IDS State
Tax-Exempt
Funds
Tax-exempt funds from the
following states:
California
Massachusetts
Michigan
Minnesota
New York
Ohio
1997 SEMIANNUAL REPORT
The goal of each Fund is to provide a high level of income generally exempt from
federal income tax as well as from the respective state and local income tax. A
portion of each Fund's assets may be invested in bonds whose interest is subject
to the alternative minimum tax computation.
AMERICAN EXPRESS Financial Advisors
Distributed by American Express Financial Advisors Inc.
(icon of) shield with U.S. enclosed
<PAGE>
(icon of) shield with U.S. enclosed
Twice the tax relief
Many people who want to reduce their tax burden favor municipal bonds because
the interest they pay is generally free from federal tax. If you want to reduce
state tax, too, you can invest in municipal bonds in the state you reside.
Investments in municipal bonds are one of the best tax-advantaged investments
still available to individuals. What's more, the money you invest is typically
used by municipalities to fund projects such as schools and highways. So, with
this investment, the benefits reach well beyond your pocketbook.
Contents
From the chairman 3
From the portfolio manager 3
Ten largest holdings 6
Financial statements 12
Notes to financial statements 19
Investments in securities 37
Board members and officers 67
IDS mutual funds 68
<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 stock markets, including the U.S.
That fact 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 powerful rally by the U.S. bond market led to a very productive six
months for the IDS State Tax-Exempt Funds. For investors in the Funds'
Class A shares, the total returns (which include net asset value change
and dividends) ranged from 4.9% to 5.7% for the July through December 1997
period -- the first half of the fiscal year.
Despite a continuation of solid economic growth, which many observers
thought would put upward pressure on consumer prices, inflation remained
remarkably tame throughout the six months. Bolstering the low-inflation
outlook during November and December 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 to the market.
Rates down, bonds up
As a result, long-term interest rates, aside from a moderate run-up in
August, declined substantially during the period. In fact, yields on
municipal bonds reached a 25-year low by year-end. Bond prices, which move
in the opposite direction of interest rates, rose accordingly, boosting
the Funds' net asset values. On the other hand, the rate decline
ultimately depressed the Funds' 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. Overall, I concentrated purchases in
higher-quality issues, given the fact that lower-quality bonds offered
only minimally higher yields. I kept a low level of cash reserves (5% or
less) in all the Funds, a strategy that enhanced over all performance
during the period.
State updates
Consistent with the generally strong national economy, all of the states
represented by the Funds enjoyed good fiscal health. Reflecting that fact,
the unemployment level continued to decline in California, while remaining
below the national average in Minnesota, Michigan and Massachusetts. In
New York, reserves in the state's "rainy day" fund reached an all-time
high, and in Ohio, there was a budget surplus at the end of 1997. Those
and other positive factors resulted in a trend toward upgrading of bond
quality by rating agencies, which provided support for municipal bond
prices.
As the second half of the fiscal year begins, inflation appears to remain
well under control. Assuming that continues, the level of long-term
interest rates shouldn't present a serious problem for the bond market in
the months ahead. At the same time, given how much rates came down in
1997, I think a similar decline is unlikely this year. Therefore, I plan
to continue my emphasis on preserving investors' capital and the Funds'
dividends, which I expect to provide the bulk of the return in 1998.
Paul B. Hylle
(picture of) Paul B. Hylle
Paul B. Hylle
Portfolio manager
<PAGE>
To our shareholders
California
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1997 $5.36
June 30, 1997 $5.24
Increase $0.12
Distributions
July 1, 1997 - Dec. 31, 1997
From income $0.15
From capital gains $ --
Total distributions $0.15
Total return* +5.1**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1997 $5.36
June 30, 1996 $5.24
Increase $0.12
Distributions
July 1, 1997 - Dec. 31, 1997
From income $0.13
From capital gains $ --
Total distributions $0.13
Total return* +4.7**
Massachusetts
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1997 $5.56
June 30, 1997 $5.42
Increase $0.14
Distributions
July 1, 1997 - Dec. 31, 1997
From income $0.14
From capital gains $ --
Total distributions $0.14
Total return* +5.3**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1997 $5.56
June 30, 1997 $5.42
Increase $0.14
Distributions
July 1, 1997 - Dec. 31, 1997
From income $0.12
From capital gains $ --
Total distributions $0.12
Total return* +4.9**
Michigan
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1997 $5.57
June 30, 1997 $5.44
Increase $0.13
Distributions
July 1, 1997 - Dec. 31, 1997
From income $0.14
From capital gains $ --
Total distributions $0.14
Total return* +4.9**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1997 $5.57
June 30, 1997 $5.44
Increase $0.13
Distributions
July 1, 1997 - Dec. 31, 1997
From income $0.12
From capital gains $ --
Total distributions $0.12
Total return* +4.5**
*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.
Minnesota
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1997 $5.42
June 30, 1997 $5.30
Increase $0.12
Distributions
July 1, 1997 - Dec. 31, 1997
From income $0.15
From capital gains $ --
Total distributions $0.15
Total return* +5.2**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1997 $5.42
June 30, 1997 $5.30
Increase $0.12
Distributions
July 1, 1997 - Dec. 31, 1997
From income $0.13
From capital gains $ --
Total distributions $0.13
Total return* +4.8**
New York
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1997 $5.31
June 30, 1997 $5.15
Increase $0.16
Distributions
July 1, 1997 - Dec. 31, 1997
From income $0.14
From capital gains $ --
Total distributions $0.14
Total return* +5.7**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1997 $5.31
June 30, 1997 $5.15
Increase $0.16
Distributions
July 1, 1997 - Dec. 31, 1997
From income $0.12
From capital gains $ --
Total distributions $0.12
Total return* +5.3**
Ohio
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1997 $5.51
June 30, 1997 $5.38
Increase $0.13
Distributions
July 1, 1997 - Dec. 31, 1997
From income $0.14
From capital gains $ --
Total distributions $0.14
Total return* +5.3**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1997 $5.51
June 30, 1997 $5.38
Increase $0.13
Distributions
July 1, 1997 - Dec. 31, 1997
From income $0.12
From capital gains $ --
Total distributions $0.12
Total return* +4.9
*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.
<PAGE>
<TABLE>
<CAPTION>
The Fund's ten largest holdings
IDS California Tax-Exempt Fund
Percent Value
(of Fund's net assets) (as of Dec. 31, 1997)
Anaheim Public Finance Authority Revenue Bonds
Series 2 Electric Utilities San Juan
<S> <C> <C>
5.75% 2022 4.61% $11,558,985
Long Beach Harbor Revenue Bonds
Series 1989A A.M.T.
7.25% 2019 2.88 7,214,830
Los Angeles Department of Water & Power
Electric Plant Revenue Bonds Series 1990
7.125% 2030 2.82 7,064,005
Statewide Community Development Authority
Revenue Certificate of Participation
St. Joseph Health System Group
6.50% 2015 2.50 6,275,060
Statewide Community Development Authority
Health Facilities Revenue Bonds Unihealth America
Series 1993A Inverse Floater
7.46% 2011 2.34 5,868,750
Los Angeles Convention & Exhibition Center
Pre-refunded Certificate of Participation Series 1989A
7.00% 2020 2.12 5,316,000
University of Southern California Educational
Facilities Authority Pre-refunded Revenue Bonds
Series 1989B
6.75% 2015 2.11 5,304,650
San Diego Regional Transportation Commission
Sales Tax Pre-refunded Revenue Bonds
Limited Tax Series 1989A
6.25% 2008 2.06 5,181,806
Rancho Mirage Joint Powers Finance Authority
Certificate of Participation
Eisenhower Memorial Hospital
7.00% 2022 1.91 4,786,860
Fontana Redevelopment Agency Refunding
Certificate of Participation Police Facility Series 1993
5.625% 2016 1.84 4,611,150
Note: The Fund's investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.).
(icon of) pie chart
The ten holdings listed here make up 25.19% of the Fund's net assets
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The Fund's ten largest holdings
IDS Massachusetts Tax-Exempt Fund
Percent Value
(of Fund's net assets) (as of Dec. 31, 1997)
Boston City Hospital Refunding Revenue Bonds
Series B
<S> <C> <C> <C>
5.75% 2023 4.01% $3,060,660
Health & Educational Facilities Authority
Revenue Bonds Suffolk University Series B
6.35% 2022 3.56 2,711,342
Health & Educational Facilities Authority
Revenue Bonds Cape Cod Health System Series A
5.25% 2021 3.25 2,479,675
Health & Educational Facilities Authority
Revenue Bonds Boston College Series J
6.625% 2021 2.85 2,177,240
Industrial Finance Agency Pollution Control
Refunding Revenue Bonds Eastern Edison
Series 1993
5.875% 2008 2.70 2,055,860
Health & Educational Facilities Authority
Revenue Bonds Charlton Memorial Hospital
Series 1991B
7.25% 2013 2.53 1,928,203
Municipal Wholesale Electric Power Supply System
Refunding Revenue Bonds Series B
4.75% 2011 2.26 1,723,453
Bay Transportation Authority General Transportation
System Refunding Bonds Series 1992B
6.20% 2016 2.25 1,716,990
North Attleborough Unlimited General Obligation Bonds
Series 1997
5.25% 2017 2.23 1,700,175
Industrial Finance Agency Resource Recovery
Revenue Bonds SEMASS Series 1991A
9.00% 2015 2.22 1,695,630
Note: The Fund's investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.).
(icon of) pie chart
The ten holdings listed here make up 27.86% of the Fund's net assets
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The Fund's ten largest holdings
IDS Michigan Tax-Exempt Fund
Percent Value
(of Fund's net assets) (as of Dec. 31, 1997)
Romulus Township School District Unlimited Tax
General Obligation Refunding Bonds
<S> <C> <C>
5.75% 2022 3.22% $2,602,850
State Building Authority Refunding Revenue Bonds
Series 1991I
6.25% 2020 2.92 2,356,706
Detroit Sewer Disposal Revenue Bonds
5.70% 2023 2.56 2,065,120
Grand Ledge Public Schools Unlimited Tax General
Obligation Refunding Bonds Counties of Eaton,
Clinton & Ionia Series 1995
5.375% 2024 2.50 2,022,520
State Hospital Finance Authority Hospital Pre-refunded
Revenue Bonds McLaren Obligated Group Series 1991A
7.50% 2021 2.45 1,979,985
State Strategic Fund Limited Tax Obligation Refunding
Revenue Bonds Ford Motor Series 1991A
7.10% 2006 2.41 1,949,706
Monroe County Pollution Control Revenue Bonds Detroit Edison Fermi 2
Plants Series CC A.M.T.
7.50% 2019 2.35 1,896,877
Battle Creek Water Supply System
Pre-refunded Revenue Bonds Series 1990B
6.375% 2008-10 2.10 1,699,975
Buena Vista School District Saginaw County
School Building & Site Unlimited Tax
General Obligation Pre-refunded Bonds Series 1991
7.20% 2016 2.07 1,671,585
Northville Public Schools Unlimited Tax
General Obligation Bonds Series 1991B
7.00% 2008 2.05 1,659,345
Note: The Fund's investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.).
(icon of) pie chart
The ten holdings listed here make up 24.63% of the Fund's net assets
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The Fund's ten largest holdings
IDS Minnesota Tax-Exempt Fund
Percent Value
(of Fund's net assets) (as of Dec. 31, 1997)
State University Board of Regents
General Obligation Bonds Series 1996A
<S> <C> <C>
5.50% 2021 3.26% $13,286,625
Minneapolis & St. Paul Housing & Redevelopment
Authority Health Care System Revenue Bonds
Healthspan Series 1993
4.75% 2018 3.14 12,813,525
St. Paul & Minneapolis Housing & Redevelopment
Authority Health Care Facility Revenue Bonds
Group Health Plan Series 1992
6.75% 2013 2.84 11,577,405
Western Minnesota Municipal Power Agency
Supply Refunding Revenue Bonds Series A
5.50% 2015 2.76 11,253,250
State General Obligation Various Purpose
Pre-refunded Bonds Series 1991
6.70% 2011 2.13 8,689,040
State Public Facilities Authority Water Pollution
Control Revenue Bonds Series 1989A
7.00% 2009 2.06 8,419,203
Anoka County General Obligation Capital Improvement
Revenue Bonds Series 1989B
7.00% 2007-10 2.01 8,194,939
Hennepin County Lease Revenue
Certificate of Participation Series 1991
6.80% 2017 1.94 7,911,345
St. Paul Housing & Redevelopment Authority
Sales Tax Revenue Bonds Civic Center
5.55% 2023 1.91 7,789,575
Edina Multi-family Housing Revenue Bonds
Walker Assisted Living Series 1991
9.00% 2031 1.82 7,409,836
Note: The Fund's investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.).
(icon of) pie chart
The ten holdings listed here make up 23.87% of the Fund's net assets
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The Fund's ten largest holdings
IDS New York Tax-Exempt Fund
Percent Value
(of Fund's net assets) (as of Dec. 31, 1997)
State Energy Research & Development Authority
Electric Facility Revenue Bonds Consolidated Edison
Series 1990A A.M.T.
<S> <C> <C>
7.50% 2025 4.49% $5,270,950
United Nations Development Senior Lien
Refunding Revenue Bonds Series 1992A
6.00% 2026 4.23 4,961,070
State Urban Development Correction Facility
Pre-refunded Revenue Bonds Series 1
7.50% 2020 4.16 4,888,485
State Local Government Assistance
Pre-refunded Bonds Series 1991A
7.00% 2016 3.77 4,427,160
State Mortgage Agency Homeowner Mortgage
Revenue Bonds Series TT
7.50% 2015 3.68 4,322,840
Triborough Bridge & Tunnel Authority General Purpose
Pre-refunded Revenue Bonds Series S
7.00% 2021 2.80 3,290,220
State Environmental Facility State Water & Pollution
Control Revolving Fund Revenue Bonds New York City
Municipal Water Finance Authority Series 1990A
7.50% 2012 2.80 3,287,970
State Dormitory Authority City University System
Revenue Bonds Series 1993A
5.75% 2013 2.77 3,254,220
State Mortgage Agency Homeowner Mortgage
Revenue Bonds Series 27
6.90% 2015 2.77 3,248,520
State Energy Research & Development Authority Solid Waste Development
Revenue Bonds State Gas & Electric Company Series A A.M.T.
5.70% 2028 2.64 3,096,180
Note: The Fund's investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.).
(icon of) pie chart
The ten holdings listed here make up 34.11% of the Fund's net assets
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The Fund's ten largest holdings
IDS Ohio Tax-Exempt Fund
Percent Value
(of Fund's net assets) (as of Dec. 31, 1997)
Lakota Local School District Unlimited Tax
Improvement General Obligation Bonds
<S> <C> <C>
6.25% 2014 3.06% $2,211,220
State Air Quality Development Authority
Refunding Revenue Bonds Series 1994 A.M.T.
6.375% 2029 3.04 2,200,120
Erie County Hospital Improvement Refunding Revenue
Bonds Firelands Community Hospital Series 1992
6.75% 2015 3.01 2,177,320
State Municipal Electric Generation Agency
Joint Venture 5
Revenue Bonds
5.375% 2024 2.79 2,018,120
Lorain County Hospital Facilities Refunding
Revenue Bonds EMH Regional Medical Center
Series 1995
5.375% 2021 2.78 2,014,280
State Valley School District School Improvement
Unlimited Tax General Obligation Bonds
Adams & Highland Counties Series 1995
5.25% 2021 2.77 2,001,440
Butler County Hospital Facility Improvement
Refunding Revenue Bonds
7.50% 2010 2.63 1,905,610
Franklin County Convention Facilities Authority
Tax & Lease Revenue Anticipation
Pre-refunded Bonds
7.00% 2019 2.28 1,647,855
State Housing Finance Agency Mortgage Revenue Bonds Aristocrat South Board
& Care Series 1991A A.M.T.
7.30% 2031 2.20 1,590,825
Cuyahoga County Hospital Refunding Revenue Bonds
Cleveland Clinic Foundation Series 1992
5.50% 2011 2.16 1,566,195
Note: The Fund's investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.).
