1,000,000 1,094,960
Chicago Public Building Commission Pre-Refunded Revenue Bonds
Series 1989A (FGIC Insured) 7.75 2006 1,000,000 1,123,940
Chicago Public Building Commission Pre-Refunded Revenue Bonds
Series 1990A (MBIA Insured) 7.125 2015 5,000,000 5,551,200
Regional Transportation Authority General Obligation Bonds Series 1992A
(AMBAC Insured) 6.50 2015 10,000,000 10,108,300
____________
Total 23,427,920
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 21
Investments in securities
IDS Insured Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c)(e) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Indiana (4.1%)
Educational Facilities Authority Pre-Refunded Bonds Valparaiso University
(BIG Insured) 7.80% 2008 $ 500,000 $ 562,140
Indianapolis Airport Authority Revenue Bonds Series 1993 (MBIA Insured) 6.00 2023 6,750,000 6,347,768
Jasper County Pollution Control Refunding Revenue Bonds
Northern Indiana Public Service Series 1989A (MBIA Insured) 7.50 2014 2,675,000 2,834,831
Jasper County Pollution Control Refunding Revenue Bonds
Northern Indiana Public Service Series 1991 (MBIA Insured) 7.10 2017 2,250,000 2,407,275
Marion County Hospital Authority Refunding Revenue Bonds Methodist Hospital
Series 1989 (MBIA Insured) 6.50 2013 4,000,000 4,079,680
State Health Facility Finance Authority Hospital Refunding Revenue Bonds
Columbus Regional Hospital Series 1993 (Capital Guaranty Insured) 7.00 2015 5,000,000 5,344,300
____________
Total 21,575,994
_____________________________________________________________________________________________________________________________
Kansas (2.3%)
Burlington Pollution Control Refunding Revenue Bonds
Kansas Gas & Electric Series 1991 (MBIA Insured) 7.00 2031 10,000,000 10,750,500
Olathe Kansas Facility Refunding Revenue Bonds
Olathe Medical Center Series 1994A (AMBAC Insured) 5.875 2016 1,250,000 1,188,288
____________
Total 11,938,788
_____________________________________________________________________________________________________________________________
Kentucky (0.1%)
Jefferson County Multi-family Housing Revenue Bonds AMT Brownsboro Gardens
Series 1986A (FHA Insured) 8.00 2026 395,000 405,049
Louisville & Jefferson County Airport Authority System Revenue Bonds AMT
(MBIA Insured) 8.50 2017 300,000 332,427
____________
Total 737,476
_____________________________________________________________________________________________________________________________
Louisiana (1.6%)
Energy & Power Authority Power Refunding Revenue Bonds Rodemacher Unit #2
Series 1991 (FGIC Insured) 6.75 2008 7,000,000 7,383,670
New Orleans Audubon Park Commission Aquarium Pre-Refunded Bonds
Series 1988 (MBIA Insured) 7.90 2008 500,000 554,035
New Orleans International Airport Pre-Refunded Revenue Bonds AMT Series A
(FGIC Insured) 8.875 2017 565,000 637,591
____________
Total 8,575,296
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 22
Investments in securities
IDS Insured Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c)(e) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Maryland (1.6%)
Baltimore Refunding Revenue Bonds Wastewater Series 1994A
(FGIC Insured) 5.00% 2022 $ 1,000,000 $ 825,440
Health & Higher Educational Facilities Authority Refunding Revenue
Bonds Greater Baltimore Medical Center (FGIC Insured) 5.00 2019 2,650,000 2,184,554
Health & Higher Educational Facilities Authority Revenue Bonds
Frederick Memorial Hospital Series 1993 (FGIC Insured) 5.00 2028 4,750,000 3,794,585
Health & Higher Educational Facilities Authority Revenue Bonds
Peninsula Regional Medical Center (MBIA Insured) 5.00 2023 2,000,000 1,626,140
____________
Total 8,430,719
_____________________________________________________________________________________________________________________________
Massachusetts (2.6%)
Boston Water & Sewer Commission Revenue Bonds General Subordinate Series A
