IDS State
Tax-Exempt
Funds
1998 semiannual report
(icon of) Padlock
Tax-exempt funds from
the following states:
California
Massachusetts
Michigan
Minnesota
New York
Ohio
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.
Distributed by American Express Financial Advisors Inc.
American Express Financial Advisors
<PAGE>
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
Fund Facts 4
The 10 Largest Holdings 6
Financial Statements 12
Notes to Financial Statements 19
Investments in Securities 33
Board Members and Officers 85
<PAGE>
To our shareholders
From the Chairman
If you're an experienced investor, you know that the past several months was a
highly volatile period in many financial markets. But history tells us that
substantial market moves are nothing new. Though they're often unpredictable,
declines -- whether they're brief or long-lasting, moderate or substantial --
are always a possibility.
The potential for such volatility reinforces the need for investors to review
periodically their long-term goals and examine whether their investment program
remains on track to achieving them. Your quarterly investment statements are one
part of that monitoring process. The other is a meeting with your American
Express financial advisor. That becomes more important if there's a major change
in your financial situation or in the financial markets.
William R. Pearce
(picture of) William R. Pearce
William R. Pearce
Chairman of the board
<PAGE>
From the Portfolio Manager
In a largely positive environment for municipal bonds, the IDS State Tax-Exempt
Funds enjoyed a productive six months. For investors in the Funds' Class A
shares, the total returns (which include net asset value change and interest
income) ranged from 2.86% to 3.21% for the first half of the fiscal year -- July
through December 1998. The bulk of the returns came in the form of tax-free
income.
The low rate of inflation that has dominated the investment environment in
recent years remained in place during the period, providing ongoing reassurance
for the bond market. But this time the market got an additional boost from
another outbreak of the so-called "Asian flu," the financial malady that first
struck Asia in the fall of 1997. This past summer it was Russia and Latin
American that were affected.
Seeking a safe haven
The result was a flood of money into the U.S. bond market from investors who
were seeking what they believed to be a safe haven for investment. This "flight
to quality" drove down long-term interest rates until mid-fall, boosting bond
prices along the way. While U.S. Treasury bonds attracted the bulk of the buying
and, thus, enjoyed the most price appreciation by a large margin, municipal
bonds also benefited from the trend.
As has been the case in recent years, there was a substantial supply of
municipal bonds during the six months. But, thanks to healthy demand from
investors, the supply was readily absorbed. On the other hand, because of the
declining-rate trend, many bonds were "called" by their issuers and replaced by
new issues paying lower interest. Ultimately, this resulted in slightly lower
Fund yields over the period.
On the whole, I kept the Funds' durations somewhat shorter than average, a
strategy that results in less volatility in the Funds' net asset values. This is
in keeping with my preference to focus on keeping the yields as high as
possible, rather than trying to capture more potential price appreciation.
State updates
Looking at the Funds on an individual basis, all of the states continued to reap
the benefits of a strong national economy, including fiscal health and overall
upgradings of their bonds' quality. More specifically, in California and
Minnesota, municipal bond demand outpaced supply, which was good for bond
prices. The supply/demand situation was more balanced in Ohio, Michigan,
Massachusetts and New York, so prices were largely unaffected.
As the second half of the fiscal year begins, demand for municipal bonds is
still good, while the inflation and interest-rate environment remains favorable.
Therefore, barring any major change in those factors, I think municipal bonds
will continue to be a good choice for income-seeking investors.
Paul Hylle
(picture of) Paul Hylle
Paul Hylle
Portfolio Manager
<PAGE>
Fund Facts
California
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1998 $5.39
June 30, 1998 $5.35
Increase $0.04
Distributions
July 1, 1998 - Dec. 31, 1998
From income $0.13
From capital gains $ --
Total distributions $0.13
Total return* +3.21%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1998 $5.39
June 30, 1998 $5.35
Increase $0.04
Distributions
July 1, 1998 - Dec. 31, 1998
From income $0.11
From capital gains $ --
Total distributions $0.11
Total return* +2.84%**
Massachusetts
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1998 $5.58
June 30, 1998 $5.56
Increase $0.02
Distributions
July 1, 1998 - Dec. 31, 1998
From income $0.14
From capital gains $ --
Total distributions $0.14
Total return* +2.86%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1998 $5.58
June 30, 1998 $5.56
Increase $0.02
Distributions
July 1, 1998 - Dec. 31, 1998
From income $0.12
From capital gains $ --
Total distributions $0.12
Total return* +2.48%**
Michigan
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1998 $5.57
June 30, 1998 $5.57
Increase $ --
Distributions
July 1, 1998 - Dec. 31, 1998
From income $0.14
From capital gains $0.02
Total distributions $0.16
Total return* +2.93%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1998 $5.57
June 30, 1998 $5.57
Increase $ --
Distributions
July 1, 1998 - Dec. 31, 1998
From income $0.12
From capital gains $0.02
Total distributions $0.14
Total return* +2.55%**
* 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>
Minnesota
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1998 $5.43
June 30, 1998 $5.41
Increase $0.02
Distributions
July 1, 1998 - Dec. 31, 1998
From income $0.15
From capital gains $ --
Total distributions $0.15
Total return* +3.11%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1998 $5.43
June 30, 1998 $5.41
Increase $0.02
Distributions
July 1, 1998 - Dec. 31, 1998
From income $0.13
From capital gains $ --
Total distributions $0.13
Total return* +2.74%**
New York
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1998 $5.33
June 30, 1998 $5.29
Increase $0.04
Distributions
July 1, 1998 - Dec. 31, 1998
From income $0.13
From capital gains $ --
Total distributions $0.13
Total return* +3.19%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1998 $5.33
June 30, 1998 $5.29
Increase $0.04
Distributions
July 1, 1998 - Dec. 31, 1998
From income $0.11
From capital gains $ --
Total distributions $0.11
Total return* +2.80%**
Ohio
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1998 $5.53
June 30, 1998 $5.50
Increase $0.03
Distributions
July 1, 1998 - Dec. 31, 1998
From income $0.14
From capital gains $ --
Total distributions $0.14
Total return* +3.16%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1998 $5.53
June 30, 1998 $5.50
Increase $0.03
Distributions
July 1, 1998 - Dec. 31, 1998
From income $0.12
From capital gains $ --
Total distributions $0.12
Total return* +2.80%**
* 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>
The 10 Largest Holdings
IDS California Tax-Exempt Fund
Percent Value
(of net assets) (as of Dec. 31, 1998)
Anaheim Public Finance Authority Revenue Bonds
Electric Utilities San Juan Series 2
5.75% 2022 4.34% $11,855,243
Corona Community Facilities District 90-1
Special Tax Refunding Bonds Series 1998A
4.70% 2020 2.77 7,552,594
Los Angeles Water & Power
Electric Plant Revenue Bonds Series 1990
7.13% 2030 2.55 6,948,500
Community Development Authority
Revenue Certificate of Participation
St. Joseph Health System Group
6.50% 2015 2.32 6,317,300
Community Development Authority
Health Facilities Unihealth America Certificate of Participation
Series 1993 Inverse Floater
7.77% 2011 2.23 6,087,500
University of Southern California Educational
Facilities Authority Pre-refunded Revenue Bonds
Series 1989B
6.75% 2015 1.91 5,223,200
Los Angeles Convention & Exhibition Center
Pre-refunded Certificate of Participation
Series 1989A
7.00% 2020 1.91 5,199,450
San Diego Regional Transportation Commission
Sales Tax Pre-refunded Revenue Bonds
Limited Tax Series 1989A
6.25% 2008 1.86 5,071,648
Rancho Mirage Joint Powers Finance Authority
Certificate of Participation
Eisenhower Memorial Hospital
7.00% 2022 1.74 4,752,690
Northern California Transmission Select Auction
Variable Rate Security & Residual Interest Revenue Bonds
Inverse Floater
5.50% 2024 1.71 4,672,170
Note: Investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.). For further detail about these holdings,
please refer to the section entitled "Investments in Securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 23.34% of net assets
<PAGE>
IDS Massachusetts Tax-Exempt Fund
Percent Value
(of net assets) (as of Dec. 31, 1998)
Boston City Hospital Refunding Revenue Bonds
Series B
5.75% 2023 3.56% $3,109,381
Health & Educational Facilities Authority
Revenue Bonds Suffolk University Series B
6.35% 2022 3.11 2,715,333
Health & Educational Facilities Authority
Revenue Bonds Cape Cod Health System Series A
5.25% 2021 2.87 2,506,975
Health & Educational Facilities Authority
Revenue Bonds Boston College Series J
6.63% 2021 2.49 2,169,940
Industrial Finance Agency Pollution Control
Refunding Revenue Bonds Eastern Edison Series 1993
5.88% 2008 2.37 2,068,160
Health & Educational Facilities Authority
Revenue Bonds Charlton Memorial Hospital Series 1991B
7.25% 2013 2.21 1,932,088
State Health & Educational Facilities Authority
Revenue Bonds Boston College Series 1998L
4.75% 2031 2.14 1,868,500
Municipal Wholesale Electric Power
Supply System Refunding Revenue Bonds
Series B
4.75% 2011 2.03 1,769,268
Bay Transportation Authority General Transportation System
Refunding Bonds Series 1992B
6.20% 2016 2.01 1,750,905
Industrial Finance Agency Resource Recovery
Revenue Bonds SEMASS Series 1991A
9.00% 2015 1.90 1,658,325
Note: Investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.). For further details about these holdings,
please refer to the section entitled "Investments in Securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 24.69% of net assets
<PAGE>
The 10 Largest Holdings
IDS Michigan Tax-Exempt Fund
Percent Value
(of net assets) (as of Dec. 31, 1998)
Romulus Township School District Unlimited Tax
General Obligation Refunding Bonds
5.75% 2022 3.21% $2,668,149
State Building Authority Refunding Revenue Bonds
Series 1991I
6.25% 2020 2.83 2,357,431
Detroit Sewer Disposal Revenue Bonds
5.70% 2023 2.53 2,105,019
Grand Ledge Public Schools Unlimited Tax General
Obligation Refunding Bonds Counties of Eaton,
Clinton & Ionia Series 1995
5.38% 2024 2.47 2,054,580
State Hospital Finance Authority Hospital Pre-refunded
Revenue Bonds McLaren Obligated Group Series 1991A
7.50% 2021 2.35 1,954,943
State Strategic Fund Limited Tax Obligation Refunding
Revenue Bonds Ford Motor Series 1991A
7.10% 2006 2.33 1,937,942
Monroe County Pollution Control Revenue Bonds Detroit Edison Fermi 2 Plants
Series CC A.M.T.
7.50% 2019 2.23 1,859,638
Troy City Downtown Development Authority
County of Oakland Development Bonds
Series 1995A Asset Guaranty
6.38% 2018 2.02 1,680,705
Farmington Hills Hospital Finance Authority
Revenue Bonds Botsford General Hospital
Series 1992A
6.50% 2022 1.98 1,650,615
Buena Vista School District Saginaw County
School Building & Site Unlimited Tax
General Obligation Pre-refunded Bonds Series 1991
7.20% 2016 1.98 1,647,990
Note: Investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.). For further detail about these holdings,
please refer to the section entitled "Investments in Securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 23.93% of net assets
<PAGE>
IDS Minnesota Tax-Exempt Fund
Percent Value
(of net assets) (as of Dec. 31, 1998)
State University Board of Regents General
Obligation Bonds Series 1996A
5.50% 2021 3.12% $13,542,374
Minneapolis & St. Paul Housing Redevelopment
Authority Health Care System Revenue Bonds
Healthspan Series 1993A
4.75% 2018 2.99 12,996,584
Minneapolis & St. Paul Housing Redevelopment
Authority Health Care Facilities Revenue Bonds
Group Health Plan Series 1992
6.75% 2013 2.62 11,365,619
Western Minnesota Municipal Power Agency
Supply Refunding Revenue Bonds Series 1987A
5.50% 2015 2.59 11,263,775
Southern Minnesota Municipal Power Agency
Revenue Bonds
4.75% 2016 2.08 9,049,245
State General Obligation Various Purpose
Pre-refunded Bonds Series 1991
6.70% 2011 1.98 8,606,239
State General Obligation Various Purpose
Pre-refunded Bonds Series 1990
7.00% 2009 1.91 8,288,814
St. Paul Housing & Redevelopment Authority
Sales Tax Revenue Bonds Civic Center
Escrowed to Maturity
5.55% 2023 1.84 7,996,275
Hennepin County Lease Revenue Certificates of
Participation Series 1991
6.80% 2017 1.81 7,873,138
Edina Multi-family Housing Revenue Bonds Walker
Assisted Living Series 1991
9.00% 2031 1.72 7,471,062
Note:Investment income from certain securities may be subject to the Alternative
Minimum Tax (A.M.T.). For further detail about these holdings, please refer to
the section entitled "Investments in Securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 22.66% of net assets
<PAGE>
The 10 Largest Holdings
IDS New York Tax-Exempt Fund
Percent Value
(of net assets) (as of Dec. 31, 1998)
State Energy Research & Development Authority
Electric Facility Revenue Bonds Consolidated
Edison Series 1990A A.M.T.
7.50% 2025 4.44% $5,144,649
United Nations Development Senior Lien
Refunding Revenue Bonds Series 1992A
6.00% 2026 4.30 4,987,890
State Urban Development Correction Facility
Pre-refunded Revenue Bonds 1st Series 1990
7.50% 2020 4.12 4,782,600
State Local Government Assistance Pre-refunded
Bonds Series 1991A
7.00% 2016 3.77 4,368,600
State Mortgage Agency Homeowner Mortgage
Revenue Bonds Series 1991TT
7.50% 2015 3.68 4,267,320
State Dormitory Authority City University System
Revenue Bonds Series 1993A
5.75% 2013 2.87 3,333,510
State Mortgage Agency Homeowner Mortgage
Revenue Bonds 27th Series 1992
6.90% 2015 2.80 3,245,820
Triborough Bridge & Tunnel Authority General
Purpose Pre-refunded Revenue Bonds Series 1990S
7.00% 2021 2.80 3,244,920
State Environmental Facility State Water & Pollution
Control Revolving Fund Revenue Bonds New York City
Municipal Water Finance Authority Series 1990A
7.50% 2012 2.78 3,224,880
State Energy Research & Development Authority Solid Waste Development
Revenue Bonds State Gas & Electric Company Series 1993A A.M.T.
5.70% 2028 2.71 3,139,230
Note: Investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.). For further detail about these holdings,
please refer to the section entitled "Investments in Securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 34.27% of net assets
<PAGE>
IDS Ohio Tax-Exempt Fund
Percent Value
(of net assets) (as of Dec. 31, 1998)
Lakota Local School District Unlimited Tax
Improvement General Obligation Bonds
6.25% 2014 2.96% $2,273,619
State Air Quality Development Authority Refunding
Revenue Bonds Series 1994 A.M.T.
6.38% 2029 2.89 2,221,079
Erie County Hospital Improvement Refunding
Revenue Bonds Firelands Community Hospital
6.75% 2015 2.82 2,171,760
State Municipal Electric Generation Agency Revenue Bonds
Joint Venture 5
5.38% 2024 2.66 2,045,360
Lorain County Hospital Facilities Refunding Revenue Bonds
EMH Regional Medical Center Series 1995
5.38% 2021 2.65 2,040,000
State Valley School District School Improvement
Unlimited Tax General Obligation Bonds Adams & Highland
Counties Series 1995
5.25% 2021 2.65 2,035,520
Butler County Hospital Facilities Improvement Refunding
Revenue Bonds Fort Hamilton-Hughes Memorial Center
Series 1991
7.50% 2010 2.45 1,885,170
Franklin County Convention Facilities Authority Tax & Lease
Revenue Anticipation Pre-refunded Bonds
7.00% 2019 2.12 1,629,300
Cuyahoga County Hospital Refunding Revenue Bonds
Cleveland Clinic Foundation Series 1992
5.50% 2011 2.08 1,598,145
State Housing Finance Agency Mortgage Revenue
Bonds Aristocrat South Board & Care Series 1991A A.M.T.