(icon of) pie chart
The ten holdings listed here make up 26.72% of the Funds's net assets
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of assets and liabilities
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Dec. 31, 1997 (Unaudited)
Assets
California Massachusetts Michigan
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
Investments in securities, at value (Note 1)
(identified cost $228,702,990, $69,186,977
<S> <C> <C> <C>
and $71,503,898) $252,070,174 $75,614,168 $78,913,920
Cash in bank on demand deposit -- -- 3,447
Accrued interest receivable 4,418,980 1,574,286 1,279,270
Receivable for investment securities sold -- 115,000 714,000
--------- ------- -------
Total assets 256,489,154 77,303,454 80,910,637
----------- ---------- ----------
Liabilities
Disbursements in excess of cash on demand deposit 130,984 963,278 --
Dividends payable to shareholders 176,394 52,162 56,875
Payable for investment securities purchased 5,274,216 -- --
Accrued investment management services fee 3,231 983 1,041
Accrued distribution fee 259 213 93
Accrued service fee 1,203 366 387
Accrued transfer agency fee 238 114 99
Accrued administrative services fee 275 84 89
Other accrued expenses 34,223 16,732 26,119
------ ------ ------
Total liabilities 5,621,023 1,033,932 84,703
--------- --------- ------
Net assets applicable to outstanding shares $250,868,131 $76,269,522 $80,825,934
============ =========== ===========
Represented by
Shares of beneficial interest-- $.01 par value (Note 1) $ 468,346 $ 137,247 $ 145,207
Additional paid-in capital 232,895,907 70,810,148 74,531,322
Excess of distributions over net investment income (10,734) (1,056) (97)
Accumulated net realized gain (loss) (Note 5) (5,852,572) (1,104,008) (1,260,520)
Unrealized appreciation (depreciation) on investments 23,367,184 6,427,191 7,410,022
---------- --------- ---------
Total-- representing net assets applicable
to outstanding shares $250,868,131 $76,269,522 $80,825,934
============ =========== ===========
Net assets applicable to outstanding shares:
Class A $238,253,719 $65,886,057 $76,317,547
Class B $ 12,614,412 $10,383,465 $ 4,508,387
Outstanding shares of beneficial interest:
Class A shares 44,479,079 11,856,082 13,710,757
Class B shares 2,355,500 1,868,635 809,952
Net asset value per share:
Class A $ 5.36 $ 5.56 $ 5.57
Class B $ 5.36 $ 5.56 $ 5.57
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of assets and liabilities
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Dec. 31, 1997 (Unaudited)
Assets
Minnesota New York Ohio
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
Investments in securities, at value (Note 1)
(identified cost $373,435,447, $105,036,036
<S> <C> <C> <C>
and $65,367,803) $405,775,599 $115,729,512 $71,423,567
Cash in bank on demand deposit 200,053 1,117,948 23,229
Accrued interest receivable 8,218,242 2,243,841 966,337
Receivable for investment securities sold 75,000 -- --
------ ------- -------
Total assets 414,268,894 119,091,301 72,413,133
Liabilities
Dividends payable to shareholders 304,047 82,745 50,305
Payable for investment securities purchased 6,027,284 1,583,722 --
Accrued investment management services fee 5,142 1,511 931
Accrued distribution fee 536 175 85
Accrued service fee 1,955 563 347
Accrued transfer agency fee 553 158 798
Accrued administrative services fee 425 129 79
Other accrued expenses 75,226 15,991 10,146
------ ------ ------
Total liabilities 6,415,168 1,684,994 62,691
--------- --------- ------
Net assets applicable to outstanding shares $407,853,726 $117,406,307 $72,350,442
============ ============ ===========
Represented by
Shares of beneficial interest-- $.01 par value (Note 1) $ 752,772 $ 221,300 $ 131,289
Additional paid-in capital 383,752,047 109,209,546 67,641,571
Undistributed (excess of distributions over) net investment income 5,382 (193) 9,550
Accumulated net realized gain (loss) (Note 5) (8,996,627) (2,717,822) (1,487,732)
Unrealized appreciation (depreciation) on investments 32,340,152 10,693,476 6,055,764
---------- ---------- ---------
Total-- representing net assets applicable
to outstanding shares $407,853,726 $117,406,307 $72,350,442
============ ============ ===========
Net assets applicable to outstanding shares:
Class A $381,750,540 $108,701,645 $68,199,947
Class B $ 26,103,186 $ 8,704,662 $ 4,150,495
Outstanding shares of beneficial interest:
Class A shares 70,459,087 20,489,300 12,375,784
Class B shares 4,818,074 1,640,654 753,148
Net asset value per share:
Class A $ 5.42 $ 5.31 $ 5.51
Class B $ 5.42 $ 5.31 $ 5.51
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of operations
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Six months ended Dec. 31, 1997 (Unaudited)
Assets
California Massachusetts Michigan
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
Income:
<S> <C> <C> <C>
Interest $ 7,435,323 $2,264,222 $2,436,175
------------ ---------- ----------
Expenses (Note 2):
Investment management services fee 583,692 178,195 190,869
Distribution fee-- Class B 42,442 34,106 15,012
Transfer agency fee 43,830 21,025 18,591
Incremental transfer agency fee-- Class B 198 167 84
Service fee
Class A 205,316 57,940 67,166
Class B 9,738 7,958 3,456
Administrative services fees and expenses 51,639 16,768 17,856
Compensation of board members 4,084 4,084 4,084
Custodian fees 8,576 6,056 3,809
Postage 6,719 1,822 921
Registration fees 18,227 12,842 16,205
Reports to shareholders 1,422 226 200
Audit fees 8,500 7,750 7,750
Other 1,930 337 405
----- --- ---
Total expenses 986,313 349,276 346,408
Earnings credits on cash balances (Note 2) (33,691) (11,030) (8,146)
------- ------- ------
Total net expenses 952,622 338,246 338,262
------- ------- -------
Investment income (loss)-- net 6,482,701 1,925,976 2,097,913
--------- --------- ---------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 1,303,653 111,534 141,512
Financial futures contracts 67,376 7,365 11,039
------ ----- ------
Net realized gain (loss) on investments 1,371,029 118,899 152,551
Net change in unrealized appreciation
(depreciation) on investments 4,340,244 1,778,400 1,635,516
--------- --------- ---------
Net gain (loss) on investments 5,711,273 1,897,299 1,788,067
--------- --------- ---------
Net increase (decrease) in net assets resulting from operations $12,193,974 $3,823,275 $3,885,980
=========== ========== ==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of operations
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Six months ended Dec. 31, 1997 (Unaudited)
Investment income
Minnesota New York Ohio
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
Income:
<S> <C> <C> <C>
Interest $12,879,312 $3,487,762 $2,172,415
----------- ---------- ----------
Expenses (Note 2):
Investment management services fee 934,721 273,175 169,535
Distribution fee-- Class B 91,108 30,796 14,594
Transfer agency fee 102,347 29,713 17,791
Incremental transfer agency fee-- Class B 493 167 78
Service fee
Class A 332,414 93,685 59,199
Class B 21,201 7,157 3,405
Administrative services fees and expenses 79,400 24,892 16,518
Compensation of board members 4,084 4,084 4,084
Custodian fees 46,757 1,176 5,271
Postage 16,977 1,626 1,855
Registration fees 16,410 9,963 13,770
Reports to shareholders 13,574 2,500 226
Audit fees 9,000 8,500 7,750
Other 4,905 10,086 2,162
----- ------ -----
Total expenses 1,673,391 497,520 316,238
Earnings credits on cash balances (Note 2) (55,790) (14,152) (8,747)
------- ------- ------
Total net expenses 1,617,601 483,368 307,491
--------- ------- -------
Investment income (loss)-- net 11,261,711 3,004,394 1,864,924
---------- --------- ---------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 412,279 174,987 198,827
Financial futures contracts 86,512 285,080 7,365
------ ------- -----
Net realized gain (loss) on investments 498,791 460,067 206,192
Net change in unrealized appreciation
(depreciation) on investments 8,637,019 2,889,190 1,584,947
--------- --------- ---------
Net gain (loss) on investments 9,135,810 3,349,257 1,791,139
--------- --------- ---------
Net increase (decrease) in net assets resulting from operations $20,397,521 $6,353,651 $3,656,063
=========== ========== ==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Operations and distributions Dec. 31, 1997 June 30, 1997 Dec. 31, 1997 June 30, 1997
California Massachusetts
Tax-Exempt Fund Tax-Exempt Fund
Six months ended Year ended Six months ended Year ended
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Investment income (loss)-- net $ 6,482,701 $ 13,603,961 $ 1,925,976 $ 3,910,959
Net realized gain (loss) on investments 1,371,029 1,428,855 118,899 244,141
Net change in unrealized appreciation
(depreciation) on investments 4,340,244 3,063,495 1,778,400 1,390,465
--------- --------- --------- ---------
Net increase (decrease) in net assets resulting
from operations 12,193,974 18,096,311 3,823,275 5,545,565
---------- ---------- --------- ---------
Distributions to shareholders from:
Net investment income
Class A (6,534,702) (12,900,026) (1,725,599) (3,608,592)
Class B (269,441) (394,958) (201,433) (308,683)
Net realized gain
Class A (2,840) (518,965) -- --
Class B (150) (17,699) -- --
---- -------
Total distributions (6,807,133) (13,831,648) (1,927,032) (3,917,275)
---------- ----------- ---------- ----------
Share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 13,525,692 19,424,292 3,384,608 6,908,468
Class B shares 2,840,753 4,411,205 2,320,741 3,032,071
Reinvestment of distributions at net asset value
Class A shares 4,521,326 9,248,935 1,323,133 2,774,110
Class B shares 203,280 327,596 177,656 269,072
Payments for redemptions
Class A shares (17,039,452) (34,815,979) (6,998,078) (12,428,315)
Class B shares (Note 2) (731,111) (1,214,600) (456,701) (889,801)
-------- ---------- -------- --------
Increase (decrease) in net assets from
share transactions 3,320,488 (2,618,551) (248,641) (334,395)
--------- ---------- -------- --------
Total increase (decrease) in net assets 8,707,329 1,646,112 1,647,602 1,293,895
Net assets at beginning of period 242,160,802 240,514,690 74,621,920 73,328,025
----------- ----------- ---------- ----------
Net assets at end of period $250,868,131 $242,160,802 $76,269,522 $74,621,920
============ ============ =========== ===========
Undistributed (excess of distributions over)
net investment income $ (10,734) $ 310,708 $ (1,056) $ --
------------ ------------ ----------- --------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Operations and distributions Dec. 31, 1997 June 30, 1997 Dec. 31, 1997 June 30, 1997
Michigan Minnesota
Tax-Exempt Fund Tax-Exempt Fund
Six months ended Year ended Six months ended Year ended
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Investment income (loss)-- net $ 2,097,913 $ 4,357,220 $ 11,261,711 $ 23,303,678
Net realized gain (loss) on investments 152,551 178,720 498,791 1,732,758
Net change in unrealized appreciation
(depreciation) on investments 1,635,516 1,046,406 8,637,019 6,062,416
--------- --------- --------- ---------
Net increase (decrease) in net assets resulting
from operations 3,885,980 5,582,346 20,397,521 31,098,852
--------- --------- ---------- ----------
Distributions to shareholders from:
Net investment income
Class A (2,009,159) (4,220,612) (10,677,425) (22,346,136)
Class B (89,330) (145,774) (588,474) (975,607)
Net realized gain
Class A -- (19,158) -- --
Class B -- (747) -- --
----
Total distributions (2,098,489) (4,386,291) (11,265,899) (23,321,743)
---------- ---------- ----------- -----------
Share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 2,586,139 4,657,190 25,822,143 37,612,445
Class B shares 960,445 1,464,265 4,384,731 7,437,173
Reinvestment of distributions at net asset value
Class A shares 1,429,465 3,050,415 8,283,105 17,393,622
Class B shares 68,472 108,932 465,865 781,646
Payments for redemptions
Class A shares (6,048,375) (11,286,452) (37,410,525) (78,924,930)
Class B shares (Note 2) (238,707) (582,299) (1,490,992) (2,465,251)
-------- -------- ---------- ----------
Increase (decrease) in net assets from
share transactions (1,242,561) (2,587,949) 54,327 (18,165,295)
---------- ---------- ------ -----------
Total increase (decrease) in net assets 544,930 (1,391,894) 9,185,949 (10,388,186)
Net assets at beginning of period 80,281,004 81,672,898 398,667,777 409,055,963
---------- ---------- ----------- -----------
Net assets at end of period $80,825,934 $80,281,004 $407,853,726 $398,667,777
=========== =========== ============ ============
Undistributed (excess of distributions over)
net investment income $ (97) $ 479 $ 5,382 $ 9,570
----------- ----------- ------------ ------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Operations and distributions Dec. 31, 1997 June 30, 1997 Dec. 31, 1997 June 30, 1997
New York Ohio
Tax-Exempt Fund Tax-Exempt Fund
Six months ended Year ended Six months ended Year ended
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Investment income (loss)-- net $ 3,004,394 $ 6,530,033 $ 1,864,924 $ 3,889,654
Net realized gain (loss) on investments 460,067 1,161,146 206,192 470,175
Net change in unrealized appreciation
(depreciation) on investments 2,889,190 939,832 1,584,947 744,941
--------- ------- --------- -------
Net increase (decrease) in net assets resulting
from operations 6,353,651 8,631,011 3,656,063 5,104,770
--------- --------- --------- ---------
Distributions to shareholders from:
Net investment income
Class A (2,821,590) (6,237,111) (1,790,260) (3,739,886)
Class B (183,708) (294,055) (87,356) (129,674)
Net realized gain
Class A -- -- -- (7,128)
Class B -- -- -- (297)
----
Total distributions (3,005,298) (6,531,166) (1,877,616) (3,876,985)
---------- ---------- ---------- ----------
Share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 6,801,802 11,232,398 3,646,497 5,210,610
Class B shares 1,556,230 3,038,506 586,192 1,817,909
Reinvestment of distributions at net asset value
Class A shares 2,047,186 4,709,717 1,366,487 2,867,182
Class B shares 154,744 250,963 63,676 98,384
Payments for redemptions
Class A shares (10,866,821) (25,606,182) (5,098,771) (14,289,613)
Class B shares (Note 2) (790,957) (800,957) (134,877) (607,746)
-------- -------- -------- --------
Increase (decrease) in net assets from
share transactions (1,097,816) (7,175,555) 429,204 (4,903,274)
---------- ---------- ------- ----------
Total increase (decrease) in net assets 2,250,537 (5,075,710) 2,207,651 (3,675,489)
Net assets at beginning of period 115,155,770 120,231,480 70,142,791 73,818,280
----------- ----------- ---------- ----------
Net assets at end of period $117,406,307 $115,155,770 $72,350,442 $70,142,791
============ ============ =========== ===========
Undistributed (excess of distributions over)
net investment income $ (193) $ 711 $ 9,550 $ 22,242
------------ ------------ ----------- -----------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
(Unaudited as to Dec. 31, 1997)
1
Summary of significant
accounting policies
IDS California Tax-Exempt Trust and IDS Special Tax-Exempt Series Trust
were organized as Massachusetts business trusts. IDS California Tax-Exempt
Trust includes only IDS California Tax-Exempt Fund. IDS Special Tax-Exempt
Series Trust is a "series fund" that is currently composed of individual
state tax-exempt funds and one insured national tax-exempt fund, including
IDS Massachusetts Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund, IDS
Minnesota Tax-Exempt Fund, IDS New York Tax-Exempt Fund, IDS Ohio
Tax-Exempt Fund and IDS Insured Tax-Exempt Fund (the Funds). The Funds are
non-diversified, open-end management investment companies as defined in
the Investment Company Act of 1940 (as amended). Each Fund has unlimited
authorized shares of beneficial interest.
Each Fund's goal is to provide a high level of income generally exempt
from federal income tax as well as from the respective state and local
income tax. A portion of each Fund's assets may be invested in bonds whose
interest is subject to the alternative minimum tax computation. The Funds,
excluding IDS Insured Tax-Exempt Fund, concentrate their investments in a
single state and therefore may have more credit risk related to the
economic conditions of the respective state than Funds that have a broader
geographical diversification.
Each Fund offers Class A and Class B shares. Class A shares are sold with
a front-end sales charge. Class B shares may be subject to a contingent
deferred sales charge and such shares automatically convert to Class A
shares during the ninth calendar year of ownership.
All classes of shares have identical voting, dividend, liquidation and
other rights, and the same terms and conditions, except that the level of
distribution fee, transfer agency fee and service fee (class specific
expenses) differs among classes. Income, expenses (other than
class-specific expenses) and realized and unrealized gains or losses on
investments are allocated to each class of shares based upon its relative
net assets.
The significant accounting policies followed by the Funds are summarized
as follows:
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.
Valuation of securities
All securities are valued at the close of each business day. Securities
traded on national securities exchanges or included in national market
systems are valued at the last quoted sale price. Debt securities are
generally traded in the over-the-counter market and are valued at a price
deemed best to reflect fair value as quoted by dealers who make the
markets in these securities or by an independent pricing service.
Securities for which market quotations are not readily available are
valued at fair value according to methods selected in good faith by the
board. Short-term securities maturing in more than 60 days from the
valuation date are valued at the market price or approximate market value
based on current interest rates; those maturing in 60 days or less are
valued at amortized cost.
Option transactions
In order to produce incremental earnings, protect gains and facilitate
buying and selling of securities for investment purposes, the Funds may
buy and sell put and call options and write covered call options on
portfolio securities and may write cash-secured put options. The risk in
writing a call option is that the Funds give up the opportunity for profit
if the market price of the security increases. The risk in writing a put
option is that the Funds may incur a loss if the market price of the
security decreases and the option is exercised. The risk in buying an
option is that the Funds pay a premium whether or not the option is
exercised. The Funds also have the additional risk of not being able to
enter into a closing transaction if a liquid secondary market does not
exist. The Funds also may write over-the-counter options where the
completion of the obligation is dependent upon the credit standing of the
other party.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. Each
Fund will realize a gain or loss upon expiration or closing of the option
transaction. When options on debt securities or futures are exercised, the
Fund will realize a gain or loss. When other options are exercised, the
proceeds on sales for a written call option, the purchase cost for a
written put option or the cost of a security for a purchased put or call
option is adjusted by the amount of the premium received or paid.
Futures transactions
In order to gain exposure to or protect itself from changes in the market,
the Funds may buy and sell financial futures contracts. Risks of entering
into futures contracts and related options include the possibility that
there may be an illiquid market and that a change in the value of the
contract or option may not correlate with changes in the value of the
underlying securities.
Upon entering into a futures contract, the Funds may be 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 Funds 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 Funds recognize a realized
gain or loss when the contract is closed or expires.
Illiquid securities
At Dec. 31, 1997, investments in securities for IDS Minnesota Tax-Exempt
Fund includes an issue that is illiquid. The Fund currently limits
investments in illiquid securities to 10% of the net assets, at market
value, at the time of purchase. The aggregate value of such securities at
Dec. 31, 1997, was $1,747,719 representing 0.4% of IDS Minnesota
Tax-Exempt Fund's net assets. Pursuant to guidelines adopted by the board,
certain unregistered securities are determined to be liquid and are not
included within the 10% limitation specified above.
Federal income taxes
Since each Fund intends 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. Each Fund is treated as a separate
entity for federal income tax purposes.
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 and losses deferred due to "wash
sale" transactions. The character of distributions made during the year
from net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. The effect on
dividend distributions of certain book-to-tax differences is presented as
"excess distributions" in the statement of changes in net assets. Also,
due to the timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the income or
realized gains (losses) were recorded by the Funds.
Dividends to shareholders
Dividends from net investment income, declared daily and paid monthly, are
reinvested in additional shares of each Fund at net asset value or payable
in cash. Capital gains, when available, are distributed along with the
last income dividend at the end 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.
2
Expenses and
sales charges
Effective March 20, 1995, each Fund entered into an agreement with
American Express Financial Corporation (AEFC) for managing its portfolio,
providing administrative services and serving as transfer agent. Under an
Investment Management Services Agreement, AEFC determines which securities
will be purchased, held or sold. The management fee is a percentage of
each Fund's average daily net assets in reducing percentages from 0.47% to
0.38% annually.
Under an Administrative Services Agreement, each Fund pays AEFC a fee for
administration and accounting services at a percentage of the Fund's
average daily net assets in reducing percentages from 0.04% to 0.02%
annually. Additional administrative service expenses paid by the Fund are
office expenses, consultants' fees and compensation of officers and
employees. Under this agreement, the Fund also pays taxes, audit and
certain legal fees, registration fees for shares, compensation of board
members, corporate filing fees, organizational expenses and any other
expenses properly payable by the Fund and approved by the board.
Under a separate Transfer Agency Agreement, American Express Client
Service Corporation (AECSC) maintains shareholder accounts and records.
Each Fund pays AECSC an annual fee per shareholder account for this
service as follows:
oClass A $15.50
oClass B $16.50
Also effective March 20, 1995, each Fund entered into agreements with
American Express Financial Advisors Inc. for distribution and shareholder
servicing-related services.
Under a Plan and Agreement of Distribution, each Fund pays a distribution
fee at an annual rate of 0.75% of the Fund's average daily net assets
attributable to Class B shares for distribution-related services.
Under a Shareholder Service Agreement, each Fund pays a fee for service
provided to shareholders by financial advisors and other servicing agents.
The fee is calculated at a rate of 0.175% of each Fund's average daily net
assets attributable to Class A and Class B shares.