(BIG Insured) 6.00 2008 2,500,000 2,513,925
Commonwealth General Obligation Pre-Refunded Bonds Consolidated Loan
Series 1989C (AMBAC Insured) 7.00 2009 1,500,000 1,650,090
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Lahey Clinic Medical Center (MBIA Insured) 7.625 2018 2,200,000 2,442,396
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Northeastern University Series 1989C (AMBAC Insured) 7.10 2006 1,000,000 1,088,000
Health & Educational Facilities Authority Revenue Bonds Boston College
Series J (FGIC Insured) 6.625 2021 2,250,000 2,291,917
Industrial Finance Agency Revenue Bonds Brandeis University (MBIA Insured) 6.80 2019 1,700,000 1,752,615
Quincy Refunding Revenue Bonds Quincy Hospital Series 1993 (FSA Insured) 5.25 2016 2,235,000 1,962,710
____________
Total 13,701,653
_____________________________________________________________________________________________________________________________
Michigan (0.8%)
Chippewa Valley School District Macomb County Qualified School Building
Loan Fund Unlimited Tax General Obligation Refunding Bonds
(FGIC Insured) 5.00 2021 2,145,000 1,776,339
Detroit Water Supply System Refunding Revenue Bonds Series 1993
(FGIC Insured) 5.00 2023 1,050,000 858,427
Sandusky County School District Refunding Bonds (AMBAC Insured) 5.25 2021 1,000,000 860,180
Wayne County Charter Airport Revenue Bonds AMT
Detroit Metropolitan Wayne County Airport (FGIC Insured) 8.00 2014 675,000 738,376
____________
Total 4,233,322
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 23
Investments in securities
IDS Insured Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c)(e) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Minnesota (1.4%)
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group Series 1993A (AMBAC Insured) 5.20% 2023 $ 3,000,000 $ 2,545,290
Western Municipal Power Agency Transmission Pre-Refunded Revenue
Bonds Series 1991 (AMBAC Insured) 6.75 2016 4,500,000 4,643,640
____________
Total 7,188,930
_____________________________________________________________________________________________________________________________
Missouri (1.5%)
Kansas City School District Insured Leasehold Revenue Bonds
Capital Improvement (FGIC Insured) 5.00 2014 7,930,000 6,778,643
St. Louis Municipal Finance Leasehold Improvement Revenue Bonds
St. Louis Civil Courts Building Series 1994 (FGIC Insured) 5.75 2013 1,000,000 951,060
____________
Total 7,729,703
_____________________________________________________________________________________________________________________________
Montana (2.2%)
Forsyth Rosebud County Pollution Refunding Revenue Bonds AMT
Puget Sound Power & Light (AMBAC Insured) 7.25 2021 4,000,000 4,323,040
State Board of Investments Payroll Tax Bonds Worker's Compensation Program
Series 1991 (MBIA Insured) 6.875 2020 7,000,000 7,285,460
____________
Total 11,608,500
_____________________________________________________________________________________________________________________________
Nevada (1.9%)
Reno General Obligation Limited Tax Capital Improvement Pre-Refunded Bonds
(AMBAC Insured) 7.40 2007 1,000,000 1,114,310
Washoe County Gas & Water Facilities Refunding Revenue Bonds
Sierra Pacific Power Series 1993B (MBIA Insured) 5.90 2023 9,400,000 8,714,082
____________
Total 9,828,392
_____________________________________________________________________________________________________________________________
New Hampshire (2.5%)
Industrial Development Authority Pollution Control Revenue Bonds AMT
Light & Power Series 1989 (AMBAC Insured) 7.375 2019 5,000,000 5,432,250
State Higher Educational & University System of New Hampshire
(MBIA Insured) 5.75 2024 2,500,000 2,262,950
Turnpike System Refunding Revenue Bonds Series 1991A (FGIC Insured) 6.75 2011 5,000,000 5,262,950
____________
Total 12,958,150
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 24