7.30% 2031 2.06 1,585,290
Note: Investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.). For further detail about these holdings,
please refer to the section entitled "Investments in Securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 25.34% of net assets
<PAGE>
<TABLE>
<CAPTION>
Financial Statements
Statements of assets and liabilities
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Dec. 31, 1998 (Unaudited)
Assets
California Massachusetts Michigan
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
Investments in securities, at value (Note 1)
(identified cost $244,394,050, $78,920,079
<S> <C> <C> <C>
and $74,580,571) $268,824,248 $85,479,450 $82,053,000
Cash in bank on demand deposit -- 172,448 69,340
Accrued interest receivable 4,366,309 1,709,863 1,228,914
Receivable for investment securities sold 67,077 40,000 2,344
------ ------ -----
Total assets 273,257,634 87,401,761 83,353,598
Liabilities
Disbursements in excess of cash on demand deposit 26,218 -- --
Dividends payable to shareholders 305,422 87,980 101,588
Payable for investment securities purchased 3,125 938 3,281
Accrued investment management services fee 3,500 1,121 1,071
Accrued distribution fee 371 329 116
Accrued service fee 1,309 417 399
Accrued transfer agency fee 241 120 96
Accrued administrative services fee 296 95 91
Other accrued expenses 40,106 -- 21,712
------ ------
Total liabilities 380,588 91,000 128,354
------- ------ -------
Net assets applicable to outstanding shares $272,877,046 $87,310,761 $83,225,244
============ =========== ===========
Represented by
Shares of beneficial interest-- $.01 par value (Note 1) $ 506,259 $ 156,375 $ 149,433
Additional paid-in capital 253,230,481 81,468,310 76,863,280
Undistributed (excess of distributions over) net investment income (2) -- --
Accumulated net realized gain (loss) (Note 6) (5,233,859) (856,483) (1,243,086)
Unrealized appreciation (depreciation) on investments 24,374,167 6,542,559 7,455,617
---------- --------- ---------
Total-- representing net assets applicable to outstanding shares $272,877,046 $87,310,761 $83,225,244
============ =========== ===========
Net assets applicable to outstanding shares: Class A $254,756,578 $71,308,114 $77,585,368
Class B $ 18,120,468 $16,002,647 $ 5,639,876
Outstanding shares of beneficial interest: Class A shares 47,263,796 12,771,292 13,930,639
Class B shares 3,362,141 2,866,242 1,012,661
Net asset value per share: Class A $ 5.39 $ 5.58 $ 5.57
Class B $ 5.39 $ 5.58 $ 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, 1998 (Unaudited)
Assets
Minnesota New York Ohio
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
Investments in securities, at value (Note 1)
(identified cost $392,832,481, $102,964,490
<S> <C> <C> <C>
and $69,863,220) $425,546,448 $113,815,093 $75,926,391
Cash in bank on demand deposit 77,762 52,439 98,833
Accrued interest receivable 8,219,345 2,218,096 988,326
Receivable for investment securities sold 1,150,410 -- --
--------- ---- ----
Total assets 434,993,965 116,085,628 77,013,550
Liabilities
Dividends payable to shareholders 534,796 117,637 94,388
Payable for investment securities purchased 2,500 2,500 937
Accrued investment management services fee 5,465 1,490 989
Accrued distribution fee 782 238 137
Accrued service fee 2,082 555 368
Accrued transfer agency fee 552 152 92
Accrued administrative services fee 450 127 84
Other accrued expenses 17,499 -- 1,946
Total liabilities 564,126 122,699 98,941
------- ------- ------
Net assets applicable to outstanding shares $434,429,839 $115,962,929 $76,914,609
============ ============ ===========
Represented by
Shares of beneficial interest-- $.01 par value (Note 1) $ 800,727 $ 217,537 $ 139,000
Additional paid-in capital 409,666,214 107,230,216 71,901,902
Undistributed (excess of distributions over) net investment income (1,930) 2 31
Accumulated net realized gain (loss) (Note 6) (8,704,295) (2,290,586) (1,172,682)
Unrealized appreciation (depreciation) on investments 32,669,123 10,805,760 6,046,358
---------- ---------- ---------
Total-- representing net assets applicable to outstanding shares $434,429,839 $115,962,929 $76,914,609
============ ============ ===========
Net assets applicable to outstanding shares: Class A $396,156,805 $104,381,047 $70,232,690
Class B $ 38,273,034 $ 11,581,882 $ 6,681,919
Outstanding shares of beneficial interest: Class A shares 73,018,455 19,581,188 12,692,499
Class B shares 7,054,230 2,172,546 1,207,469
Net asset value per share: Class A $ 5.43 $ 5.33 $ 5.53
Class B $ 5.43 $ 5.33 $ 5.53
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, 1998 (Unaudited)
Investment income
California Massachusetts Michigan
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
Income:
<S> <C> <C> <C>
Interest $7,596,108 $2,386,197 $2,406,618
---------- ---------- ----------
Expenses (Note 2):
Investment management services fee 625,450 195,011 195,561
Distribution fee-- Class B 61,578 53,504 20,128
Transfer agency fee 43,336 21,239 17,447
Incremental transfer agency fee-- Class B 268 225 96
Service fee
Class A 216,750 59,839 67,538
Class B 14,197 12,424 4,635
Administrative services fees and expenses 54,764 17,002 17,079
Compensation of board members 4,094 4,094 4,094
Custodian fees 14,094 4,271 5,947
Postage 20,938 2,650 2,860
Registration fees 21,227 13,665 14,277
Reports to shareholders 1,961 1,823 2,115
Audit fees 8,500 7,750 7,750
Other 7,198 2,087 320
----- ----- ---
Total expenses 1,094,355 395,584 359,847
Earnings credits on cash balances (Note 2) (12,435) (2,955) (2,429)
------- ------ ------
Total net expenses 1,081,920 392,629 357,418
--------- ------- -------
Investment income (loss)-- net 6,514,188 1,993,568 2,049,200
--------- --------- ---------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) (75,980) 84,873 402,535
Financial futures contracts 150,363 45,108 45,109
------- ------ ------
Net realized gain (loss) on investments 74,383 129,981 447,644
Net change in unrealized appreciation (depreciation) on investments 1,788,589 171,430 (74,776)
--------- ------- -------
Net gain (loss) on investments 1,862,972 301,411 372,868
Net increase (decrease) in net assets resulting from operations $8,377,160 $2,294,979 $2,422,068
========== ========== ==========
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, 1998 (Unaudited)
Investment income
Minnesota New York Ohio
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
Income:
<S> <C> <C> <C>
Interest $13,449,819 $3,285,588 $2,206,521
----------- ---------- ----------
Expenses (Note 2):
Investment management services fee 978,585 272,611 177,268
Distribution fee-- Class B 127,869 39,772 22,673
Transfer agency fee 99,524 27,699 16,885
Incremental transfer agency fee-- Class B 617 200 96
Service fee
Class A 340,583 91,268 60,339
Class B 29,773 9,268 5,289
Administrative services fees and expenses 84,013 23,781 15,445
Compensation of board members 4,503 4,093 4,093
Custodian fees 21,939 10,521 6,434
Postage 32,103 6,170 2,819
Registration fees 30,452 13,226 14,227
Reports to shareholders 4,496 -- 824
Audit fees 9,000 8,500 7,750
Other 8,569 -- 881
----- --- ---
Total expenses 1,772,026 507,109 335,023
Earnings credits on cash balances (Note 2) (21,392) (4,624) (6,580)
------- ------ ------
Total net expenses 1,750,634 502,485 328,443
--------- ------- -------
Investment income (loss)-- net 11,699,185 2,783,103 1,878,078
---------- --------- ---------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) (197,339) 18,565 34,647
Financial futures contracts 120,290 120,290 45,109
------- ------- ------
Net realized gain (loss) on investments (77,049) 138,855 79,756
Net change in unrealized appreciation (depreciation) on investments 1,393,772 687,522 381,650
--------- ------- -------
Net gain (loss) on investments 1,316,723 826,377 461,406
--------- ------- -------
Net increase (decrease) in net assets resulting from operations $13,015,908 $3,609,480 $2,339,484
=========== ========== ==========
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
California Tax-Exempt Fund Massachusetts Tax-Exempt Fund
Dec. 31, 1998 June 30, 1998 Dec. 31, 1998 June 30, 1998
Six months ended Year ended Six months ended Year ended
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Investment income (loss)-- net $ 6,514,188 $ 12,975,883 $ 1,993,568 $ 3,873,971
Net realized gain (loss) on investments 74,383 1,926,039 129,981 277,400
Net change in unrealized appreciation (depreciation) on investments 1,788,589 3,558,638 171,430 1,722,338
--------- --------- ------- ---------
Net increase (decrease) in net assets resulting from operations 8,377,160 18,460,560 2,294,979 5,873,709
--------- ---------- --------- ---------
Distributions to shareholders from:
Net investment income
Class A (6,173,645) (12,717,817) (1,695,005) (3,418,898)
Class B (340,490) (572,424) (298,512) (455,124)
Net realized gain
Class A -- (9,568) (33,427) --
Class B -- (507) (7,530) --
--- ---- ------ ---
Total distributions (6,514,135) (13,300,316) (2,034,474) (3,874,022)
---------- ----------- ---------- ----------
Share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 23,839,379 27,263,050 8,992,481 9,567,532
Class B shares 3,913,148 5,637,162 3,766,610 5,760,628
Reinvestment of distributions at net asset value
Class A shares 4,130,901 8,796,579 1,322,949 2,647,896
Class B shares 260,702 436,950 250,555 392,654
Payments for redemptions
Class A shares (14,323,487) (33,740,758) (5,931,728) (13,778,211)
Class B shares (Note 2) (1,124,303) (1,396,348) (1,059,741) (1,502,976)
---------- ---------- ---------- ----------
Increase (decrease) in net assets from share transactions 16,696,340 6,996,635 7,341,126 3,087,523
---------- --------- --------- ---------
Total increase (decrease) in net assets 18,559,365 12,156,879 7,601,631 5,087,210
Net assets at beginning of period 254,317,681 242,160,802 79,709,130 74,621,920
----------- ----------- ---------- ----------
Net assets at end of period $272,877,046 $254,317,681 $87,310,761 $79,709,130
============ ============ =========== ===========
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
MichiganTax-Exempt Fund MinnesotaTax-Exempt Fund
Dec. 31, 1998 June 30, 1998 Dec. 31, 1998 June 30, 1998
Six months ended Year ended Six months ended Year ended
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Investment income (loss)-- net $ 2,049,200 $ 4,153,422 $ 11,699,185 $ 22,597,273
Net realized gain (loss) on investments 447,644 39,801 (77,049) 867,273
Net change in unrealized appreciation (depreciation) on investments (74,776) 1,755,887 1,393,772 7,572,218
------- --------- --------- ---------
Net increase (decrease) in net assets resulting from operations 2,422,068 5,949,110 13,015,908 31,036,764
--------- --------- ---------- ----------
Distributions to shareholders from:
Net investment income
Class A (1,935,809) (3,959,928) (10,874,207) (21,338,695)
Class B (113,391) (194,070) (816,964) (1,277,193)
Net realized gain
Class A (295,765) -- -- --
Class B (21,598) -- -- --
------- --- --- ---
Total distributions (2,366,563) (4,153,998) (11,691,171) (22,615,888)
---------- ---------- ----------- -----------
Share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 4,869,174 6,481,056 35,647,622 55,067,262
Class B shares 699,509 2,106,132 8,154,571 10,919,373
Reinvestment of distributions at net asset value
Class A shares 1,612,607 2,829,652 8,341,719 16,634,462
Class B shares 107,997 153,120 650,461 1,015,306
Payments for redemptions
Class A shares (5,877,221) (10,742,181) (33,909,132) (71,239,533)
Class B shares (Note 2) (296,691) (849,531) (1,851,476) (3,414,186)
-------- -------- ---------- ----------
Increase (decrease) in net assets from share transactions 1,115,375 (21,752) 17,033,765 8,982,684
--------- ------- ---------- ---------
Total increase (decrease) in net assets 1,170,880 1,773,360 18,358,502 17,403,560
Net assets at beginning of period 82,054,364 80,281,004 416,071,337 398,667,777
---------- ---------- ----------- -----------
Net assets at end of period $83,225,244 $82,054,364 $434,429,839 $416,071,337
=========== =========== ============ ============
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
New York Tax-Exempt Fund Ohio Tax-Exempt Fund
Six months ended Year ended Six months ended Year ended
Dec. 31, 1998 June 30, 1998 Dec. 31, 1998 June 30, 1998
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Investment income (loss)-- net $ 2,783,103 $ 5,988,600 $ 1,878,078 $ 3,710,452
Net realized gain (loss) on investments 138,855 748,448 79,756 441,486
Net change in unrealized appreciation (depreciation) on investments 687,522 2,313,952 381,650 1,193,891
------- --------- ------- ---------
Net increase (decrease) in net assets resulting from operations 3,609,480 9,051,000 2,339,484 5,345,829
--------- --------- --------- ---------
Distributions to shareholders from:
Net investment income
Class A (2,564,821) (5,597,877) (1,746,736) (3,541,325)
Class B (218,087) (391,627) (129,502) (193,178)
-------- -------- -------- --------
Total distributions (2,782,908) (5,989,504) (1,876,238) (3,734,503)
---------- ---------- ---------- ----------
Share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 6,708,914 13,077,412 6,583,023 6,692,901
Class B shares 2,483,482 3,058,971 1,674,244 1,943,456
Reinvestment of distributions at net asset value
Class A shares 1,790,799 4,046,559 1,267,352 2,702,866
Class B shares 176,710 331,272 96,923 143,123
Payments for redemptions
Class A shares (10,347,279) (22,106,362) (5,262,699) (10,309,437)
Class B shares (Note 2) (942,845) (1,358,542) (418,655) (415,851)
-------- ---------- -------- --------
Increase (decrease) in net assets from share transactions (130,219) (2,950,690) 3,940,188 757,058
-------- ---------- --------- -------
Total increase (decrease) in net assets 696,353 110,806 4,403,434 2,368,384
Net assets at beginning of period 115,266,576 115,155,770 72,511,175 70,142,791
----------- ----------- ---------- ----------
Net assets at end of period $115,962,929 $115,266,576 $76,914,609 $72,511,175
============ ============ =========== ===========
Undistributed (excess of distributions over) net investment income $ 2 $ (193) $ 31 $ (1,809)
--------- ------------ ----------- -----------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
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.
o Class A shares are sold with a front-end sales charge.
o Class B shares may be subject to a contingent deferred sales charge and
automatically convert to Class A shares during the ninth calendar year of
ownership.
All classes of shares have identical voting, dividend and liquidation rights.
The 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 Fund's significant accounting policies are summarized below:
Use of estimates
Preparing financial statements that conform to generally accepted accounting
principles requires management to make estimates (e.g., on assets and
liabilities) that could differ from actual results.
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 that reflects fair value
as quoted by dealers 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.
<PAGE>
Notes to Financial Statements
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Option transactions
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the Funds may buy and sell put and call options
and write covered call options on portfolio securities as well as 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 being unable to
enter into a closing transaction if a liquid secondary market does not exist.
The Funds also may write over-the-counter options where completing the
obligation depends 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 when the option transaction expires or closes. 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
To gain exposure to or protect itself from market changes, the Funds may buy and
sell financial futures contracts. Risks of entering into futures contracts and
related options include the possibility of 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 are 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.
Federal taxes
Each Fund's policy is to comply with all sections of the Internal Revenue Code
that apply to regulated investment companies and to distribute all of its
taxable income to shareholders, no provision for income or excise taxes is thus
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 deferred 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. 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.
<PAGE>
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 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
Each Fund entered into agreements with American Express Financial Corporation
(AEFC) for managing its portfolio and providing administrative services. 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, 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:
o Class A $15.50
o Class B $16.50
Each Fund entered into agreements with American Express Financial Advisors Inc.
for distribution and shareholder 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 services.
<PAGE>
Notes to Financial Statements
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
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, 1998, are as
follows:
Fund Class A Class B
IDS California $368,823 $18,186
IDS Massachusetts 209,788 11,976
IDS Michigan 119,365 1,691
IDS Minnesota 573,105 18,856
IDS New York 113,231 15,918
IDS Ohio 95,949 8,038
During the six months ended Dec. 31, 1998, 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 $12,435
IDS Massachusetts 2,955
IDS Michigan 2,429
IDS Minnesota 21,392
IDS New York 4,624
IDS Ohio 6,580
3
SECURITIES
TRANSACTIONS
For the six months ended Dec. 31, 1998, cost of purchases and proceeds from
sales (other than short-term obligations) aggregated for each Fund are as
follows:
Fund Purchases Proceeds
IDS California $31,505,261 $11,322,013
IDS Massachusetts 5,242,219 1,502,525
IDS Michigan 6,032,864 6,582,376
IDS Minnesota 26,664,834 25,921,002
IDS New York 2,131,428 7,125,390
IDS Ohio 2,360,531 4,678,314
Realized gains and losses are determined on an identified cost basis.
<PAGE>
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, 1998
Class A Class B
Sold 4,422,139 725,412
Issued for reinvested distributions 766,415 48,373
Redeemed (2,651,355) (209,359)
Net increase (decrease) 2,537,199 564,426
Year ended June 30, 1998
Class A Class B
Sold 5,116,223 1,058,071
Issued for reinvested distributions 1,651,772 82,051
Redeemed (6,331,307) (262,162)
Net increase (decrease) 436,688 877,960
Massachusetts Tax-Exempt Fund
Six months ended Dec. 31, 1998
Class A Class B
Sold 1,607,656 673,376
Issued for reinvested distributions 236,773 44,846
Redeemed (1,061,186) (189,801)
Net increase (decrease) 783,243 528,421
Year ended June 30, 1998
Class A Class B
Sold 1,728,151 1,040,229
Issued for reinvested distributions 479,241 71,032
Redeemed (2,493,940) (271,030)
Net increase (decrease) (286,548) 840,231
Michigan Tax-Exempt Fund
Six months ended Dec. 31, 1998
Class A Class B
Sold 870,510 124,871
Issues for reinvested distributions 288,543 19,327
Redeemed (1,048,598) (53,012)
Net increase (decrease) 110,455 91,186
Year ended June 30, 1998
Class A Class B
Sold 1,170,022 380,067
Issued for reinvested distributions 511,164 27,650
Redeemed (1,941,314) (153,133)
Net increase (decrease) (260,128) 254,584
<PAGE>
Notes to Financial Statements
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Minnesota Tax-Exempt Fund
Six months ended Dec. 31, 1998
Class A Class B
Sold 6,563,791 1,502,433
Issued for reinvested distributions 1,537,717 119,904
Redeemed (6,245,235) (341,278)
Net increase (decrease) 1,856,273 1,281,059
Year ended June 30, 1998
Class A Class B
Sold 10,219,416 2,026,791
Issued for reinvested distributions 3,090,353 188,593
Redeemed (13,225,380) (633,606)
Net increase (decrease) 84,389 1,581,778
New York Tax-Exempt Fund
Six months ended Dec. 31, 1998
Class A Class B
Sold 1,257,574 466,215
Issued for reinvested distributions 336,445 33,198
Redeemed (1,943,287) (177,152)
Net increase (decrease) (349,268) 322,261
Year ended June 30, 1998
Class A Class B
Sold 2,476,927 580,183
Issued for reinvested distributions 768,096 62,867
Redeemed (4,193,469) (257,849)
Net increase (decrease) (948,446) 385,201
Ohio Tax-Exempt Fund
Six months ended Dec. 31, 1998
Class A Class B
Sold 1,188,741 302,589
Issued for reinvested distributions 229,283 17,532
Redeemed (952,104) (75,642)
Net increase (decrease) 465,920 244,479
Year ended June 30, 1998
Class A Class B
Sold 1,224,084 354,262
Issued for reinvested distributions 493,970 26,147
Redeemed (1,882,921) (75,894)
Net increase (decrease) (164,867) 304,515
<PAGE>
5
INTEREST RATE
FUTURES CONTRACTS
Investments in securities at Dec. 31, 1998, included securities that were valued
and pledged as collateral to cover initial margin deposits, (see "Summary of
significant accounting policies") as follows:
Open
Market purchase
Fund value contracts
IDS California $3,353,248 50
IDS Massachusetts 1,576,850 15
IDS Michigan 2,182,445 15
IDS Minnesota 6,510,580 40
IDS New York 3,368,655 40
IDS Ohio 2,176,760 15
The market value of the open purchase contracts at Dec. 31, 1998, was as
follows:
Net
Market unrealized
Fund value gain (loss)
IDS California $6,250,000 $(56,031)
IDS Massachusetts 1,875,000 (16,812)
IDS Michigan 1,875,000 (16,812)
IDS Minnesota 5,000,000 (44,844)
IDS New York 5,000,000 (44,843)
IDS Ohio 1,875,000 (16,813)
The Funds maintain, in a segregated account with its custodian, advanced
refunded bonds with at least a market value equal to the value of these open
long futures contracts. Advanced refunded bonds are highly liquid, usually
covered by government securities, which will be refunded at the bond's first
call date.