Sales charges received by American Express Financial Advisors Inc. for
distributing the Funds' shares for the six months ended Dec. 31, 1997, are
as follows:
Fund Class A Class B
IDS California $250,309 $ 8,898
IDS Massachusetts 107,724 5,137
IDS Michigan 89,780 5,342
IDS Minnesota 477,243 21,246
IDS New York 120,558 12,182
IDS Ohio 23,001 1,459
During the six months ended Dec. 31, 1997, the Funds' custodian and
transfer agency fees were reduced as a result of earnings credits from
overnight cash balances as follows:
Fund Reduction
IDS California $33,691
IDS Massachusetts 11,030
IDS Michigan 8,146
IDS Minnesota 55,790
IDS New York 14,152
IDS Ohio 8,747
3
Securities
transactions
For the six months ended Dec. 31, 1997, cost of purchases and proceeds
from sales (other than short-term obligations) aggregated for each Fund
are as follows:
Fund Purchases Proceeds
IDS California $16,037,587 $19,425,844
IDS Massachusetts 3,090,379 3,616,690
IDS Michigan 1,958,502 3,907,277
IDS Minnesota 21,636,129 16,233,180
IDS New York 3,572,548 7,731,600
IDS Ohio 4,342,723 3,980,525
Net realized gains and losses on investment sales are determined on an
identified cost basis.
4
Capital share
transactions
Transactions in shares of each Fund for the periods indicated are as
follows:
California Tax-Exempt Fund
Six months ended Dec. 31, 1997
Class A Class B
Sold 2,549,146 535,453
Issued for reinvested distributions 851,011 38,266
Redeemed (3,210,987) (137,974)
Net increase (decrease) 189,170 435,745
Year ended June 30, 1997
Class A Class B
Sold 3,727,951 847,908
Issued for reinvested distributions 1,775,984 62,918
Redeemed (6,684,505) (234,000)
Net increase (decrease) (1,180,570) 676,826
Massachusetts Tax-Exempt Fund
Six months ended Dec. 31, 1997
Class A Class B
Sold 615,331 421,827
Issued for reinvested distributions 240,518 32,286
Redeemed (1,274,364) (83,068)
Net increase (decrease) (418,515) 371,045
Year ended June 30, 1997
Class A Class B
Sold 1,287,516 564,106
Issued for reinvested distributions 517,304 50,175
Redeemed (2,316,120) (166,069)
Net increase (decrease) (511,300) 448,212
Michigan Tax-Exempt Fund
Six months ended Dec. 31, 1997
Class A Class B
Sold 468,646 173,997
Issues for reinvested distributions 259,017 12,405
Redeemed (1,097,218) (43,341)
Net increase (decrease) (369,555) 143,061
Year ended June 30, 1997
Class A Class B
Sold 859,824 270,029
Issued for reinvested distributions 563,716 20,129
Redeemed (2,086,380) (107,455)
Net increase (decrease) (662,840) 182,703
Minnesota Tax-Exempt Fund
Six months ended Dec. 31, 1997
Class A Class B
Sold 4,809,800 817,796
Issued for reinvested distributions 1,542,687 86,755
Redeemed (6,971,193) (277,870)
Net increase (decrease) (618,706) 626,681
Year ended June 30, 1997
Class A Class B
Sold 7,159,020 1,414,781
Issued for reinvested distributions 3,311,994 148,821
Redeemed (15,031,003) (469,087)
Net increase (decrease) (4,559,989) 1,094,515
New York Tax-Exempt Fund
Six months ended Dec. 31, 1997
Class A Class B
Sold 1,292,853 296,716
Issued for reinvested distributions 389,632 29,448
Redeemed (2,072,087) (150,594)
Net increase (decrease) (389,602) 175,570
Year ended June 30, 1997
Class A Class B
Sold 2,196,024 593,838
Issued for reinvested distributions 921,975 49,118
Redeemed (5,008,087) (156,652)
Net increase (decrease) (1,890,088) 486,304
Ohio Tax-Exempt Fund
Six months ended Dec. 31, 1997
Class A Class B
Sold 670,162 107,803
Issued for reinvested distributions 250,577 11,675
Redeemed (936,401) (24,805)
Net increase (decrease) (15,662) 94,673
Year ended June 30, 1997
Class A Class B
Sold 974,586 339,467
Issued for reinvested distributions 537,160 18,433
Redeemed (2,679,134) (113,803)
Net increase (decrease) (1,167,388) 244,097
5
Capital loss
carryover
For federal income tax purposes, capital loss carryovers were as follows
at June 30, 1997:
Expiration
Fund Carryover Date
IDS California $1,643,088 2006
IDS Massachusetts 268,549 1999 - 2005
IDS Michigan 147,263 2005
IDS Minnesota 972,605 2005
IDS New York 1,956,275 2002 - 2005
IDS Ohio 527,216 2005
It is unlikely the board will authorize a distribution of any net realized
capital gains for a Fund until the respective capital loss carryover has
been offset or expires.
<PAGE>
<TABLE>
<CAPTION>
IDS California Tax-Exempt Trust
IDS California Tax-Exempt Fund
6. Financial highlights
The tables below show certain important financial information for evaluating
each Fund's results.
Fiscal period ended June 30,
Per share income and capital changesa
Class A
1997d 1997 1996 1995 1994 1993 1992 1991 1990 1989c 1988b
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $5.24 $5.15 $5.16 $5.13 $5.41 $5.18 $4.94 $4.89 $4.97 $4.82 $4.66
beginning of
period
Income from investment operations:
Net investment .15 .29 .28 .30 .31 .30 .31 .32 .32 .16 .32
income (loss)
Net gains (losses) .12 .10 .02 .03 (.28) .23 .24 .05 (.08) .15 .16
(both realized
and unrealized)
Total from .27 .39 .30 .33 .03 .53 .55 .37 .24 .31 .48
investment
operations
Less distributions:
Distributions (.15) (.29) (.28) (.30) (.31) (.30) (.31) (.32) (.32) (.16) (.32)
from net
investment income
Distributions from -- (.01) (.03) -- -- -- -- -- -- -- --
realized gains
Total (.15) (.30) (.31) (.30) (.31) (.30) (.31) (.32) (.32) (.16) (.32)
distributions
Net asset value, $5.36 $5.24 $5.15 $5.16 $5.13 $5.41 $5.18 $4.94 $4.89 $4.97 $4.82
end of period
Ratios/supplemental data:
Class A
1997d 1997 1996 1995 1994 1993 1992 1991 1990 1989c 1988b
Net assets, end of $238 $232 $234 $239 $255 $261 $222 $185 $142 $95 $63
period (in
millions)
Ratio of expenses .76%f .77%+ .80% .65% .61% .63% .64% .60% .62% .64%f .72%
to average daily net
assetse
Ratio of net 5.25%f 5.64% 5.40% 5.89% 5.67% 5.78% 6.16% 6.51% 6.53% 6.67%f 6.61%+
income (loss)
to average daily
net assets
Portfolio 7% 14% 15% 48% 27% 5% 7% 23% 20% 6% 13%
turnover rate
(excluding
short-term
securities)
Total returng 5.1% 7.8% 6.0% 6.5% .4% 10.8% 11.4% 7.7% 5.0% 6.5% 10.5%
aFor a share outstanding throughout the period. Rounded to the nearest
cent.
bFiscal year ended Dec. 31, 1988.
cSix months ended June 30, 1989. The Fund's fiscal year end was changed
from Dec. 31 to June 30, effective 1989.
dSix months ended Dec. 31, 1997 (Unaudited).
eEffective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credit on cash balances.
fAdjusted to an annual basis.
gTotal return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
IDS California Tax-Exempt Trust
IDS California Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class B
1997c 1997 1996 1995b
Net asset value, $5.24 $5.15 $5.16 $5.21
beginning of
period
Income from investment operations:
Net investment .13 .25 .24 .09
income (loss)
Net gains (losses) .12 .10 .02 (.05)
(both realized
and unrealized)
Total from .25 .35 .26 .04
investment
operations
Less distributions:
Distributions (.13) (.25) (.24) (.09)
from net
investment income
Distributions -- (.01) (.03) --
from
realized gains
Total (.13) (.26) (.27) (.09)
distributions
Net asset value, $5.36 $5.24 $5.15 $5.16
end of period
Ratios/supplemental data:
Class B
1997c 1997 1996 1995b
Net assets, end of $13 $10 $6 $2
period (in
millions)
Ratio of expenses 1.51%e 1.52% 1.57% 1.51%e
to
average daily net
assetsd
Ratio of net 4.51%e 4.94% 4.64% 4.87%e
income (loss)
to average daily
net assets
Portfolio 7% 14% 15% 48%
turnover rate
(excluding
short-term
securities)
Total returnf 4.7% 7.0% 5.2% .8%
aFor a share outstanding throughout the period. Rounded to the nearest
cent.
bInception date was March 20, 1995.
cSix months ended Dec. 31, 1997 (Unaudited).
dEffective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credits on cash balances.
eAdjusted to an annual basis.
fTotal return does not reflect payment of a sales charge.
<PAGE>
<TABLE>
<CAPTION>
IDS Special Tax-Exempt Series Trust
IDS Massachusetts Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class A
1997b 1997 1996 1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $5.42 $5.30 $5.27 $5.24 $5.49 $5.20 $4.96 $4.88 $5.01 $4.91
beginning of period
Income from investment operations:
Net investment .14 .29 .28 .30 .30 .30 .31 .32 .32 .32
income (loss)
Net gains (losses) .14 .12 .03 .03 (.25) .29 .24 .08 (.12) .12
(both realized
and unrealized)
Total from .28 .41 .31 .33 .05 .59 .55 .40 .20 .44
investment
operations
Less distributions:
Distributions from (.14) (.29) (.28) (.30) (.30) (.30) (.31) (.32) (.32) (.32)
netinvestment income
Distributions from -- -- -- -- -- -- -- -- (.01) (.02)
realized gains
Total distributions (.14) (.29) (.28) (.30) (.30) (.30) (.31) (.32) (.33) (.34)
Net asset value, $5.56 $5.42 $5.30 $5.27 $5.24 $5.49 $5.20 $4.96 $4.88 $5.01
end of period
Ratios/supplemental data:
Class A
1997b 1997 1996 1995 1994 1993 1992 1991 1990 1989
Net assets, end of $66 $67 $68 $68 $72 $64 $44 $27 $19 $13
period (in
millions)
Ratio of expenses .83%d .84% .86% .72% .69% .72% .72% .69% .70% .84%
to average daily net
assetsc
Ratio of net 5.17%d 5.32% 5.26% 5.74% 5.40% 5.57% 6.05% 6.53% 6.59% 6.55%
income (loss)
to average daily
net assets
Portfolio turnover 4% 8% 6% 16% 6% --% 2% 16% 36% 25%
rate
(excluding
short-term
securities)
Total returne 5.3% 7.8% 6.0% 6.5% .9% 11.5% 11.4% 8.5% 4.2% 9.2%
aFor a share outstanding throughout the period. Rounded to the nearest
cent.
bSix months ended Dec. 31, 1997 (Unaudited).
cEffective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credits on cash balances.
dAdjusted to an annual basis.
eTotal return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
IDS Special Tax-Exempt Series Trust
IDS Massachusetts Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class B
1997c 1997 1996 1995b
Net asset value, $5.42 $5.30 $5.27 $5.31
beginning of period
Income from investment operations:
Net investment .12 .25 .24 .09
income (loss)
Net gains (losses) .14 .12 .03 (.04)
(both realized
and unrealized)
Total from .26 .37 .27 .05
investment
operations
Less distributions:
Distributions from (.12) (.25) (.24) (.09)
net
investment income
Net asset value, $5.56 $5.42 $5.30 $5.27
end of period
Ratios/supplemental data:
Class B
1997c 1997 1996 1995b
Net assets, $10 $8 $6 $2
end of
period (in
millions)
Ratio of expenses 1.59%e 1.59% 1.63% 1.59%e
to
average daily net
assetsd
Ratio of net 4.43%e 4.58% 4.51% 4.83%e
income (loss)
to average daily
net assets
Portfolio turnover 4% 8% 6% 16%
rate
(excluding
short-term
securities)
Total returnf 4.9% 7.0% 5.2% .9%
aFor a share outstanding throughout the period. Rounded to the nearest
cent.
bInception date was March 20, 1995.
cSix months ended Dec. 31, 1997 (Unaudited).
dEffective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credit on cash balances.
eAdjusted to an annual basis.
fTotal return does not reflect payment of a sales charge.
<PAGE>
<TABLE>
<CAPTION>
IDS Special Tax-Exempt Series Trust
IDS Michigan Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class A
1997b 1997 1996 1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $5.44 $5.36 $5.39 $5.35 $5.60 $5.31 $5.04 $4.96 $5.08 $4.85
beginning of
period
Income from investment operations:
Net investment .14 .29 .30 .30 .31 .31 .32 .32 .32 .32
income (loss)
Net gains (losses) .13 .08 .04 .05 (.25) .29 .27 .08 (.12) .23
(both realized
and unrealized)
Total from .27 .37 .34 .35 .06 .60 .59 .40 .20 .55
investment
operations
Less distributions:
Distributions (.14) (.29) (.30) (.31) (.31) (.31) (.32) (.32) (.32) (.32)
from net
investment income
Distributions -- -- (.07) -- -- -- -- -- -- --
from
realized gains
Total (.14) (.29) (.37) (.31) (.31) (.31) (.32) (.32) (.32) (.32)
distributions
Net asset value, $5.57 $5.44 $5.36 $5.39 $5.35 $5.60 $5.31 $5.04 $4.96 $5.08
end of period
Ratios/supplemental data:
Class A
1997b 1997 1996 1995 1994 1993 1992 1991 1990 1989
Net assets, end of $76 $77 $79 $78 $77 $72 $55 $41 $29 $16
period (in
millions)
Ratio of expenses .82%d .81% .82% .70% .65% .68% .67% .67% .71% .81%
to
average daily net
assetsc
Ratio of net 5.20%d 5.38% 5.37% 5.71% 5.43% 5.64% 6.18% 6.45% 6.47% 6.50%
income (loss)
to average daily
net assets
Portfolio 2% 21% 29% 48% 16% 2% --% 3% 5% 10%
turnover rate
(excluding
short-term
securities)
Total returne 4.9% 7.1% 6.3% 6.6% 1.0% 11.6% 12.0% 8.3% 4.1% 11.7%
aFor a share outstanding throughout the period. Rounded to the nearest
cent.
bSix months ended Dec. 31, 1997 (Unaudited).
cEffective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credits on cash balances.
dAdjusted to an annual basis.
eTotal return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
IDS Special Tax-Exempt Series Trust
IDS Michigan Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class B
1997c 1997 1996 1995b
Net asset value, $5.44 $5.36 $5.39 $5.43
beginning of
period
Income from investment operations:
Net investment .12 .25 .25 .09
income (loss)
Net gains (losses) .13 .08 .04 (.04)
(both realized
and unrealized)
Total from .25 .33 .29 .05
investment
operations
Less distributions:
Distributions (.12) (.25) (.25) (.09)
from net
investment income
Distributions -- -- (.07) --
from
realized gains
Total (.12) (.25) (.32) (.09)
distributions
Net asset value, $5.57 $5.44 $5.36 $5.39
end of period
Ratios/supplemental data:
Class B
1997c 1997 1996 1995b
Net assets, end of $5 $4 $3 $1
period (in
millions)
Ratio of expenses 1.57%d 1.56% 1.59% 1.62%d
to
average daily net
assetse
Ratio of net 4.46%d 4.65% 4.63% 4.89%d
income (loss)
to average daily
net assets
Portfolio 2% 21% 29% 48%
turnover rate
(excluding
short-term
securities)
Total returnf 4.5% 6.3% 5.6% .9%
aFor a share outstanding throughout the period. Rounded to the nearest
cent.
bInception date was March 20, 1995.
cSix months ended Dec. 31, 1997 (Unaudited).
dAdjusted to an annual basis.
eEffective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credits on cash balances.
fTotal return does not reflect payment of a sales charge.
<PAGE>
<TABLE>
<CAPTION>
IDS Special Tax-Exempt Series Trust
IDS Minnesota Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class A
1997d 1997 1996 1995 1994 1993 1992 1991 1990 1989c 1988b
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $5.30 $5.20 $5.19 $5.16 $5.44 $5.22 $5.01 $4.95 $5.05 $4.86 $4.76
beginning of
period
Income from investment operations:
Net investment .15 .31 .30 .31 .31 .31 .33 .33 .32 .16 .33
income (loss)
Net gains (losses) .12 .10 .01 .03 (.28) .22 .21 .06 (.10) .19 .10
(both realized
and unrealized)
Total from .27 .41 .31 .34 .03 .53 .54 .39 .22 .35 .43
investment
operations
Less distributions:
Distributions (.15) (.31) (.30) (.31) (.31) (.31) (.33) (.33) (.32) (.16) (.33)
from net
investment income
Net asset value, $5.42 $5.30 $5.20 $5.19 $5.16 $5.44 $5.22 $5.01 $4.95 $5.05 $4.86
end of period
Ratios/supplemental data:
Class A
1997d 1997 1996 1995 1994 1993 1992 1991 1990 1989c 1988b
Net assets, end of $382 $376 $393 $403 $408 $402 $313 $233 $181 $121 $82
period (in
millions)
Ratio of expenses .78%f .75%+ .80% .67% .66% .67% .66% .63% .64% .65%f .65%
to average daily
net assetse
Ratio of net 5.59%f 5.81% 5.66% 6.01% 5.73% 5.91% 6.43% 6.67% 6.62% 6.84%f 6.73%+
income (loss)
to average daily
net assets
Portfolio 4% 14% 13% 28% 13% 2% 7% 10% 8% --% 14%
turnover rate
(excluding
short-term
securities)
Total returng 5.2% 8.1% 5.9% 6.8% .4% 10.5% 11.0% 8.2% 4.8% 7.4% 9.3%
aFor a share outstanding throughout the period. Rounded to the nearest
cent.
bFiscal year ended Dec. 31, 1988.
cSix months ended June 30, 1989. The Fund's fiscal year end was changed
from Dec. 31 to June 30, effective 1989.
dSix months ended Dec. 31, 1997 (Unaudited).
eEffective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credit on cash balances.
fAdjusted to an annual basis.
gTotal return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
IDS Special Tax-Exempt Series Trust
IDS Minnesota Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class B
1997c 1997 1996 1995b
Net asset value, $5.30 $5.20 $5.19 $5.24
beginning of
period
Income from investment operations:
Net investment .13 .27 .26 .09
income (loss)
Net gains (losses) .12 .10 .01 (.05)
(both realized
and unrealized)
Total from .25 .37 .27 .04
investment
operations
Less distributions:
Distributions (.13) (.27) (.26) (.09)
from net
investment income
Net asset value, $5.42 $5.30 $5.20 $5.19
end of period
Ratios/supplemental data:
Class B
1997c 1997 1996 1995b
Net assets, end of $26 $22 $16 $4
period (in
millions)
Ratio of expenses 1.53%e 1.50% 1.57% 1.27%e
to average daily net
assetsd
Ratio of net 4.84%e 5.05% 4.94% 5.40%e
income (loss)
to average daily
net assets
Portfolio 4% 14% 13% 28%
turnover rate
(excluding
short-term
securities)
Total returnf 4.8% 7.2% 5.2% .8%
aFor a share outstanding throughout the period. Rounded to the nearest
cent.
bInception date was March 20, 1995.
cSix months ended Dec. 31, 1997 (Unaudited).
dEffective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credit on cash balances.
eAdjusted to an annual basis.
fTotal return does not reflect payment of a sales charge.
