1998 annual report
IDS
Insured
Tax-Exempt
Fund
(prospectus enclosed)
(icon of) shield with star
The goal of IDS Insured Tax-Exempt Fund, a part of IDS Special Tax-Exempt Series
Trust, is 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. Insured
securities fluctuate in market value as interest rates change. (This annual
report includes a prospectus that describes in detail the Fund's objective,
investment policies, risks, sales charges, fees and other matters of interest.
Please read the prospectus carefully before you invest or send money.)
American Express Financial Advisors
Distributed by American Express Financial Advisors Inc.
<PAGE>
(icon of) shield with star
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 the Fund receives
principal and interest payments when they are due. Along the way, shareholders
enjoy regular income that is generally free from federal income tax.
<PAGE>
Contents
1998 annual report
From the chairman 4
From the portfolio manager 4
The Fund's ten largest holdings 6
Making the most of the Fund 7
The Fund's long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 22
IDS mutual funds 39
Federal income tax information 43
1998 prospectus
The Fund in brief 3p
Goal 3p
Investment policies and risks 3p
Manager and distributor 3p
Portfolio manager 3p
Alternative purchase arrangements 4p
Sales charge and Fund expenses 5p
Performance 7p
Financial highlights 7p
Total returns 9p
Yield 11p
Investment policies and risks 12p
Facts about investments and their risks 12p
Alternative investment option 16p
Valuing Fund shares 17p
How to purchase, exchange or redeem shares 18p
Alternative purchase arrangements 18p
How to purchase shares 21p
How to exchange shares 23p
How to redeem shares 23p
Reductions and waivers of the sales charge 28p
Special shareholder services 32p
Services 32p
Quick telephone reference 32p
Distributions and taxes 33p
Dividend and capital gain distributions 33p
Reinvestments 34p
Taxes 35p
How to determine the correct TIN 37p
How the Fund is organized 38p
Shares 38p
Voting rights 38p
Shareholder meetings 38p
Board members and officers 38p
Investment manager 40p
Administrator and transfer agent 40p
Distributor 41p
About American Express Financial Corporation 42p
General information 42p
Year 2000 43p
Appendices 44p
1998 Federal tax-exempt and taxable
equivalent yield calculations 44p
Descriptions of derivative instruments 46p
The purpose of this annual report is to tell investors how the Fund
performed.
(icon of)one open book inside of another
The prospectus, which is bound into the middle of this annual report,
describes the Fund in detail.
(This annual report is not part of the prospectus.)
<PAGE>
To our shareholders
From the chairman
If you're an experienced investor, you know that the past few years have
been unusually strong in many financial markets. Perhaps just as
important, history shows that bull markets don't last forever. Though
they're often unpredictable, declines -- whether they're brief or
long-lasting, moderate or substantial -- are always a possibility. We saw
evidence of that last October, when financial turmoil in Southeast Asia
sparked a sharp decline in worldwide financial markets, including the U.S.
The potential for such volatility reinforces the need for investors to
review periodically their long-term goals and examine whether their
investment program remains on track to achieving them. Your quarterly
investment statements are one part of that monitoring process. The other
is a meeting with your American Express financial advisor. That becomes
more important if there's a major change in your financial situation or in
the financial markets.
William R. Pearce
(picture of) William R. Pearce
William R. Pearce
Chairman of the board
<PAGE>
From the portfolio manager
A generally strong bond market led to a very productive fiscal year for
IDS Insured Tax-Exempt Fund. For investors in the Funds' Class A shares,
the total return (which includes net asset value change and dividends) was
7.6% for the July 1997 through June 1998 period.
Despite a continuation of solid economic growth, which many observers
thought would put upward pressure on consumer prices, inflation remained
remarkably tame throughout the 12 months. Bolstering the low-inflation
outlook over the winter was the financial turmoil in Asian markets, which
reinforced the case for falling prices of imported goods as well as
somewhat slower economic growth in the U.S. In addition, the Asian
situation spawned a "flight to quality" by foreign investors, who, seeking
a safe haven for their investments, moved money into U.S. bonds, lending
further support for the market.
