<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. __ / /
Post-Effective Amendment No. 12 (File No. 33-20872) /X/
and/or
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY (ACT OF 1940)
Amendment No. 15 (File No. 811-5522)
------------------------
IDS UTILITIES INCOME FUND, INC.
IDS Tower 10, Minneapolis, MN 55440-0010
Leslie L. Ogg
901 S. Marquette Ave., Suite 2810
Minneapolis, MN 55402-3268
(612) 330-9283
------------------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
It is proposed that this filing will become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/X/ on Mar. 3, 1995 pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(ii)
/ / on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
/ / this Post-Effective Amendment designates a new effective
date for a previously filed post-effective amendment.
------------------------
THE REGISTRANT HAS REGISTERED AN INDEFINITE NUMBER OR AMOUNT OF SECURITIES UNDER
THE SECURITIES ACT OF 1933 PURSUANT TO SECTION 24-F OF THE INVESTMENT COMPANY
ACT OF 1940. REGISTRANT'S RULE 24F-2 NOTICE FOR ITS MOST RECENT FISCAL YEAR WAS
FILED ON OR ABOUT AUG. 29, 1994.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION IN THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION OF
THE INFORMATION CALLED
FOR BY THE ITEMS ENUMERATED IN PART A AND B OF FORM N-1A.
Negative answers omitted from Part A or Part B are so indicated.
<TABLE>
<CAPTION>
PART A
- ---------------------------------------
Page Number in
Item No. Prospectus
- ---------------- ---------------------
<S> <C>
1 3
2 5;5-6
3(a) 7
(b) NA
(c) 8-9
(d) 7
4(a) 5;9-11;23-26
(b) 9-11
(c) 9-11
5(a) 24;24-25
(b) 23-26;26-27
(b)(i) 26-27
(b)(ii) 25
(b)(iii) 25
(c) 5
(d) 5
(e) 25
(f) 26
(g) 25
6(a) 23;23
(b) NA
(c) NA
(d) 23
(e) 3;20-21
(f) 21;21-22
(g) 22-23
7(a) 26
(b) 8-9;11
(c) 11-20
(d) 14-15
(e) NA
(f) 26
8(a) 15-18
(b) NA
(c) 15
(d) 17
9 None
<CAPTION>
PART B
- ---------------------------------------
Page Number in the
Statement of
Additional
Item No. Information
- ---------------- ---------------------
<S> <C>
10 28
11 29
12 NA
13(a) 30-32;53-64
(b) 30-32
(c) 31
(d) 34
14(a) 24-25**;48-51
(b) 48-51
(c) 51
15(a) NA
(b) NA
(c) 51
16(a)(i) 26-27**
(a)(ii) 45-46;47-48
(a)(iii) 46
(b) 45-46;47-48
(c) NA
(d) None
(e) NA
(f) 47;47-48
(g) NA
(h) 51-52;52
(i) 46;51-52
17(a) 32-34
(b) 34-35
(c) 32-34
(d) 34
(e) 34
18(a) 23**;23**
(b) NA
19(a) 39-42
(b) 37-38;39-42
(c) NA
20 44-45
21(a) 47
(b) 47
(c) NA
22(a) NA
(b) 35-37
23 52
<FN>
*Designates information is located in annual report.
**Designates page number in prospectus.
</TABLE>
<PAGE>
IDS UTILITIES INCOME FUND
PROSPECTUS
AUG. 29, 1994 AS REVISED MARCH 3, 1995
The primary goal of IDS Utilities Income Fund, Inc. is a high level of current
income. Secondary goals are growth of income and capital. The fund invests
primarily in securities of public utility companies.
This prospectus contains facts that can help you decide if the fund is the right
investment for you. Read it before you invest and keep it for future reference.
Additional facts about the fund are in a Statement of Additional Information
(SAI), filed with the Securities and Exchange Commission. The SAI, dated Aug.
29, 1994 as revised March 3, 1995, is incorporated here by reference. For a free
copy, contact American Express Shareholder Service.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
American Express Shareholder Service
P.O. Box 534
Minneapolis, MN
55440-0534
612-671-3733
TTY: 800-846-4852
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
THE FUND IN BRIEF...........................................