<PAGE>
<TABLE>
<CAPTION>
IDS Special Tax-Exempt Series Trust
IDS New York Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class A
1997d 1997 1996 1995 1994 1993 1992 1991 1990 1989c 1988b
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $5.15 $5.06 $5.09 $5.12 $5.41 $5.13 $4.86 $4.80 $4.87 $4.73 $4.58
beginning of period
Income from investment operations:
Net investment .14 .28 .29 .30 .30 .30 .31 .31 .31 .16 .31
income (loss)
Net gains (losses) .16 .09 (.03) (.03) (.29) .28 .27 .06 (.07) .14 .15
(both realized
and unrealized)
Total from .30 .37 .26 .27 .01 .58 .58 .37 .24 .30 .46
investment
operations
Less distributions:
Distributions from (.14) (.28) (.29) (.30) (.30) (.30) (.31) (.31) (.31) (.16) (.31)
net investment income
Net asset value, $5.31 $5.15 $5.06 $5.09 $5.12 $5.41 $5.13 $4.86 $4.80 $4.87 $4.73
end of period
Ratios/supplemental data
Class A
1997d 1997 1996 1995 1994 1993 1992 1991 1990 1989c 1988b
Net assets, end of $109 $108 $115 $120 $120 $117 $95 $79 $68 $49 $34
period (in millions)
Ratio of expenses to .80%f .81% .82% .70% .65% .67% .67% .65% .65% .66%f .71%
average daily net
assetse
Ratio of net income 5.22%f 5.55% 5.51% 6.00% 5.61% 5.79% 6.26% 6.53% 6.57% 6.78%f 6.61%
(loss) to average
daily net assets
Portfolio turnover 3% 12% 9% 20% 10% --% 8% 17% 8% 1% 6%
rate (excluding
short-term
securities)
Total returng 5.7% 7.6% 5.2% 5.5% .1% 11.6% 12.3% 8.2% 5.0% 6.5% 10.3%
aFor a share outstanding throughout the period. Rounded to the nearest
cent.
bFiscal year ended Dec. 31, 1988.
cSix months ended June 30, 1989. The Fund's fiscal year end was changed
from Dec. 31 to June 30, effective 1989.
dSix months ended Dec. 31, 1997 (Unaudited).
eEffective fiscal year 1996, expense ratio is based on total expense of
the Fund before reduction of earnings credits on cash balances. fAdjusted
to an annual basis. gTotal return does not reflect payment of a sales
charge.
</TABLE>
<PAGE>
IDS Special Tax-Exempt Series Trust
IDS New York Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class B
1997c 1997 1996 1995b
Net asset value, $5.15 $5.06 $5.09 $5.17
beginning of period
Income from investment operations:
Net investment .12 .25 .25 .09
income (loss)
Net gains (losses) .16 .09 (.03) (.08)
(both realized
and unrealized
Total from investment .28 .34 .22 .01
operations
Less distributions:
Distributions from net (.12) (.25) (.25) (.09)
investment income
Net asset value, $5.31 $5.15 $5.06 $5.09
end of period
Ratios/supplemental data
Class B
1997c 1997 1996 1995b
Net assets, end of $9 $8 $5 $2
period (in millions)
Ratio of expenses to 1.56%e 1.56% 1.59% 1.59%e
average daily net
assetsd
Ratio of net income 4.47%e 4.81% 4.79% 5.42%e
(loss) to average
daily net assets
Portfolio turnover rate 3% 12% 9% 20%
(excluding short-term
securities)
Total return f 5.3% 6.8% 4.4% .2%
aFor a share outstanding throughout the period. Rounded to the nearest
cent.
bInception date was March 20, 1995.
cSix months ended Dec. 31, 1997 (Unaudited).
dEffective fiscal year 1996, expense ratio is based on total expense of
the Fund before reduction of earnings credits on cash balances.
eAdjusted to an annual basis.
fTotal return does not reflect payment of a sales charge.
<PAGE>
<TABLE>
<CAPTION>
IDS Special Tax-Exempt Series Trust
IDS Ohio Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class A
1997b 1997 1996 1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $5.38 $5.28 $5.28 $5.26 $5.58 $5.28 $5.01 $4.94 $5.04 $4.87
beginning of period
Income from investment operations:
Net investment .14 .29 .29 .29 .30 .30 .31 .32 .31 .31
income (loss)
Net gains (losses) .13 .10 .01 .03 (.32) .31 .27 .07 (.09) .18
(both realized
and unrealized)
Total from .27 .39 .30 .32 (.02) .61 .58 .39 .22 .49
investment
operations
Less distributions:
Distributions from (.14) (.29) (.29) (.30) (.30) (.30) (.31) (.32) (.31) (.31)
net
investment income
Distributions from -- -- (.01) -- -- (.01) -- -- (.01) (.01)
realized gains
Total distributions (.14) (.29) (.30) (.30) (.30) (.31) (.31) (.32) (.32) (.32)
Net asset value, $5.51 $5.38 $5.28 $5.28 $5.26 $5.58 $5.28 $5.01 $4.94 $5.04
end of period
Ratios/supplemental data:
Class A
1997b 1997 1996 1995 1994 1993 1992 1991 1990 1989
Net assets, end of $68 $67 $72 $73 $72 $65 $47 $33 $25 $16
period (in millions)
Ratio of expenses to .84%d .83% .85% .71% .66% .67% .70% .68% .70% .82%
average daily net
assetsc
Ratio of net income 5.21%d 5.46% 5.35% 5.65% 5.44% 5.65% 6.14% 6.41% 6.43% 6.40%
(loss)
to average daily
net assets
Portfolio turnover 6% 9% 24% 45% 11% --% 5% 2% 6% 10%
rate
(excluding
short-term
securities)
Total returne 5.3% 7.4% 5.7% 6.2% (.5%) 12.1% 11.9% 8.1% 4.6% 10.5%
aFor a share outstanding throughout the period. Rounded to the nearest
cent.
bSix months ended Dec. 31, 1997. (Unaudited).
cEffective fiscal year 1996, expense ratio is based on total expense of
the Fund before reduction of earnings credits on cash balances.
dAdjusted to an annual basis.
eTotal return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
IDS Special Tax-Exempt Series Trust
IDS Ohio Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class B
1997c 1997 1996 1995b
Net asset value, $5.38 $5.28 $5.28 $5.34
beginning of
period
Income from investment operations:
Net investment .12 .25 .24 .09
income (loss)
Net gains (losses) .13 .10 .01 (.06)
(both realized
and unrealized)
Total from .25 .35 .25 .03
investment
operations
Less distributions:
Distributions (.12) (.25) (.24) (.09)
from net
investment income
Distributions -- -- (.01) --
from
realized gains
Total (.12) (.25) (.25) (.09)
distributions
Net asset value, $5.51 $5.38 $5.28 $5.28
end of period
Ratios/supplemental data:
Class B
1997c 1997 1996 1995b
Net assets, end of $4 $4 $2 $1
period (in
millions)
Ratio of expenses 1.59%e 1.59% 1.59% 1.66%e
to
average daily net
assetsd
Ratio of net 4.46%e 4.74% 4.63% 4.58%e
income (loss)
to average daily
net assets
Portfolio 6% 9% 24% 45%
turnover rate
(excluding
short-term
securities)
Total returnf 4.9% 6.6% 5.0% .6%
aFor a share outstanding throughout the period. Rounded to the nearest
cent.
bInception date was March 20, 1995.
cSix months ended Dec. 31, 1997. (Unaudited).
dEffective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credits on cash balances.
eAdjusted to an annual basis.
fTotal return does not reflect payment of a sales charge.
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS California Tax-Exempt Fund (Percentages represent value of
Dec. 31, 1997 (Unaudited) investments compared to net assets)
Municipal bonds (95.1%)
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate year amount
ABAG Finance Authority for Nonprofit Corporations
Certificate of Participation International
<S> <C> <C> <C> <C>
School Series 1996 7.375% 2026 $ 2,200,000 $ 2,284,238
Alameda County Certificate of Participation
Series 1997 (AMBAC Insured) 5.00 2016 250,000 246,205
Aliso Viejo Orange County District Community Facilities
District 88-1 Special Tax Bonds Series 1992A 7.35 2018 3,000,000 3,457,380
Anaheim Public Finance Authority Revenue Bonds
Series 2 Electric Utilities San Juan (FGIC Insured) 5.75 2022 11,100,000 11,558,985
Brea Redevelopment Agency Tax Allocation Refunding
Bonds Redevelopment Project AB (MBIA Insured) 5.50 2017 1,800,000 1,842,462
Burbank Redevelopment Agency Tax Allocation Bonds
Golden State Series 1993A 6.00 2023 2,000,000 2,078,980
Chapman College Educational Facilities Authority
Revenue Bonds Series 1989B 7.50 2018 500,000 557,590
Clearlake Redevelopment Agency
Highlands Park Community Development
Tax Allocation Bonds Series 1993 6.40 2023 1,420,000 1,488,657
Eastern Municipal Water District Riverside County
Water & Sewer Pre-refunded Revenue Certificate of
Participation Series 1991 (FGIC Insured) 6.50 2020 3,000,000 3,294,930
Eastern Municipal Water District Riverside County
Water & Sewer Revenue Certificate of Participation
Series 1991 6.00 2023 1,000,000 1,046,110
El Centro Financial Authority Water & Wastewater
Revenue Bonds Series 1997A (AMBAC Insured) 5.125 2027 1,200,000 1,179,216
Encinitas Unified School District
Unlimited General Obligation Bonds
Zero Coupon Series 1996 (MBIA Insured) 5.85 2015-16 3,500,000(g) 1,402,425
Fontana Redevelopment Agency
Refunding Certificate of Participation
Police Facility Series 1993 5.625 2016 4,500,000 4,611,150
Fontana Unified School District
Unlimited General Obligation Bonds
Series C (FGIC Insured) 6.15 2020 3,470,000 3,835,669
Fontana Unified School District
Unlimited Tax General Obligation Bonds
Zero Coupon Series C (FGIC Insured) 6.28 2000 2,000,000(e) 1,837,020
Foothill/Eastern Transportation Corridor Agency
Toll Road Senior Lien Revenue Bonds Series 1995A 6.00 2034 1,775,000 1,857,857
Garden Grove Agency Community Development
Tax Allocation Refunding Bonds
Garden Grove Community 5.875 2023 3,000,000 3,081,330
Garden Grove Certificate of Participation
Bahia Village/Emerald Isle (FSA Insured) 5.70 2023 2,660,000 2,765,974
Huntington Beach Certificate of Participation Revenue
Bonds Civic Center Refinancing (AMBAC Insured) 5.50 2016 1,715,000 1,754,411
Irwindale Community Redevelopment Agency City
Industrial Development Tax Allocation
Refunding Bonds Series 1998 (FSA Insured) 5.00 2017 1,000,000 985,230
Irwindale Redevelopment Agency Sub Lien
Tax Allocation Bonds Series 1996 7.00 2019 1,700,000 1,876,987
Janesville Union School District
Lassen County General Obligation Bonds
Series 1996 Election Bank Qualified 6.45 2021 875,000 918,759
Lake Elsinore Public Financing Authority
Local Agency Revenue Bonds Series 1997F 7.10 2020 3,000,000 3,215,010
Lake Elsinore School Financing Authority
Revenue Bonds Series 1997 6.125 2019 1,235,000 1,292,489
Long Beach Harbor Revenue Bonds
Series 1989A A.M.T. 7.25 2019 7,000,000 7,214,830
Los Angeles Convention & Exhibition Center
Pre-refunded Certificate of Participation Series 1989A 7.00 2020 5,000,000 5,316,000
Los Angeles Convention & Exhibition Center
Pre-refunded Certificate of Participation Series 1989A 7.30 2009 1,000,000 1,067,870
Los Angeles Convention & Exhibition Center
Pre-refunded Certificate of Participation Series 1989A 7.375 2018 2,900,000 3,100,216
Los Angeles County Transportation Commission
Sales Tax Pre-refunded Revenue Bonds
Series 1988A 7.875 2008 500,000 520,065
Los Angeles County Transportation Commission
Sales Tax Refunding Revenue Bonds
Series 1989A 7.40 2015 2,000,000 2,130,300
Los Angeles County Transportation Commission
Sales Tax Refunding Revenue Bonds Series A 7.00 2019 4,150,000 4,394,601
Los Angeles Department of Water & Power
Electric Plant Revenue Bonds Series 1990 7.125 2030 6,500,000 7,064,005
Los Angeles Department of Water & Power
Waterworks Refunding Revenue Bonds
Series 2 (Secondary FGIC Insured) 4.50 2018 3,000,000 2,748,480
Los Angeles International Airport Revenue Bonds
Series D (FGIC Insured) A.M.T. 5.50 2015 1,000,000 1,033,210
Los Angeles Multi-family Housing Revenue Bonds
Park Parthenia Series 1986A
(GNMA Insured) A.M.T. 7.40 2022 1,000,000 1,027,820
Los Angeles Single Family Home Mortgage
Revenue Bonds Series 1991A
(GNMA & FNMA Insured) A.M.T. 6.875 2025 775,000 818,671
Los Angeles State Building Authority
Lease Pre-refunded Revenue Bonds
State Department of General Services Lease
Series 1988A 7.25 2006 1,500,000 1,538,565
Los Angeles State Building Authority
Lease Pre-refunded Revenue Bonds
State Department of General Services Lease
Series 1988A 7.50 2011 1,500,000 1,539,180
Los Angeles State Harbor Revenue Bonds
Escrowed to Maturity 7.60 2018 1,000,000 1,287,260
Los Angeles State Harbor Revenue Bonds
Series 1996B (MBIA Insured) A.M.T. 5.375 2019-23 3,300,000 3,310,624
Los Angeles Wastewater System Refunding
Revenue Bonds Series D (FGIC Insured) 4.70 2017 1,000,000 949,190
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Millbrae Residential Facilities Revenue Bonds
<S> <C> <C> <C> <C> <C>
Magnolia of Millbrae Series 1997A A.M.T. 7.375 2027 2,500,000 2,534,775
Mount Diablo Hospital District Hospital
Pre-refunded Revenue Bonds
Series 1990A (AMBAC Insured) 7.00 2017 3,000,000 3,300,090
North City West Community School Facility Authority
Special Tax Refunding Revenue Bonds
Series 1995B (CGIC Insured) 5.75 2015 1,000,000 1,073,580
Northern California Public Power Authority Power
Pre-refunded Revenue Bonds Hydroelectric
Series 1986B-3 8.00 2024 2,000,000 2,042,620
Northern California Public Power Authority Power
Pre-refunded Revenue Bonds Hydroelectric 1
Series 1986B-1 8.00 2024 2,100,000 2,144,751
Northern California Transmission Agency
California-Oregon Transmission Pre-refunded
Revenue Bonds Series 1990A (MBIA Insured) 7.00 2024 2,000,000 2,163,940
Northern California Transmission
Select Auction Variable Rate Security &
Residual Interest Revenue Bonds Inverse Floater
(MBIA Insured) 5.50 2024 4,500,000(f) 4,561,830
Novato Community Facility District 1 Vintage Oaks
Public Improvement Special Tax Refunding Bonds 7.25 2021 2,000,000 2,185,300
Pleasanton Joint Powers Financing Authority
Reassessment Revenue Bonds Series 1993A 6.15 2012 1,860,000 1,989,568
Port of Oakland Refunding Revenue Bonds
Series 1997G (MBIA Insured) A.M.T. 5.375 2025 3,080,000 3,097,186
Rancho Cucamonga Redevelopment Agency
1990 Tax Allocation Pre-refunded Bonds
(MBIA Insured) 7.125 2019 3,540,000 3,791,623
Rancho Mirage Joint Powers Finance Authority
Certificate of Participation Eisenhower
Memorial Hospital 7.00 2022 4,250,000 4,786,860
Redding Redevelopment Agency Tax Allocation
Refunding Bonds Canby Hilltop Cypress
Series D (CGIC Insured) 5.00 2023 4,700,000 4,560,833
Redwood City Elementary School District Capital
Appreciation General Obligation Bonds
San Mateo County Zero Coupon
Series 1997 (FGIC Insured) 5.65 2020 5,475,000(g) 1,706,174
Richmond Elementary School District
Lassen County General Obligation Bonds
Series 1996 Election Bank Qualified 6.50 2021 649,000 697,811
Richmond Joint Powers Financing Authority Leases &
Gas Tax Refunding Revenue Bonds Series 1995A 5.25 2013 2,000,000 2,027,020
Sacramento Cogeneration Authority Cogeneration
Revenue Bonds Procter & Gamble Series 1995 6.375 2010 1,000,000 1,098,930
Sacramento County Certificate of Participation
(AMBAC Insured) 4.75 2017 3,000,000 2,866,440
Sacramento Municipal Utility District
Pre-refunded Bonds Series V 7.50 2018 2,775,000 2,839,796
Sacramento Municipal Utility District
Pre-refunded Bonds Series W 7.50 2018 1,980,000 2,026,233
Sacramento Municipal Utility District
Pre-refunded Bonds Series Y (MBIA Insured) 6.75 2019 3,400,000 3,774,510
Sacramento Power Authority Cogeneration
Revenue Bonds Series 1995 6.00 2022 1,000,000 1,052,530
San Diego County Capital Asset Lease
Certificate of Participation
Series 1993 Inverse Floater (AMBAC Insured) 7.02 2007 3,200,000(f) 3,700,000
San Diego County Water Authority Refunding
Certificate of Participation Series 1997A 4.75 2018 1,500,000 1,423,020
San Diego Regional Transportation Commission
Sales Tax Pre-refunded Revenue Bonds
Limited Tax Series 1989A 6.25 2008 5,030,000 5,181,806
San Joaquin County Certificate of Participation
Jail & Sheriffs Operation Center (MBIA Insured) 6.75 2015 2,000,000 2,139,980
San Joaquin County Pre-refunded Certificate of
Participation Human Services Facility
Series 1989 (BIG Insured) 6.70 2009 3,500,000 3,701,285
San Jose Redevelopment Agency Merged Area
Redevelopment Tax Allocation Bonds
Series 1993 (MBIA Insured) 4.75 2024 3,055,000 2,879,002
San Jose Redevelopment Agency Merged Area
Tax Allocation Bonds Series 1993 Inverse Floater
(MBIA Insured) 6.61 2014 3,000,000(f) 3,112,500
San Mateo County Transit District Limited Tax
Pre-refunded Bonds Series 1990A (MBIA Insured) 6.50 2020 1,500,000 1,546,275
San Ysidro School District General Obligation Bonds
San Diego County Series 1997 (AMBAC Insured) 6.125 2021 1,000,000 1,145,350
Santa Clara County Mountain View Los Altos
Union High School District Unlimited Tax
General Obligation Bonds Series A 5.75 2015 1,200,000 1,267,812
Santa Cruz Certificate of Participation 8.375 2007 1,220,000 1,248,743
Southern California Home Financing Authority
Single Family Mortgage Revenue Bonds 1990B
(GNMA Insured) A.M.T. 7.75 2024 560,000 592,749
Southern California Public Power Authority
Transmission Special Bonds 6.00 2012 2,700,000 2,901,447
South Tahoe Joint Powers Financing Authority
Refunding Revenue Bonds Series 1995B 6.25 2020 2,700,000 2,857,248
State Department Water Resource Water System
Revenue Bonds Central Valley Series L 5.50 2023 3,000,000 3,032,490
State Education Facility Authority Revenue Bonds
Pomona College 6.00 2017 3,000,000 3,175,410
State Education Facility Authority
Revenue Bonds Series 1997B 6.30 2021 1,000,000 1,063,750
State Health Facility Finance Authority
Pre-refunded Revenue Bonds
St. Joseph Health System Series 1989A 6.90 2014 3,500,000 3,713,360
State Housing Finance Agency Home Mortgage
Revenue Bonds Series 1986B 6.90 2016 1,770,000 1,809,825
State Pollution Control Finance Authority Pollution
Control Revenue Bonds Southern California Edison
Series 1988A A.M.T. 6.90 2006 2,000,000 2,121,320
State Public Works Board Lease Revenue Bonds
California Community Colleges Series 1994B 7.00 2019 2,000,000 2,342,760
State Public Works Board Lease Revenue Bonds
Department of Corrections Substance Abuse
Treatment Facility & State Prison at Corcoran
Series 1996A (AMBAC Insured) 5.25 2021 1,870,000 1,871,216
State Public Works Board University of California Lease
Pre-refunded Revenue Bonds Series 1990A 7.00 2015 2,250,000 2,463,660
State Rural Home Mortgage Financing Authority
Single Family Mortgage Revenue Bonds
Series 1997A-3 (GNMA & FNMA Insured) A.M.T. 6.25 2029 1,500,000 1,697,550
State University Refunding Revenue Bonds
Series C (AMBAC Insured) 5.00 2023 2,000,000 1,940,780
State Unlimited Tax General Obligation Bonds
(Secondary FGIC Insured) 4.75 2023 1,325,000 1,251,701
Statewide Community Development Authority Health
Facilities Revenue Bonds Unihealth America
Series 1993A Inverse Floater (AMBAC Insured) 7.46 2011 5,000,000(f) 5,868,750
Statewide Community Development Authority Revenue
Certificate of Participation
St. Joseph Health System Group 6.50 2015 5,500,000 6,275,060
Stockton Single Family Mortgage Revenue Bonds
Series 1990A (GNMA Insured) A.M.T. 7.50 2023 110,000 119,464
University of Southern California Educational
Facilities Authority Pre-refunded Revenue Bonds
Series 1989B 6.75 2015 5,000,000 5,304,650
Upland Certificate of Participation Water System
Refunding Bonds (FGIC Insured) 6.60 2016 1,000,000 1,098,860
Total municipal bonds
(Cost: $215,332,990) $238,700,174
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term securities (5.3%)
Issuer (d,h) Effective Amount Value(a)
yield payable at
maturity
Municipal notes
Irvine Ranch Water District (Bank of America) V.R.