Investments in securities
IDS Insured Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c)(e) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
New Jersey (0.9%)
Health Care Facilities Finance Authority Revenue Bonds
Newark Bethleham Israel Medical Center Series 1994
(FSA Insured) 6.00% 2024 $ 5,000,000 (d) $ 4,762,500
_____________________________________________________________________________________________________________________________
New Mexico (1.3%)
Farmington Pollution Control Refunding Revenue Bonds
Southern California Edison Series A (MBIA Insured) 5.875 2023 5,750,000 5,354,227
Los Alamos Utility System Revenue Bonds Series 1994A
(FSA Insured) 6.00 2015 1,755,000 (d) 1,690,153
____________
Total 7,044,380
_____________________________________________________________________________________________________________________________
New York (1.2%)
Broome Certificate of Participation Public Safety Facility
Series 1994 (MBIA Insured) 5.25 2022 2,250,000 1,915,807
Metropolitan Transportation Authority Commuter Facility Service
Contract Bonds Series L (AMBAC Insured) 7.50 2017 1,300,000 1,424,007
New York City General Obligation Pre-Refunded Bonds Series A
(FGIC Insured) 8.125 2007 1,145,000 1,279,469
State Urban Development Correctional Facilities Pre-Refunded Revenue Bonds
Series 1 (FSA Insured) 7.50 2020 1,500,000 1,693,650
____________
Total 6,312,933
_____________________________________________________________________________________________________________________________
North Carolina (3.5%)
Charlotte Pre-Refunded Certificates of Participation Convention Facility
Series 1991 (AMBAC Insured) 6.75 2021 3,150,000 3,477,915
Charlotte Convention Facility Refunding Certificate of Participation
Series 1993C (AMBAC Insured) 5.25 2020 5,350,000 4,570,344
Eastern Municipal Power Agency Power System Revenue Bonds
Series 1993A (FGIC Insured) 6.125 2010 3,860,000 3,850,389
Metropolitan Sewerage District of Buncombe County Refunding Revenue Bonds
Series 1993A (FGIC Insured) 5.50 2022 1,400,000 1,245,132
Municipal Power Agency #1 Catawba Electric Refunding Revenue Bonds
Series 1993 (MBIA Insured) 5.75 2020 5,500,000 5,085,740
____________
Total 18,229,520
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 25
Investments in securities
IDS Insured Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c)(e) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
North Dakota (0.3%)
State Building Authority Refunding Lease Revenue Bonds
Series 1993A (AMBAC Insured) 6.00% 2010 $ 1,500,000 $ 1,478,745
_____________________________________________________________________________________________________________________________
Ohio (1.4%)
Clermont County Hospital Facility Refunding Revenue Bonds
Mercy Health System Series A (MBIA Insured) 5.875 2015 1,000,000 955,870
Clermont County Sewer System Refunding Bonds (AMBAC Insured) 5.20 2021 4,000,000 3,452,080
Cuyahoga County Hospital Facility Revenue Bonds
Metrohealth System Series 1989 (MBIA Insured) 6.00 2019 1,500,000 1,456,695
Municipal Electric Generation Agency Joint Venture 5
Revenue Bonds (AMBAC Insured) 5.375 2024 1,480,000 1,300,742
____________
Total 7,165,387
_____________________________________________________________________________________________________________________________
Oklahoma (0.9%)
Moore Public Works Authority Refunding Revenue Bonds Series 1989
(AMBAC Insured) 7.60 2006 2,700,000 3,029,076
Tulsa International Airport General Revenue Bonds Consolidated Fixed Rate
Series 1989 (MBIA Insured) 7.50 2008 1,500,000 1,636,500
____________
Total 4,665,576
_____________________________________________________________________________________________________________________________
Pennsylvania (7.1%)
Allegheny County Airport Revenue Bonds Pittsburgh International
Series D (FGIC Insured) 7.75 2019 2,300,000 2,477,215