Goals.....................................................
Types of fund investments.................................
Manager and distributor...................................
Portfolio manager.........................................
Alternative sales arrangements............................
SALES CHARGE AND FUND EXPENSES..............................
Sales charge..............................................
Operating expenses........................................
PERFORMANCE.................................................
Financial highlights......................................
Total returns.............................................
Key terms.................................................
INVESTMENT POLICIES AND RISKS...............................
Facts about investments and their risks...................
Alternative investment option.............................
Valuing assets............................................
HOW TO BUY, EXCHANGE OR SELL SHARES.........................
Alternative sales arrangements............................
How to buy shares.........................................
How to exchange shares....................................
How to sell shares........................................
Reductions of the sales charge............................
Waivers of the sales charge...............................
SPECIAL SHAREHOLDER SERVICES................................
Services..................................................
Quick telephone reference.................................
DISTRIBUTIONS AND TAXES.....................................
Dividend and capital gain distributions...................
Reinvestments.............................................
Taxes.....................................................
HOW THE FUND IS ORGANIZED...................................
Shares....................................................
Voting rights.............................................
Shareholder meetings......................................
Directors and officers....................................
Investment manager and transfer agent.....................
Distributor...............................................
ABOUT AEFC..................................................
General information.......................................
</TABLE>
2
<PAGE>
THE FUND IN BRIEF
GOALS
IDS Utilities Income Fund seeks to provide shareholders with a high level of
current income. Secondary goals are growth of income and capital. Because any
investment involves risk, achieving these goals cannot be guaranteed. Only
shareholders can change the goals.
TYPES OF FUND INVESTMENTS
The fund is a diversified mutual fund that invests primarily in securities of
public utilities. These include companies that produce or supply electric power,
natural gas, water, sanitary services, telecommunications and other
communications services (excluding radio and television broadcasters) for public
use or consumption. Other investments include derivative instruments, money
market instruments, and securities that are not public utilities. Some of the
fund's investments may be considered speculative and involve additional
investment risks.
MANAGER AND DISTRIBUTOR
The fund is managed by American Express Financial Corporation (AEFC), a provider
of financial services since 1894. AEFC currently manages more than $38 billion
in assets for the IDS MUTUAL FUND GROUP. Shares of the fund are sold through
American Express Financial Advisors Inc., a wholly owned subsidiary of AEFC.
PORTFOLIO MANAGER
Dick Warden joined AEFC in 1962 and serves as portfolio manager. He has managed
this fund since 1993. He also serves as portfolio manager of IDS Precious Metals
Fund. Prior to this, he had been senior securities analyst and the associate
portfolio manager of IDS Precious Metals Fund and IDS Progressive Fund.
ALTERNATIVE SALES ARRANGEMENTS
The fund offers its shares in three classes. Class A shares are subject to a
sales charge at the time of purchase. Class B shares are subject to a contingent
deferred sales charge (CDSC) on redemptions made within 6 years of purchase and
an annual distribution (12b-1) fee. Class Y shares are sold without a sales
charge to qualifying institutional investors. Other differences between the
classes include the fees paid by each class. The fund offers these alternatives
so you may choose the method of purchasing shares that is most beneficial given
the amount of purchase, length of time you expect to hold the shares and other
circumstances.
SALES CHARGE AND FUND EXPENSES
SALES CHARGE
When you buy Class A shares, you pay a maximum sales charge of 5% of the public
offering price. This charge can be reduced, depending on your total investments
in IDS funds. See "Reductions of the sales charge." No sales charge applies at
the time of purchase of Class B shares, although Class B shares may be subject
to a CDSC on redemptions made within 6 years and are subject to annual
distribution (12b-1) fees. Class Y shares are sold without a sales charge to
qualifying institutional investors.