<S> <C> <C> <C>
04-01-33 5.00% $3,700,000 $ 3,700,000
Irvine Ranch Water District Series 1985 V.R.
10-01-10 5.00 200,000 200,000
Irvine Ranch Water District V.R.
09-02-15 3.50 1,370,000 1,370,000
08-01-16 5.00 600,000 600,000
09-02-21 5.00 800,000 800,000
Statewide Community Development Authority
Certificate of Participation V.R.
06-01-26 4.85 2,800,000 2,800,000
Tustin Improvement Bonds 2nd Series 1995 V.R.
09-02-13 5.00 3,900,000 3,900,000
Total short-term securities
(Cost $13,370,000) $ 13,370,000
Total investments in securities
(Cost: $228,702,990)(i) $252,070,174
</TABLE>
<PAGE>
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:
(Unaudited)
Rating 12-31-97 6-30-97
AAA 65% 61%
AA 17 19
A 5 9
BBB 8 8
BB and below 5 3
Non-rated -- --
Total 100% 100%
(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 CGIC -- Capital Guaranty Insurance
Company FGIC -- Financial Guarantee Insurance Corporation FNMA -- Federal
National Mortgage Association FSA -- Financial Security Assurance GNMA --
Government National Mortgage Association MBIA -- Municipal Bond Investors
Assurance
(d) The following abbreviations are used in portfolio descriptions:
A.M.T. -- Alternative Minimum Tax-- As of Dec. 31, 1997, the value of securities
subject to alternative minimum tax represented 9.4% of net assets.
V.R. -- Variable Rate
(e) For those zero coupon bonds that become coupon paying at a future date, the
interest rate disclosed represents the annualized effective yield from the date
of acquisition to interest reset date disclosed.
(f) Inverse floaters represent securities that pay interest at a rate that
increases (decreases) in the same magnitude as, or in a multiple of, a decline
(increase) in market short-term rates. Interest rate disclosed is the rate in
effect on Dec. 31, 1997. Inverse floaters in the aggregate represent 6.9% of the
Fund's net assets as of Dec. 31, 1997.
(g) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(h) The Fund is entitled to receive principal amount from issuer or corporate
guarantor, if indicated in parentheses, after a day or a week's notice. The
maturity date disclosed represents the final maturity. Interest rate varies to
reflect current market conditions; rate shown is the effective rate on Dec. 31,
1997.
(i) At Dec. 31, 1997, the cost of securities for federal income tax purposes was
approximately $228,380,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation......................................$23,695,000
Unrealized depreciation...................................... (5,000)
------
Net unrealized appreciation..................................$23,690,000
See accompanying notes to investments in securities.
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS Massachusetts Tax-Exempt Fund (Percentages represent value of
Dec. 31, 1997 (Unaudited) investments compared to net assets)
Municipal bonds (97.0%)
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate year amount
<S> <C> <C> <C> <C>
Bay Transit Authority Series A (Secondary CGIC Insured) 5.50 % 2021 $ 500,000 $ 508,265
Bay Transportation Authority General Transportation
System Refunding Bonds Series 1992B 6.20 2016 1,500,000 1,716,990
Boston City Hospital Pre-refunded Revenue Bonds
Series A (FHA Insured) 7.625 2021 1,000,000 1,105,580
Boston City Hospital Refunding Revenue Bonds
Series B (FHA Insured) 5.75 2023 3,000,000 3,060,660
Boston General Obligation Bonds
Series 1991A (MBIA Insured) 6.75 2011 500,000 551,470
Boston General Obligation Refunding Bonds
Series 1993A (AMBAC Insured) 5.65 2009 1,500,000 1,598,850
Boston Industrial Development Financing Authority
Revenue Bonds Massachusetts College of Pharmacy
Series 1993A (Connie Lee Insured) 5.25 2026 1,000,000 991,120
Boston Water & Sewer Commission
General Pre-refunded Revenue Bonds
Senior Lien Series 1991A (FGIC Insured) 7.00 2018 1,000,000 1,118,950
Boston Water & Sewer Commission General Subordinate
Revenue Bonds Series A (MBIA Insured) 6.00 2008 500,000 508,875
Commonwealth General Obligation Consolidated Loan
Pre-refunded Bonds Series 1990A (FGIC Insured) 7.25 2009 500,000 542,655
Greater Lawrence Sanitary District North Andover
General Obligation Bonds 8.50 2005 400,000 412,716
Haverhill City Unlimited Tax General Obligation Bonds
Series 1997 (FGIC Insured) 5.00 2017 1,000,000 987,730
Health & Educational Facilities Authority Pre-refunded
Revenue Bonds Beverly Hospital Series D
(MBIA Insured) 7.30 2019 400,000 426,936
Health & Educational Facilities Authority Pre-refunded
Revenue Bonds Lahey Clinic Medical Center
Series A (MBIA Insured) 7.625 2018 500,000 519,455
Health & Educational Facilities Authority
Pre-refunded Revenue Bonds Mount Auburn Hospital
Series A (MBIA Insured) 7.875 2018 205,000 213,227
Health & Educational Facilities Authority
Pre-refunded Revenue Bonds Northeastern University
Series 1989C (AMBAC Insured) 7.10 2006 1,000,000 1,069,590
Health & Educational Facilities Authority
Pre-refunded Revenue Bonds Northeastern University
Series E (MBIA Insured) 6.55 2022 1,000,000 1,102,900
Health & Educational Facilities Authority
Pre-refunded Revenue Bonds Stonehill College
Series 1990D (AMBAC Insured) 7.70 2020 1,000,000 1,104,810
Health & Educational Facilities Authority Pre-refunded
Revenue Bonds Wentworth Institute of Technology
Series A (AMBAC Insured) 7.40 2010 750,000 818,003
Health & Educational Facilities Authority Refunding
Revenue Bonds Beth Israel Hospital Series 1989E 7.00 2009-14 550,000 581,924
Health & Educational Facilities Authority Revenue Bonds
Berkshire Health Systems Series A (MBIA Insured) 7.50 2008 500,000 523,605
Health & Educational Facilities Authority Revenue Bonds
Berkshire Health Systems Series C 5.90 2011 1,000,000 1,027,480
Health & Educational Facilities Authority Revenue Bonds
Boston College Series J (FGIC Insured) 6.625 2021 2,000,000 2,177,240
Health & Educational Facilities Authority Revenue Bonds
Brigham & Women's Hospital Series C 6.75 2021 500,000 528,585
Health & Educational Facilities Authority Revenue Bonds
Brigham & Women's Hospital Series 1991D 6.75 2024 1,000,000 1,101,560
Health & Educational Facilities Authority Revenue Bonds
Cape Cod Health System Series A (Connie Lee Insured) 5.25 2021 2,500,000 2,479,675
Health & Educational Facilities Authority Revenue Bonds
Charlton Memorial Hospital Series 1991B 7.25 2013 1,750,000 1,928,203
Health & Educational Facilities Authority Revenue Bonds
Holyoke Hospital Series B 6.50 2015 1,000,000 1,061,600
Health & Educational Facilities Authority Revenue Bonds
Melrose-Wakefield Hospital Series 1992B 6.375 2016 1,000,000 1,121,520
Health & Educational Facilities Authority Revenue Bonds
New England Deaconess Hospital Series 1992D 6.625 2012 1,000,000 1,078,440
Health & Educational Facilities Authority Revenue Bonds
Newton Wellesley Hospital Series 1991D (MBIA Insured) 7.00 2015 1,000,000 1,109,630
Health & Educational Facilities Authority Revenue Bonds
North Adams Regional Hospital Series 1 6.625 2018 1,000,000 1,069,890
Health & Educational Facilities Authority Revenue Bonds
South Shore Hospital Series 1992D (MBIA Insured) 6.50 2022 1,000,000 1,090,610
Health & Educational Facilities Authority Revenue Bonds
Suffolk University Series B (Connie Lee Insured) 6.35 2022 2,495,000 2,711,342
Health & Educational Facilities Authority Revenue Bonds
Valley Regional Health System
Series C (Connie Lee Insured) 5.75 2018 1,000,000 1,045,080
Industrial Finance Agency Assumption College
Revenue Bonds Series 1996 (Connie Lee Insured) 6.00 2026 1,000,000 1,078,380
Industrial Finance Agency Hampshire College
Revenue Bonds Series 1997 5.80 2017 1,105,000 1,128,503
Industrial Finance Agency Pollution Control Refunding
Revenue Bonds Eastern Edison Series 1993 5.875 2008 2,000,000 2,055,860
Industrial Finance Agency Resource Recovery
Revenue Bonds Ogden Haverhill Series 1986A
(AMBAC Insured) A.M.T. 7.375 2011 175,000 178,064
Industrial Finance Agency Resource Recovery
Revenue Bonds SEMASS Series 1991A 9.00 2015 1,500,000 1,695,630
Industrial Finance Agency Revenue Bonds
Museum of Science Series 1989 (FSA Insured) 7.30 2009 1,000,000 1,076,670
Leominster General Obligation Bonds (MBIA Insured) 7.50 2009 1,000,000 1,092,800
Mansfield General Obligation Bonds (AMBAC Insured) 6.70 2011 1,000,000 1,111,520
Municipal Wholesale Electric Power Supply System
Pre-refunded Revenue Bonds Series 1992B 6.75 2017 1,395,000 1,563,237
Municipal Wholesale Electric Power Supply System
Refunding Revenue Bonds Series B (MBIA Insured) 4.75 2011 1,750,000 1,723,453
Municipal Wholesale Electric Power
Supply System Revenue Bonds
Special Pars & Inflows (AMBAC Insured) 5.45 2018 1,600,000 1,615,328
Nantucket General Obligation Bonds 6.80 2011 1,000,000 1,113,800
New Bedford General Obligation Bonds
Series 1995 (AMBAC Insured) 5.50 2015 700,000 726,887
North Andover General Obligation Bonds (MBIA Insured) 7.35 2008 310,000 343,012
North Attleborough Unlimited General Obligation Bonds
Series 1997 (AMBAC Insured) 5.25 2017 1,675,000 1,700,175
Port Authority Revenue Bonds Series 1990A
(FGIC Insured) A.M.T. 7.50 2020 1,000,000 1,086,840
Southeastern University Building Refunding Revenue Bonds
Series A (AMBAC Insured) 5.75 2016 1,250,000 1,327,100
Southern Berkshire Regional School District Unlimited Tax
General Obligation Pre-refunded Bonds
(AMBAC Insured) 7.55 2010 1,000,000 1,097,340
State Education Loan Authority
Educational Loan Revenue Bonds
Issue E Series B (AMBAC Insured) A.M.T. 6.00 2012 915,000 985,409
State General Obligation Consolidated Loan Bonds
Series 1991A (FGIC Insured) 6.00 2011 1,095,000 1,161,018
State Housing Finance Agency Single Family Housing
Revenue Bonds Series 13 A.M.T. 7.95 2023 430,000 457,124
State Housing Finance Authority Residential
Development Bonds Series 1992A (FNMA Insured) 6.875 2011 1,000,000 1,088,860
State Housing Finance Authority Single Family Mortgage
Housing Revenue Bonds Series 4 7.375 2014 430,000 440,019
State Housing Finance Authority Single Family Mortgage
Housing Revenue Bonds Series 7 A.M.T. 8.10 2020 245,000 251,573
State Industrial Finance Agency Assisted Living
Facility Revenue Bonds Marina Bay LLC
Series 1997 A.M.T. 7.50 2027 1,000,000 1,001,630
State Industrial Finance Agency Assisted Living
Facility Revenue Bonds Newton Group Properties LLC
Series 1997 A.M.T. 8.00 2027 1,160,000 1,187,828
State Turnpike Authority Metro Highway System
Senior Lien Revenue Bonds Toll Road
Series 1997A (MBIA Insured) 5.00 2037 1,000,000 966,730
State Water Resource Authority Revenue Bonds
Series A (Secondary MBIA Insured) 5.50 2022 1,100,000 1,116,269
University of Massachusetts Building Authority
Revenue Bonds Series A Escrowed to Maturity 7.50 2011 115,000 136,966
University of Massachusetts Building Authority
Revenue Bonds Series A (FSA Insured) 7.50 2014 500,000 516,150
Water Resource Authority General
Pre-refunded Revenue Bonds Series 1990A 7.625 2014 500,000 547,730
Water Resource Authority General
Pre-refunded Revenue Bonds Series 1991A 6.50 2019 1,000,000 1,103,050
Water Resource Authority General Revenue Bonds
Series 1993B (MBIA Insured) 5.00 2022 1,365,000 1,323,927
Worcester General Obligation Refunding Bonds
Series 1995G (MBIA Insured) 5.30 2015 1,000,000 1,020,120
Total municipal bonds
(Cost: $67,586,977) $74,014,168
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term security (2.1%)
Issuer (d,e) Effective Amount Value(a)
yield payable at
maturity
Municipal note
State Health & Education Facility Authority V.R.
<S> <C> <C> <C>
01-02-98 4.80% $1,600,000 $ 1,600,000
Total short-term security
(Cost: $1,600,000) $ 1,600,000
Total investments in securities
(Cost: $69,186,977)(f) $75,614,168
</TABLE>
<PAGE>
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:
(Unaudited)
Rating 12-31-97 06-30-97
AAA 68% 64%
AA 9 9
A 9 16
BBB 9 9
BB and below 4 2
Non-rated 1 --
Total 100% 100%
(c) The following abbreviations are used in portfolio descriptions to identify
the insurer of the issue: AMBAC -- American Municipal Bond Association
Corporation CGIC -- Capital Guaranty Insurance Company FGIC -- Financial
Guarantee Insurance Corporation FHA -- Federal Housing Authority FNMA -- Federal
National Mortgage Association FSA -- Financial Security Assurance MBIA --
Municipal Bond Investors Assurance
(d) The following abbreviations are used in portfolio descriptions:
A.M.T. -- Alternative Minimum Tax-- As of Dec. 31, 1997, the value of securities
subject to alternative minimum tax represented 6.8% of net assets.
V.R. -- Variable Rate
(e) The Fund is entitled to receive principal amount from issuer or corporate
guarantor, if indicated in parentheses, after a day or a week's notice. The
maturity date disclosed represents the final maturity. Interest rate varies to
reflect current market conditions; rate shown is the effective rate on Dec. 31,
1997.
(f) At Dec. 31, 1997, the cost of securities for federal income tax purposes was
approximately $69,187,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation.........................................$6,427,000
Unrealized depreciation.................................................--
Net unrealized appreciation.... ................................$6,427,000
See accompanying notes to investments in securities.