<PAGE>
Notes to Financial Statements
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
6
CAPITAL LOSS
CARRYOVER
For federal income tax purposes, capital loss carryovers were as follows at June
30, 1998:
Expiration
Fund Carryover date
IDS California $364,073 2006
IDS Massachusetts 15,918 2005
IDS Michigan 206,533 2007
IDS Minnesota 419,215 2005 - 2007
IDS New York 1,329,019 2005
IDS Ohio 166,361 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.
7
BANK
BORROWINGS
Each Fund entered into a revolving credit agreement with U.S. Bank, N.A.,
whereby each Fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. Each Fund must have asset
coverage for borrowings not to exceed the aggregate of 333% of advances equal to
or less than five business days plus 367% of advances over five business days.
The agreement, which enables each Fund to participate with other IDS Funds,
permits borrowings up to $200 million, collectively. Interest is charged to each
Fund based on its borrowings at a rate equal to the Federal Funds Rate plus
0.30% or the Eurodollar Rate (Reserve Adjusted) plus 0.20%. Borrowings are
payable up to 90 days after such loan is executed. Each Fund also pays a
commitment fee equal to its pro rata share of the amount of the credit facility
at a rate of 0.05% per annum. Each Fund had no borrowings outstanding during the
six months ended Dec. 31, 1998.
<PAGE>
<TABLE>
<CAPTION>
8. FINANCIAL
HIGHLIGHTS
The tables below show certain important financial information for evaluating
each Fund's results.
IDS California Tax-Exempt Trust
IDS California Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class A Class B
1998b 1998 1997 1996 1995 1998b 1998 1997 1996 1995c
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $5.35 $5.24 $5.15 $5.16 $5.13 $5.35 $5.24 $5.15 $5.16 $5.21
Income from investment operations:
Net investment income (loss) .13 .29 .29 .28 .30 .11 .25 .25 .24 .09
Net gains (losses) (both realized and unrealize.04 .11 .10 .02 .03 .04 .11 .10 .02 (.05)
Total from investment operations .17 .40 .39 .30 .33 .15 .36 .35 .26 .04
Less distributions:
Distributions from net investment income (.13) (.29) (.29) (.28) (.30) (.11) (.25) (.25) (.24) (.09)
Distributions from realized gains -- -- (.01) (.03) -- -- -- (.01) (.03) --
Total distributions (.13) (.29) (.30) (.31) (.30) (.11) (.25) (.26) (.27) (.09)
Net asset value, end of period $5.39 $5.35 $5.24 $5.15 $5.16 $5.39 $5.35 $5.24 $5.15 $5.16
Ratios/supplemental data
Class A Class B
1998b 1998 1997 1996 1995 1998b 1998 1997 1996 1995c
Net assets, end of period (in millions) $255 $239 $232 $234 $239 $18 $15 $10 $6 $2
Ratio of expenses to average daily net assets.77%d .75% .77% .80% .65% 1.53%d 1.50% 1.52% 1.57% 1.51%d
Ratio of net investment income (loss)
to average daily net assets 4.93%d 5.24% 5.64% 5.40% 5.89% 4.17%d 4.50% 4.94% 4.64% 4.87%d
Portfolio turnover rate
(excluding short-term securities) 5% 15% 14% 15% 48% 5% 15% 14% 15% 48%
Total returnf 3.21% 7.72% 7.77% 6.00% 6.52% 2.84% 6.94% 6.95% 5.19% .63%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Dec. 31, 1998 (Unaudited).
c Inception date was March 20, 1995.
d Adjusted to an annual basis.
e Effective 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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Special Tax-Exempt Series Trust
IDS Massachusetts Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capitala
Class A Class B
1998b 1998 1997 1996 1995 1998b 1998 1997 1996 1995c
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $5.56 $5.42 $5.30 $5.27 $5.24 $5.56 $5.42 $5.30 $5.27 $5.31
Income from investment operations:
Net investment income (loss) .14 .29 .29 .28 .30 .12 .24 .25 .24 .09
Net gains (losses) (both realized
and unrealized .02 .14 .12 .03 .03 .02 .14 .12 .03 (.04)
Total from investment operations .16 .43 .41 .31 .33 .14 .38 .37 .27 .05
Less distributions:
Distributions from net investment income (.14) (.29) (.29) (.28) (.30) (.12) (.24) (.25) (.24) (.09)
Net asset value, end of period $5.58 $5.56 $5.42 $5.30 $5.27 $5.58 $5.56 $5.42 $5.30 $5.27
Ratios/supplemental data
Class A Class B
1998b 1998 1997 1996 1995 1998b 1998 1997 1996 1995c
Net assets, end of period (in millions) $71 $67 $67 $68 $68 $16 $13 $8 $6 $2
Ratio of expenses to average daily net assets.82%d .82% .84% .86% .72% 1.58%d 1.57% 1.59% 1.63% 1.59%d
Ratio of net investment income (loss)
to average daily net assets 4.93%d 5.17% 5.32% 5.26% 5.74% 4.18%d 4.43% 4.58% 4.51% 4.83%d
Portfolio turnover rate
(excluding short-term securities) 2% 9% 8% 6% 16% 2% 9% 8% 6% 16%
Total returnf 2.86% 8.13% 7.81% 5.96% 6.53% 2.48% 7.32% 7.00% 5.19% .83%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Dec. 31, 1998 (Unaudited).
c Inception date was March 20, 1995.
d Adjusted to an annual basis.
e Effective 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.
</TABLE>
<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 Class B
1998b 1998 1997 1996 1995 1998b 1998 1997 1996 1995c
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $5.57 $5.44 $5.36 $5.39 $5.35 $5.57 $5.44 $5.36 $5.39 $5.43
Income from investment operations:
Net investment income (loss) .14 .29 .29 .30 .30 .12 .25 .25 .25 .09
Net gains (losses) (both realized and realized).02 .13 .08 .04 .05 .02 .13 .08 .04 (.04)
Total from investment operations .16 .42 .37 .34 .35 .14 .38 .33 .29 .05
Less distributions:
Distributions from net investment income (.14) (.29) (.29) (.30) (.31) (.12) (.25) (.25) (.25) (.09)
Distributions from realized gains (.02) -- -- (.07) -- (.02) -- -- (.07) --
Total distributions (.16) (.29) (.29) (.37) (.31) (.14) (.25) (.25) (.32) (.09)
Net asset value, end of period $5.57 $5.57 $5.44 $5.36 $5.39 $5.57 $5.57 $5.44 $5.36 $5.39
Ratios/supplemental data:
Class A Class B
1998b 1998 1997 1996 1995 1998b 1998 1997 1996 1995c
Net assets, end of period (in millions) $78 $77 $77 $79 $78 $6 $5 $4 $3 $1
Ratio of expenses to average daily net assets.82%d .82% .81% .82% .70% 1.57%d 1.57% 1.56% 1.59% 1.62%d
Ratio of net investment income
(loss) to average daily net assets 4.97%d 5.19% 5.38% 5.37% 5.71% 4.22%d 4.44% 4.65% 4.63% 4.89%d
Portfolio turnover rate
(excluding short-term securities) 7% 10% 21% 29% 48% 7% 10% 21% 29% 48%
Total returnf 2.93% 7.66% 7.12% 6.36% 6.59% 2.55% 6.86% 6.32% 5.57% .68%
aFor a share outstanding throughout the period. Rounded to the nearest cent.
bSix months ended Dec. 31, 1998 (Unaudited).
cInception date was March 20, 1995.
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.
</TABLE>
<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 Class B
1998b 1998 1997 1996 1995 1998b 1998 1997 1996 1995c
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $5.41 $5.30 $5.20 $5.19 $5.16 $5.41 $5.30 $5.20 $5.19 $5.24
Income from investment operations:
Net investment income (loss) .15 .30 .31 .30 .31 .13 .26 .27 .26 .09
Net gains (losses) (both realized
and unrealized) .02 .11 .10 .01 .03 .02 .11 .10 .01 (.05)
Total from investment operations .17 .41 .41 .31 .34 .15 .37 .37 .27 .04
Less distributions:
Distributions from net investment income (.15) (.30) (.31) (.30) (.31) (.13) (.26) (.27) (.26) (.09)
Net asset value, end of period $5.43 $5.41 $5.30 $5.20 $5.19 $5.43 $5.41 $5.30 $5.20 $5.19
Ratios/supplemental data:
Class A Class B
1998b 1998 1997 1996 1995 1998b 1998 1997 1996 1995c
Net assets, end of period (in millions) $396 $385 $376 $393 $403 $38 $31 $22 $16 $4
Ratio of expenses to average daily net assets.77%d .75% .75% .80% .67% 1.53%d 1.50% 1.50% 1.57% 1.27%d
Ratio of net investment income (loss)
to average daily net assets 5.56%d 5.61% 5.81% 5.66% 6.01% 4.80%d 4.86% 5.05% 4.94% 5.40%d
Portfolio turnover rate
(excluding short-term securities) 6% 8% 14% 13% 28% 6% 8% 14% 13% 28%
Total returnf 3.11% 7.96% 8.06% 5.99% 6.77% 2.74% 7.17% 7.23% 5.20% .89%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Dec. 31, 1998 (Unaudited).
c Inception date was March 20, 1995.
d Adjusted to an annual basis.
e Effective 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.
</TABLE>
<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 Class B
1998b 1998 1997 1996 1995 1998b 1998 1997 1996 1995c
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $5.29 $5.15 $5.06 $5.09 $5.12 $5.29 $5.15 $5.06 $5.09 $5.17
Income from investment operations:
Net investment income (loss) .13 .27 .28 .29 .30 .11 .23 .25 .25 .09
Net gains (losses) (both realized and unrealize.04 .14 .09 (.03) (.03) .04 .14 .09 (.03) (.08)
Total from investment operations .17 .41 .37 .26 .27 .15 .37 .34 .22 .01
Less distributions:
Distributions from net investment income (.13) (.27) (.28) (.29) (.30) (.11) (.23) (.25) (.25) (.09)
Net asset value, end of period $5.33 $5.29 $5.15 $5.06 $5.09 $5.33 $5.29 $5.15 $5.06 $5.09
Ratios/supplemental data:
Class A Class B
1998b 1998 1997 1996 1995 1998b 1998 1997 1996 1995c
Net assets, end of period (in millions) $104 $105 $108 $115 $120 $12 $10 $8 $5 $2
Ratio of expenses to average daily net assets.80%d .79% .81% .82% .70% 1.56%d 1.55% 1.56% 1.59% 1.59%d
Ratio of net investment income (loss)
to average daily net assets 4.87%d 5.22% 5.55% 5.51% 6.00% 4.12%d 4.47% 4.81% 4.79% 5.42%d
Portfolio turnover rate
(excluding short-term securities) 2% 10% 12% 9% 20% 2% 10% 12% 9% 20%
Total returnf 3.19% 8.13% 7.60% 5.23% 5.46% 2.80% 7.35% 6.80% 4.45% .28%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Dec. 31, 1998 (Unaudited).
c Inception date was March 20, 1995.
d Adjusted to an annual basis.
e Effective 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.
</TABLE>
<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 Class B
1998b 1998 1997 1996 1995 1998b 1998 1997 1996 1995c
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $5.50 $5.38 $5.28 $5.28 $5.26 $5.50 $5.38 $5.28 $5.28 $5.34
Income from investment operations:
Net investment income (loss) .14 .29 .29 .29 .29 .12 .24 .25 .24 .09
Net gains (losses) (both realized and unrealize.03 .12 .10 .01 .03 .03 .13 .10 .01 (.06)
Total from investment operations .17 .41 .39 .30 .32 .15 .37 .35 .25 .03
Less distributions:
Distributions from net investment income (.14) (.29) (.29) (.29) (.30) (.12) (.25) (.25) (.24) (.09)
Distributions from realized gains -- -- -- (.01) -- -- -- -- (.01) --
Total distributions (.14) (.29) (.29) (.30) (.30) (.12) (.25) (.25) (.25) (.09)
Net asset value, end of period $5.53 $5.50 $5.38 $5.28 $5.28 $5.53 $5.50 $5.38 $5.28 $5.28
Ratios/supplemental data
Class A Class B
1998b 1998 1997 1996 1995 1998b 1998 1997 1996 1995c
Net assets, end of period (in millions) $70 $67 $67 $72 $73 $7 $5 $4 $2 $1
Ration of expenses to average daily net asset.83%d .83% .83% .85% .71% 1.58%d 1.59% 1.59% 1.59% 1.66%d
Ratio of net investment income (loss)
to average daily net assets 5.04%d 5.22% 5.46% 5.35% 5.65% 4.29%d 4.47% 4.74% 4.63% 4.58%d
Portfolio turnover rate
(excluding short-term securities) 3% 10% 9% 24% 45% 3% 10% 9% 24% 45%
Total returnf 3.16% 7.79% 7.43% 5.76% 6.23% 2.80% 6.98% 6.62% 4.96% .47%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Dec. 31, 1998 (Unaudited).
c Inception date was March 20, 1995.
d Adjusted to an annual basis.
e Effective 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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
IDS California Tax-Exempt Fund
Dec. 31, 1998 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Municipal bonds (95.7%)
Name of issuer and Coupon Principal Value(a)
title of issue(b,c) rate amount
ABAG Financial Authority for Nonprofit Corporations
Certificate of Participation International School
Series 1996
<S> <C> <C> <C>
05-01-26 7.38% $2,200,000 $2,351,888
Anaheim Public Finance Authority Revenue Bonds
Electric Utilities San Juan Series 2 (FGIC Insured)
10-01-22 5.75 11,100,000 11,855,243
Brea Redevelopment Agency Tax Allocation Refunding Bonds
Redevelopment Project AB (MBIA Insured)
08-01-17 5.50 1,800,000 1,866,618
Burbank Redevelopment Agency Tax Allocation Bonds
Golden State Series 1993A
12-01-23 6.00 2,000,000 2,120,440
Calleguas-Las Virgines Public Finance Authority
Refunding Revenue Bonds
Las Virgines Municipal Water District (FSA Insured)
11-01-23 5.00 1,000,000 992,900
Chapman College Educational Facilities Authority
Revenue Bonds Series 1991B
01-01-18 7.50 500,000 548,460
Clearlake Redevelopment Agency
Highlands Park Community Development
Tax Allocation Bonds Series 1993
10-01-23 6.40 1,420,000 1,513,635
Community Development Authority Health Facilities
Unihealth America Certificate of Participation
Series 1993 Inverse Floater (AMBAC Insured)
10-01-11 7.77 5,000,000(g) 6,087,500
Contra Costa County Residential Rent Facility
Multi-family Housing Revenue Bonds Cypress Meadows
Series 1998E A.M.T.