Armstrong County Hospital Authority Health Center Refunding Revenue Bonds
Canterbury PL (MBIA Insured) 6.50 2021 2,940,000 2,946,615
Lehigh County General Purpose Authority Fixed Rate Exempt Facility
Pre-Refunded Revenue Bonds Lehigh Pretreatment Plant Series 1984
(FGIC Insured) 7.25 2010 2,000,000 2,183,360
Montgomery County Industrial Development Authority Pollution Control
Refunding Revenue Bonds Philadelphia Electric Series 1991B
(MBIA Insured) 6.70 2021 10,000,000 10,237,300
Pittsburgh Water & Sewer Authority Water & Sewer System
Pre-Refunded Revenue Bonds Series 1991A (FGIC Insured) 6.50 2014 10,000,000 10,894,600
Robinson Township Municipal Authority Water & Sewer Revenue Bonds
(FGIC Insured) 6.00 2019 2,200,000 2,108,700
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 26
Investments in securities
IDS Insured Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c)(e) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
State Higher Educational Facilities Authority Temple University
Revenue Bonds Series 1991-1 (MBIA Insured) 5.75% 2031 $ 3,100,000 $ 2,795,828
Turnpike Commission Pre-Refunded Revenue Bonds Series 1989K (MBIA Insured) 7.50 2012 1,000,000 1,130,610
Turnpike Commission Revenue Bonds Series 1991L (MBIA Insured) 6.00 2015 2,500,000 2,410,475
____________
Total 37,184,703
_____________________________________________________________________________________________________________________________
Tennessee (1.3%)
Johnson County Health & Educational Facility Board Hospital
Refunding Revenue Bonds Johnson County Medical Center Series 1994
(MBIA Insured) 5.00 2013 500,000 425,615
Knox County Health Education & Housing Facility Board Hospital Refunding
Revenue Bonds Fort Sanders Alliance Obligation Group Series 1993
(MBIA Insured) 5.75 2014 7,000,000 6,608,560
____________
Total 7,034,175
_____________________________________________________________________________________________________________________________
Texas (17.4%)
Austin Combine Utility System Pre-Refunded Revenue Bonds (AMBAC Insured) 5.75 2016 2,000,000 1,851,900
Austin Combine Utility System Revenue Bonds (MBIA Insured) 5.25 2018 2,300,000 1,975,838
Austin Combine Utility System Revenue Bonds Series 1987 (BIG Insured) 8.625 2012-17 1,250,000 1,506,227
Brazos River Authority Collateralized Pollution Control
Refunding Revenue Bonds Texas Utility Electric Series 1992
(AMBAC Insured) 6.75 2022 9,750,000 9,943,830
Brazos River Authority Collateralized Pollution Control
Refunding Revenue Bonds Texas Utility Electric Series 1992B
(FGIC Insured) 6.625 2022 6,000,000 6,066,780
Brazos River Authority Collateralized Pollution Control
Refunding Revenue Bonds Texas Utility Electric Series 1992C
(FGIC Insured) 6.70 2022 14,935,000 15,187,402
Colorado River Municipal Water District Water System
Pre-Refunded Revenue Bonds Series A (AMBAC Insured) 6.625 2021 8,900,000 9,531,366
Harris County Health Facilities Development Hospital Revenue Bonds
State Children's Hospital Series 1989A (MBIA Insured) 7.00 2019 1,500,000 1,600,425
Harris County Public Facilities Corporation Detention Facility Mortgage
Pre-Refunded Revenue Bonds (MBIA Insured) 7.80 2011 1,000,000 1,126,250
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 27
Investments in securities
IDS Insured Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c)(e) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Harris County Toll Road Senior Lien Pre-Refunded Revenue Bonds
Series A (AMBAC Insured) 6.50% 2017 $ 8,170,000 $ 8,905,300
Harris County Toll Road Senior Lien Refunding Revenue Bonds
Series A (AMBAC Insured) 6.50 2017 1,530,000 1,541,123
League City General Obligation Refunding & Improvement Bonds Series 1990
(FGIC Insured) 6.25 2013 2,500,000 2,475,450
Lower Colorado River Authority Priority Pre-Refunded Revenue Bonds