Rates down, bonds up
As a result, long-term interest rates, aside from a couple of brief,
moderate run-ups, declined substantially. In fact, yields on municipal
bonds reached a 25-year low during the period. Bond prices, which move in
the opposite direction of interest rates, rose accordingly, boosting the
Fund's net asset value. On the other hand, the rate decline ultimately
depressed the Fund's dividend payments slightly. Compared to most
municipal bond funds, however, the dividend level held up quite well.
Looking at the technical factors in the market, the supply of new issues
was substantial. Fortunately, demand from both institutional and
individual buyers was equally strong. For the most part, I avoided
purchasing bonds issued by states without income taxes, concentrating
instead on securities issued by high-tax states. I also kept a low level
of cash reserves (5% or less) in the portfolio, a strategy that enhanced
overall performance during the period.
Looking to the current fiscal year, at this point (mid-July) inflation
remains well under control while the economy continues to grow at a solid
rate. Should the economy stay strong, which I expect, upward pressure on
inflation is likely to increase, perhaps prompting the Federal Reserve
Board to push up short-term interest rates. In light of that possibility,
I plan to continue my emphasis on maintaining the Fund's dividend and
conserving shareholders' capital.
Paul B. Hylle
(picture of) Paul B. Hylle
Paul B. Hylle
Portfolio Manager
(This annual report is not part of the prospectus.)
<PAGE>
Class A
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1998 $5.63
June 30, 1997 $5.51
Increase $0.12
Distributions
July 1, 1997 - June 30, 1998
From income $0.29
From capital gains $ --
Total distributions $0.29
Total return* +7.6%**
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1998 $5.63
June 30, 1997 $5.51
Increase $0.12
Distributions
July 1, 1997 - June 30, 1998
From income $0.25
From capital gains $ --
Total distributions $0.25
Total return* +6.8%**
Class Y
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1998 $5.64
June 30, 1997 $5.52
Increase $0.12
Distributions
July 1, 1997 - June 30, 1998
From income $0.30
From capital gains $ --
Total distributions $0.30
Total return* +7.7%**
* The prospectus discusses the effect of sales charges, if any, on the
various classes.
** The total return is a hypothetical investment in the Fund with all
distributions reinvested.
(This annual report is not part of the prospectus.)
<PAGE>
The Fund's ten largest holdings
Percent Value
(of Fund's net assets) (as of June 30, 1998)
Brazos River Texas Authority Collateralized Pollution Control
Refunding Revenue Bonds Texas Utility Electric Series 1992C A.M.T.
6.70% 2022 3.29% $16,403,110
New York State Energy Research & Development Authority
Solid Waste Development Revenue Bonds State
Gas & Electric Company A.M.T.
5.70% 2028 2.33 11,627,685
Pittsburgh Pennsylvania Water & Sewer Authority System
Pre-refunded Revenue Bonds Series 1991A
6.50% 2014 2.19 10,913,000
Metropolitan Washington D.C. Airports Authority Airport System
Revenue Bonds Series 1992A A.M.T.
6.625% 2019 2.06 10,307,458
San Diego County California Certificate of Participation
Regional Authority Bonds Mt. Tower
Series 1991 Inverse Floater
6.36% 2019 1.94 9,662,220
Colorado River Texas Municipal Water District
Water System Pre-refunded Revenue Bonds Series 1991A
6.625% 2021 1.89 9,453,313
Harris County Texas Toll Road Senior Lien
Pre-refunded Revenue Bonds Series 1992A
6.50% 2017 1.81 9,048,193
Austin Texas Combined Utilities System Refunding
Revenue Bonds Series 1994
5.75% 2024 1.78 8,872,045
Louisiana Energy & Power Authority Refunding
Revenue Bonds Rodemacher Unit 2 Series 1991
6.75% 2008 1.52 7,566,930
Houston Texas Water & Sewer System Junior Lien
Refunding Revenue Bonds Series 1997A
5.25% 2022 1.45 7,228,097
Note: The Fund's investment income from certain securities may be
subject to the Alternative Minimum Tax (A.M.T.).