09-01-28 7.00 2,000,000 1,983,680
Corona Community Facilities District 90-1
Special Tax Refunding Bonds Series 1998A
09-01-20 4.70 7,905,000 7,552,594
Eastern Municipal Water District Riverside County
Water & Sewer Pre-refunded Revenue
Certificates of Participation Series 1991 (FGIC Insured)
07-01-20 6.50 3,000,000 3,271,710
Eastern Municipal Water District Riverside County
Water & Sewer Revenue Certificates of Participation
Series 1991
07-01-23 6.00 1,000,000 1,077,440
Educational Facilities Authority Revenue Bonds
Institute of Technology
10-01-27 4.50 3,000,000 2,772,330
El Centro Financial Authority Water & Wastewater
Revenue Bonds Series 1997A (AMBAC Insured)
10-01-27 5.13 1,200,000 1,206,312
Encinitas Unified School District
Unlimited General Obligation Bonds
Zero Coupon Series 1996 (MBIA Insured)
08-01-15 5.85 2,500,000(f) 1,107,575
08-01-16 5.85 1,000,000(f) 418,200
Fontana Redevelopment Agency
Refunding Certificate of Participation
Police Facility Series 1993
04-01-16 5.63 4,500,000 4,658,760
Fontana Unified School District
San Bernardino County General Obligation
Convertible Capital Appreciation Bonds
Series 1995C (FGIC Insured)
05-01-20 6.15 3,470,000 3,891,987
Fontana Unified School District
Unlimited Tax General Obligation Bonds
Zero Coupon Series D (FGIC Insured)
05-01-20 6.28 2,000,000(h) 2,021,840
Foothill/Eastern Transportation Corridor Agency
Toll Road Senior Lien Revenue Bonds Series 1995A
01-01-34 6.00 1,775,000 1,896,889
Garden Grove Agency Community Development
Tax Allocation Refunding Bonds
Garden Grove Community
10-01-23 5.88 3,000,000 3,139,800
Garden Grove Certificate of Participation
Bahia Village/Emerald Isle
(FSA Insured)
08-01-23 5.70 2,660,000 2,827,527
Huntington Beach Certificate of Participation Revenue Bonds
Civic Center Refinancing (AMBAC Insured)
08-01-16 5.50 1,715,000 1,763,363
Inglewood Redevelopment Agency Revenue Bonds
Series 1998A (AMBAC Insured)
05-01-23 5.25 1,100,000 1,149,016
Intercommunity Hospital Finance Authority
Certificate of Participation (ACA Insured)
11-01-19 5.25 4,000,000 3,920,280
Irwindale Redevelopment Agency Sub Lien
Tax Allocation Bonds Series 1996
12-01-19 7.00 1,700,000 1,892,525
Janesville Union School District
Lassen County General Obligation Bonds
Series 1996
08-01-21 6.45 870,000 928,873
La Mirada Redevelopment Agency Special Tax
Refunding Revenue Bonds Community Facilities
District 89-1 Series 1998
10-01-20 5.70 1,000,000 1,013,070
Lake Elsinore Public Financing Authority
Local Agency Revenue Bonds Series 1997F
09-01-20 7.10 3,000,000 3,251,220
Lake Elsinore School Financing Authority
Revenue Bonds Series 1997
09-01-19 6.13 1,235,000 1,312,150
Los Angeles Convention & Exhibition Center
Pre-refunded Certificate of Participation
Series 1989A
08-15-09 7.30 1,000,000(d) 1,041,660
08-15-18 7.38 2,900,000(d) 3,022,119
08-15-20 7.00 5,000,000 5,199,450
Los Angeles County Transportation Commission
Sales Tax Refunding Revenue Bonds
Series 1989A
07-01-15 7.40 2,000,000 2,079,480
Los Angeles County Transportation Commission
Sales Tax Refunding Revenue Bonds Series A
07-01-19 7.00 4,150,000 4,312,058
Los Angeles Department of Airports Revenue Bonds
Los Angeles International Airport Series 1995D
(FGIC Insured) A.M.T.
05-15-15 5.50 1,000,000 1,047,610
Los Angeles Department of Water & Power
Waterworks Refunding Revenue Bonds
Series 2 (Secondary FGIC Insured)
05-15-18 4.50 3,000,000 2,845,770
Los Angeles Multi-family Housing Revenue Bonds
Park Parthenia Series 1986A
(GNMA Insured) A.M.T.
01-20-22 7.40 1,000,000 1,023,010
Los Angeles Single Family Home Mortgage Revenue Bonds
Series 1991A (GNMA & FNMA
Insured) A.M.T.
06-01-25 6.88 770,000 811,488
Los Angeles State Harbor Revenue Bonds
Escrowed to Maturity
10-01-18 7.60 1,000,000 1,307,050
Los Angeles State Harbor Revenue Bonds
Series 1996B (MBIA Insured) A.M.T.
11-01-19 5.38 2,000,000 2,052,860
11-01-23 5.38 1,300,000 1,341,496
Los Angeles Wastewater System
Refunding Revenue Bonds Series D (FGIC Insured)
11-01-17 4.70 1,000,000 979,380
Los Angeles Water & Power
Electric Plant Revenue Bonds Series 1990
05-15-30 7.13 6,500,000 6,948,500
Millbrae Residential Facility Revenue Bonds
Magnolia of Millbrae Series 1997A A.M.T.
09-01-27 7.38 2,500,000 2,631,675
Modesto Irrigation District Finance Authority
Refunding Revenue Bonds Domestic Water
Series 1998D (AMBAC Insured)
09-01-22 4.75 2,000,000 1,920,220
Mount Diablo Hospital District Hospital
Pre-refunded Revenue Bonds
Series 1990A (AMBAC Insured)
12-01-17 7.00 3,000,000 3,264,480
North City West Community School Facility
Authority Special Tax Refunding Revenue Bonds
Series 1995B (CGIC Insured)
09-01-15 5.75 1,000,000 1,091,920
Northern California Transmission Agency
California-Oregon Transmission
Pre-refunded Revenue Bonds
Series 1990A (MBIA Insured)
05-01-24 7.00 2,000,000 2,128,540
Northern California Transmission Select Auction
Variable Rate Security & Residual Interest Revenue Bonds
Inverse Floater (MBIA Insured)
04-29-24 5.50 4,500,000(g) 4,672,170
Novato Community Facility District 1 Vintage Oaks
Public Improvement Special Tax Refunding Bonds
08-01-21 7.25 2,000,000 2,191,160
Orange County Special Tax Community Facilities Bonds
Aliso Veijo District 88-1 Series 1992A
08-15-18 7.35 3,000,000 3,432,510
Palmdale Community Redevelopment Agency
Tax Allocation Refunding Revenue Bonds
Series 1998 (MBIA Insured)
09-01-34 5.00 2,000,000 1,983,400
Pittsburg Infrastructure Finance Authority
Reassessment Revenue Improvement Bonds
Series 1998A
09-02-24 5.60 1,465,000 1,474,610
Pleasanton Joint Powers Financing Authority Reassessment
Revenue Bonds Series 1993A
09-02-12 6.15 1,765,000 1,898,699
Port of Oakland Refunding Revenue Bonds
Series 1997G (MBIA Insured) A.M.T.
11-01-25 5.38 3,080,000 3,154,752
Rancho Cucamonga Redevelopment Agency
Allocation Pre-refunded Bonds Series 1990
(MBIA Insured)
09-01-19 7.13 3,540,000 3,707,513
Rancho Mirage Joint Powers Finance Authority
Certificate of Participation Eisenhower Memorial Hospital
03-01-22 7.00 4,250,000 4,752,690
Redding Redevelopment Agency Tax Allocation
Refunding Bonds Canby Hilltop Cypress
Series D (CGIC Insured)
09-01-23 5.00 4,700,000 4,653,658
Redwood City Elementary School District Capital
Appreciation General Obligation Bonds
San Mateo County Zero Coupon
Series 1997 (FGIC Insured)
08-01-20 5.65 5,475,000(f) 1,827,062
Richmond Elementary School District
Lassen County General Obligation Bonds
Series 1996
08-01-21 6.50 649,000 708,792
Richmond Joint Powers Financing Authority
Leases and Gas Tax Refunding Revenue Bonds
Series 1995A
05-15-13 5.25 2,000,000 2,075,740
Richmond Redevelopment Agency Tax Allocation
Refunding Bonds Harbour Redevelopment
Series 1998A (MBIA Insured)
07-01-23 4.75 2,000,000 1,918,920
Rural Home Mortgage Financing Authority
Single Family Mortgage Revenue Bonds
3rd Series 1997A (GNMA Insured) A.M.T.
09-01-29 7.00 1,425,000 1,606,531
Rural Home Mortgage Financing Authority
Single Family Mortgage Revenue Bonds
4th Series 1998B (FNMA/GNMA Insured) A.M.T.
12-01-29 5.75 1,500,000 1,639,980
Sacramento Cogeneration Authority Pre-refunded
Revenue Bonds Procter & Gamble
07-01-10 6.38 500,000 573,250
Sacramento Cogeneration Authority Unrefunded
Revenue Bonds Procter & Gamble
07-01-10 6.38 500,000 568,320
Sacramento County Certificate of Participation
(AMBAC Insured)
10-01-17 4.75 3,000,000 2,917,020
Sacramento Municipal Utility District Pre-refunded Bonds
Series Y (MBIA Insured)
09-01-19 6.75 3,400,000 3,744,454
Sacramento Power Authority Cogeneration
Revenue Bonds Campbell Soup Series 1995
07-01-22 6.00 1,000,000 1,068,650
San Diego Community Facilities District 1
Special Tax (MBIA Insured)
09-01-20 4.75 2,000,000 1,936,740
San Diego County Capital Asset Lease
Certificate of Participation
Series 1993 Inverse Floater (AMBAC Insured)
09-01-07 7.02 3,200,000(g) 3,860,000
San Diego Regional Transportation Commission Sales Tax
Pre-refunded Revenue Bonds Limited Tax Series 1989A
04-01-08 6.25 5,030,000 5,071,648
San Francisco City & County Airport Commission
International Airport Revenue Bonds Issue 15B
2nd Series 1998 (MBIA Insured)
05-01-20 4.90 2,000,000 1,973,820
San Joaquin County Certificate of Participation
Jail & Sheriff's Operation Center (MBIA Insured)
11-15-15 6.75 2,000,000 2,104,860
San Joaquin County Pre-refunded Certificate of Participation
Human Services Facility Series 1989 (BIG Insured)
05-15-09 6.70 3,500,000 3,618,230
San Jose Redevelopment Agency Merged Area
Redevelopment Tax Allocation Bonds
Series 1993 (MBIA Insured)
08-01-24 4.75 3,055,000 2,924,063
San Jose Redevelopment Agency Merged Area
Tax Allocation Bonds Series 1993 Inverse Floater
(MBIA Insured)
08-01-14 6.81 3,000,000(g) 3,240,000
San Ysidro School District General Obligation Bonds
San Diego County Series 1997 (AMBAC Insured)
08-01-21 6.13 1,000,000 1,138,680
Santa Clara County Mountain View
Los Altos Union High School District Unlimited Tax
General Obligation Bonds Series A
08-01-15 5.75 1,200,000 1,296,780
Santa Cruz Certificate of Participation
08-01-07 8.38 1,140,000 1,161,466
Santa Nella County Water District Improvement
Limited Obligation Refunding Improvement Bonds
Series 1998
09-02-28 6.25 2,500,000 2,489,700
Sierra Madre Finance Authority Water & Sewer
Refunding Revenue Bonds Series 1998A (MBIA Insured)
11-01-18 5.00 2,010,000 2,000,352
South Tahoe Joint Powers Financing Authority
Refunding Revenue Bonds Series 1995B
10-01-20 6.25 2,700,000 2,898,963
South Whittier Elementary School District
Unlimited Tax General Obligation Capital
Appreciation Bonds Zero Coupon
Series 1998A (FGIC Insured)
08-01-15 5.15 300,000(f) 132,909
08-01-16 5.15 500,000(f) 209,100
Southern California Home Financing Authority
Single Family Mortgage Revenue Bonds 1990B
(GNMA Insured) A.M.T.
03-01-24 7.75 475,000 497,629
Southern California Metropolitan Water District
Waterworks Revenue Bonds Series 1998A
07-01-22 4.75 3,750,000 3,596,213
Southern California Public Power Authority Transmission
Special Bonds
07-01-12 6.00 2,700,000 2,903,823
State Department Water Resource
Water Systems Revenue Bonds Center Valley
Series 1995O
12-01-18 4.75 2,000,000 1,947,160
State Department Water Resource
Water Systems Revenue Bonds Central Valley
Series L
12-01-23 5.50 3,000,000 3,111,600
State Education Facility Authority
Revenue Bonds Pomona College
02-15-17 6.00 3,000,000 3,223,470
State Education Facility Authority
Revenue Bonds Series 1997B
04-01-21 6.30 1,000,000 1,084,620
State Health Facility Finance Authority
Pre-refunded Revenue Bonds
St. Joseph Health System Series 1989A
07-01-14 6.90 3,500,000 3,635,660
State Pollution Control Finance Authority Pollution Control
Revenue Bonds Southern California Edison
Series 1988A A.M.T.
09-01-06 6.90 2,000,000 2,074,800
State Public Works Board California Community
Colleges Lease Revenue Bonds Series 1994B
03-01-19 7.00 2,000,000 2,339,420
State Public Works Board Lease Revenue Bonds
Department of Correction Substance Abuse Treatment
Facility & State Prison at Corcoran Series 1996A
(AMBAC Insured)
01-01-21 5.25 1,870,000 1,901,753
State Public Works Board University of California Lease
Pre-refunded Revenue Bonds Series 1990A
09-01-15 7.00 2,250,000 2,429,978
State University Refunding Revenue Bonds
Series C (AMBAC Insured)
09-01-23 5.00 2,000,000 1,980,280
State Unlimited Tax General Obligation Bonds
(Secondary FGIC Insured)
09-01-23 4.75 1,325,000(d) 1,267,402
State Unlimited Tax General Obligation Refunding Bonds
02-01-21 5.00 3,000,000 2,976,090
Statewide Communities Development Authority
Certificate of Participation San Diego State University
Student Residence Series 1998A (MBIA Insured)
06-01-20 5.00 1,500,000 1,494,075
Statewide Community Development Authority
Revenue Certificate of Participation
St. Joseph Health System Group
07-01-15 6.50 5,500,000 6,317,300
Stockton Single Family Mortgage Revenue Bonds
Series 1990A (GNMA Insured) A.M.T.
02-01-23 7.50 90,000 99,452
University of Southern California Educational
Facilities Authority Pre-refunded Revenue Bonds
Series 1989B
10-01-15 6.75 5,000,000 5,223,200
Upland Certificate of Participation Water System
Refunding Bonds (FGIC Insured)
08-01-16 6.60 1,000,000 1,098,760
Total municipal bonds
(Cost: $236,844,544) $261,272,468
Municipal notes (2.8%)
Health Facilities Authority
Sutter Health V.R. Series 1996
07-02-22 5.10% $500,000 $500,000
Health Facilities Authority
Sutter Health V.R. Series 1996B
03-01-12 5.10 100,000 100,000
Health Facilities Authority
Sutter Health V.R. Series 1996C
11-15-11 5.38 1,070,000 1,151,780
07-02-22 5.10 800,000 800,000
Health Facilities Financing Authority
Revenue Bonds Sutter Health
V.R. Series 1990A
03-01-20 5.10 900,000 900,000
Irvine Ranch Water District
Bank of America V.R. Series 1993
04-01-33 5.10 600,000 600,000
Irvine Ranch Water District
V.R. Series 1990
09-02-15 5.10 1,000,000 1,000,000
Irvine Ranch Water District
V.R. Series 1991
08-01-16 5.10 600,000 600,000
Irvine Ranch Water District
V.R. Series 1995
01-01-21 5.10 1,100,000 1,100,000
Orange County Sanitation District
V.R. Series 1990 (AMBAC Insured)
08-01-15 5.10 700,000 700,000
Statewide Community Development Authority
Certificate of Participation
Northern California Retirement Officers V.R.
06-01-26 5.10 100,000 100,000
Total municipal notes
(Cost: $7,549,506) $7,551,780
Total investments in securities
(Cost: $244,394,050)(i) $268,824,248
See accompanying notes to investments in securities.
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) The following abbreviations may be used in portfolio descriptions to
identify the insurer of the issue: ACA -- ACA Financial Guaranty Corporation
AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors
Guarantee CGIC -- Capital Guaranty Insurance Company 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
(c) The following abbreviations may be used in the portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of Dec. 31, 1998, the value of
securities subject to alternative minimum tax represented 7.32%
of net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N.-- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B.-- Variable Rate Demand Bond
V.R.D.N.-- Variable Rate Demand Note
(d) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 5 to the financial statements):
Type of security Notional amount
Purchase contracts
Municipal Bonds March 1999 $5,000,000
(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,
1998.
(f) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(g) 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, 1998. Inverse floaters in the aggregate represent 6.54% of
the Fund's net assets as of Dec. 31, 1998.
(h) 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.