Series 1990 (BIG Insured) 7.75 1996-10 600,000 641,424
Matagorda County Navigation District #1 Collateralized Pollution Control
Revenue Bonds Central Power & Light Series 1984A (AMBAC Insured) 7.50 2014 2,500,000 2,771,125
Matagorda County Navigation District #1 Pollution Control
Refunding Revenue Bonds Houston Light & Power Series E (FGIC Insured) 7.20 2018 2,150,000 2,336,384
Matagorda County Navigation District #1 Pollution Control Revenue Bonds
AMT Central Power & Light Series 1990 (AMBAC Insured) 7.50 2020 2,000,000 2,194,020
Municipal Power Agency Refunding Revenue Bonds Series 1991A
(AMBAC Insured) 6.75 2012 5,250,000 5,445,300
North Central State Health Facilities Pre-Refunded Bonds
Children's Medical Center (BIG Insured) 7.875 2018 2,000,000 2,202,980
San Antonio Water Refunding Revenue Bonds (MBIA Insured) 5.50 2018 5,000,000 4,447,100
Tarrant County Health Facility Development Hospital Revenue Bonds
Adventist Health System/Sunbelt Series 1993
(Capital Guaranty Insured) 5.00 2013 1,250,000 1,057,150
Turnpike Authority Dallas North Tollway Pre-Refunded Revenue Bonds
Series 1990 (AMBAC Insured) 6.00 2020 5,000,000 5,199,350
University of Houston System Consolidated Pre-Refunded Revenue Bonds
Series 1990A (MBIA Insured) 7.40 2006 3,160,000 3,501,501
____________
Total 91,508,225
_____________________________________________________________________________________________________________________________
Utah (0.6%)
Intermountain Power Agency Special Obligation Bonds 2nd Crossover Series
(FGIC Insured) 7.25 2017 875,000 931,901
Intermountain Power Authority Power Supply Pre-Refunded Revenue Bonds
Series 1987C (AMBAC Insured) 8.375 2012 900,000 1,003,509
Salt Lake City-County Airport Pre-Refunded Revenue Bonds AMT Series 1989
(FGIC Insured) 7.875 2018 1,000,000 1,111,840
____________
Total 3,047,250
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 28
Investments in securities
IDS Insured Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c)(e) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
Virginia (2.5%)
Industrial Development Authority Chesapeake Public Facility Lease
Revenue Bonds Chesapeake Jail Series 1994 (MBIA Insured) 5.625% 2014 $ 855,000 $ 783,163
Loudoun County Sanitation Authority Waste & Sewer
Refunding Revenue Bonds (MBIA Insured) 5.25 2030 1,435,000 1,196,044
Norfolk Water Revenue Bonds (AMBAC Insured) 5.375 2023 3,905,000 3,368,570
Roanoke Industrial Development Authority Refunding Revenue Bonds
Memorial Hospital Series A (MBIA Insured) 5.00 2024 4,250,000 3,432,003
Southeastern Public Service Authority Pre-Refunded Revenue Bonds
Regional Solid Waste System Series 1989 (BIG Insured) 7.00 2013 4,000,000 4,394,160
____________
Total 13,173,940
_____________________________________________________________________________________________________________________________
Washington (6.5%)
Public Power Supply System Nuclear Project #1 Pre-Refunded Revenue Bonds
Series A (MBIA Insured) 7.50 2015 1,805,000 2,025,625
Public Power Supply System Nuclear Project #1 Refunding Revenue Bonds
Series A (MBIA Insured) 7.50 2015 1,195,000 1,323,415
Public Power Supply System Nuclear Project #1 Refunding Revenue Bonds
Series 1992A (MBIA Insured) 6.25 2017 10,500,000 10,237,605
Public Power Supply System Pre-Refunded Revenue Bonds Nuclear Project #3
Series 1989A (BIG Insured) 7.25 2016 1,000,000 1,112,240
Public Power Supply System Refunding Revenue Bonds Nuclear Project #3
Series 1989A (BIG Insured) 6.00 2018 3,000,000 2,860,830
Snohomish County Public Utility District #1 General System Revenue Bonds
Series 1993 (FGIC Insured) 6.00 2013 12,920,000 12,364,052
Spokane Regional Solid Waste Management System Revenue Bonds AMT
Series 1989 (AMBAC Insured) 7.75 2011 300,000 331,548
Spokane Regional Solid Waste Management System Revenue Bonds AMT
Series 1989 (AMBAC Insured) 7.875 2007 1,250,000 1,390,275