3
<PAGE>
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
Class A Class B Class Y
------------- ------------- -------------
<S> <C> <C> <C>
Maximum sales charge on purchases (as a percentage of
offering price).................................... 5% 0% 0%
Maximum deferred sales charge imposed on redemptions
(as a percent of original purchase price).......... 0% 5% 0%
</TABLE>
OPERATING EXPENSES
The fund pays certain expenses out of its assets for each class of shares. The
expenses are reflected in the fund's daily share price and dividends, and are
not charged directly to shareholder accounts. The following chart gives a
projection of these expenses -- based on historical expenses.
ANNUAL FUND OPERATING EXPENSES
(% of average daily net assets):
<TABLE>
<CAPTION>
Class A Class B Class Y
----------- ----------- -----------
<S> <C> <C> <C>
Management fee...................................... 0.00% 0.00% 0.00%
12b-1 fee........................................... 0.00% 0.00% 0.00%
Other expenses...................................... 0.00% 0.00% 0.00%
Total............................................... 0.00% 0.00% 0.00%
</TABLE>
Expenses for Class A are based on actual expenses for the last fiscal year,
restated to reflect current fees. Expenses for Class B and Class Y are estimated
based on the restated expenses for Class A, except that the 12b-1 fee for Class
B is based on the Plan and Agreement of Distribution for that class.
EXAMPLE: Suppose for each year for the next 10 years, fund expenses are as
above and annual return is 5%. If you sold your shares at the end of the
following years, for each $1,000 invested, you would pay total expenses of:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years**
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Class A......................... $ $ $ $
Class B......................... $ $ $ $
Class B*........................ $ $ $ $
Class Y......................... $ $ $ $
<FN>
*Assuming Class B shares are not redeemed at the end of the period.
**Assuming conversion of Class B shares to Class A shares after 8 years.
</TABLE>
THIS EXAMPLE DOES NOT REPRESENT ACTUAL EXPENSES, PAST OR FUTURE. ACTUAL EXPENSES
MAY BE HIGHER OR LOWER THAN THOSE SHOWN. Because Class B pays annual
distribution (12b-1) fees, long-term shareholders of Class B may indirectly pay
an equivalent of more than a 6.25% sales charge, the maximum permitted by the
National Association of Securities Dealers.
4
<PAGE>
PERFORMANCE
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Fiscal period ended June 30, Per share income
and capital changes*
-----------------------------------------------
1994 1993 1992 1991 1990 1989**
----- ----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $7.05 $6.35 $5.67 $5.67 $5.54 $ 5.00
Income from investment operations:
-----------------------------------------------
Net investment income....................................... .31 .32 .33 .35 .37 .34
Net gains (losses) on securities (both realized and
unrealized)............................................... (.38) .89 .73 .05 .19 .54
Total from investment operations............................ (.07) 1.21 1.06 .40 .56 .88
Less distributions:
-----------------------------------------------
Dividends from net investment income........................ (.31) (.33) (.32) (.35) (.37) (.34)
Distributions from realized gains........................... (.44) (.18) (.06) (.05) (.06) --
Total distributions......................................... (.75) (.51) (.38) (.40) (.43) (.34)
Net asset value, end of period.............................. $6.23 $7.05 $6.35 $5.67 $5.67 $ 5.54
<CAPTION>
Ratios/supplemental data
-----------------------------------------------
1994 1993 1992 1991 1990 1989**
----- ----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C>
Net assets, end of period (in millions)..................... $ 651 $ 655 $ 406 $ 252 $ 197 $ 72
Ratio of expenses to average daily net assets............... .82% .86% .92% .90% .96% .87%
Ratio of net income to average daily net assets............. 4.55% 4.78% 5.37% 6.37% 6.65% 7.09%***
Portfolio turnover rate (excluding short-term securities)... 102% 64% 49% 57% 53% 41%
Total return****............................................ (1.7%) 19.90% 19.20% 7.30% 10.30% 18.20%+
<FN>
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Commencement of operations. Period from Aug. 1, 1988 to June 30, 1989.
***Adjusted to an annual basis.
****Total return does not reflect payment of a sales charge.
+For the fiscal period ended June 30, 1989, the annualized total return is
20.1%.