(i) At Dec. 31, 1998, the cost of securities for federal income tax purposes was
approximately $244,394,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation......................................$24,628,000
Unrealized depreciation.........................................(198,000)
Net unrealized appreciation..................................$24,430,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Massachusetts Tax-Exempt Fund
Dec. 31, 1998 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Municipal bonds (94.2%)
Name of issuer and Coupon Principal Value(a)
title of issue(b,c) rate amount
Bay Transit Authority Series B
(Secondary CGIC Insured)
<S> <C> <C> <C>
03-01-21 5.50% $500,000 $513,610
Bay Transportation Authority General Transportation System
Refunding Bonds Series 1992B
03-01-16 6.20 1,500,000 1,750,905
Boston City Hospital Pre-refunded Revenue Bonds
Series A (FHA Insured)
02-15-21 7.63 1,000,000 1,083,490
Boston City Hospital Refunding Revenue Bonds
Series B (FHA Insured)
02-15-23 5.75 3,000,000(e) 3,109,381
Boston General Obligation Bonds
Series 1991A (MBIA Insured)
07-01-11 6.75 500,000 546,480
Boston General Obligation Refunding Bonds
Series 1993A (AMBAC Insured)
02-01-09 5.65 1,500,000(e) 1,621,170
Boston Industrial Development Financing Authority
Revenue Bonds Massachusetts College of Pharmacy
Series 1993A (Connie Lee Insured)
10-01-26 5.25 1,000,000 1,003,700
Boston Water & Sewer Commission
General Pre-refunded Revenue Bonds
Senior Series 1991A (FGIC Insured)
11-01-18 7.00 1,000,000 1,108,820
Commonwealth General Obligation Consolidated Loan
Pre-refunded Bonds Series 1990A (FGIC Insured)
03-01-09 7.25 500,000 532,525
Haverhill City Unlimited Tax General Obligation Bonds
Series 1997 (FGIC Insured)
06-15-17 5.00 1,000,000 1,005,240
Health & Education Facilities Authority
Revenue Bonds Vinfen Corporation
Series 1998A (ACA Insured)
11-15-28 5.30 1,000,000 979,380
Health & Educational Facilities Authority
Pre-refunded Bonds Northeastern University
Series 1989C (AMBAC Insured)
10-01-06 7.10 1,000,000 1,047,790
Health & Educational Facilities Authority
Pre-refunded Bonds Northeastern University
Series E (MBIA Insured)
10-01-22 6.55 1,000,000 1,104,960
Health & Educational Facilities Authority
Pre-refunded Revenue Bonds
Beverly Hospital Series D (MBIA Insured)
07-01-19 7.30 400,000 416,272
Health & Educational Facilities Authority
Pre-refunded Revenue Bonds
Stonehill College Series 1990D (AMBAC Insured)
07-01-20 7.70 1,000,000 1,082,150
Health & Educational Facilities Authority
Pre-refunded Revenue Bonds
Wentworth Institute of Technology
Series A (AMBAC Insured)
04-01-10 7.40 750,000 801,983
Health & Educational Facilities Authority
Refunding Revenue Bonds
Beth Israel Hospital Series 1989E
07-01-09 7.00 300,000 311,073
07-01-14 7.00 250,000 259,035
Health & Educational Facilities Authority
Revenue Bonds Berkshire Health Systems
Series C
10-01-11 5.90 1,000,000 1,036,240
Health & Educational Facilities Authority
Revenue Bonds Boston College
Series J (FGIC Insured)
07-01-21 6.63 2,000,000 2,169,940
Health & Educational Facilities Authority
Revenue Bonds Brigham & Women's Hospital
Series 1991D
07-01-24 6.75 1,000,000 1,092,460
Health & Educational Facilities Authority
Revenue Bonds Brigham & Women's Hospital
Series C
06-01-21 6.75 500,000 517,435
Health & Educational Facilities Authority
Revenue Bonds Cape Cod Health System
Series A (Connie Lee Insured)
11-15-21 5.25 2,500,000 2,506,975
Health & Educational Facilities Authority
Revenue Bonds Charlton Memorial Hospital
Series 1991B
07-01-13 7.25 1,750,000 1,932,088
Health & Educational Facilities Authority
Revenue Bonds Holyoke Hospital
Series B
07-01-15 6.50 1,000,000 1,069,630
Health & Educational Facilities Authority
Revenue Bonds Melrose-Wakefield Hospital
Series 1992B
07-01-16 6.38 1,000,000 1,102,920
Health & Educational Facilities Authority
Revenue Bonds New England Deaconess Hospital
Series 1992D
04-01-12 6.63 1,000,000 1,105,500
Health & Educational Facilities Authority
Revenue Bonds Newton Wellesley Hospital
Series 1991D (MBIA Insured)
07-01-15 7.00 1,000,000 1,098,380
Health & Educational Facilities Authority
Revenue Bonds North Adams Regional Hospital
Series C
07-01-18 6.63 1,000,000 1,086,200
Health & Educational Facilities Authority
Revenue Bonds South Shore Hospital
Series 1992D (MBIA Insured)
07-01-22 6.50 1,000,000 1,094,870
Health & Educational Facilities Authority
Revenue Bonds Suffolk University
Series B (Connie Lee Insured)
07-01-22 6.35 2,495,000 2,715,333
Health & Educational Facilities Authority
Revenue Bonds Valley Regional Health System
Series C (Connie Lee Insured)
07-01-18 5.75 1,000,000 1,052,810
Industrial Finance Agency Assumption College
Revenue Bonds Series 1996 (Connie Lee Insured)
07-01-26 6.00 1,000,000 1,092,500
Industrial Finance Agency Hampshire College
Revenue Bonds Series 1997
10-01-17 5.80 1,105,000 1,139,675
Industrial Finance Agency Pollution Control
Refunding Revenue Bonds Eastern Edison
Series 1993
08-01-08 5.88 2,000,000 2,068,160
Industrial Finance Agency Resource Recovery
Revenue Bonds SEMASS Series 1991A
07-01-15 9.00 1,500,000 1,658,325
Industrial Finance Agency Revenue Bonds
Museum of Science Series 1989 (FSA Insured)
11-01-09 7.30 1,000,000 1,054,120
Leominster General Obligation Bonds (MBIA Insured)
04-01-09 7.50 1,000,000 1,070,530
Mansfield General Obligation Bonds (AMBAC Insured)
11-15-11 6.70 1,000,000 1,104,630
Municipal Wholesale Electric Power
Supply System Pre-refunded Revenue Bonds
Series 1992B
07-01-17 6.75 1,395,000 1,557,531
Municipal Wholesale Electric Power
Supply System Refunding Revenue Bonds
Series B (MBIA Insured)
07-01-11 4.75 1,750,000 1,769,268
Municipal Wholesale Electric Power
Supply System Revenue Bonds
Special Parts & Inflows (AMBAC Insured)
07-01-18 5.45 1,600,000 1,656,016
Nantucket General Obligation Bonds
12-01-11 6.80 1,000,000 1,105,010
New Bedford General Obligation Bonds
Series 1995 (AMBAC Insured)
10-15-15 5.50 700,000 735,875
North Andover General Obligation Bonds
(MBIA Insured)
09-15-08 7.35 310,000 338,129
North Andover Unlimited Tax General
Obligation Municipal Purpose Loan Bonds
Series 1998 (FGIC Insured)
01-15-18 4.75 1,000,000 974,300
North Attleborough Unlimited General Obligation Bonds
Series 1997 (AMBAC Insured)
03-01-17 5.25 1,000,000 1,033,060
Port Authority Revenue Bonds
Series 1990A (FGIC Insured) A.M.T.
07-01-20 7.50 1,000,000 1,070,680
Southeastern University Building Refunding Revenue Bonds
Series A (AMBAC Insured)
05-01-16 5.75 1,250,000 1,340,175
Southern Berkshire Regional School District Unlimited Tax
General Obligation Pre-refunded Bonds (AMBAC Insured)
04-15-10 7.55 1,000,000 1,073,070
State Development Finance Agency
Private School Revenue Bonds
Series 1998
11-01-18 5.88 500,000 508,115
State Education Loan Authority
Educational Loan Revenue Bonds
Issue E Series B (AMBAC Insured) A.M.T.
01-01-12 6.00 850,000 922,216
State General Obligation Consolidated Loan Bonds
Series 1991A (FGIC Insured)
06-01-11 6.00 1,095,000 1,155,345
State Health & Education Facilities Authority
College Revenue Bonds Brandeis University
Series 1998I (MBIA Insured)
10-01-28 4.75 1,000,000 940,810
State Health & Education Facilities Authority
Harvard Pilgrim Health Hospital Revenue Bonds
Series 1998A (FSA Insured)
07-01-22 4.75 1,000,000 940,650
State Health & Education Facilities Authority
Hospital Revenue Bonds Milford-Whitinsville
Regional Hospital Series 1998C
07-15-28 5.38 1,065,000 1,050,388
State Health & Education Facilities Authority
Revenue Bonds Southcoast Health System
Series 1998A (MBIA Insured)
07-01-27 4.75 1,000,000 934,900
State Health & Education Facility Authority
Hospital Revenue Bonds Boston Medical Center
Series 1998A (MBIA Insured)
07-01-19 5.00 1,000,000 992,400
State Health & Educational Facilities Authority
Revenue Bonds Boston College Series 1998L
06-01-31 4.75 2,000,000 1,868,500
State Housing Authority Residential
Development Bonds Series 1992A (FNMA Insured)
11-15-11 6.88 1,000,000 1,091,020
State Housing Finance Agency Single Family Housing
Revenue Bonds Series 13 A.M.T.
06-01-23 7.95 420,000 440,294
State Industrial Finance Agency Assisted Living
Facility Revenue Bonds Marina Bay LLC
Series 1997 A.M.T.
12-01-27 7.50 1,000,000 1,042,340
State Industrial Finance Agency Assisted Living
Facility Revenue Bonds Newton Group Properties LLC
Series 1997 A.M.T.
09-01-27 8.00 1,160,000 1,270,165
State Industrial Finance Agency College Revenue
Bonds Tufts University Series 1998H (MBIA Insured)
02-15-28 4.75 1,000,000 941,380
State Industrial Finance Agency Miscellaneous
Revenue Bonds Cambridge Friends School
Series 1998
09-01-28 5.80 700,000 719,670
State Industrial Finance Agency School Bonds
St. John's High School of Worcester County
Series 1998
06-01-28 5.35 500,000 496,310
State Turnpike Authority Metro Highway System
Senior Lien Revenue Bonds Toll Road
Series 1997A (MBIA Insured)
01-01-37 5.00 1,000,000 971,840
State Water Resource Authority Revenue Bonds
Series A (Secondary MBIA Insured)
07-15-22 5.50 1,100,000 1,164,724
University of Massachusetts Building Authority
Revenue Bonds Escrowed to Maturity
05-01-11 7.50 110,000 131,773
Water Resource Authority General
Pre-refunded Revenue Bonds Series 1990A
04-01-14 7.63 500,000 536,025
Water Resource Authority General
Pre-refunded Revenue Bonds Series 1991A
12-01-19 6.50 1,000,000 1,097,600
Water Resource Authority General
Revenue Bonds Series B (MBIA Insured)
03-01-22 5.00 1,365,000 1,337,386
Worcester General Obligation Refunding Bonds
Series 1995G (MBIA Insured)
07-01-15 5.30 1,000,000 1,035,760
Worcester Unlimited Tax General
Obligation Bonds Series 1998A (FSA Insured)
07-01-17 4.90 1,000,000 990,040
Total municipal bonds
(Cost: $75,720,079) $82,279,450
Municipal notes (3.7%)
State Health & Education Facility
Series 1985 V.R.
01-01-35 4.00% $300,000 $300,000
01-01-35 5.00 1,800,000 1,800,000
State Health & Education Facility
Series 1985B V.R.
01-01-35 5.00 1,100,000 1,100,000
Total municipal notes
(Cost: $3,200,000) $3,200,000
Total investments in securities
(Cost: $78,920,079)(f) $85,479,450
See accompanying notes to investments in securities.
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) The following abbreviations may be used in portfolio descriptions to
identify the insurer of the issue: ACA -- ACA Financial Guaranty Corporation
AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors
Guarantee CGIC -- Capital Guaranty Insurance Company 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
(c) The following abbreviations may be used in the portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of Dec. 31, 1998, the value of
securities subject to alternative minimum tax represented 5.44%
of net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N.-- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B.-- Variable Rate Demand Bond
V.R.D.N.-- Variable Rate Demand Note
(d) 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,
1998.
(e) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 5 to the financial statements):
Type of security Notional amount
Purchase contracts
Municipal Bonds March 1999 $1,500,000
(f) At Dec. 31, 1998, the cost of securities for federal income tax purposes was
approximately $78,835,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation.................................$6,651,000
Unrealized depreciation.....................................(7,000)
Net unrealized appreciation.............................$6,644,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Michigan Tax-Exempt Fund
Dec. 31, 1998 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Municipal bonds (97.3%)
Name of issuer and Coupon Principal Value(a)
title of issue(b,c) rate amount
Auburn Hills Limited Tax General Obligation
Street Improvement Bonds
<S> <C> <C> <C>
05-01-04 6.00% $200,000(e) $204,726
Battle Creek Calhoun County Downtown
Development Authority Bonds Series 1994
05-01-22 7.65 1,250,000 1,486,850
Belding Area Schools Unlimited Tax General
Obligation Refunding Bonds Series 1998
(AMBAC Insured)
05-01-26 5.00 1,000,000 982,380
Buena Vista School District Saginaw County
School Building & Site Unlimited Tax
General Obligation Pre-refunded Bonds Series 1991
05-01-16 7.20 1,500,000(e) 1,647,990
Central Michigan University Revenue Bonds
Series 1997 (FGIC Insured)
10-01-26 5.50 750,000 828,458
Central Michigan University Revenue Bonds
Series 1998 (FGIC Insured)
10-01-27 5.00 1,000,000 981,960
Chippewa County Hospital Financial Authority
Hospital Refunding Revenue Bonds
Chippewa County War Memorial Hospital
Series 1997B
11-01-14 5.63 500,000 507,290
Chippewa Valley School District Unlimited Tax
General Obligation Bonds (FGIC Insured)
05-01-21 5.00 1,000,000 981,460
Chippewa Valley Schools Unlimited Tax
General Obligation Refunding Bonds
Series 1998 (AMBAC Insured)
05-01-23 4.75 1,000,000 948,790
Comstock Park Public School Kent County Unlimited Tax
General Obligation Pre-refunded Bonds Series 1989
05-01-10 6.88 260,000 268,343
05-01-16 6.00 400,000 411,688
Concord Academy Certificate of Participation Series 1998
10-01-19 7.00 1,000,000 994,440
Detroit Downtown Development Authority
Development Area Project 1 Junior Lien
Tax Increment Refunding Bonds Series 1996D
07-01-25 6.50 1,000,000 1,166,950
Detroit General Obligation Pre-refunded Bonds
Distributable State Aid Series 1989 (AMBAC Insured)
05-01-09 7.20 1,000,000 1,033,470
Detroit Sewer Disposal Revenue Bonds (FGIC Insured)
07-01-23 5.70 2,000,000(e) 2,105,019
Detroit Unlimited Tax General Obligation Bonds
Series 1995A
04-01-15 6.80 1,000,000 1,162,120
Detroit Unlimited Tax General Obligation
Pre-refunded Bonds Series A
04-01-09 7.25 1,000,000 1,030,210
Detroit Water Supply System Second Lien
Revenue Bonds Series 1995A (MBIA Insured)
07-01-25 5.50 1,500,000 1,564,530
East Lansing School District School Building & Site
Unlimited Tax General Obligation
Pre-refunded Bonds Series 1991
05-01-14 6.63 1,000,000 1,085,390
Famington Hills Hospital Finance Authority
Revenue Bonds Botsford General Hospital
Series 1992A (MBIA Insured)
02-15-22 6.50 1,500,000 1,650,615
Ferris State University Board of Trustees
General Refunding Revenue Bonds
Series 1995 (MBIA Insured)
10-01-20 5.25 1,000,000 1,013,250
Forest Hills School District Unlimited Tax
General Obligation Pre-refunded Bonds
05-01-15 7.38 1,000,000 1,062,160
Frenchtown Resort Drainage District Monroe County Drain
Pre-refunded Revenue Bonds Series 1987
05-01-11 7.50 200,000 206,890
05-01-12 7.50 415,000 429,297
Garden City Hospital Finance Authority
Hospital Revenue Bonds Series 1998
09-01-17 5.75 1,000,000 997,080
Genesee County General Obligation Bonds
Sewer Disposal System Series A (AMBAC Insured)
04-01-15 5.40 1,400,000 1,464,596
Grand Ledge Public Schools Unlimited Tax General Obligation
Refunding Bonds Counties of Eaton, Clinton & Ionia
Series 1995 (MBIA Insured)
05-01-24 5.38 2,000,000 2,054,580
Grand Rapids Community College Limited Tax
General Obligation Bonds Series 1996 (MBIA Insured)
05-01-19 5.38 1,000,000 1,029,130
Grand Rapids Sanitary Sewer System Refunding
Revenue Bonds Series 1998A (FGIC Insured)
01-01-28 4.75 1,000,000 944,410
Grand Rapids Tax Increment Revenue Bonds
Series 1994 (MBIA Insured)
06-01-24 6.88 380,000 435,081
Grand Rapids Water Supply System Improvement
Pre-refunded Revenue Bonds Series 1990 (FGIC Insured)
01-01-20 7.25 1,250,000 1,324,938
Inkster School District Unlimited Tax General Obligation
Pre-refunded Bonds (AMBAC Insured)
05-01-18 7.00 450,000 478,125
Iosco County Water Supply System Limited Tax
General Obligation Bonds (AMBAC Insured)
05-01-08 5.50 175,000 178,500
05-01-09 5.50 200,000 204,000
05-01-10 5.50 200,000 204,000
Kalamazoo Hospital Finance Authority
Hospital Refunding Revenue Bonds
Bronson Methodist Hospital Series 1998 (MBIA Insured)
05-15-18 5.25 500,000 508,975
Lake Orion School District General Obligation Bonds
(AMBAC Insured)
05-01-20 5.50 1,000,000 1,039,640
Lincoln Park School District Wayne County
School Building & Site Unlimited Tax
General Obligation Bonds (FGIC Insured)
05-01-26 5.90 1,000,000 1,123,960
Marquette Hospital Finance Authority
Pre-refunded Revenue Bonds
Marquette General Hospital Series 1989C
04-01-07 7.50 175,000 180,376
04-01-19 7.50 650,000 669,968
Monroe County Pollution Control Revenue Bonds
Detroit Edison Fermi 2 Plants
Series CC (AMBAC Insured) A.M.T.
12-01-19 7.50 1,750,000 1,859,638
Monroe County Pollution Control Revenue Bonds
Detroit Edison Fermi Plants
Series 1990I (FGIC Insured) A.M.T.