For further detail about these holdings, please refer to the section
entitled "Investments in securities" herein.
(icon of) pie chart
The ten holdings listed here make up 20.26% of the Fund's net assets
(This annual report is not part of the prospectus.)
<PAGE>
Making the most of the Fund
Build your assets systematically
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.
Using this strategy does not ensure a profit or avoid a loss if the marke
declines, and requires that you be able to keep on investing on a regular
basis, even when the price of your shares falls or the market declines.
Investing in this manner 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
invested market price purchased
Jan $100 $20 5.00 XXXXX
Feb 100 18 5.56 XXXXXx
March 100 17 5.88 XXXXXx
April 100 15 6.67 XXXXXXx
May 100 16 6.25 XXXXXXx
June 100 18 5.56 XXXXXx
July 100 17 5.88 XXXXXx
Aug 100 19 5.26 XXXXXx
Sept 100 21 4.76 XXXXx
Oct 100 20 5.00 XXXXX
(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.
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 stock dividends, 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.
(This annual report is not part of the prospectus.)
<PAGE>
The Fund's long-term performance
How your $10,000 has grown in IDS Insured Tax-Exempt Fund
$20,000
X $19,968
Insured Tax-Exempt Fund
Class A
X Lehman Brothers
Municipal Bond Index
$10,000
$9,500
'88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98
Average annual total return
(as of June 30, 1998)
1 year Since 5 years 10 years
inception*
Class A +2.22% --% +4.46% +7.16%
Class B +2.80% +4.95%* --% --%
Class Y +7.74% +6.66%* --% --%
* Inception date was March 20, 1995.
Assumes: o Holding period from 7/1/88 to 6/30/98.
o Returns do not reflect taxes payable on distributions.
o Reinvestment of all income and capital gain distributions for
the Fund, with a value of $8,757. Also see "Performance"
in the Fund's current prospectus.
Lehman Brothers Municipal Bond Index is an unmanaged index made up of a
representative list of general obligation, revenue, insured and
pre-refunded bonds. The index is frequently used as a general measure of
tax-exempt bond market performance.
On the graph above you can see how the Fund's total return compared to a
widely cited performance index, the Lehman Brothers Municipal Bond Index.
In comparing Insured Tax-Exempt Fund (Class A) 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 index.
Your investment and return values fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Average annual
total return figures reflect the impact of the applicable sales charge up
to a maximum of 5%. This was a period of widely fluctuating security
prices. Past performance is no guarantee of future results.
(This annual report is not part of the prospectus.)
<PAGE>
The financial statements contained in Post-Effective Amendment #30 to
Registration Statement No.33-5102 filed on or about August 28, 1998, are
incorporated herein by reference.
<PAGE>
IDS mutual funds
Global/International funds
Funds in this group seek capital growth and/or income by investing primarily in
foreign securities. Foreign investments may be subject to currency fluctuations
and political and economic risks of the countries in which the investments are
made. They are high risk mutual funds with a potential for high reward.
IDS Emerging Markets Fund
Invests in a Portfolio comprised primarily of stocks of companies in developing
countries throughout the world that are believed to offer growth potential.
Seeks to provide long-term growth of capital.
(icon of) world with countries
IDS Global Growth Fund
Invests in a Portfolio comprised primarily of 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 International Fund
Invests primarily in common stocks of foreign companies that offer potential for
superior growth. The Fund may invest up to 20% of its assets in the U.S. market.
(icon of) three flags
IDS Global Balanced Fund
Invests in stocks and bonds in, for the most part, major markets throughout the
world, including the U.S. Seeks to provide a balance of growth of capital and
current income.
(icon of) scale of globes
IDS Global Bond Fund
Invests in a Portfolio comprised primarily of debt securities of U.S. and
foreign issuers to seek high total return through income and growth of capital.
(icon of) globe
Growth funds
Funds in this group seek capital growth, primarily from common stocks. They are
high risk mutual funds with a potential for high reward.
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. A
highly aggressive and speculative fund that seeks long-term growth of capital.