</TABLE>
The information in this table has been audited by KPMG Peat Marwick LLP,
independent auditors. The independent auditors' report and additional
information about the performance of the fund are contained in the fund's annual
report which, if not included with this prospectus, may be obtained without
charge. Information on Class B and Class Y shares is not included because no
shares of those classes were outstanding for the periods shown.
5
<PAGE>
TOTAL RETURNS
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS as of June 30, 1994
- ------------------------------------------------------------------------------------
Since
Purchase made 1 year ago 5 years ago inception*
- --------------------------------------- ------------ ------------ ---------------
<S> <C> <C> <C>
Utilities:
Class A.............................. -6.6% +9.6% +11.2%
S&P 500.............................. +1.4% +10.6% +12.2%
<FN>
*Aug. 1, 1988
</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURNS as of June 30, 1994
- ------------------------------------------------------------------------------------
Since
Purchase made 1 year ago 5 years ago inception*
- --------------------------------------- ------------ ------------ ---------------
<S> <C> <C> <C>
Utilities:
Class A.............................. -6.6% +58.0% +86.8%
S&P 500.............................. +1.4% +65.2% +97.5%
<FN>
*Aug. 1, 1988
</TABLE>
These examples show total returns from hypothetical investments in Class A
shares of the fund. No shares for Class B and Class Y were outstanding during
the periods presented. These returns are compared to those of a popular index
for the same periods.
For purposes of calculation, information about the fund assumes:
- - a sales charge of 5% for Class A shares
- - no adjustments for taxes an investor may have paid on the reinvested income
and capital gains
- - a period of widely fluctuating securities prices. Returns shown should not be
considered a representation of the fund's future performance.
The fund invests in common stocks that may be different from those in the index.
The index reflects reinvestment of all distributions and changes in market
prices, but excludes brokerage commissions or other fees.
Standard & Poor's 500 Stock Index (S&P 500), an unmanaged list of common stocks,
is frequently used as a general measure of market performance. However, the S&P
500 companies are generally larger than those in which the fund invests.
KEY TERMS
NET ASSET VALUE (NAV)
Value of a single fund share. For each class, it is the total market value of
all of a fund's investments and other assets attributable to that class, less
any liabilities attributable to that class, divided by the number of shares of
that class outstanding.
When you buy shares, you pay the NAV plus any applicable sales charge. When you
sell shares, the price you receive is the NAV minus any applicable sales charge.
The NAV usually changes daily, and is calculated at the close of business,
normally 3 p.m. Central time, each business day (any day the New York Stock
Exchange is open).
PUBLIC OFFERING PRICE
Price at which you buy shares. It is the NAV plus the sales charge for Class A.
It is the NAV for Class B and Class Y. NAVs and public offering prices of IDS
funds are listed each day in major newspapers and financial publications.
6
<PAGE>
INVESTMENT INCOME
Dividends and interest earned on securities held by the fund.
CAPITAL GAINS OR LOSSES
Increase or decrease in value of the securities the fund holds. Gains or losses
are realized when securities that have increased or decreased in value are sold.
A fund also may have unrealized gains or losses when securities increase or
decrease in value but are not sold.
DISTRIBUTIONS
Payments to shareholders of two types: investment income (dividends) and
realized net long-term capital gains (capital gains distributions).
TOTAL RETURN
Sum of all of your returns for a given period, assuming you reinvest all
distributions. Calculated by taking the total value of shares you own at the end
of the period (including shares acquired by reinvestment), less the price of
shares you purchased at the beginning of the period.
AVERAGE ANNUAL TOTAL RETURN
The annually compounded rate of return over a given time period (usually two or
more years) -- total return for the period converted to an equivalent annual
figure.
INVESTMENT POLICIES AND RISKS
Under normal market conditions, the fund will concentrate at least 65% of its
total assets in securities of public utility companies. Generally the fund will
invest in dividend-paying stocks. These include companies that produce or supply
electric power, natural gas, water, sanitary services, telecommunications and
other communications services (but not radio or television broadcasters) for
public use or consumption.
The fund also may invest derivative instruments, money market instruments and
securities that are not public utilities.
The various types of investments the portfolio manager uses to achieve
investment performance are described in more detail in the next section and in
the SAI.