09-01-20 7.65 1,000,000 1,077,820
Northville Public Schools Unlimited Tax
General Obligation Bonds Series 1991B
05-01-08 7.00 1,500,000 1,640,565
Oakland County Economic Development Corporation
Obligation Refunding Revenue Bonds
Cranbrook Educational Community Series 1998
11-01-17 5.00 1,000,000 991,500
Ovid-Elsie School District Unlimited Tax
General Obligation Bonds (Secondary MBIA Insured)
05-01-21 5.60 1,000,000 1,099,580
Redford General Obligation Bonds (MBIA Insured)
04-01-16 5.25 1,450,000 1,509,073
Richmond Limited Obligation Refunding Revenue Bonds
K mart Series A
01-01-07 6.63 530,000 567,662
Rockford Public Schools Kent County Unlimited Tax
General Obligation Pre-refunded Revenue Bonds
05-01-19 7.38 1,000,000 1,060,940
Romulus Township School District Unlimited Tax
General Obligation Refunding Bonds (FGIC Insured)
05-01-22 5.75 2,500,000 2,668,149
Schoolcraft Community School District
County of Kalamazoo School Building
& Site Unlimited General Obligation Bonds
Series 1996 (FGIC Insured)
05-01-26 5.38 1,000,000 1,025,910
South Lake District Unlimited Tax General Obligation
Pre-refunded Bonds
05-01-10 6.80 355,000 385,477
South Redford School District Unlimited General
Obligation Bonds Series 1996 (FGIC Insured)
05-01-22 5.50 1,000,000 1,050,350
State Building Authority Refunding
Revenue Bonds Series 1991I
10-01-20 6.25 2,200,000 2,357,431
State Hospital Finance Authority
Hospital Pre-refunded Revenue Bonds
McLaren Obligated Group Series 1991A
09-15-21 7.50 1,750,000 1,954,943
State Hospital Finance Authority
Hospital Refunding Revenue Bonds
Detroit Medical Center Series 1988A
08-15-12 8.13 90,000 92,138
State Hospital Finance Authority
Hospital Refunding Revenue Bonds
Detroit Medical Center Series A
08-15-13 6.25 1,200,000 1,289,424
State Hospital Finance Authority
Hospital Refunding Revenue Bonds
Sinai Hospital of Greater Detroit Series 1995
01-01-26 6.70 1,000,000 1,113,530
State Hospital Finance Authority
Pre-refunded Revenue Bonds
Henry Ford Hospital Series 1990A
07-01-10 7.00 1,000,000 1,071,990
State Hospital Finance Authority
Pre-refunded Revenue Bonds
Oakwood Hospital Group Series 1990A (FGIC Insured)
07-01-18 7.10 1,000,000 1,073,380
State Hospital Finance Authority
Refunding Revenue Bonds
Presbyterian Villages Obligated Group Series 1995
01-01-25 6.50 1,000,000 1,073,910
State Hospital Finance Authority Revenue Bonds
Central Michigan Community Hospital
10-01-27 6.25 1,000,000 1,057,850
State Hospital Finance Authority Revenue Bonds
Presbyterian Villages of Michigan
Obligated Group Series 1997
01-01-25 6.38 700,000 748,860
State Hospital Finance Authority Revenue Bonds
St. John's Hospital & Medical Center (AMBAC Insured)
05-15-26 5.25 1,400,000 1,408,148
State Public Power Agency Belle River
Refunding Revenue Bonds Series A
01-01-18 5.25 1,000,000 1,009,210
State Strategic Fund Limited Obligation Refunding
Revenue Bonds Great Lakes Pulp & Fibre
Series 1994 A.M.T.
12-01-27 5.00 625,827(d) 438,079
State Strategic Fund Limited Tax Obligation
Refunding Revenue Bonds Detroit Edison
Series 1990BB (MBIA Insured)
07-15-08 7.00 1,000,000 1,214,670
State Strategic Fund Limited Tax Obligation
Refunding Revenue Bonds Detroit Edison
Series 1992BB (FGIC Insured)
02-15-16 6.50 1,500,000 1,628,715
State Strategic Fund Limited Tax Obligation
Refunding Revenue Bonds Ford Motor
Series 1991A
02-01-06 7.10 1,650,000(e) 1,937,942
State Strategic Fund Limited Tax Obligation
Refunding Revenue Bonds
Oxford Institute Escrowed to Maturity
08-15-05 7.88 150,000 170,913
State Strategic Fund Nursing Home
Revenue Bonds Holland Home Series 1998
11-15-28 5.75 1,000,000 988,660
State Trunk Line Bonds Series A (FGIC Insured)
11-15-20 5.75 1,065,000 1,184,621
State Trunk Line Refunding Revenue Bonds
Series 1998A (MBIA Insured)
11-01-20 4.75 1,000,000 954,160
State University Revenue Bonds Series A
08-15-22 5.50 560,000 593,074
Summit Academy Certificate of Participation
Series 1998
09-01-18 7.00 1,110,000 1,111,476
Troy City Downtown Development Authority
County of Oakland Development Bonds
Series 1995A Asset Guaranty
11-01-18 6.38 1,500,000 1,680,705
Van Buren Township Tax Increment Revenue Bonds
Series 1994
10-01-16 8.40 1,000,000 1,141,960
Wayne Charter County Airport Revenue Bonds Detroit
Metropolitan Airport Series
1990A (AMBAC Insured) A.M.T.
12-01-20 7.00 1,080,000 1,159,142
Wayne Charter County Airport Revenue Bonds
Detroit Metropolitan Airport
Series 1998A A.M.T.
12-01-28 5.00 1,000,000 969,770
Total municipal bonds
(Cost: $73,480,571) $80,953,000
Municipal notes (1.3%)
Regents of the University of Michigan Hospital
Revenue Bonds V.R. Series A
12-01-21 5.15% $400,000 $400,000
Regents of the University of Michigan Hospital
Revenue Bonds V.R. Series 1992A
12-01-19 5.15 300,000 300,000
Regents of the University of Michigan Hospital
Revenue Bonds V.R. Series 1995A
12-01-27 5.15 100,000 100,000
Wayne Charter County Airport Revenue Bonds
A.M.T.
12-01-22 4.45 300,000 300,000
Total municipal notes
(Cost: $1,100,000) $1,100,000
Total investments in securities
(Cost: $74,580,571)(g) $82,053,000
See accompanying notes to investments in securities.
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) The following abbreviations may be used in portfolio descriptions to
identify the insurer of the issue: ACA -- ACA Financial Guaranty Corporation
AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors
Guarantee CGIC -- Capital Guaranty Insurance Company 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
(c) The following abbreviations may be used in the portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of Dec. 31, 1998, the value of
securities subject to alternative minimum tax represented - 6.97%
of net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N.-- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B.-- Variable Rate Demand Bond
V.R.D.N.-- Variable Rate Demand Note
(d) Non-income producing. Items identified are in default as to payment of
interest and/or principal.
(e) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 5 to the financial statements):
Type of security Notional amount
Purchase contracts
Municipal Bonds March 1999 $1,500,000
(f) 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,
1998.
(g) At Dec. 31, 1998, the cost of securities for federal income tax purposes was
approximately $74,514,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation.....................................$7,738,000
Unrealized depreciation.......................................(199,000)
Net unrealized appreciation.................................$7,539,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Minnesota Tax-Exempt Fund
Dec. 31, 1998 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Municipal bonds (94.6%)
Name of issuer and Coupon Principal Value(a)
title of issue(c,d) rate amount
Albert Lea Independent School District 241
Unlimited Tax General Obligation Bonds
Series 1998 (MBIA Insured)
<S> <C> <C> <C>
02-01-16 4.80% $2,555,000 $2,552,241
Anoka County General Obligation Capital
Improvement Revenue Bonds Series 1989B
02-01-07 7.00 1,525,000 1,529,697
02-01-08 7.00 1,650,000 1,655,082
02-01-09 7.00 1,775,000 1,780,467
02-01-10 7.00 3,000,000 3,009,240
Anoka County Resource Recovery Revenue Bonds
Northern States Power Series 1985
12-01-08 7.15 3,750,000 3,914,663
Becker Pollution Control Revenue Bonds Northern
States Power Sherburne County Generating Station
Units 1 & 2 Series 1987A
12-01-05 7.25 2,000,000 2,005,560
Becker Solid Waste Disposal Facility Revenue
Bonds Liberty Paper Series 1994B A.M.T.
08-01-15 9.00 3,825,000 4,165,846
Bemidji Hospital Facilities 1st Mortgage
Pre-refunded Revenue Bonds North Country
Health Services Series 1991
09-01-21 7.00 1,755,000 1,932,027
Brooklyn Center Tax Credit Investor Refunding
Revenue Bonds Four Courts Apartment
Series 1995B A.M.T.
06-01-09 7.58 2,450,000 2,506,693
Burnsville Multi-family Housing Refunding Revenue
Bonds Summit Park Apartments Series 1993
(FHA Insured)
07-01-33 6.00 4,000,000 4,154,520
Columbia Heights Multi-family Housing
Pre-refunded Revenue Bonds Crestview Lutheran
Home Royce Place Series 1991
06-01-32 10.00 540,000 637,978
Columbia Heights Multi-family Housing Revenue
Bonds Crestview Lutheran Home Royce Place
Series 1991 (FHA Insured)
06-01-32 7.75 2,710,000 3,042,707
Duluth Economic Development Authority Health
Care Facilities Pre-refunded Revenue Bonds
Benedictine Health System St. Mary's Medical
Center Series 1990
02-15-20 8.38 2,000,000 2,151,380
Duluth Economic Development Authority Health
Care Facilities Revenue Bonds BSM Properties
Incorporated Series 1998A
12-01-28 5.88 500,000 502,935
Eden Prairie Housing Development Refunding
Revenue Bonds Eden Commons Series 1990
(FHA Insured)
03-01-25 8.25 6,075,000 6,285,985
Edina Hospital System Pre-refunded Revenue Bonds
Fairview Hospital & Health Care Services
Series 1989A
07-01-19 7.13 2,500,000 2,599,625
Edina Multi-family Housing Revenue Bonds Walker
Assisted Living Series 1991
09-01-31 9.00 6,640,000 7,471,062
Faribault Rice & Goodhue County Independent
School District 656 General Obligation School
Building Bonds Series 1995 (FSA Insured)
06-01-15 5.75 6,900,000 7,288,539
Faribault Single Family Housing Mortgage
Refunding Revenue Bonds Series 1991A
12-01-11 7.50 1,020,000 1,079,303
Farmington Independent School District 192
Unlimited Tax General Obligation Capital
Appreciation School Building Bonds Zero Coupon
Series 1998B (FSA Insured)
02-01-15 5.30 2,070,000(g) 922,558
Fergus Falls Health Care Facilities Revenue Bonds
LRHC Long-term Care Facility Series 1995
12-01-25 6.50 1,500,000 1,633,020
Harmony Multi-family Housing Refunding
Revenue Bonds Zedakah Foundation Series 1997A
09-01-20 5.95 1,240,000 1,293,618
Hastings Healthcare Tax-Exempt Nursing Home
Revenue Bonds Regina Medical Center
(ACA Insured)
09-15-28 5.30 4,100,000 4,051,292
Hennepin County Lease Revenue Certificates of
Participation Series 1991
05-15-17 6.80 7,250,000 7,873,138
Hopkins Pre-refunded Revenue Bonds Blake School
09-01-24 6.70 3,120,000 3,542,635
Hubbard County Solid Waste Disposal Revenue
Bonds Potlatch Series 1989 A.M.T.
08-01-13 7.38 5,610,000 5,812,577
International Falls Solid Waste Disposal Revenue
Bonds Boise Cascade Series 1990 A.M.T.
01-01-15 7.75 4,000,000 4,154,760
Little Canada Multi-family Housing Revenue Bonds
Housing Alternative Development Company
Series 1997A
12-01-27 6.25 1,000,000 1,015,630
Little Canada Multi-family Housing Revenue Bonds
Little Canada Series 1996 A.M.T.
02-01-27 7.00 3,830,000 3,988,562
Mahtomedi Multi-family Housing Revenue Bonds
Briarcliff A.M.T.
06-01-36 7.35 2,255,000 2,367,209
Maplewood Elder Care Facility Revenue Bonds
Care Institute Series 1994
01-01-24 7.75 3,830,000 4,020,657
Maplewood Multi-family Housing Refunding
Revenue Bonds Carefree Cottages of Maplewood III
Series 1995 A.M.T.
11-01-32 7.20 2,895,000 3,002,260
Maplewood Multi-family Housing Revenue Bonds
(FHA Insured) A.M.T.
07-15-21 7.75 2,000,000 2,012,520
Minneapolis & St. Paul Housing Redevelopment
Authority Health Care Facilities Revenue Bonds
Group Health Plan Series 1992
12-01-13 6.75 10,500,000(f) 11,365,619
Minneapolis & St. Paul Housing Redevelopment
Authority Health Care System Revenue Bonds
Healthspan Series 1993A (AMBAC Insured)
11-15-18 4.75 13,500,000 12,996,584
Minneapolis & St. Paul Metropolitan Airports
Commission Airport Revenue Bonds Series 1998A
(AMBAC Insured)
01-01-22 5.00 2,500,000 2,487,150
Minneapolis Community Development Agency
Limited Tax Supported Development General
Obligation Bonds Common Bond Fund
Series 1997-97A
06-01-12 5.50 250,000 263,490
Minneapolis Community Development Agency
Limited Tax Supported Development Revenue
Bonds Common Bond Fund 1st Series 1996
06-01-11 6.00 980,000 1,032,616
Minneapolis Community Development Agency
Limited Tax Supported Development Revenue
Bonds Common Bond Fund 2nd Series 1998A
A.M.T.
06-01-16 5.20 290,000 290,844
06-01-19 5.25 500,000 498,115
Minneapolis Community Development Agency
Limited Tax Supported Development Revenue
Bonds Common Bond Fund 5th Series 1997
12-01-27 5.70 680,000 710,396
Minneapolis General Obligation Bonds Sports Arena
Series 1996
10-01-24 5.20 4,940,000 5,048,779
Minneapolis Hospital Facilities Pre-refunded
Revenue Bonds Lifespan Incorporated Series 1989A
12-01-14 7.00 5,000,000 5,274,450
Minneapolis Nursing Home Revenue Bonds Walker
Cityview & Southview Series 1992
07-01-22 8.50 5,345,000 6,075,662
Minneapolis Special School District 1 Certificates
of Participation Series 1997A (MBIA Insured)
02-01-17 5.38 2,400,000 2,491,296
Minneapolis Special School District 1 Certificates
of Participation Series 1998A (FGIC Insured)
02-01-19 4.75 2,000,000 1,937,000
Minnetonka Multi-family Housing Refunding
Revenue Bonds Cedar Hills West (FHA Insured)
06-01-26 7.75 5,400,000 5,606,550
Minnetonka Multi-family Housing Revenue Bonds
Cedar Hills Series 1985
12-01-17 7.50 500,000 523,335
Minnetonka Senior Housing Revenue Bonds
Westridge
09-01-17 6.75 650,000 669,604
09-01-27 7.00 500,000 520,550
New Brighton Tax Credit Investor Revenue Bonds
Polynesian Village Apartments
Series 1995B A.M.T.
07-15-09 7.75 2,355,000 2,438,108
North St. Paul General Obligation School Bonds
Series 1996A
02-01-25 5.13 6,310,000 6,370,008
Northern Minnesota Municipal Power Agency
Electric System Refunding Revenue Bonds
Series 1989A
01-01-16 7.25 5,475,000 5,584,500
Northern Minnesota Municipal Power Agency
Electric System Refunding Revenue Bonds
Series 1998B (AMBAC Insured)
01-01-20 4.75 3,000,000 2,914,560
Oakdale Multi-family Housing Refunding Revenue
Bonds Oakdale Village Apartments Series 1998
A.M.T.
11-01-28 6.00 3,650,000 3,659,016
Olmsted County Health Care Facilities Revenue
Bonds Olmsted Medical Center
07-01-19 5.55 1,125,000 1,089,169
Owatonna Public Utilities Pre-refunded Revenue
Bonds Series 1991
01-01-16 6.75 1,000,000 1,062,450
Plymouth Multi-family Housing Revenue Bonds
Harbor Lane Apartments Series 1993
(Asset Guaranty) A.M.T.
09-01-13 5.90 2,325,000 2,423,487
Richfield Independent School District 280
Unlimited Tax General Obligation School Building
Bonds Series 1993C Inverse Floater (FGIC Insured)
02-01-10 6.23 3,300,000(h) 3,518,625
02-01-12 6.18 2,510,000(h) 2,648,050
Richfield Multi-family Housing Refunding Revenue
Bonds Village Shores Apartments Series 1996
08-01-31 7.63 2,970,000 3,109,382
Robbinsdale Multi-family Housing Revenue Bonds
Copperfield Hill Series 1996A
12-01-31 7.35 3,260,000 3,361,484
Rochester Health Care Facilities Revenue Bonds
Mayo Foundation Series 1992A
11-15-19 4.95 5,000,000 4,904,700
Rochester Multi-family Housing Development
Revenue Bonds Civic Square Series 1991
(FHA Insured) A.M.T.