State Health Care Facilities Authority Refunding Revenue Bonds
Dominican Health Service Spokane Series 1993 (Connie Lee Insured) 5.75 2020 2,800,000 2,492,000
____________
Total 34,137,590
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 29
Investments in securities
IDS Insured Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b)(c)(e) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
West Virginia (2.5%)
Board of Regents Registration Fee Pre-Refunded Revenue Bonds Series 1989B
(MBIA Insured) 7.40% 2009 $ 2,000,000 $ 2,228,620
School Building Authority Capital Improvement Pre-Refunded Revenue Bonds
(MBIA Insured) 7.25 2015 3,415,000 3,822,307
School Building Authority Capital Improvement Revenue Bonds Series 1990B
(MBIA Insured) 6.75 2017 5,000,000 5,105,100
State Parkway Economic Development & Tourism Authority Parkway
Pre-Refunded Revenue Bonds Series 1989 (FGIC Insured) 7.125 2019 2,000,000 2,208,020
____________
Total 13,364,047
_____________________________________________________________________________________________________________________________
Wyoming (0.9%)
State Municipal Power Agency Power Supply System Refunding Revenue Bonds
Series 1993A (MBIA Insured) 6.125 2016 5,000,000 4,854,750
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $501,838,663) $514,188,252
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (2.3%)
_____________________________________________________________________________________________________________________________
Issuer (e)(f) Effective Amount Value(a)
yield payable at
maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Municipal notes
Gulf Coast Amoco V.R.D.B.
10-12-17 2.75% $1,400,000 $ 1,400,000
Lincoln County Wyoming Pollution Control V.R.D.B. Exxon
Series 1984A
11-01-14 3.00 500,000 500,000
New York City General Obligation V.R.D.B. Series H-2
08-01-14 3.30 3,700,000 3,700,000
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 30
Investments in securities
IDS Insured Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Short-term securities (continued)
_____________________________________________________________________________________________________________________________
Issuer (e)(f) Annualized Amount Value(a)
yield on date payable at
of purchase maturity
_____________________________________________________________________________________________________________________________
New York City General Obligation V.R.D.B Series H-4
08-01-15 3.30% $3,000,000 $ 3,000,000
New York City General Obligation V.R.D.B. Series H-6
08-01-11 3.30 3,300,000 3,300,000
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $11,900,000) $ 11,900,000
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $513,738,663)(g) $526,088,252
_____________________________________________________________________________________________________________________________
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Investments in bonds, by rating category as a percentage of total bonds, are as follows:
</TABLE>
<TABLE>
<CAPTION>
(Unaudited)
__________________________________________
Rating 06-30-94 06-30-93
_______________________________________________________________________________________________________
<S> <C> <C>
AAA 100% 100%
AA - -
A - -
BBB - -
Non-rated - -
Total 100% 100%
_______________________________________________________________________________________________________
<PAGE>
PAGE 31
Investments in securities
IDS Insured Tax-Exempt Fund
June 30, 1994
_____________________________________________________________________________________________________________________________
Notes to investments in securities (continued)
_____________________________________________________________________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
(d) At June 30, 1994, the cost of securities purchased on a when-issued basis was $6,508,119.