(icon of) cart of precious gems
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies emphasizing
technological innovation and productivity enhancement. Buys and holds larger
growth-oriented stocks.
(icon of) ship
IDS Small Company Index Fund
Invests in all or a representative group of the equity securities comprising the
S&P SmallCap 600 Index, as it strives to provide long-term capital appreciation.
(icon of) building
IDS Strategy Aggressive 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 S&P 500 Stock Index.
(icon of) chess piece
IDS Research Opportunities Fund
Invests in a Portfolio comprised primarily of equity securities of companies
included in the S&P 500 Stock Index that are believed to have strong growth
potential. The Portfolio is managed using a research methodology by the Research
Department of AEFC. Goal is long-term appreciation.
(icon of) magnifying glass
(This annual report is not part of the prospectus.)
IDS Growth Fund
Invests in a Portfolio comprised primarily of companies that have above-average
potential for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) trees
IDS New Dimensions Fund
Invests in a Portfolio comprised primarily of 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
Growth & income funds
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. Foreign investments may be subject to currency fluctuations and
political and economic risks of the countries in which the investments are made.
IDS Equity Select Fund
Invests primarily in a combination of moderate growth stocks that generaly pay
dividends and bonds. Seeks growth of capital and income.
(icon of) three pine trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities purchased are
those recommended by our 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 Managed Allocation Fund
Invests in a Portfolio comprised primarily of U.S. equity securities, U.S. and
foreign debt securities, foreign equity securities and money market instruments.
The Fund provides diversification among these major investment categories and
has a target mix that represents the way the Fund's investments will be
allocated over the long term. Seeks maximum total return.
(icon of) gyroscope
IDS Stock Fund
Invests in a Portfolio comprised primarily of common stock of companies
representing many sectors of the economy. Seeks current income and growth of
capital.
(icon of) building with columns
IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential for growth
of capital and income.
(icon of) three growing flowers
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek high current
income and growth of income and capital with reduced volatility.
(icon of) light bulb
IDS Diversified Equity Income Fund
Invests in a Portfolio comprised primarily in high-yielding common stocks to
seek high current income and, secondarily, to benefit from the growth potential
offered by stock investments.
(icon of) two puzzle pieces
IDS Mutual
Invests in a Portfolio that seeks to 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
(This annual report is not part of the prospectus.)
Income funds
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 Extra Income Fund
Invests in a Portfolio comprised mainly of long-term, high-yielding corporate
fixed-income securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) two coins
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
IDS Selective Fund
Invests in a Portfolio comprised primarily of 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 in a Portfolio comprised primarily of securities issued or guaranteed as
to the timely payment of 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) shield with eagle head
Tax-exempt income funds
These funds provide tax-free income by investing in municipal bonds. The income
is generally free from federal income tax, but a portion of the income may be
subject to state and local taxes. Risk varies by bond quality.
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government units, with at
least 75% 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 star
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
IDS High Yield Tax-Exempt Fund
Invests in a Portfolio comprised primarily of medium- and lower-quality
municipal bonds and notes. Lower-quality securities generally involve greater
risk of principal and income.
(icon of) shield with basket of apples enclosed
IDS Intermediate Tax-Exempt Fund
Invests in mainly investment-grade bonds and other debt securities with
intermediate-term maturities issued by state and local government units. Goal is
to seek a high level of current income exempt from federal taxes.
(icon of) shield with tree enclosed
(This annual report is not part of the prospectus.)
Money market funds
These money market funds have three main goals: conservation of capital,
constant liquidity and the highest possible current income consistent with these
objectives. An investment in these funds is neither insured nor guaranteed by
the U.S. government, and there can be no assurance that these funds will be able
to maintain a stable net asset value of $1.00 per share. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial paper,
bankers' acceptances, certificates of deposit (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
For more complete information about any of these funds, including charges and
expenses, you can obtain a prospectus by contacting your financial advisor or
writing to American Express Shareholder Service, P.O. Box 534, Minneapolis, MN
55440-0534. Read it carefully before you invest or send money.