FACTS ABOUT INVESTMENTS AND THEIR RISKS
UTILITY STOCKS: Utilities are subject to certain regulatory rulings that may
affect the value of their stocks. Such rules include regulation over growth,
environmental protection, and allocation of increased production cost to
consumers. Other conditions that may affect their stock value include
fluctuations in demands for service, availability and cost of fuels, and special
risks associated with constructing and operating nuclear power plants or other
specialized types of power plants.
OTHER STOCKS: Stock prices are subject to market fluctuations. Stocks of
smaller companies may be subject to more abrupt or erratic price movements than
stocks of larger, established companies or the stock market as a whole. While
most of the fund's investments are in established companies having adequate
financial reserves, some investments involve substantial risk and may be
considered speculative.
PREFERRED STOCKS: If a company earns a profit, it generally must pay its
preferred stockholders a dividend at a pre-established rate.
7
<PAGE>
CONVERTIBLE SECURITIES: These securities generally are preferred stocks or
bonds that can be exchanged for other securities, usually common stock, at
prestated prices. When the trading price of the common stock makes the exchange
likely, the convertible securities trade more like common stock.
DEBT SECURITIES: The fund may invest in bonds if they are rated in the top four
classifications by Moody's Investors Service, Inc. or Standard & Poor's
Corporation, or are of equivalent quality in the opinion of the fund's portfolio
manager. The price of an investment-grade bond fluctuates as interest rates
change or if its credit rating is upgraded or downgraded. Securities that are
subsequently downgraded in quality may continue to be held by the fund, and will
be sold only if the fund's investment manager believes it is advantageous to do
so.
FOREIGN INVESTMENTS: Securities of foreign companies and governments may be
traded in the United States, but often they are traded only on foreign markets.
Frequently, there is less information about foreign companies and less
government supervision of foreign markets. Foreign investments are subject to
political and economic risks of the countries in which the investments are made,
including the possibility of seizure or nationalization of companies, imposition
of withholding taxes on income, establishment of exchange controls or adoption
of other restrictions that might affect an investment adversely. If an
investment is made in a foreign market, the local currency must be purchased.
This is done by using a forward contract in which the price of the foreign
currency in U.S. dollars is established on the date the trade is made, but
delivery of the currency is not made until the securities are received. As long
as the fund holds foreign currencies or securities valued in foreign currencies,
the price of a fund share will be affected by changes in the value of the
currencies relative to the U.S. dollar. Because of the limited trading volume in
some foreign markets, efforts to buy or sell a security may change the price of
the security, and it may be difficult to complete the transaction. The fund may
invest up to 25% of its total assets in foreign investments.
DERIVATIVE INSTRUMENTS: The portfolio manager may use derivative instruments in
addition to securities to achieve investment performance. Derivative instruments
include futures, options and forward contracts. Such instruments may be used to
maintain cash reserves while remaining fully invested, to offset anticipated
declines in values of investments, to facilitate trading, to reduce transaction
costs, or to pursue higher investment returns. Derivative instruments are
characterized by requiring little or no initial payment and a daily change in
price based on or derived from a security, a currency, a group of securities or
currencies, or an index. A number of strategies or combination of instruments
can be used to achieve the desired investment performance characteristics. A
small change in the value of the underlying security, currency or index will
cause a sizable gain or loss in the price of the derivative instrument.
Derivative instruments allow the portfolio manager to change the investment
performance characteristics very quickly and at lower costs. Risks include
losses of premiums, rapid changes in prices, defaults by other parties, and
inability to close such instruments. The fund will use derivative instruments
only to achieve the same investment performance characteristics it could achieve
by directly holding those securities and currencies permitted under the
investment policies. The fund will designate cash or appropriate liquid assets
to cover its portfolio obligations. No more than 5% of the fund's net assets can
be used at any one time for good faith
8
<PAGE>
deposits on futures and premiums for options on futures that do not offset
existing investment positions. For further information, see the options and
futures appendix in the SAI.