(e) The following abbreviations are used in the portfolio descriptions:
AMT -- Alternative Minimum Tax
V.R.D.B. -- Variable Rate Demand Bond
(f) Interest rate varies to reflect current market conditions; rate shown is the effective rate
on June 30, 1994.
(g) At June 30, 1994, the cost of securities for federal income tax purposes was $513,767,121
and the aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $24,427,424
Unrealized depreciation (12,106,293)
_______________________________________________________________________________________________________
Net unrealized appreciation $12,321,131
_______________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 32
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conversation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposits (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income. Secondary
objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
achieve high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed-income
securities in the lower rated, higher risk bond categories to
provide high current income. Secondary objective is capital
growth.
(icon of) cornucopia
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher
rated, lower risk bond categories,or the equivalent, and in
government bonds.
(icon of) greek column
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PAGE 33
IDS Strategy, Income Fund
Invests primarily in corporate and government bonds to seek high
current income while conserving capital. Also may seek capital
appreciation when consistent with its primary goals.
(icon of) chess piece
IDS Selective Fund
Invests in high quality corporate bonds and other highly-rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests primarily in securities issued or guaranteed as to
principal and interest by the U.S. government, its agencies and
instrumentalities. Seeks a high level of current income and safety
of principal consistent with its type of investments.
(icon of) federal building
IDS Strategy, Short-Term Income Fund
Invests primarily in short-term and intermediate-term bonds and
notes to seek a high level of current income.
(icon of) chess piece
Tax-exempt income investments
These funds provide tax-free income by investing in municipal
bonds. The income is generally free from federal income tax. Risk
varies by bond quality.
IDS High Yield Tax-Exempt Fund
Invests primarily in medium- and lower-quality municipal bonds and
notes.
(icon of) shield with basket of apples enclosed
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities to
provide income to residents of each respective state that is exempt
from federal, state and local income taxes. (New York is the only
state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
<PAGE>
PAGE 34
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government
units, with at least 75 percent in the four highest rated, lowest
risk bond categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the Fund but does not guarantee
the market value of the Fund's shares.
(icon of) shield with eagle head
Growth and income investments
These funds focus on securities of medium to large, well-
established companies that offer long-term growth of capital and
reasonable income from dividends and interest. Moderate risk.
IDS International Fund
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The Fund may invest up to 20
percent of its assets in the U.S. market.
(icon of) three flags
IDS Strategy, Worldwide Growth Fund
Invests primarily in common stocks of companies throughout the
world that offer potential for superior growth. Holding may range
from small- to large-capitalization stocks, including those of
companies involve in areas of rapid economic growth.
(icon of) chess piece
IDS Managed Retirement Fund
Invests in a combination of common stocks, fixed income investments
and money market securities to seek a maximum total return through
a combination of growth of capital and current income.
(icon of) bird in a nest
IDS Equity Plus Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of capital and
income.
(icon of) three apple trees
<PAGE>
PAGE 35
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by IDS research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund
Invests primarily in common stocks of blue chip U.S. companies
representing almost every major sector of the economy. Seeks
current income and growth of capital.
(icon of) building with columns
IDS Strategy, Equity Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) chess piece
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to
provide high current income and growth of income and capital with
reduced volatility.
(icon of) electrical cord
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to provide high
current income and, secondarily to benefit from the growth
potential offered by stock investments.
(icon of) four puzzle pieces
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice
Growth investments
Funds in this group seek capital growth, primarily from common
stocks. They are high risk mutual funds with a potential for high
reward.
<PAGE>
PAGE 36
IDS Discovery Fund
Invests in small and medium-sized, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Strategy, Aggressive Equity Fund
Invests primarily in common stocks of companies that are selected
for their potential for above-average growth. Above-average means
that their growth potential is better, in the opinion of the
Portfolio's investment manager, than the Standard & Poor's
Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS Growth Fund
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) flower
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy. These
companies offer above-average potential for long-term growth.