<PAGE>
<TABLE>
<CAPTION>
IDS Michigan Tax-Exempt Fund (Percentages represent value of
Dec. 31, 1997 (Unaudited) investments compared to net assets)
Municipal bonds (97.4%)
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate year amount
Auburn Hills Limited Tax General Obligation
<S> <C> <C> <C> <C>
Street Improvement Bonds 6.00 % 2004 $ 200,000 $ 205,396
Battle Creek Calhoun County Downtown Development
Authority Bonds Series 1994 7.65 2022 1,250,000 1,491,838
Battle Creek Downtown Development Authority
Tax Allocation Refunding Revenue Bonds
Series 1997 (MBIA Insured) 5.00 2017 1,000,000 980,500
Battle Creek Water Supply System
Pre-refunded Revenue Bonds Series 1990B 6.375 2008-10 1,640,000 1,699,975
Buena Vista School District Saginaw County
School Building & Site Unlimited Tax
General Obligation Pre-refunded Bonds Series 1991 7.20 2016 1,500,000 1,671,585
Central Michigan University Revenue Bonds
Series 1997 (FGIC Insured) 5.50 2026 750,000 771,840
Chippewa County Hospital Financial Authority
Hospital Refunding Revenue Bonds
Chippewa County War Memorial Hospital
Series 1997B 5.625 2014 500,000 502,750
Chippewa Valley School District Unlimited Tax
General Obligation Bonds (FGIC Insured) 5.00 2021 1,000,000 969,140
Comstock Park Public School Kent County Unlimited Tax
General Obligation Pre-refunded Bonds Series 1989 6.00 2016 400,000 418,192
Comstock Park Public School Kent County Unlimited Tax
General Obligation Pre-refunded Bonds Series 1989 6.875 2010 260,000 274,750
Detroit Downtown Development Authority
Development Area Project 1 Junior Lien
Tax Increment Refunding Bonds Series 1996D 6.50 2025 1,000,000 1,073,190
Detroit General Obligation Pre-refunded Bonds
Distributable State Aid Series 1989 (AMBAC Insured) 7.20 2009 1,000,000 1,062,120
Detroit Sewer Disposal Revenue Bonds (FGIC Insured) 5.70 2023 2,000,000 2,065,120
Detroit Unlimited Tax General Obligation
Pre-refunded Bonds Series 1988A 7.875 2008 700,000 721,091
Detroit Unlimited Tax General Obligation
Pre-refunded Bonds Series A 7.25 2009 1,000,000 1,060,470
Detroit Unlimited Tax General Obligation Bonds
Series 1995A 6.80 2015 1,000,000 1,158,720
Detroit Water Supply System Pre-refunded
Revenue Bonds Series 1988 (MBIA Insured) 7.875 2008 400,000 416,136
Detroit Unlimited Tax General Obligation Bonds
Series A (FGIC Insured) 5.50 2016 500,000 515,970
Detroit Water Supply System Second Lien
Revenue Bonds Series 1995A (MBIA Insured) 5.50 2025 1,500,000 1,537,845
East Lansing School District School Building & Site
Unlimited Tax General Obligation Pre-refunded Bonds
Series 1991 6.625 2014 1,000,000 1,094,660
Farmington Hills Hospital Finance Authority
Revenue Bonds Botsford General Hospital
Series 1992A (MBIA Insured) 6.50 2022 1,500,000 1,627,725
Ferris State University Board of Trustees
General Revenue & Refunding Bonds
Series 1995 (MBIA Insured) 5.25 2020 1,000,000 998,600
Forest Hills School District Unlimited Tax
General Obligation Pre-refunded Bonds 7.375 2015 1,000,000 1,082,420
Frenchtown Resort Drainage District Monroe County
Drain Pre-refunded Revenue Bonds Series 1987 7.50 2011-12 615,000 655,916
Garden City School District Authority
Pre-refunded Revenue Bonds 7.80 2010 305,000 318,176
Genesee County General Obligation Bonds
Sewer Disposal System Series A (AMBAC Insured) 5.40 2015 1,400,000 1,441,426
Grand Ledge Public Schools Unlimited Tax General
Obligation Refunding Bonds Counties of Eaton,
Clinton & Ionia Series 1995 (MBIA Insured) 5.375% 2024 $2,000,000 $2,022,520
Grand Rapids Community College Limited Tax
General Obligation Bonds Series 1996 (MBIA Insured) 5.375 2019 1,000,000 1,012,980
Grand Rapids Tax Increment Revenue Bonds
Series 1994 (MBIA Insured) 6.875 2024 380,000 432,767
Grand Rapids Water Supply System Improvement
Pre-refunded Revenue Bonds Series 1990
(FGIC Insured) 7.25 2020 1,250,000 1,351,200
Hillman Community Schools General Obligation Bonds
Series 1997 (FGIC Insured) 5.25 2023 1,000,000 1,000,660
Inkster School District Unlimited Tax General Obligation
Pre-refunded Bonds (AMBAC Insured) 7.00 2018 450,000 485,838
Isoco County Water Supply System Limited Tax
General Obligation Bonds (AMBAC Insured) 5.50 2008-10 575,000 588,180
Kent County Hospital Pre-refunded Revenue Bonds
Butterworth Hospital Series 1989A 7.25 2013 500,000 527,225
Lake Orion School District General Obligation Bonds
(AMBAC Insured) 5.50 2020 1,000,000 1,024,760
Lincoln Park School Distict Wayne County School
Building & Site Unlimited Tax General Obligation Bonds
(FGIC Insured) 5.90 2026 1,000,000 1,069,390
Marquette Hospital Finance Authority Pre-refunded
Revenue Bonds Marquette General Hospital
Series 1989C 7.50 2007-19 825,000 876,645
Monroe County Pollution Control Revenue Bonds
Detroit Edison Fermi Plants Series 1990I
(FGIC Insured) A.M.T. 7.65 2020 1,000,000 1,094,670
Monroe County Pollution Control Revenue Bonds
Detroit Edison Fermi 2 Plants Series CC
(AMBAC Insured) A.M.T. 7.50 2019 1,750,000 1,896,877
Muskegon Hospital Finance Authority Refunding
Revenue Bonds Hackley Hospital Series 1988A 8.00 2008 400,000 409,144
Northville Public Schools Unlimited Tax
General Obligation Bonds Series 1991B 7.00 2008 1,500,000 1,659,345
Ovid-Elsie School District Unlimited Tax
General Obligation Bonds (Secondary MBIA Insured) 5.60 2021 1,000,000 1,036,690
Redford General Obligation Bonds (MBIA Insured) 5.25 2016 1,450,000 1,465,834
Richmond Limited Obligation Refunding Revenue Bonds
K mart Series A 6.625 2007 530,000 563,586
Rochester Hill Unlimited Tax General Obligation Bonds
Series 1990A 6.00 2009-10 735,000 757,733
Rockford Public Schools Kent County Unlimited Tax
General Obligation Pre-refunded Revenue Bonds 7.375 2019 1,000,000 1,081,020
Romulus Township School District Unlimited Tax
General Obligation Refunding Bonds (FGIC Insured) 5.75 2022 2,500,000 2,602,850
Schoolcraft Community School District Kalamazoo
County School Building & Site Unlimited
General Obligation Bonds Series 1996 (FGIC Insured) 5.375 2026 1,000,000 1,012,000
South Lake District Unlimited Tax General Obligation
Pre-refunded Bonds 6.80 2010 355,000 390,372
South Redford School District Unlimited General
Obligation Bonds Series 1996 (FGIC Insured) 5.50 2022 1,000,000 1,027,090
State Building Authority Refunding Revenue Bonds
Series 1991I 6.25 2020 2,200,000 2,356,706
State Hospital Finance Authority Hospital Pre-refunded
Revenue Bonds Detroit Medical Center Series 1988A 8.125 2012 310,000 324,300
State Hospital Finance Authority Hospital Pre-refunded
Revenue Bonds Detroit Medical Center Series 1988B 8.00 2008 500,000 522,685
State Hospital Finance Authority Hospital Pre-refunded
Revenue Bonds McLaren Obligated Group Series 1991A 7.50 2021 1,750,000 1,979,985
State Hospital Finance Authority Hospital Refunding
Revenue Bonds Detroit Medical Center Series 1988A 8.125 2012 90,000 93,929
State Hospital Finance Authority Hospital Refunding
Revenue Bonds Detroit Medical Center Series A 6.25 2013 1,200,000 1,284,720
State Hospital Finance Authority Hospital Refunding
Revenue Bonds Sinai Hospital of Greater Detroit
Series 1995 6.70 2026 1,000,000 1,108,330
State Hospital Finance Authority Pre-refunded
Revenue Bonds Henry Ford Hospital Series 1990A 7.00 2010 1,000,000 1,087,320
State Hospital Finance Authority Pre-refunded
Revenue Bonds Oakwood Hospital Group
Series 1990A (FGIC Insured) 7.10 2018 1,000,000 1,089,670
State Hospital Finance Authority Revenue Bonds
Central Michigan Community Hospital 6.25 2027 1,000,000 1,056,000
State Hospital Finance Authority Revenue Bonds
Presbyterian Villages of Michigan Obligated Group
Series 1995 6.50 2025 1,000,000 1,061,910
State Hospital Finance Authority Revenue Bonds
Presbyterian Villages of Michigan Obligated Group
Series 1997 6.375 2025 700,000 739,396
State Hospital Finance Authority Revenue Bonds
St. Johns Hospital & Medical Center (AMBAC Insured) 5.25 2026 1,400,000 1,389,696
State Public Power Agency Belle River
Refunding Revenue Bonds Series A 5.25 2018 1,000,000 995,100
State Strategic Fund Limited Tax Obligation Refunding
Revenue Bonds Detroit Edison Series 1990BB
(MBIA Insured) 7.00 2008 1,000,000 1,212,550
State Strategic Fund Limited Tax Obligation Refunding
Revenue Bonds Detroit Edison Series 1992BB
(FGIC Insured) 6.50 2016 1,500,000 1,627,725
State Strategic Fund Limited Tax Obligation Refunding
Revenue Bonds Ford Motor Series 1991A 7.10 2006 1,650,000 1,949,706
State Strategic Fund Limited Tax Obligation Refunding
Revenue Bonds Oxford Institute Escrowed to Maturity 7.875 2005 150,000 172,872
State Strategic Fund Limited Tax Obligation
Revenue Bonds Great Lakes Pulp & Fibre A.M.T. 10.25 2016 1,000,000(f) 555,000
State Trunk Line Bonds Series A (FGIC Insured) 5.75 2020 1,065,000 1,116,163
State University Revenue Bonds Series A 5.50 2022 560,000 564,732
Taylor Tax Increment Finance Authority Bonds
Series 1989A (MBIA Insured) 6.00 2007-09 1,205,000 1,237,402
Troy City Downtown Development Authority
County of Oakland Development Bonds
Series 1995A Asset Guaranty 6.375 2018 1,500,000 1,658,760
Van Buren Township Tax Increment Revenue Bonds
Series 1994 8.40 2016 1,000,000 1,153,940
Wayne County Airport Revenue Bonds Detroit
Metropolitan Airport Series 1990A
(AMBAC Insured) A.M.T. 7.00 2020 1,080,000 1,170,396
Total municipal bonds
(Cost: $71,303,898) $78,713,920
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term security (0.2%)
Issuer (d,e) Effective Amount Value(a)
yield payable at
maturity
Municipal note
State Strategic Fund Consumer Power Company
Series 1988A V.R.
<S> <C> <C> <C>
04-15-18 4.95% $200,000 $ 200,000
Total short-term security
(Cost: $200,000) $ 200,000
Total investments in securities
(Cost: $71,503,898)(g) $78,913,920
</TABLE>
<PAGE>
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:
(Unaudited)
Rating 12-31-97 06-30-97
AAA 77% 74%
AA 8 11
A 6 5
BBB 7 9
BB and below 2 1
Non-rated -- --
Total 100% 100%
(c) The following abbreviations are used in portfolio descriptions to identify
the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
FGIC -- Financial Guarantee Insurance Corporation
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviations are used in portfolio descriptions:
A.M.T. -- Alternative Minimum Tax-- As of Dec. 31, 1997, the value of securities
subject to alternative minimum tax represented 5.8% of net assets.
V.R. -- Variable Rate
(e) The Fund is entitled to receive principal amount from issuer or corporate
guarantor, if indicated in parentheses, after a day or a week's notice. The
maturity date disclosed represents the final maturity. Interest rate varies to
reflect current market conditions; rate shown is the effective rate on Dec. 31,
1997.
(f) Non-income producing. Item identified is in default as to payment of
interest and/or principal.
(g) At Dec. 31, 1997, the cost of securities for federal income tax purposes was
approximately $71,455,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation............................................$7,904,000
Unrealized depreciation............................................ (445,000)
Net unrealized appreciation........................................$7,459,000
<PAGE>
<TABLE>
<CAPTION>
IDS Minnesota Tax-Exempt Fund (Percentages represent value of
Dec. 31, 1997 (Unaudited) investments compared to net assets)
Municipal bonds (99.0%)
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate year amount
Anoka County General Obligation Capital Improvement
<S> <C> <C> <C> <C> <C>
Revenue Bonds Series 1989B 7.00 % 2007-10 $7,950,000 $8,194,939
Anoka County Resource Recovery Revenue Bonds
Northern States Power Series 1985 7.15 2008 3,750,000 3,999,787
Becker Pollution Control Revenue Bonds
Northern States Power Sherburne County
Generating Station Units 1 & 2 Series 1987A 7.25 2005 2,000,000 2,005,620
Becker Solid Waste Disposal Facility
Revenue Bonds Liberty Paper Series 1994B A.M.T. 9.00 2015 3,825,000 4,119,066
Bemidji Hospital Facilities 1st Mortgage Revenue Bonds
North Country Health Services Series 1991 7.00 2021 1,755,000 1,954,842
Bemidji Independent School District 31
Unlimited Tax General Obligation Bonds Series 1998 5.00 2019 4,000,000 3,943,040
Bloomington Community Development
Refunding Revenue Note 24th Avenue Motel 8.50 2005 1,739,023(h) 1,747,719
Brooklyn Center Tax Credit Investor Refunding
Revenue Bonds Four Courts Apartment
Series 1995B A.M.T. 7.58 2009 2,450,000 2,499,710
Burnsville Multi-family Housing Refunding
Revenue Bonds Summit Park Apartments
Series 1993 (FHA Insured) 6.00 2033 4,000,000 4,106,760
Columbia Heights Multi-family Housing Revenue Bonds
Crestview Lutheran Home Royce Place Series 1991 10.00 2032 550,000 597,586
Columbia Heights Multi-family Housing Revenue Bonds
Crestview Lutheran Home Royce Place
Series 1991 (FHA Insured) 7.75 2032 2,720,000 2,864,758
Duluth Economic Development Authority
Health Care Facility Pre-refunded Revenue Bonds
Benedictine Health System
St. Mary's Medical Center Series 1990 8.375 2020 2,000,000 2,212,320
Duluth Housing & Redevelopment Authority 1st Mortgage
Revenue Bonds Lakeshore Lutheran Home 8.25 2009 125,000 125,276
Duluth Hospital Facilities St. Lukes Hospital
Pre-refunded Revenue Bonds Series 1988 9.00 2018 2,500,000 2,592,675
Eden Prairie Housing Development Refunding
Revenue Bonds Eden Commons Series 1990
(FHA Insured) 8.25 2025 6,155,000 6,357,192
Edina Hospital System Revenue Bonds
Fairview Hospital & Health Care Services
Series 1989A 7.125 2019 2,500,000 2,662,425
Edina Multi-family Housing Revenue Bonds
Walker Assisted Living Series 1991 9.00 2031 6,670,000 7,409,836
Faribault Rice & Goodhue County
Independent School District 656
General Obligation School Building Bonds
Series 1995 (FSA Insured) 5.75 2015 6,900,000 7,240,929
Faribault Single Family Mortgage
Refunding Revenue Bonds Series 1991A 7.50 2011 1,425,000 1,514,932
Fergus Falls Health Care Facilities Revenue Bonds
LRHC Long-Term Care Facility Series 1995 6.50 2025 1,500,000 1,614,585
Harmony Multi-family Housing Refunding
Revenue Bonds Zedekah Foundation Series 1997A 5.95 2020 1,240,000 1,273,492
Hennepin County Lease Revenue
Certificate of Participation Series 1991 6.80 2017 7,250,000 7,911,345
Hopkins Revenue Bonds Blake School 6.70 2024 3,120,000 3,532,994
Hubbard County Solid Waste Disposal Revenue Bonds
Potlatch Series 1989 A.M.T. 7.375 2013 5,610,000 5,951,705
International Falls Solid Waste Disposal
Revenue Bonds Boise Cascade Series 1990 A.M.T. 7.75 2015 4,000,000 4,215,720
Little Canada Multi-family Housing Revenue Bonds
Housing Alternatives Development Series 1997A 6.25 2027 1,000,000 1,001,400
Little Canada Multi-family Housing Revenue Bonds
Provinces of Little Canada Series 1996 A.M.T. 7.00 2027 3,870,000 4,021,046
Mahtomedi Multi-family Housing
Briarcliff Revenue Bonds A.M.T. 7.35 2036 2,270,000 2,360,210
Maplewood Care Institute Series 1994 7.75 2024 3,830,000 4,163,019
Maplewood Multi-family Housing
Carefree Cottages of Maplewood III
Refunding Revenue Bonds Series 1995 A.M.T. 7.20 2032 2,900,000 2,970,673
Maplewood Multi-family Housing
Revenue Bonds Maplewood (FHA Insured) A.M.T. 7.75 2021 2,030,000 2,040,921
Minneapolis & St. Paul Housing & Redevelopment
Authority Health Care System Revenue Bonds
Healthspan Series 1993 (AMBAC Insured) 4.75 2018 13,500,000 12,813,525
Minneapolis & St. Paul Housing Board
Multi-family Mortgage Revenue Bonds
Collateral Mortgage Revenue Loan
Riverside Plaza Series 1988 (GNMA Insured) A.M.T. 8.25 2030 3,945,000 4,104,812
Minneapolis Community Development Agency
Supported Development Limited Tax
General Obligation Bonds
Common Bond Fund Series 1997-97A 5.50 2012 250,000 254,193
Minneapolis Community Development Agency
Supported Development Limited Tax
Revenue Bonds Common Bond Fund
5th Series 1997 5.70 2027 680,000 697,048
Minneapolis Community Development Agency
Supported Development Limited Tax
Revenue Bonds Common Bond Fund Series 1996-01 6.00 2011 980,000 1,013,271
Minneapolis General Obligation Bonds
Sports Arena Series 1996 5.20 2024 4,940,000 4,974,728
Minneapolis Hospital Facility
Pre-refunded Revenue Bonds
Lifespan Incorporated Series 1989A 7.00 2014 5,000,000 5,368,500
Minneapolis Nursing Home Revenue Bonds
Walker Cityview & Southview Series 1992 8.50 2022 5,405,000 5,998,631
Minneapolis Special School District 1
Certificates of Participation
Series 1997A (MBIA Insured) 5.375 2017 2,400,000 2,455,968
Minnetonka Multi-family Housing
Refunding Revenue Bonds Cedar Hill West
(FHA Insured) 7.75 2026 5,460,000 5,677,854
Minnetonka Multi-family Housing Revenue Bonds
The Cedar Hills Series 1985 7.50 2017 500,000 519,905
Minnetonka Senior Housing Revenue Bonds Westridge 6.75 2017 650,000 667,245
Minnetonka Senior Housing Revenue Bonds Westridge 7.00 2027 500,000 514,650
New Brighton Tax Credit Investor Revenue Bonds
Polynesian Village Apartments Series 1995B A.M.T. 7.75 2009 2,355,000 2,428,900
North St. Paul General Obligation School Bonds 5.125 2025 6,310,000 6,295,929
Northern Municipal Power Agency Electric System
Pre-refunded Revenue Bonds
Series 1989A (AMBAC Insured) 7.40 2018 1,000,000 1,055,270
Northern Municipal Power Agency Electric System
Pre-refunded Revenue Bonds
Series 1989B (AMBAC Insured) 7.40 2018 1,800,000 1,891,818
Northern Municipal Power Agency Electric System
Refunding Revenue Bonds Series 1989A 7.25 2016 5,475,000 5,746,889
Owatanna Public Utilities Pre-refunded
Revenue Bonds Series 1991 6.75 2016 1,000,000 1,076,430
Plymouth Multi-family Housing Revenue Bonds
Harbor Lane Apartments Series 1993
(Asset Guaranty Insured) A.M.T. 5.90 2013 2,325,000 2,394,053
Richfield Independent School District 280 Unlimited Tax
General Obligation School Building Bonds Series 1993C
Inverse Floater (FGIC Insured) 6.275 2010 3,300,000(f) 3,436,125
Richfield Independent School District 280 Unlimited Tax
General Obligation School Building Bonds Series 1993C
Inverse Floater (FGIC Insured) 6.375 2012 2,510,000(f) 2,610,400
Richfield Multi-family Housing
Refunding Revenue Bonds
Village Shores Apartments Series 1996 7.625 2031 2,980,000 3,082,154
Robbinsdale Hospital Pre-refunded Revenue Bonds
North Memorial Medical Center
Series 1989 (AMBAC Insured) 7.375 2019 2,200,000 2,320,164
Robbinsdale Multi-family Housing Revenue Bonds
Series 1996A 7.35 2031 3,260,000 3,323,374
Rochester Health Care Facility Revenue Bonds
Mayo Foundation Series A 4.95 2019 5,000,000 4,800,350
Rochester Multi-family Housing Development