<PAGE>
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, 1998
Class A
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 25, 1997 $0.02688
Aug. 27, 1997 0.02626
Sept. 25, 1997 0.02321
Oct. 28, 1997 0.02568
Nov. 25, 1997 0.02221
Dec. 26, 1997 0.02394
Jan. 28, 1998 0.02504
Feb. 26, 1998 0.02463
March 26, 1998 0.02144
April 28, 1998 0.02590
May 27, 1998 0.02196
June 25, 1998 0.02253
Total $0.28968
Taxable dividend -- income distribution taxable as dividend income.
Payable date Per share
Dec. 26, 1997 $0.00044
Total distributions $0.29012
(This annual report is not part of the prospectus.)
<PAGE>
Class B
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 25, 1997 $0.02356
Aug. 27, 1997 0.02245
Sept. 25, 1997 0.01989
Oct. 28, 1997 0.02191
Nov. 25, 1997 0.01900
Dec. 26, 1997 0.02035
Jan. 28, 1998 0.02120
Feb. 26, 1998 0.02123
March 26, 1998 0.01819
April 28, 1998 0.02208
May 27, 1998 0.01861
June 25, 1998 0.01916
Total $0.24763
Taxable dividend -- income distribution taxable as dividend income.
Payable date Per share
Dec. 26, 1997 $0.00044
Total distributions $0.24807
(This annual report is not part of the prospectus.)
<PAGE>
Class Y
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 25, 1997 $0.02746
Aug. 27, 1997 0.02670
Sept. 25, 1997 0.02353
Oct. 28, 1997 0.02637
Nov. 25, 1997 0.02304
Dec. 26, 1997 0.02468
Jan. 28, 1998 0.02579
Feb. 26, 1998 0.02521
March 26, 1998 0.02199
April 28, 1998 0.02680
May 27, 1998 0.02254
June 25, 1998 0.02322
Total $0.29733
Taxable dividend -- income distribution taxable as dividend income.
Payable date Per share
Dec. 26, 1997 $0.00044
Total distributions $0.29777
Federal taxation
Exempt-interest dividends are exempt from federal income taxes and should
not be included in shareholders' gross income.
Other taxation
Exempt-interest dividends may be subject to state and local taxes. Each
shareholder should consult a tax advisor about reporting this income for
state and local tax purposes.
(This annual report is not part of the prospectus.)
<PAGE>
Federal income tax information
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, 1998 are listed
below.
Alabama 0.751%
Alaska 1.550
Arizona 1.719
Arkan 0.246
California 11.781
Colorado 2.164
Delaware 0.244
Florida 2.206
Georgia 3.966
Hawaii 0.193
Illinois 3.273
Indiana 2.195
Kansas 0.284
Louisiana 1.831
Maine 0.376
Maryland 0.006
Massachusetts 5.001
Michigan 3.376
Minnesota 2.090
Mississippi 0.422
Missouri 0.073
Montana 2.126
Nevada 0.975
New Hampshire 1.278
New Jersey 0.011
New Mexico 0.217
New York 8.087
North Carolina 1.377
North Dakota 0.819
Ohio 1.289
Oklahoma 1.173
Oregon 0.003
Pennsylvania 3.760
Rhode Island 0.592
South Carolina 0.235
Tennessee 1.231
Texas 20.811
Utah 0.114
Virginia 3.458
Washington 2.107
Washington, DC 3.093
West Virginia 3.052
Wisconsin 0.397
Wyoming 0.048
(This annual report is not part of the prospectus.)
<PAGE>
Quick telephone reference
American Express Redemptions and exchanges, National/Minnesota
Financial Advisors dividend payments or 800-437-3133
Telephone Transaction reinvestments and automatic
Service payment arrangements Mpls./St. Paul area:
671-3800
TTY Service For the hearing impaired 800-846-4852
American Express Automated account information 800-862-7919
Financial Advisors (TouchTone(R) phones only),
Easy Access Line including current fund prices
and performance, account values
and recent account transactions
You may experience delays when call volumes are high.
<PAGE>
AMERICAN EXPRESS Financial Advisors
IDS Insured Tax-Exempt Fund
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
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 are
placed in a 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. 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.