07-15-31 7.45 4,340,000 4,609,688
Roseville Housing Facilities Nursing Home
Refunding Revenue Bonds College Properties
Incorporated Series 1998
10-01-28 5.88 2,000,000 1,992,820
Shoreview Senior Housing Revenue Bonds
Series 1996
02-01-26 7.25 2,700,000 2,771,928
Southeastern Minnesota Multi-county Housing &
Redevelopment Authority Winona County
Unlimited Tax General Obligation Bonds
Series 1997
01-01-28 5.35 1,170,000 1,202,947
Southern Minnesota Municipal Power Agency Power
Supply System Revenue Bonds Zero Coupon
Series 1994A (MBIA Insured)
01-01-19 6.67 19,500,000(g) 7,149,870
01-01-22 6.88 12,000,000(g) 3,756,480
01-01-24 6.08 5,150,000(g) 1,454,412
Southern Minnesota Municipal Power Agency
Pre-refunded Revenue Bonds Series 1992A
Escrowed to Maturity (Secondary MBIA Insured)
01-01-18 5.75 1,970,000 2,137,529
Southern Minnesota Municipal Power Agency
Revenue Bonds (Secondary MBIA Insured)
01-01-16 4.75 9,165,000 9,049,245
Southern Minnesota Municipal Power Agency
Unrefunded Balance Revenue Bonds Series 1992A
01-01-18 5.75 1,895,000 1,985,884
Spring Park Health Care Facilities Revenue Bonds
Twin Birch Health Care Center Series 1991
08-01-11 8.25 1,780,000 1,908,035
St. Cloud Certificates of Participation
12-01-17 5.90 400,000 407,264
St. Cloud Hospital Facility Refunding Revenue
Bonds Series 1993C (AMBAC Insured)
10-01-20 5.30 1,515,000 1,529,408
St. Cloud Hospital Facility Pre-refunded Revenue
Bonds St. Cloud Hospital Series 1990B
(AMBAC Insured)
07-01-20 7.00 5,000,000(f) 5,491,900
St. Louis Park Health Care Facilities Pre-refunded
Revenue Bonds Park Nicollet Medical Center
Series 1990A
01-01-20 9.25 4,000,000 4,316,000
St. Louis Park Health Care Facilities Pre-refunded
Revenue Bonds Park Nicollet Medical Center
Series 1991A
01-01-21 8.63 2,000,000 2,194,880
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group
Series 1993 (AMBAC Insured)
07-01-23 5.20 5,000,000 5,010,950
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group
Series 1993B Inverse Floater (AMBAC Insured)
07-01-13 5.68 7,000,000(h) 7,262,500
St. Louis Park Multi-family Housing Refunding
Revenue Bonds Park Boulevard Towers
Series 1996A
04-01-31 7.00 3,940,000 4,116,551
St. Paul Housing & Development Bonds
Highland Retirement (FHA Insured)
03-01-26 7.01 5,210,000(b) 5,157,900
St. Paul Housing & Redevelopment Authority
Health Care Facilities Revenue Bonds
Lyngblomsten Care Center Series 1993A
11-01-06 7.13 890,000 939,244
11-01-17 7.13 1,840,000 1,971,026
St. Paul Housing & Redevelopment Authority
Health Care Facilities Revenue Bonds
Lyngblomsten Multi-family Rental Housing
Series 1993B
11-01-24 7.00 1,870,000 1,916,096
St. Paul Housing & Redevelopment Authority
Health Care Facilities Revenue Bonds
Regions Hospital Series 1998
05-15-28 5.30 4,125,000 4,005,210
St. Paul Housing & Redevelopment Authority
Sales Tax Revenue Bonds Civic Center
Escrowed to Maturity (Secondary MBIA Insured)
11-01-23 5.55 7,500,000 7,996,275
St. Paul Housing & Redevelopment Authority
Single Family Housing Mortgage Refunding
Revenue Mortgage-backed Bonds Middle Income
Phase II (FNMA Insured)
03-01-28 6.80 3,345,000 3,622,568
St. Paul Port Authority Unlimited Tax General
Obligation Bonds
03-01-24 5.13 4,770,000 4,739,615
St. Paul Unlimited Tax General Obligation Bonds
Block 39 Series 1998A
02-01-25 4.75 2,000,000 1,919,060
State Agricultural & Economic Development Board
Health Care Systems Fairview Hospital &
Healthcare Service Series 1997A (MBIA Insured)
11-15-26 5.75 2,000,000 2,138,360
State General Obligation Various Purpose
Pre-refunded Bonds Series 1990
08-01-09 7.00 7,850,000 8,288,814
State General Obligation Various Purpose
Pre-refunded Bonds Series 1991
08-01-11 6.70 8,000,000 8,606,239
State Higher Education Facilities Authority
Augsburg College Mortgage Revenue Bonds
Series 4-F1
05-01-23 6.25 1,750,000 1,891,418
State Higher Education Facilities Authority
Gustavus Adolphus College Revenue Bonds
4th Series 1998X
10-01-24 4.80 2,340,000 2,232,711
State Higher Education Facilities Authority
Macalester College Refunding Revenue
Bonds Series 1998U-2
03-01-22 5.13 1,155,000 1,154,134
State Higher Education Facilities Authority
Macalester College Revenue Bonds 4th Series 1997J
03-01-17 5.55 1,000,000 1,061,900
State Higher Education Facilities Authority
St. Mary's College Mortgage Pre-refunded Revenue
Bonds Series 2-M
05-01-17 8.38 1,000,000 1,016,830
State Higher Education Facilities Authority
University of St. Thomas College Revenue Bonds
4th Series 1997P
04-01-23 5.40 580,000 593,903
State Housing Finance Agency Single Family
Housing Mortgage Bonds Series 1989A A.M.T.
07-01-29 8.00 425,000 434,278
State Housing Finance Agency Single Family
Housing Mortgage Bonds Series 1991A A.M.T.
07-01-22 7.45 3,305,000 3,464,962
State Housing Finance Agency Single Family
Housing Mortgage Bonds Series 1992A
07-01-16 6.95 2,505,000 2,674,764
State Housing Finance Agency Single Family Housing
Mortgage Revenue Bonds
Series 1997D A.M.T.
07-01-19 5.85 2,520,000 2,632,493
State Housing Finance Agency Single Family Housing
Mortgage Revenue Bonds
Series 1994L A.M.T.
07-01-20 6.70 985,000 1,051,527
State Public Facilities Authority Water Pollution
Control Revenue Bonds Series 1989A
03-01-09 7.00 6,250,000 6,415,000
State Public Facilities Authority Water Pollution
Control Revenue Bonds Series 1998A
03-01-16 4.75 3,500,000 3,478,650
State University Board of Regents General
Obligation Bonds Inverse Floater Series 1993A
08-15-03 5.92 5,000,000(h) 5,400,000
State University Board of Regents General
Obligation Bonds Series 1996A
07-01-21 5.50 12,500,000 13,542,374
State University Board of Regents General
Obligation Pre-refunded Bonds Series 1989A
02-01-11 6.00 4,625,000 4,587,121
State University Board of Regents State University
System Pre-refunded Revenue Bonds
06-30-19 7.40 2,250,000 2,298,420
Vadnais Heights Multi-family Housing Refunding
Revenue Bonds Cottages of Vadnais Heights
Series 1995 A.M.T.
12-01-31 7.00 3,150,000 3,265,763
Vadnais Heights Multi-family Housing Tax Credit
Revenue Bonds Series 1997 A.M.T.
07-15-09 7.00 1,080,000 1,102,086
Washington County General Obligation Capital
Improvement Bonds Series 1989A
02-01-09 7.00 2,125,000 2,131,694
02-01-10 7.00 2,300,000 2,307,245
Washington County Housing & Redevelopment
Authority Refunding Revenue Bonds
12-01-23 6.95 1,955,000 2,027,100
Western Minnesota Municipal Power Agency
Revenue Bonds Escrowed to Maturity
(AMBAC Insured)
01-01-16 6.75 5,935,000 6,362,557
Western Minnesota Municipal Power Agency
Supply Refunding Revenue Bonds Series 1987A
(Secondary MBIA Insured)
01-01-15 5.50 11,250,000 11,263,775
White Bear Lake Industrial Development Revenue
Bonds Taylor Series 1988A A.M.T.
09-01-08 8.75 2,250,000 2,310,480
Total municipal bonds
(Cost: $378,467,481) $411,181,448
Municipal notes (3.3%)
Cohasset Revenue Bonds (Minnesota Power & Light)
V.R.D.N. Series 1997A
06-01-20 5.10% $5,200,000 $5,200,000
Cohasset Revenue Bonds (Minnesota Power & Light)
V.R.D.N. Series 1997B
06-01-13 5.10 3,600,000 3,600,000
Cohasset Revenue Bonds (Minnesota Power & Light)
V.R.D.N. Series 1997C
06-01-13 5.10 400,000 400,000
Cohasset Revenue Bonds (Minnesota Power & Light)
V.R.D.N. Series 1997D
12-01-07 5.10 100,000 100,000
Duluth Health Facilities Revenue Bonds
(Miller-Dwan Medical Center) V.R.
06-01-19 5.10 3,500,000 3,500,000
Minneapolis & St. Paul Housing & Redevelopment
Authority Health Care System Revenue Bonds V.R.
08-15-25 5.15 1,565,000 1,565,000
Total municipal notes
(Cost: $14,365,000) $14,365,000
Total investments in securities
(Cost: $392,832,481)(i) $425,546,448
See accompanying notes to investments in securities.
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing. Items identified are in default as to payment of
interest and/or principal.
(c) The following abbreviations may be used in portfolio descriptions to
identify the insurer of the issue: ACA -- ACA Financial Guaranty Corporation
AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors
Guarantee CGIC -- Capital Guaranty Insurance Company 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 may be used in the portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of Dec. 31, 1998, the value of
securities subject to alternative minimum tax represented 12.93%
of net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N.-- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B.-- Variable Rate Demand Bond
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,
1998.
(f) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 5 to the financial statements):
Type of security Notional amount
Purchase contracts
Municipal Bonds March 1999 $4,000,000
(g) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(h) 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, 1998. Inverse floaters in the aggregate represent 4.33% of
the Fund's net assets as of Dec. 31, 1998.
(i) At Dec. 31, 1998, the cost of securities for federal income tax purposes was
approximately $392,832,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation.................................$32,873,000
Unrealized depreciation....................................(159,000)
Net unrealized appreciation.............................$32,714,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
IDS New York Tax-Exempt Fund
Dec. 31, 1998 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Municipal bonds (95.6%)
Name of issuer and Coupon Principal Value(a)
title of issue(b,c) rate amount
Albany County Airport Authority Revenue Bonds
Series 1997 (FSA Insured) A.M.T.
<S> <C> <C> <C>
12-15-19 5.50% $250,000(e) $258,095
Broome County Certificates of Participation
Public Safety Facility Series 1994 (MBIA Insured)
04-01-22 5.25 2,650,000 2,689,671
Buffalo Municipal Water Agency Authority
Water System Revenue Bonds
Series 1995 (FGIC Insured)
07-01-25 5.00 1,000,000 986,990
Buffalo School Serial Bonds
Series 1997B (AMBAC Insured)
02-01-16 5.38 500,000 523,115
Erie County Unlimited Tax General Obligation Bonds
Series 1995B (FGIC Insured)
06-15-25 5.50 700,000 732,718
Erie County Water Authority
Water Works System Revenue Bonds
Series 1990A Escrowed to Maturity (AMBAC Insured)
12-01-08 6.00 1,765,000 1,970,305
Fallsburg Sullivan County Unlimited Tax
General Obligation Improvement Pre-refunded Bonds
Series 1991 (AMBAC Insured)
04-01-11 7.05 325,000 355,579
04-01-12 7.05 325,000 355,579
04-01-13 7.05 325,000 355,579
04-01-14 7.05 325,000 355,579
Great Neck North Water Authority Water System
Pre-refunded Revenue Bonds Series 1989A
01-01-20 6.00 1,415,000 1,455,101
Metropolitan Transportation Authority
Commuter Facilities Revenue Bonds
Series 1997B (AMBAC Insured)
07-01-24 5.13 1,000,000 1,000,400
Metropolitan Transportation Authority
Commuter Facilities Service Contract
Refunding Bonds 5th Series 1987
07-01-16 6.50 1,775,000 1,891,564
Metropolitan Transportation Authority
Transportation Facility Revenue Bonds
Series 1998A (MBIA Insured)
07-01-24 4.75 1,500,000 1,431,735
Municipal Assistance Troy
General Revenue Bonds
Series 1996A (MBIA Insured)
01-15-22 5.00 1,250,000 1,234,813
New York & New Jersey Port Authority Special
Obligation Revenue Bonds KIAC
Partners 4th Series 1996 A.M.T.
10-01-19 6.75 1,500,000 1,659,645
New York City General Obligation Bonds Series 1996J
02-15-19 5.88 1,000,000 1,068,590
New York City Industrial Development Agency
Civic Facility Lease Refunding Revenue
& Improvement Bonds Lighthouse
International Series 1998 (MBIA Insured)
07-01-23 4.50 200,000 183,846
New York City Industrial Development Agency
Civic Facility Lease Revenue Bonds Series 1997
08-01-16 5.80 1,000,000 1,060,580
New York City Industrial Development Agency
Civic Facility Lease Revenue Bonds
Series 1997 (MBIA Insured)
06-01-17 5.25 1,000,000 1,032,040
06-15-27 5.25 1,000,000 1,020,960
New York City Industrial Development Agency
Civic Facility Revenue Bonds Series 1993
07-01-23 5.38 2,000,000 2,056,820
New York City Municipal Water Finance Authority
Water & Sewer System Revenue Bonds
Series 1994B Inverse Floater (MBIA Insured)
06-15-09 6.47 2,000,000(d) 2,207,500
New York City Municipal Water Finance Authority
Water & Sewer System Revenue Bonds
Series 1996B (MBIA Insured)
06-15-26 5.75 500,000 534,905
New York City Pre-refunded Unlimited
General Obligation Bonds Series 1994B-1
08-15-16 7.00 1,500,000 1,747,020
New York City Transitional Finance Authority
Future Tax Secured Revenue Bonds Sales Tax
Series 1998B
11-15-23 4.75 1,500,000 1,426,395
New York City Unlimited Tax General
Obligation Bonds Series 1996G
02-01-17 5.75 1,500,000 1,593,285
New York City Water Finance Authority
Water & Sewer System Pre-refunded
Revenue Bonds Series 1989A (FGIC Insured)
06-15-14 6.75 1,185,000 1,222,363
New York City Water Finance Authority
Water & Sewer System Revenue Bonds
Series 1989A (FGIC Insured)
06-15-14 6.75 565,000 582,815
North Hempstead Nassau County
Various Purpose Bonds
Series 1998A (FGIC Insured)
01-15-23 4.75 1,000,000 955,800
State Dormitory Authority City University System
Consolidated 3rd Resolution Revenue Bonds
2nd Series 1994 (MBIA Insured)
07-01-19 6.25 1,500,000 1,676,910
State Dormitory Authority City University System
Revenue Bonds Series 1993A
07-01-13 5.75 3,000,000 3,333,510
State Dormitory Authority College
Revenue Bonds Series 1996 (AMBAC Insured)
07-01-16 5.25 1,140,000 1,179,547
State Dormitory Authority College Revenue Bonds
St. Thomas Aquinas Series 1998 (Asset Guaranty)
07-01-14 5.00 1,125,000 1,132,346
State Dormitory Authority Nursing Home
Revenue Bonds Frances Schervier Home
Series 1997 (Asset Guaranty)
07-01-17 5.50 1,000,000 1,043,780
State Dormitory Authority Revenue Bonds
Culinary Institute of America Series 1997
(MBIA Insured)
07-01-17 5.00 500,000 502,390
State Dormitory Authority Revenue Bonds
NYACK Hospital Series 1996
07-01-13 6.25 1,000,000 1,072,510
State Dormitory Authority Revenue Bonds
Presbyterian Hospital
08-01-27 4.75 1,000,000 947,600
State Dormitory Authority State University
Education Facility Cooper Union
Insured College Revenue Bonds
Series 1996 (AMBAC Insured)
07-01-20 5.38 860,000 887,434
State Dormitory Authority State University
Education Facility Pre-refunded
Revenue Bonds Series 1990A
05-15-12 7.70 1,750,000 1,886,850
State Dormitory Authority State University
Education Facility Refunding
Revenue Bonds Series 1990B
05-15-11 7.50 1,900,000 2,369,433
State Dormitory Authority State University
Education Facility
Revenue Bonds (Secondary AMBAC Insured)
05-15-15 5.25 1,000,000 1,062,980
05-15-19 5.50 2,000,000 2,160,440
State Energy Research & Development Authority
Electric Facility Revenue Bonds Consolidated Edison
Series 1990A A.M.T.
07-01-25 7.50 5,000,000(e) 5,144,649
State Energy Research & Development Authority
Gas Facilities Industrial Development
Revenue Bonds Series 1996 (MBIA Insured)
01-01-21 5.50 2,000,000 2,096,880
State Energy Research & Development Authority
Pollution Control Refunding Revenue Bonds
Rochester Gas & Electric
(MBIA Insured) A.M.T.
05-15-32 6.50 2,500,000 2,718,475
State Energy Research & Development Authority
Solid Waste Development Revenue Bonds
State Gas & Electric Company Series
1993A (MBIA Insured) A.M.T.
12-01-28 5.70 3,000,000 3,139,230
State Environmental Facility State Water & Pollution Control
Revolving Fund Revenue Bonds New York City
Municipal Water Finance Authority Series 1990A
06-15-12 7.50 3,000,000 3,224,880
State Local Government Assistance Bonds Series 1992C
04-01-22 5.50 1,500,000 1,529,775
State Local Government Assistance
Pre-refunded Bonds Series 1991A
04-01-16 7.00 4,000,000 4,368,600
State Local Government Assistance
Sales Tax Refunding Revenue Bonds
Series 1997B (MBIA Insured)
04-01-20 4.88 1,000,000 976,010
State Medical Care Facility Finance Agency
Hospital & Nursing Home Mortgage
Revenue Bonds Montefiore Hospital
Series 1989A (FHA Insured)
02-15-24 7.25 1,400,000 1,434,944
State Medical Care Facility Finance Agency
Mental Health Services Facility Improving
Refunding Revenue Bonds Series 1993F
(Secondary FSA Insured)
02-15-14 5.38 1,000,000(e) 1,052,700
State Medical Care Facility Finance Agency
Mental Health Services Facility Improving
Refunding Revenue Bonds Series 1994A
(Secondary FSA Insured)
08-15-23 5.25 1,500,000 1,523,055
State Mortgage Agency Homeowner
Mortgage Revenue Bonds 27th Series 1992
04-01-15 6.90 3,000,000 3,245,820
State Mortgage Agency Homeowner
Mortgage Revenue Bonds Series 1991TT
04-01-15 7.50 4,000,000 4,267,320
State Thruway Authority Local Highway & Bridge
Service Contract Bonds Series 1991
01-01-11 6.00 2,500,000 2,621,200
State Urban Development Correction Facility
Pre-refunded Revenue Bonds Series 1st Series 1990
(FSA Insured)
01-01-20 7.50 4,500,000 4,782,600
State Urban Development Correctional Capital Facilities
Refunding Revenue Bonds Series 1993A
01-01-21 5.25 2,500,000 2,504,350
State Urban Development Correctional Capital Facilities
Revenue Bonds 5th Series 1995 (MBIA Insured)
01-01-25 5.50 750,000 783,525
State Urban Development Revenue Bonds
Higher Education Applied Technology Grants
Series 1995 (MBIA Insured)
04-01-15 5.75 1,000,000 1,076,710
Triborough Bridge & Tunnel Authority
General Purpose Pre-refunded
Revenue Bonds Series 1990S
01-01-21 7.00 3,000,000 3,244,920
Triborough Bridge & Tunnel Authority
Special Obligation Refunding Bonds
Series 1991B (FGIC Insured)
01-01-15 6.88 2,000,000 2,150,840
United Nations Development Senior Lien
Refunding Revenue Bonds Series 1992A
07-01-26 6.00 4,500,000 4,987,890
Utica Industrial Development Agency
Civic Facility Revenue Bonds
Series 1996A (MBIA Insured)
07-15-16 5.50 750,000 785,603
Total municipal bonds
(Cost: $100,014,490) $110,865,093
Municipal notes (2.5%)
Long Island Power Authority
New York Electric System Revenue Bonds V.R.