Revenue Bonds Civic Square
Series 1991 (FHA Insured) A.M.T. 7.45 2031 4,370,000 4,663,970
St. Cloud Certificates of Participation 5.90 2017 400,000 406,060
St. Cloud Hospital Facility Refunding Revenue Bonds
Series C (AMBAC Insured) 5.30 2020 1,515,000 1,516,773
St. Cloud Hospital Facility Revenue Bonds
St. Cloud Hospital Series 1990B (AMBAC Insured) 7.00 2020 5,000,000 5,549,900
St. Cloud Unlimited Tax General Obligation Bonds
Series 1998A (FGIC Insured) 5.00 2020-24 2,180,000 2,133,448
St. Louis Park Health Care Facilities
Pre-refunded Revenue Bonds
Park Nicollet Medical Center Series 1990A 9.25 2020 4,000,000 4,472,640
St. Louis Park Health Care Facilities
Pre-refunded Revenue Bonds
Park Nicollet Medical Center Series 1991A 8.625 2021 2,000,000 2,254,240
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group
Series 1993 (AMBAC Insured) 5.20 2023 5,000,000 4,923,650
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group
Series 1993B Inverse Floater (AMBAC Insured) 5.875 2013 7,000,000(f) 7,122,500
St. Louis Park Multi-family Housing Refunding
Revenue Bonds Park Blvd Towers Series 1996A 7.00 2031 3,955,000 4,091,764
St. Paul & Minneapolis Housing & Redevelopment
Authority Health Care Facility Revenue Bonds
Group Health Plan Series 1992 6.75 2013 10,500,000 11,577,405
St. Paul Housing & Development Bonds
Highland Retirement (FHA Insured) 7.01 2026 5,210,000(i) 5,157,900
St. Paul Housing & Redevelopment Authority
Health Care Facility Revenue Bonds
Lyngblomsten Care Center Series 1993A 7.125 2006-17 2,730,000 2,894,863
St. Paul Housing & Redevelopment Authority
Health Care Facility Multi-family Rental Housing
Revenue Bonds Lynblomsten Series 1993B 7.00 2024 1,870,000 1,898,013
St. Paul Housing & Redevelopment Authority
Sales Tax Revenue Bonds
Civic Center (Secondary MBIA Insured) 5.55 2023 7,500,000 7,789,575
St. Paul Housing & Redevelopment Authority Single Family
Mortgage Refunding Revenue Bonds Middle Income
Phase II Mortgage Backed (FNMA Insured) 6.80 2028 3,460,000 3,734,759
St. Paul Port Authority Unlimited Tax
General Obligation Bonds 5.125 2024 4,770,000 4,773,387
Shoreview Senior Housing Revenue Bonds
Series 1996 7.25 2026 2,700,000 2,742,174
Southeastern Minnesota Multi-county Housing &
Redevelopment Authority Housing Development
Winona County Unlimited Tax
General Obligation Bonds Series 1997 5.35 2028 1,170,000 1,179,980
Southern Minnesota Municipal Power Agency
Power Supply System Revenue Bonds
Zero Coupon (MBIA Insured) 6.08 2024 5,150,000(g) 1,328,443
Southern Minnesota Municipal Power Agency Power
Supply System Revenue Bonds Zero Coupon
Series 1994A (MBIA Insured) 6.67 2019 19,500,000(g) 6,581,055
Southern Minnesota Municipal Power Agency Power
Supply System Revenue Bonds Zero Coupon
Series 1994A (MBIA Insured) 6.88 2022 12,000,000(g) 3,435,480
Southern Minnesota Municipal Power Agency
Pre-refunded Bonds Series 1988A-B 8.125 2018 2,315,000 2,361,300
Southern Minnesota Municipal Power Agency
Pre-refunded Revenue Bonds Series A
Escrowed to Maturity (Secondary MBIA Insured) 5.75 2018 1,970,000 2,101,926
Southern Minnesota Municipal Power Agency
Revenue Bonds (Secondary MBIA Insured) 4.75 2016 7,165,000 6,937,511
Southern Minnesota Municipal Power Agency
Un-refunded Balance Power Revenue Bonds Series A 5.75 2018 1,895,000 1,945,445
Spring Park Health Care Facility Revenue Bonds
Twin Birch Health Care Center Series 1991 8.25 2011 1,780,000 1,927,740
State Agricultural & Economic Development Board
Health Care System Fairview Hospital &
Healthcare Service Series 1997A (MBIA Insured) 5.75 2026 2,000,000 2,118,240
State Agricultural & Economic Development Board
Hospital Revenue Bonds Evangelical Lutheran
Good Samaritan Society Series 1997 5.15 2022 3,000,000 2,950,230
State General Obligation Various Purpose
Pre-refunded Bonds Series 1990 7.00 2009 6,250,000 6,597,313
State General Obligation Various Purpose
Pre-refunded Bonds Series 1991 6.70 2011 8,000,000 8,689,040
State Higher Education Facilities Authority
Augsburg College Mortgage Revenue Bonds
Series 4-F1 6.25 2023 1,750,000 1,877,943
State Higher Education Facilities Authority
MacAlester College Revenue Bonds 4th Series 1997J 5.55 2017 1,000,000 1,031,810
State Higher Education Facility Authority
College Revenue Bonds
University of St. Thomas 4th Series 1997P 5.40 2023 580,000 584,947
State Higher Education Facility Authority
Mortgage Pre-refunded Revenue Bonds
St. Mary's College Series 2-M 8.375 2017 1,000,000 1,055,690
State Housing Facility Authority
Housing Finance Agency Housing Development
Single Family Mortgage Bonds Series B 7.25 2016 305,000 309,596
State Housing Finance Agency Single Family
Mortgage Bonds Series 1989A A.M.T. 8.00 2029 1,165,000 1,206,066
State Housing Finance Agency Single Family
Mortgage Bonds Series 1990A A.M.T. 7.95 2022 3,015,000 3,191,619
State Housing Finance Agency Single Family
Mortgage Bonds Series 1991A A.M.T. 7.45 2022 3,470,000 3,675,181
State Housing Finance Agency Single Family
Mortgage Bonds Series 1992A 6.95 2016 2,830,000 3,008,516
State Housing Finance Agency Single Family
Mortgage Revenue Bonds Series 1997D A.M.T. 5.85 2019 3,000,000 3,103,320
State Housing Finance Agency Single Family
Mortgage Revenue Bonds Series L A.M.T. 6.70 2020 1,025,000 1,092,148
State Public Facilities Authority Water Pollution
Control Revenue Bonds Series 1989A 7.00 2009 7,850,000 8,419,203
State University Board of Regents General
Obligation Bonds Series 1993A Inverse Floater 5.72 2003 5,000,000(f) 5,200,000
State University Board of Regents
General Obligation Bonds Series 1996A 5.50 2021 12,500,000 13,286,625
State University Board of Regents General Obligation
Pre-refunded Bonds Series 1989A 6.00 2011 4,625,000 4,817,400
State University Board State University System
Pre-refunded Revenue Bonds
Series 1989A (MBIA Insured) 7.40 2019 2,250,000 2,364,030
Vadnais Heights Multi-family Housing
Cottages of Vadnais Heights
Refunding Revenue Bonds Series 1995 A.M.T. 7.00 2031 3,180,000 3,255,811
Vadnais Heights Multi-family Housing
Cottages of Vadnais Heights
Tax Credit Revenue Bonds Series 1997 A.M.T. 7.00 2009 1,080,000 1,092,377
Washington County General Obligation
Capital Improvement Bonds Series 1989A 7.00 2009-10 4,425,000 4,561,334
Washington County Housing & Redevelopment Authority
Woodbury Multi-family Housing
Refunding Revenue Bonds Series 1996 6.95 2023 1,970,000 2,019,821
Western Minnesota Municipal Power Agency
Revenue Bonds Escrowed to Maturity
(AMBAC Insured) 6.75 2016 5,935,000 6,427,190
Western Minnesota Municipal Power Agency
Supply Refunding Revenue Bonds
Series A (Secondary MBIA Insured) 5.50 2015 11,250,000 11,253,250
White Bear Lake Industrial Development
Revenue Bonds Taylor Series 1988A A.M.T. 8.75 2008 2,250,000 2,356,290
Total municipal bonds
(Cost: $371,435,447) $403,775,599
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term security (0.5%)
Issuer (d,e) Effective Amount Value(a)
yield payable at
maturity
Municipal notes
Cohasset Revenue Bonds Minnesota Power & Light
V.R.D.N. Series B
<S> <C> <C> <C>
06-01-13 5.25% $ 200,000 $ 200,000
Duluth Health Facilities Revenue Bonds V.R.
06-01-19 5.25 1,300,000 1,300,000
Minneapolis & St. Paul Housing & Redevelopment
Authority Health Care Revenue Bonds V.R. Series B
08-15-25 5.30 500,000 500,000
Total short-term securities
(Cost: $2,000,000) $ 2,000,000
Total investments in securities
(Cost: $373,435,447)(j) $405,775,599
</TABLE>
<PAGE>
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:
(Unaudited)
Rating 12-31-97 6-30-97
AAA 46% 44%
AA 22 22
A 12 13
BBB 5 9
BB and below 15 12
Non-rated -- --
Total 100% 100%
(c) ) The following abbreviations are used in portfolio descriptions to identify
the insurer of the issue: AMBAC -- American Municipal Bond Association
Corporation FGIC -- Financial Guarantee Insurance Corporation FHA -- Federal
Housing Authority FNMA -- Federal National Mortgage Association FSA -- Financial
Security Assurance GNMA -- Government National Mortgage Association MBIA --
Municipal Bond Investors Assurance
(d) The following abbreviations are used in portfolio descriptions:
A.M.T. -- Alternative Minimum Tax-- As of Dec. 31, 1997, the value of
securities subject to alternative minimum tax represented 15.0% of net assets.
V.R. -- Variable Rate
V.R.D.N. -- Variable Rate Demand Note
(e) The Fund is entitled to receive principal amount from issuer or corporate
guarantor, if indicated in parentheses, after a day or a week's notice. The
maturity date disclosed represents the final maturity. Interest rate varies to
reflect current market conditions; rate shown is the effective rate on Dec. 31,
1997.
(f) Inverse floaters represent securities that pay interest at a rate that
increases (decreases) in the same magnitude as, or in a multiple of, a decline
(increase) in market short-term rates. Interest rate disclosed is the rate in
effect on Dec. 31, 1997. Inverse floaters in the aggregate represent 4.5% of the
Fund's net assets as of Dec. 31, 1997.
(g) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(h) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements.) Information concerning such security
holdings at Dec. 31, 1997 is as follows:
Security Acquisition Purchase
date cost
Bloomington Community Development
Refunding Revenue Note 24th Avenue Motel 3-31-88 $1,758,382
(i) Non-income producing. Item identified is in default as to payment of
interest and/or principal.
(j) At Dec. 31, 1997, the cost of securities for federal income tax purposes was
approximately $372,941,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation...........................................$32,858,000
Unrealized depreciation........................................... (23,000)
Net unrealized appreciation.......................................$32,835,000
See accompanying notes to investments in securities.
<PAGE>
<TABLE>
<CAPTION>
IDS New York Tax-Exempt Fund
Dec. 31, 1997 (Unaudited)
(Percentages represent value of
investments compared to net assets)
Municipal bonds (97.0%)
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate year amount
Albany County Airport Authority Revenue Bonds
<S> <C> <C> <C> <C>
Series 1997 (FSA Insured) A.M.T. 5.50 % 2019 $ 250,000 $ 256,385
Broome County Certificates of Partication
Public Safety Facility Series 1994 (MBIA Insured) 5.25 2022 2,650,000 2,642,553
Buffalo Municipal Water Agency Authority Water System
Revenue Bonds Series 1995 (FGIC Insured) 5.00 2025 1,000,000 976,630
Buffalo School Serial Bonds Series 1997B
(AMBAC Insured) 5.375 2016 500,000 513,985
Erie County Unlimited Tax General Obligation Bonds
Series B (FGIC Insured) 5.50 2025 700,000 719,194
Erie County Water Authority Fourth Resolution Water
Refunding Revenue Bonds Zero Coupon
Series 1992 (AMBAC Insured) 7.30 2017 1,215,000(e) 292,268
Erie County Water Authority Water Works System
Revenue Bonds Series 1990A Escrowed to Maturity
(AMBAC Insured) 6.00 2008 1,765,000 1,955,443
Fallsburg Sullivan County Unlimited Tax General
Obligation Improvement Pre-refunded Bonds
Series 1991 7.05 2011-14 1,300,000 1,445,002
Great Neck North Water Authority Water System
Pre-refunded Revenue Bonds Series 1989A 6.00 2020 1,415,000 1,468,600
Metropolitan Transportation Authority Commuter Facilities
Service Contract Refunding Bonds 5th Series 1987 6.50 2016 1,775,000 1,905,391
Metropolitan Transportation Authority Commuter Facilities
Service Contract Refunding Bonds Series 1987B 5.125 2024 1,000,000 983,630
Monroe County Utility General Obligation
Pre-refunded Bonds Water Improvement System 7.10 2008-09 1,000,000 1,049,410
Municipal Assistance Troy New York General
Revenue Bonds Series 1996A (MBIA Insured) 5.00 2022 1,250,000 1,224,288
New York & New Jersey Port Authority Special Obligation
Revenue Bonds KIAC Partners Series 4 A.M.T. 6.75 2019 1,500,000 1,660,620
New York City General Obligation Bonds Series 1995B 7.00 2016 1,500,000 1,707,135
New York City General Obligation Bonds Series J 5.875 2019 1,000,000 1,040,550
New York City Industrial Development Agency
Civil Facility Lease Revenue Bonds Series 1997 5.80 2016 1,000,000 1,034,280
New York City Industrial Development Agency
Civil Facility Lease Revenue Bonds Series 1997
(MBIA Insured) 5.25 2017-27 2,000,000 2,011,920
New York City Industrial Development Agency
Civil Facility Revenue Bonds Series 1993 5.375 2023 2,000,000 2,000,620
New York City Municipal Water Finance Authority
Water & Sewer System Revenue Bonds
Series B Inverse Floater (MBIA Insured) 6.27 2009 2,000,000(f) 2,095,000
New York City Municipal Water Finance Authority
Water & Sewer System Revenue Bonds
Series B (MBIA Insured) 5.75 2026 500,000 525,660
New York City Unlimited Tax General Obligation Bonds
Series 1996G 5.75 2017 1,500,000 1,548,570
New York City Water Finance Authority
Water & Sewer System Pre-refunded Revenue Bonds
Series A (FGIC Insured) 6.75 2014 1,185,000 1,250,045
New York City Water Finance Authority
Water & Sewer System Revenue Bonds
Series A (FGIC Insured) 6.75 2014 565,000 596,013
State Dormitory Authority City University System
Consolidated 3rd Resolution Revenue Bonds
2nd Series 1994 (MBIA Insured) 6.25 2019 1,500,000 1,642,110
State Dormitory Authority City University System
Revenue Bonds Series 1993A 5.75 2013 3,000,000 3,254,220
State Dormitory Authority College Revenue Bonds
New York Law School Series 1997 (AMBAC Insured) 5.00 2017 625,000 612,044
State Dormitory Authority College Revenue Bonds
Series 1996 (AMBAC Insured) 5.25 2016 1,140,000 1,158,707
State Dormitory Authority Nursing Home Revenue Bonds
Frances Schervier Home Series 1997 Asset Guaranty 5.50 2017 1,000,000 1,016,200
State Dormitory Authority Revenue Bonds
Culinary Institute of America Series 1997 (MBIA Insured) 5.00 2017 1,000,000 986,520
State Dormitory Authority Revenue Bonds
NYACK Hospital Series 1996 6.25 2013 1,000,000 1,063,330
State Dormitory Authority State University Education
Facility Cooper Union Insured College Revenue Bonds
Series 1996 (AMBAC Insured) 5.375 2020 860,000 871,369
State Dormitory Authority State University Education
Facility Pre-refunded Revenue Bonds Series 1990A 7.70 2012 1,750,000 1,927,730
State Dormitory Authority State University Education
Facility Refunding Revenue Bonds Series 1990B 7.50 2011 1,900,000 2,337,988
State Dormitory Authority State University Education
Facility Revenue Bonds (Secondary AMBAC Insured) 5.25 2015 1,000,000 1,041,750
State Dormitory Authority State University Education
Facility Revenue Bonds (Secondary AMBAC Insured) 5.50 2019 2,000,000 2,148,340
State Energy Research & Development Authority
Electric Facility Revenue Bonds Consolidated Edison
Series 1986A A.M.T. 7.50 2021 1,750,000 1,767,500
State Energy Research & Development Authority
Electric Facility Revenue Bonds Consolidated Edison
Series 1989A A.M.T. 7.75 2024 1,000,000 1,017,880
State Energy Research & Development Authority
Electric Facility Revenue Bonds Consolidated Edison
Series 1990A A.M.T. 7.50 2025 5,000,000 5,270,950
State Energy Research & Development Authority
Gas Facilities Industrial Development
Revenue Bonds Series 1996 (MBIA Insured) 5.50 2021 2,000,000 2,058,900
State Energy Research & Development Authority
Pollution Control Refunding
Revenue Bonds Rochester Gas & Electric
(MBIA Insured) A.M.T. 6.50 2032 2,500,000 2,728,050
State Energy Research & Development Authority
Solid Waste Development Revenue Bonds
State Gas & Electric Company
Series A (MBIA Insured) A.M.T. 5.70 2028 3,000,000 3,096,180
State Environmental Facility State Water & Pollution
Control Revolving Fund Revenue Bonds New York City
Municipal Water Finance Authority Series 1990A 7.50 2012 3,000,000 3,287,970
State Local Government Assistance Bonds Series C 5.50 2022 1,500,000 1,512,285
State Local Government Assistance
Pre-refunded Bonds Series 1991A 7.00 2016 4,000,000 4,427,160
State Medical Care Facility Finance Agency Hospital &
Nursing Home Mortgage Revenue Bonds
Montefiore Hospital Series 1989A (FHA Insured) 7.25 2024 1,400,000 1,479,170
State Medical Care Facility Finance Agency Mental Health
Services Facility Improving Refunding Revenue Bonds
Series 1993F (Secondary FSA Insured) 5.375 2014 1,000,000 1,016,640
State Medical Care Facility Finance Agency Mental Health
Services Facility Improving Refunding Revenue Bonds
Series 1994A (Secondary FSA Insured) 5.25 2023 1,500,000 1,493,625
State Medical Care Facility Finance Agency Revenue Bonds
Buffalo General Hospital Series 1988C (FHA Insured) 7.60 2008 1,500,000 1,564,890
State Medical Care Facility Finance Agency Revenue Bonds
Buffalo General Hospital Series 1988C (FHA Insured) 7.70 2022 1,950,000 2,035,547
State Medical Care Facility Finance Agency
Secured Hospital Revenue Bonds Series 1987A 7.10 2027 550,000 566,775
State Mortgage Agency Homeowner Mortgage
Revenue Bonds Series 27 6.90 2015 3,000,000 3,248,520
State Mortgage Agency Homeowner Mortgage
Revenue Bonds Series TT 7.50 2015 4,000,000 4,322,840
State Mortgage Agency Revenue Bonds
Series 9 A.M.T. 7.30 2017 970,000 981,427
State Thruway Authority Local Highway & Bridge Service
Contract Bonds Series 1991 6.00 2011 2,500,000 2,633,525
State Urban Development Correction Facility
Pre-refunded Revenue Bonds Series 1 (FSA Insured) 7.50 2020 4,500,000 4,888,485
State Urban Development Correctional Capital Facilities
Refunding Revenue Bonds Series 1993A 5.25 2021 2,500,000 2,434,900
State Urban Development Correctional Capital Facilities
Revenue Bonds Series 5 (MBIA Insured) 5.50 2025 750,000 769,808
State Urban Development Revenue Bonds
Higher Education Applied Technology Grants
Series 1995 (MBIA Insured) 5.75 2015 1,000,000 1,064,670
Triborough Bridge & Tunnel Authority General Purpose
Pre-refunded Revenue Bonds Series S 7.00 2021 3,000,000 3,290,220
Triborough Bridge & Tunnel Authority
Special Obligation Refunding Bonds
Series 1991B (FGIC Insured) 6.875 2015 2,000,000 2,176,940
United Nations Development Senior Lien
Refunding Revenue Bonds Series 1992A 6.00 2026 4,500,000 4,961,070
Utica Industrial Development Agency
Civic Facility Revenue Bonds
Series 1996A (MBIA Insured) 5.50 2016 750,000 770,085
Total municipal bonds
(Cost: $103,136,036) $113,829,512
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term securities (1.6%)
Issuer (d,g) Effective Amount Value(a)
yield payable at
maturity
Municipal notes
New York City General Obligation Bonds Series B-2 V.R.D.N.