(icon of) world
IDS New Dimensions Fund
Invests primarily in domestic companies with significant growth
potential due to superiority in technology, marketing or
management. The Fund frequently changes its industry mix.
(icon of) dimension
IDS Progressive Fund
Invests primarily in undervalued common stocks. The Fund holds
stocks for the long-term with the goal of capital growth.
(icon of) shooting star
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against
inflation.
<PAGE>
PAGE 37
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic
companies that explore for, mine and process or distribute gold and
other precious metals. This is the most aggressive and most
speculative IDS mutual fund.
(icon of) cart of precious gems
For more complete information about any of these funds, including
charges and expenses, you can obtain a prospectus by contacting
your financial planner or writing to IDS Shareholder Service, P.O.
Box 534, Minneapolis, MN 55440-0534. Read it carefully before you
invest or send money.
<PAGE>
PAGE 38
Federal income tax information
IDS Insured Tax-Exempt Fund
___________________________________________________________________
The fund is required by the Internal Revenue Code of 1986 to tell
its shareholders about the tax treatment of the dividends it pays
during its fiscal year. Some of the dividends listed below were
reported to you on your year-end statement, last January. Dividends
paid to you since the end of last year will be reported to you on a
tax statement sent next January.
IDS Insured Tax-Exempt Fund
Fiscal year ended June 30, 1994
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 23, 1993 $0.0237
Aug. 23, 1993 0.0248
Sept. 23, 1993 0.0253
Oct. 22, 1993 0.0234
Nov. 23, 1993 0.0263
Dec. 28, 1993 0.0283
Jan. 26, 1994 0.0231
Feb. 24, 1994 0.0255
March 25, 1994 0.0237
April 25, 1994 0.0259
May 25, 1994 0.0244
June 27, 1994 0.0273
Total $0.3017
Taxable dividend -- short-term capital gain taxable as dividend
income.
Payable date Per share
Dec. 28, 1993 $0.0011
Capital gain distribution -- taxable as long-term capital gain.
Payable date Per share
Dec. 28, 1993 $0.0003
Total distributions $0.3031
Federal taxation
Exempt-interest dividends are exempt from federal income taxes and
should not be included in shareholders' gross income.
<PAGE>
PAGE 39
Federal income tax information
IDS Insured Tax-Exempt Fund
___________________________________________________________________
Other taxation
Exempt-interest dividends may be subject to state and local taxes.
Each shareholder should consult a tax adviser about reporting this
income for state and local tax purposes.
Source of income by state
Percentages of income from municipal securities earned by the fund
from various states during the fiscal year ended June 30, 1994 are
listed below.
Alabama 0.688%
Arizona 0.720
California 4.945
Colorado 0.264
Delaware 2.382
Florida 4.339
Georgia 2.101
Illinois 5.271
Indiana 4.878
Kansas 2.238
Kentucky 0.182
Louisiana 1.820
Maryland 0.922
Massachusetts 2.645
Michigan 1.213
Minnesota 2.563
Mississippi 0.024
Missouri 0.703
Montana 2.460
Nevada 2.109
New Hampshire 2.311
New Jersey 0.003
New Mexico 0.828
New York 1.293
North Carolina 4.268
North Dakota 0.288
Ohio 1.159
Oklahoma 1.015
Pennsylvania 8.366
South Carolina 0.449
Tennessee 0.953
Texas 19.248
Utah 0.695
Virginia 1.519
Washington 7.969
Washington, DC 3.015
West Virginia 3.008
Wisconsin 0.080
Wyoming 1.066
<PAGE>
PAGE 40
Quick telephone reference
IDS Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
IDS Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
IDS Infoline
Automated account information (TouchToneR phones only), including
current fund prices and performance, account values and recent
account transactions
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 671-1630
Your IDS financial planner:
IDS Insured Tax-Exempt Fund
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
PAGE 41
STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report and
prospectus are placed
in blue strip at the top
of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described in
annual report and prospectus. parentheses.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