04-01-25 3.35% $600,000 $600,000
New York City General Obligation Bonds V.R. Series B
(MBIA Insured)
08-15-05 3.35 500,000 500,000
New York City General Obligation Bonds V.R.D.N.
Series 1995B
08-15-22 2.25 100,000 100,000
New York City General Obligation Bonds V.R.D.N.
Series B-2
08-15-22 2.25 300,000 300,000
New York City TFA V.R. Series C
05-01-28 3.30 200,000 200,000
New York City V.R. Series A
08-01-23 3.10 250,000 250,000
New York City Water Finance Authority
Water & Sewer System Revenue Bonds Series B
06-15-23 2.70 600,000 600,000
State Dormitory Authority
Cornell University V.R. Series B
07-01-25 4.10 400,000 400,000
Total municipal notes
(Cost: $2,950,000) $2,950,000
Total investments in securities
(Cost: $102,964,490)(g) $113,815,093
See accompanying notes to investments in securities.
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) The following abbreviations may be used in portfolio descriptions to
identify the insurer of the issue: ACA -- ACA Financial Guaranty Corporation
AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors
Guarantee CGIC -- Capital Guaranty Insurance Company 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
(c) The following abbreviations may be in the portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of Dec. 31, 1998, the value of
securities subject to alternative minimum tax represented -- 11.14%
of net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N.-- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B.-- Variable Rate Demand Bond
V.R.D.N.-- Variable Rate Demand Note
(d) 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, 1998. Inverse floaters in the aggregate represent 1.90% of
the Fund's net assets as of Dec. 31, 1998.
(e) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 5 to the financial statements):
Type of security Notional amount
Purchase contracts
Municipal Bonds March 1999 $4,000,000
(f) 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,
1998.
(g) At Dec. 31, 1998, the cost of securities for federal income tax purposes was
approximately $102,964,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation.......................................$10,882,000
Unrealized depreciation...........................................(31,000)
Net unrealized appreciation...................................$10,851,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
IDS Ohio Tax-Exempt Fund
Dec. 31, 1998 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Municipal bonds (96.2%)
Name of issuer and Coupon Principal Value(a)
title of issue(b,c) rate amount
Akron Bath Copley Joint Township Hospital District
Summa Hospital Revenue Bonds Series 1998A
<S> <C> <C> <C>
11-15-24 5.38% $1,000,000 $954,930
Barberton Limited Tax Various Purpose General
Obligation Bonds 1st Series 1989
12-01-09 7.35 700,000 738,948
Bellefontaine Hospital Facility Refunding Revenue
Bonds Mary Rutan Health Association of Logan
County Series 1993
12-01-13 6.00 1,000,000 1,040,630
Buckeye Valley Local School District School
Improvement Unlimited Tax General Obligation
Bonds Series 1995A (MBIA Insured)
12-01-20 5.25 1,000,000 1,017,760
Butler County Hospital Facilities Improvement
Refunding Revenue Bonds Fort Hamilton-Hughes
Memorial Center Series 1991
01-01-10 7.50 1,750,000 1,885,170
Butler County Transportation Improvement District
Highway Improvement Transit Revenue Bonds
Series 1997A (FSA Insured)
04-01-17 5.13 1,000,000 1,017,470
Carroll Water & Sewer District Unlimited Tax
General Obligation Bonds
12-01-10 6.25 450,000 478,733
Carroll Water & Sewer District Unlimited Tax
General Obligation Bonds Water System
Improvement
12-01-10 6.25 955,000 1,021,869
Celina Local School District Unlimited Tax General
Obligation Bonds Series 1996 (FGIC Insured)
12-01-20 5.25 1,000,000 1,017,760
Clermont County Hospital Facilities Revenue Bonds
Mercy Health System Province of Cincinnati
Series 1989A (AMBAC Insured)
09-01-19 7.50 750,000 794,909
Cleveland Airport Systems Revenue Bonds
Series 1990A (MBIA Insured) A.M.T.
01-01-20 7.40 500,000 530,705
Cleveland Waterworks Improvement 1st Mortgage
Refunding Revenue Bonds Series F 1992B
(AMBAC Insured)
01-01-16 6.25 1,000,000(e) 1,082,550
Coshocton County Solid Waste Disposal Refunding
Revenue Bonds Stone Container Series 1992
08-01-13 7.88 1,000,000 1,095,420
Cuyahoga County Health Care Facilities Refunding
Revenue Bonds Judson Retirement Community
Series A
11-15-18 7.25 1,000,000 1,093,280
Cuyahoga County Hospital Improvement Revenue
Bonds Mount Sinai Medical Center Series 1991
(AMBAC Insured)
11-15-21 6.63 600,000 659,904
Cuyahoga County Hospital Improvement Revenue
Bonds University Hospitals Health System
Series 1992 (AMBAC Insured)
01-15-11 6.50 500,000 541,410
Cuyahoga County Hospital Refunding Revenue
Bonds Cleveland Clinic Foundation Series 1992
11-15-11 5.50 1,500,000 1,598,145
Cuyahoga County Hospital Revenue Bonds Meridia
Health Series 1991
08-15-23 7.00 1,000,000 1,103,040
Cuyahoga County Limited Tax General
Obligation Bonds
05-15-13 5.60 500,000 556,370
Delaware County Sewer Improvement Limited Tax
General Obligation Bonds
12-01-15 5.25 1,000,000 1,027,380
Dover Limited Tax Improvement General Obligation
Bonds Municipal Sewer System
12-01-09 7.10 1,000,000 1,052,540
Elyria Limited Tax Improvement General Obligation
Recreation Facilities Bonds
12-01-09 7.10 715,000 753,574
Erie County Hospital Improvement Refunding
Revenue Bonds Firelands Community Hospital
01-01-15 6.75 2,000,000(e) 2,171,760
Franklin County Convention Facilities Authority
Tax & Lease Revenue Anticipation Pre-refunded
Bonds (MBIA Insured)
12-01-19 7.00 1,500,000 1,629,300
Franklin County Multi-family Housing Refunding
Revenue Bonds Jefferson Chase Apartments
Series 1998B A.M.T.
11-01-35 6.40 1,000,000 999,890
Franklin County Multi-family Housing Refunding
Revenue Bonds West Bay Apartments A.M.T.
12-01-25 6.38 1,000,000 1,016,210
Hamilton County Sales Tax Revenue Bonds
Hamilton County Football Series 1998A
(MBIA Insured)
12-01-17 4.75 1,000,000 976,900
Highland Heights Limited Tax Improvement
General Obligation Street Bonds
12-01-08 7.75 400,000 409,420
Hilliard County School District Unlimited Tax
General Obligation Bonds Series A (FGIC Insured)
12-01-20 5.00 1,000,000 997,320
Lakota Local School District Butler County School
Unlimited Tax Improvement Bonds
12-01-12 7.00 500,000 517,805
Lakota Local School District Unlimited Tax
Improvement General Obligation Bonds
(AMBAC Insured)
12-01-14 6.25 2,000,000 2,273,619
Lorain County Hospital Facilities Refunding
Revenue Bonds EMH Regional Medical Center
Series 1995 (AMBAC Insured)
11-01-21 5.38 2,000,000 2,040,000
Lorain County Independent Living & Hospital
Facilities Refunding Revenue Bonds Elyria United
Methodist Series 1996C
06-01-22 6.88 1,000,000 1,100,320
Marietta Sewer System Improvement Bonds
(BIG Insured)
11-01-07 7.50 190,000 193,498
Marion County Health Care Facilities Improvement
Refunding Revenue Bonds United Church Homes
Series 1993
11-15-10 6.38 1,000,000 1,058,810
Marysville Sewer System 1st Mortgage Revenue Bonds
Series 1988 (BIG Insured)
A.M.T.
02-15-08 7.85 400,000 402,072
Marysville Water System Mortgage Revenue Bonds
Series 1991 (MBIA Insured)
12-01-21 7.05 1,000,000 1,104,210
Montgomery County Health Facilities Refunding
Revenue Bonds Friendship Village Dayton
Series 1990A
02-01-16 9.25 1,000,000 1,081,850
Montgomery County Hospital Facilities Refunding
Revenue & Improvement Bonds Ketter Medical
Center Series 1996 (MBIA Insured)
04-01-26 5.50 1,000,000 1,041,100
Montgomery County Water Revenue Bonds Greater
Moraine-Beavercreek District (FGIC Insured)
11-15-17 6.25 1,000,000 1,098,700
North Olmstead County General Obligation Bonds
(AMBAC Insured)
12-01-16 5.00 1,500,000 1,517,700
12-01-21 5.00 200,000 198,374
Oak Hills Local School District Unlimited Tax
General Obligation Bonds Series 1997
(MBIA Insured)
12-01-25 5.13 1,000,000 999,230
Orrville Electric System Refunding Revenue &
Improvement Mortgage Bonds Series 1997
(AMBAC Insured)
12-01-17 5.10 1,000,000 1,014,090
Pickerington Local School District Unlimited Tax
General Obligation Pre-refunded Bonds
(AMBAC Insured)
12-01-13 7.00 1,000,000 1,086,200
Rural Loraine County Water Authority Water
Resource Improvement Pre-refunded Revenue
Bonds Series 1991 (AMBAC Insured)
10-01-11 7.00 1,000,000 1,097,250
Southwest Local School District Hamilton & Butler
Counties School Unlimited Tax Improvement Bonds
(AMBAC Insured)
12-01-10 7.65 475,000 508,535
Stark County Health Care Facilities Refunding
Revenue Bonds GNMA Rose Lane
07-20-33 5.45 215,000 217,333
State Air Quality Development Authority Refunding
Revenue Bonds JMG Funding Limited Partnership
(AMBAC Insured) A.M.T.
04-01-29 6.38 500,000 555,270
State Air Quality Development Authority Refunding
Revenue Bonds Series 1994 (AMBAC Insured)
A.M.T.
01-01-29 6.38 2,000,000 2,221,079
State Air Quality Development Authority Revenue
Bonds Columbus & Southern Series A
(FGIC Insured)
12-01-20 6.38 1,000,000 1,094,450
State Building Authority Local Jail Grant Bonds
04-01-09 7.35 500,000 534,480
State Building Authority State Facilities Pre-refunded
Bonds Columbus State Office Building Series 1985C
10-01-05 7.35 1,000,000 1,060,980
State Department of Administrative Services
Certificates of Participation Ohio Center Series 1998
(AMBAC Insured)
07-15-23 5.00 600,000 597,468
07-15-28 5.00 550,000 547,465
State Higher Educational Facilities Pre-refunded
Revenue Bonds Oberlin College Series 1989
10-01-14 7.38 500,000 525,655
State Housing Finance Agency Mortgage Revenue
Bonds Aristocrat South Board & Care Series 1991A
(FHA Insured) A.M.T.
08-01-31 7.30 1,500,000 1,585,290
State Housing Finance Agency Single Family
Mortgage Revenue Bonds Series 1990A
(GNMA Insured) A.M.T.
03-01-30 7.80 320,000 331,971
State Housing Finance Agency Single Family
Mortgage Revenue Bonds Series 1990C
(GNMA Insured) A.M.T.
09-01-21 7.85 580,000 613,623
State Municipal Electric Generation Agency
Revenue Bonds Joint Venture 5 (AMBAC Insured)
02-15-24 5.38 2,000,000 2,045,360
State Turnpike Revenue Bonds Series 1998B
(FGIC Insured)
02-15-28 4.75 800,000 762,384
State Turnpike Revenue Bonds Series A
02-15-24 5.75 1,000,000 1,101,900
State Turnpike Revenue Bonds Series A
(MBIA Insured)
02-15-26 5.50 1,000,000 1,104,440
State Valley School District School Improvement
Unlimited Tax General Obligation Bonds Adams &
Highland Counties Series 1995 (MBIA Insured)
12-01-21 5.25 2,000,000 2,035,520
State Water & Air Quality Development Authority
Pollution Control Refunding Revenue Bonds
Cleveland Electric Illuminating Series 1995
08-01-25 7.70 1,000,000 1,142,420
State Water & Air Quality Development Authority
Pollution Control Refunding
Revenue Bonds Toledo Edison Series 1994A A.M.T.
10-01-23 8.00 1,000,000 1,139,520
State Water & Air Quality Development Authority
Water Development Refunding Revenue Bonds
Pure Water (AMBAC Insured)
12-01-18 5.50 750,000 778,688
State Water & Air Quality Development Authority
Solid Waste Disposal Revenue Bonds Northstar
BHP Steel LLC-Cargill A.M.T.
09-01-20 6.30 500,000(e) 549,605
Sycamore Board of Education Community School
District Hamilton County School Improvement Bonds
12-01-09 6.50 500,000 515,560
University of Cincinnati Certificates of Participation
Student Recreation Center (MBIA Insured)
06-01-24 5.13 1,000,000 999,250
University of Cincinnati General Receipt
Pre-refunded Bonds Series I-1
06-01-10 7.10 750,000 777,345
University of Toledo General Receipt College
Revenue Bonds Series 1998 (FGIC Insured)
06-01-20 4.75 1,000,000 962,230
University of Toledo General Receipt Pre-refunded
Bonds Series 1990 (MBIA Insured)
06-01-20 7.13 500,000 535,795
Warren County Various Purpose Limited Tax
General Obligation Bonds Series 1992
12-01-12 6.10 500,000 582,675
Whitehall City School District Franklin County
Unlimited Tax Improvement General Obligation
Pre-refunded Revenue Bonds
12-01-13 7.25 500,000 528,605
Youngstown State University General Receipts
College Revenue Bonds Series 1998
(AMBAC Insured)
12-15-16 4.75 1,000,000 983,370
Total municipal bonds
(Cost: $67,963,220) $74,026,391
Municipal notes (2.5%)
Cuyahoga County Hospital Revenue Bonds
Cleveland Clinic V.R.
01-01-26 5.00% $1,400,000 $1,400,000
State Air Quality Development Authority Revenue
Bonds Cincinnati Gas & Electric V.R. Series 1985B
12-01-15 5.20 100,000 100,000
State Air Quality Development Authority Revenue
Bonds Cincinnati Gas & Electric V.R. Series 1995A
09-01-30 5.00 300,000 300,000
State Air Quality Development Authority Revenue
Bonds Cincinnati Gas & Electric V.R. Series 1995B
04-01-28 5.00 100,000 100,000
Total municipal notes
(Cost: $1,900,000) $1,900,000
Total investments in securities
(Cost: $69,863,220)(f) $75,926,391
See accompanying notes to investments in securities.
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) The following abbreviations may be used in portfolio descriptions to
identify the insurer of the issue: ACA -- ACA Financial Guaranty Corporation
AMBAC -- American Municipal Bond Association Corporation BIG -- Bond Investors
Guarantee CGIC -- Capital Guaranty Insurance Company 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
(c) The following abbreviations may be used in the portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of Dec. 31, 1998, the value of
securities subject to alternative minimum tax represented 12.93%
of net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N.-- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B.-- Variable Rate Demand Bond
V.R.D.N.-- Variable Rate Demand Note
(d) 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,
1998.
(e) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 5 to the financial statements):
Type of security Notional amount
Purchase contracts
Municipal Bonds March 1999 $1,500,000
(f) At Dec. 31, 1998, the cost of securities for federal income tax purposes was
approximately $69,863,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation........................................$6,074,000
Unrealized depreciation................ ..........................(11,000)
Net unrealized appreciation....................................$6,063,000
</TABLE>
<PAGE>
Board Members and Officers
Independent board members and officers
Chairman of
the board
William R. Pearce* Chairman of the board, Board Services Corporation
(provides administrative services to boards including the boards of the
IDS and IDS Life funds and Master Trust portfolios).
H. Brewster Atwater, Jr.
Retired chairman and chief executive officer, General Mills, Inc.
Arne H. Carlson
Former two-term governor for Minnesota
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for
Public Policy Research.
Heinz F. Hutter
Retired 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
Retired 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,
general counsel
and secretary
Leslie L. Ogg*
President, treasurer and corporate secretary of Board Services
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
Stuart A. Sedlacek
Senior vice president and chief financial officer, AEFC.
*Interested person as defined by the Investment Company Act of 1940.
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American Express
Financial Advisors
Telephone Transaction
Service
Sales and exchanges, dividend payments or reinvestments and automatic payment
arrangements
National/Minnesota:
800-437-3133
Mpls./St. Paul area:
612-671-3800
American Express
Client Service
Corporation
Fund performance, objectives and account inquiries
800-862-7919
TTY Service
For the hearing impaired
800-846-4852
American Express
Financial Advisors
Automated account information (TouchTone telephones only), including
current Fund prices and performance, account values and recent account
transactions
800-862-7919
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IDS State Tax-Exempt Funds
IDS Tower 10
Minneapolis, MN 55440-0010
S-6329 M (2/99)
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