<S> <C> <C> <C>
08-15-03 4.20% $ 300,000 $ 300,000
New York City Water Finance Authority
Water & Sewer System Revenue Bonds Series 1994C
06-15-23 5.10 1,000,000 1,000,000
New York City Water Finance Authority
Water & Sewer System Revenue Bonds Series A
06-15-25 4.15 300,000 300,000
State Energy Research & Development Authority Pollution Control Refunding
Revenue Bonds Niagara Mohawk Power Series A V.R.
07-01-15 4.50 300,000 300,000
Total short-term securities
(Cost: $1,900,000) $ 1,900,000
Total investments in securities
(Cost: $105,036,036)(h) $115,729,512
</TABLE>
<PAGE>
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:
(Unaudited)
Rating 12-31-97 6-30-97
AAA 64% 58%
AA 10 13
A 12 12
BBB 13 16
BB and below 1 1
Non-rated -- --
Total 100% 100%
(c) The following abbreviations are used in portfolio descriptions to identify
the insurer of the issue: AMBAC -- American Municipal Bond Association
Corporation FGIC -- Financial Guarantee Insurance Corporation FHA -- Federal
Housing Authority FNMA -- Federal National Mortgage Association FSA -- Financial
Security Assurance GNMA -- Government National Mortgage Association MBIA --
Municipal Bond Investors Assurance
(d) The following abbreviations are used in portfolio descriptions:
A.M.T. -- Alternative Minimum Tax-- As of Dec. 31, 1997, the value of
securities subject to alternative minimum tax represented 14.3%
of net assets.
V.R. -- Variable Rate
V.R.D.N. -- Variable Rate Demand Note
(e) For zero coupon bonds, the interest rate disclosed represents the annualized
yield on the date of acquisition.
(f) Inverse floaters represent securities that pay interest at a rate that
increases (decreases) in the same magnitude as, or in a multiple of, a decline
(increase) in market short-term rates. Interest rate disclosed is the rate in
effect on Dec. 31, 1997. Inverse floaters in the aggregate represent 1.8% of the
Fund's net assets as of Dec. 31, 1997.
(g) The Fund is entitled to receive principal amount from issuer or corporate
guarantor, if indicated in parentheses, after a day or a week's notice. The
maturity date disclosed represents the final maturity. Interest rate varies to
reflect current market conditions; rate shown is the effective rate on Dec. 31,
1997.
(h) At Dec. 31, 1997, the cost of securities for federal income tax purposes was
approximately $104,969,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation...........................................$10,761,000
Unrealized depreciation........................................... --
Net unrealized appreciation.......................................$10,761,000
See accompanying notes to investments in securities.
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS Ohio Tax-Exempt Fund
Dec. 31, 1997 (Unaudited)
(Percentages represent value of
investments compared to net assets)
Municipal bonds (96.4%)
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate year amount
Barberton Limited Tax Various Purpose General
<S> <C> <C> <C> <C> <C> <C>
Obligation Bonds 1st Series 1989 7.35 % 2009 $ 700,000 $ 753,501
Bellefontaine Hospital Facility Refunding
Revenue Bonds Mary Rutan Health Association of
Logan County Series 1993 6.00 2013 1,000,000 1,034,930
Buckeye Valley Local School District School
Improvement Unlimited Tax General
Obligation Bonds Series 1995A (MBIA Insured) 5.25 2020 1,000,000 1,000,720
Butler County Hospital Facility Improvement
Refunding Revenue Bonds 7.50 2010 1,750,000 1,905,610
Butler County Transportation Improvement District Highway
Improvement Transit Revenue Bonds
Series 1997A (FSA Insured) 5.125 2017 1,000,000 1,001,270
Carroll Water & Sewer District
Water System Improvement Unlimited Tax
General Obligation Bonds 6.25 2010 955,000 974,625
Celina Local School District
Unlimited General Obligation Bonds
Series 1996 (FGIC Insured) 5.25 2020 1,000,000 1,000,720
Clermont County Hospital Facility Revenue Bonds
Mercy Health System Province of Cincinnati
Series 1989A (AMBAC Insured) 7.50 2019 750,000 813,015
Cleveland Airport Systems Revenue Bonds
Series 1990A (MBIA Insured) A.M.T. 7.40 2020 500,000 542,010
Cleveland Waterworks Improvement 1st Mortgage
Refunding Revenue Bonds
Series F 1992B (AMBAC Insured) 6.25 2016 1,000,000 1,083,980
Cleveland Waterworks Improvement 1st Mortgage
Revenue Bonds Series 1987E 6.00 2017 200,000 200,098
Coshocton County Solid Waste Disposal
Refunding Revenue Bonds
Stone Container Series 1992 7.875 2013 1,000,000 1,120,430
Cuyahoga County Health Care Facilities
Refunding Revenue Bonds
Judson Retirement Community Series A 7.25 2018 1,000,000 1,083,700
Cuyahoga County Hospital Improvement Revenue Bonds
Mount Sinai Medical Center Series 1991
(AMBAC Insured) 6.625 2021 600,000 663,270
Cuyahoga County Hospital Improvement Revenue Bonds
University Hospitals Health System
Series 1992 (AMBAC Insured) 6.50 2011 500,000 542,000
Cuyahoga County Hospital Refunding Revenue Bonds
Cleveland Clinic Foundation Series 1992 5.50 2011 1,500,000 1,566,195
Cuyahoga County Hospital Revenue Bonds
Meridia Health Series 1991 7.00 2023 1,000,000 1,083,900
Cuyahoga County Limited Tax General Obligation Bonds 5.60 2013 500,000 542,540
Cuyahoga Hospital Revenue Bonds Metrohealth System
Series 1989 (MBIA Insured) 6.00 2019 1,000,000 1,022,680
Delaware County Sewer Improvement Limited Tax
General Obligation Bonds 5.25 2015 1,000,000 1,012,100
Dover Limited Tax Improvement General Obligation Bonds
Municipal Sewer System 7.10 2009 1,000,000 1,070,330
Elyria Limited Tax Improvement General Obligation
Recreation Facility Bonds 7.10 2009 715,000 768,039
Erie County Hospital Improvement Refunding
Revenue Bonds Firelands Community Hospital
Series 1992 6.75 2015 2,000,000 2,177,320
Franklin County Convention Facilities Authority
Tax & Lease Revenue Anticipation
Pre-refunded Bonds (MBIA Insured) 7.00 2019 1,500,000 1,647,855
Highland Heights Limited Tax Improvement
General Obligation Street Bonds 7.75 2008 400,000 421,364
Hilliard County School District Unlimited Tax
General Obligation Bonds Series A (FGIC Insured) 5.00 2020 1,000,000 981,230
Lakota Local School District Butler County School
Unlimited Tax Improvement Bonds 7.00 2012 500,000 528,335
Lakota Local School District Butler County School
Unlimited Tax Improvement Pre-refunded Bonds 7.90 2011 200,000 207,516
Lakota Local School District Unlimited Tax Improvement
General Obligation Bonds (AMBAC Insured) 6.25 2014 2,000,000 2,211,220
Lorain County Hospital Facilities Refunding
Revenue Bonds Elyria United Methodist Series C 6.875 2022 1,000,000 1,098,560
Lorain County Hospital Facilities Refunding
Revenue Bonds EMH Regional Medical Center
Series 1995 (AMBAC Insured) 5.375 2021 2,000,000 2,014,280
Marietta Sewer System Improvement Bonds (BIG Insured) 7.50 2007 200,000 204,592
Marion County Health Care Facilities Improvement
Refunding Revenue Bonds United Church Homes
Series 1993 6.375 2010 1,000,000 1,055,220
Marysville Sewer System 1st Mortgage Revenue Bonds
Series 1988 (BIG Insured) A.M.T. 7.85 2008 400,000 416,080
Marysville Water System Mortgage Revenue Bonds
Series 1991 (MBIA Insured) 7.05 2021 1,000,000 1,114,610
Medina County Hospital Revenue Bonds Medina County
Community Hospital Series 1987 (AMBAC Insured) 6.875 2016 100,000 102,222
Montgomery County Health Facilities Revenue Bonds
Friendship Village Dayton Series 1990A 9.25 2016 1,000,000 1,119,450
Montgomery County Hospital Facility
Refunding Revenue & Improvement Bonds
Ketter Medical Center Series 1996 (MBIA Insured) 5.50 2026 1,000,000 1,027,520
Montgomery County Water Revenue Bonds
Greater Moraine-Beavercreek District (FGIC Insured) 6.25 2017 1,000,000 1,096,450
North Olmsted County General Obligation Bonds
(AMBAC Insured) 5.00 2016-21 1,700,000 1,689,022
Oak Hills Local School District Unlimited Tax General
Obligation Bonds Series 1997 (MBIA Insured) 5.125 2025 1,000,000 993,340
Orrville Electric System Refunding
Revenue & Improvement Mortgage Bonds
Series 1997 (AMBAC Insured) 5.10 2017 1,000,000 995,750
Parma Hospital Improvement Revenue Bonds
Parma Community General Hospital
Series 1989B (MBIA Insured) 7.125 2013 500,000 522,000
Pickerington Local School District Unlimited Tax
General Obligation Pre-refunded Bonds
(AMBAC Insured) 7.00 2013 1,000,000 1,098,570
Rural Loraine County Water Authority Water Resource
Improvement Pre-refunded Revenue Bonds
Series 1991 (AMBAC Insured) 7.00 2011 1,000,000 1,107,250
Southwest Local School District Hamilton &
Butler Counties School Unlimited Tax
Improvement Bonds (AMBAC Insured) 7.65 2010 500,000 548,800
State Air Quality Development Authority Refunding
Revenue Bonds JMG Funding Limited Partnership
(AMBAC Insured) A.M.T. 6.375 2029 500,000 550,030
State Air Quality Development Authority Refunding
Revenue Bonds Series 1994
(AMBAC Insured) A.M.T. 6.375 2029 2,000,000 2,200,120
State Air Quality Development Authority Revenue Bonds
Columbus & Southern Series A (FGIC Insured) 6.375 2020 1,000,000 1,100,230
State Building Authority Local Jail Grant Bonds
Series 1989A (MBIA Insured) 7.35 2009 500,000 544,915
State Building Authority State Facility Pre-refunded Bonds
Columbus State Office Building Series 1985C 7.35 2005 1,000,000 1,085,410
State Department of Administrative Services
Certificate of Participation Rickenbacker Port Authority
Series 1997 (AMBAC Insured) 5.00 2023 1,500,000 1,462,020
State Higher Educational Facility Pre-refunded
Revenue Bonds Oberlin College Series 1989 7.375 2014 500,000 537,445
State Housing Finance Agency Mortgage Revenue Bonds
Aristocrat South Board & Care
Series 1991A (FHA Insured) A.M.T. 7.30 2031 1,500,000 1,590,825
State Housing Finance Agency Single Family Mortgage
Revenue Bonds Series 1990A (GNMA Insured) A.M.T. 7.80 2030 420,000 441,260
State Housing Finance Agency Single Family Mortgage
Revenue Bonds Series 1990C (GNMA Insured) A.M.T. 7.85 2021 715,000 760,367
State Municipal Electric Generation Agency
Revenue Bonds Joint Venture 5 (AMBAC Insured) 5.375 2024 2,000,000 2,018,120
State Turnpike Revenue Bonds Series A 5.75 2024 1,000,000 1,048,140
State Turnpike Revenue Bonds Series A (MBIA Insured) 5.50 2026 1,000,000 1,029,660
State Valley School District School Improvement
Unlimited Tax General Obligation Bonds
Adams & Highland Counties Series 1995 (MBIA Insured) 5.25 2021 2,000,000 2,001,440
State Water & Air Quality Development Authority
Cleveland Electric Illumination Pollution Control
Refunding Revenue Bonds Series 1995 7.70 2025 1,000,000 1,157,910
State Water Development Authority Bonds Toledo Edison
Series 1994 A.M.T. 8.00 2023 1,000,000 1,155,890
State Water Development Authority Water Development
Pre-refunded Bonds Pure Water Series 1988I 7.00 2014 500,000 506,825
State Water Development Authority Water Development
Refunding Revenue Bonds Pure Water (AMBAC Insured) 5.50 2018 750,000 767,707
State Water Development Solid Waste Disposal
Revenue Bonds Northstar BHP Steel LLC-Cargill
Series 1995 A.M.T. 6.30 2020 500,000 541,940
Summit County Industrial Development Revenue Bonds
Century Products 7.75 2005 100,000 102,941
Sycamore Board of Education Community School District
Hamilton County School Improvement Bonds 6.50 2009 500,000 520,010
University of Cincinnati Certificates of Participation
Student Recreation Center (MBIA Insured) 5.125 2024 1,000,000 985,010
University of Cincinnati General Receipt
Pre-refunded Bonds Series I-1 7.10 2010 750,000 797,318
University of Toledo General Receipt
Pre-refunded Bonds Series 1990 (MBIA Insured) 7.125 2020 500,000 544,680
Warren County Various Purpose Limited Tax
General Obligation Bonds Series 1992 6.10 2012 500,000 569,225
Whitehall City School District Franklin County
Unlimited Tax Improvement General Obligation
Pre-refunded Revenue Bonds 7.25 2013 500,000 539,910
Total municipal bonds
(Cost: $63,667,803) $69,723,567
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term securities (2.4%)
Issuer (d,e) Effective Amount Value(a)
yield payable at
maturity
Municipal notes
State Air Quality Development Authority Revenue Bonds
Cincinnati Gas & Electric V. R. Series 1985B
<S> <C> <C> <C>
12-01-15 4.50% $1,500,000 $ 1,500,000
State Air Quality Development Authority Revenue Bonds
Cincinnati Gas & Electric V. R. Series A
09-01-30 4.95 200,000 200,000
Total short-term securities
(Cost: $1,700,000) $ 1,700,000
Total investments in securities
(Cost: $65,367,803)(f) $71,423,567
</TABLE>
<PAGE>
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:
(Unaudited)
Rating 12-31-97 06-30-97
AAA 67% 64%
AA 8 9
A 8 9
BBB 10 10
BB and below 7 8
Non-rated -- --
Total 100% 100%
(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 GNMA -- Government National Mortgage Association MBIA -- Municipal
Bond Investors Assurance
(d) The following abbreviations are used in portfolio descriptions:
A.M.T. -- Alternative Minimum Tax-- As of Dec. 31, 1997, the value of
securities subject to alternative minimum tax represented 11.3%
of net assets.
V.R. -- Variable Rate
(e) The Fund is entitled to receive principal amount from issuer or corporate
guarantor, if indicated in parentheses, after a day or a week's notice. The
maturity date disclosed represents the final maturity. Interest rate varies to
reflect current market conditions; rate shown is the effective rate on Dec. 31,
1997.
(f) At Dec. 31, 1997, the cost of securities for federal income tax purposes was
approximately $65,331,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation...........................................$6,093,000
Unrealized depreciation........................................... --
Net unrealized appreciation.......................................$6,093,000
<PAGE>
Board members and officers
Independent board members and officers
Chairman William R. Pearce*
of the board Chairman of the board, Board Services Corporation (provides
administrative services to boards including the boards of the
IDS and IDSLife funds and Master Trust portfolios).
H. Brewster Atwater, Jr.
Former chairman and chief executive officer, General Mills,
Inc.
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for Public
Policy Research.
Heinz F. Hutter
Former president and chief operating officer, Cargill, Inc.
Anne P. Jones
Attorney and telecommunications consultant.
Alan K. Simpson
Former United States senator for Wyoming.
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
C. Angus Wurtele
Chairman of the board, The Valspar Corporation.
Officer
Vice president, Leslie L. Ogg*
general counsel President, treasurer and corporate secretary of Board Services
and secretary Corporation.
Board members and officers associated with AEFC
President John R. Thomas*
Senior vice president, AEFC.
William H. Dudley*
Senior advisor to the chief executive officer, AEFC.
David R. Hubers*
President and chief executive officer, AEFC.
Officers associated with AEFC
Vice president Peter J. Anderson*
Senior vice president, AEFC
Treasurer Matthew N. Karstetter*
Vice president, AEFC
* Interested person as defined by the Investment Company Act of 1940.
<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 Standard & Poor's Corporation (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 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
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, higher-yielding
equities 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.
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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.
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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.
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IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential for growth
of capital and income.
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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.
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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.
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IDS Mutual
Invests in a Portfolio which seeks to balance between common stocks and senior
securities (preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
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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.
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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.
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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.
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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.
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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.
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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.
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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.)
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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.
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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.
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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.
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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.
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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.
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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
AMERICAN EXPRESS Financial Advisors
IDS State Tax-Exempt Fund
IDS Tower 10
Minneapolis, MN 55440-0010