SECURITIES AND DERIVATIVE INSTRUMENTS THAT ARE ILLIQUID: Illiquid means the
security or derivative instrument cannot be sold quickly in the normal course of
business. Some investments cannot be resold to the U.S. public because of their
terms or government regulations. All securities and derivative instruments,
however, can be sold in private sales, and many may be sold to other
institutions and qualified buyers or on foreign markets. The portfolio manager
will follow guidelines established by the board of directors and consider
relevant factors such as the nature of the security and the number of likely
buyers when determining whether a security is illiquid. No more than 10% of the
fund's net assets will be held in securities and derivative instruments that are
illiquid.
MONEY MARKET INSTRUMENTS: Short-term debt securities rated in the top two
grades are used to meet daily cash needs and at various times to hold assets
until better investment opportunities arise. Generally less than 25% of the
fund's total assets are in these money market instruments. However, for
temporary defensive purposes these investments could exceed that amount for a
limited period of time.
The investment policies described above may be changed by the board of
directors.
LENDING PORTFOLIO SECURITIES: The fund may lend its securities to earn income
so long as borrowers provide collateral equal to the market value of the loans.
The risks are that borrowers will not provide collateral when required or return
securities when due. Unless shareholders approve otherwise, loans may not exceed
30% of the fund's net assets.
ALTERNATIVE INVESTMENT OPTION
In the future, the board of the fund may determine for operating efficiencies to
use a master feeder structure. Under that structure, the fund's investment
portfolio would be managed by another investment company with the same goal as
the fund, rather than investing directly in a portfolio of securities.
VALUING ASSETS
- - Securities (except bonds) and assets with available market values are valued
on that basis.
- - Securities maturing in 60 days or less are valued at amortized cost.
- - Bonds and assets without readily available market values are valued according
to methods selected in good faith by the board of directors.
HOW TO BUY, EXCHANGE OR SELL SHARES
HOW TO BUY SHARES -- ALTERNATIVE SALES ARRANGEMENTS
The fund offers three different classes of shares -- Class A, Class B and Class
Y. The primary differences among the classes are in the sales charge
9
<PAGE>
structures and in their ongoing expenses. These differences are summarized in
the table below. You may choose the class that best suits your circumstances and
objectives.
<TABLE>
<CAPTION>
Sales charge and Service fee
distribution (12b-1) (as a % of average
fee daily net assets) Other information
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Class A Maximum initial sales Service fee of 0.175% Initial sales charge
charge of 5% waived or reduced for
certain purchases
Class B No initial sales Service fee of 0.175% Shares convert to
charge; distribution Class A after 8
fee of 0.75% of daily years; CDSC waived in
net assets; maximum certain circumstances
CDSC of 5% declines
to 0% after 6 years
Class Y None None Available only to
certain qualifying
institutional
investors
</TABLE>
CONVERSION OF CLASS B SHARES TO CLASS A SHARES -- Eight calendar years after
Class B shares were originally purchased, Class B shares will convert to Class A
shares and will no longer be subject to a distribution fee. The conversion will
be on the basis of relative net asset values of the two classes, without the
imposition of any sales charge. Class B shares purchased through reinvested
dividends and distributions will convert to Class A shares in a pro-rata portion
as the Class B shares purchased other than through reinvestment.
CONSIDERATIONS IN DETERMINING WHETHER TO PURCHASE CLASS A OR CLASS B SHARES --
You should consider the information below in determining whether to purchase
Class A or Class B shares.
<TABLE>
<CAPTION>
If you purchase Class A shares If you purchase Class B shares
- -------------------------------- --------------------------------
SALES CHARGES ON PURCHASE OR REDEMPTION
<S> <C>
- - You will not have all of your - All of your money is invested
purchase price invested. Part in shares of stock. However,
of your purchase price will go you will pay a sales charge if
to pay the sales charge. You you redeem your shares within
will not pay a sales charge 6 years of purchase.
when you redeem your shares.
- - You will be able to take - No reductions of the sales
advantage of reductions in the charge are available for large
sales charge. If your purchases.
investments in IDS funds total
$250,000 or more, you are
better off paying the reduced
sales charge in Class A than
paying the higher fees in
Class B. If you qualify for a
waiver of the sales charge,
you should purchase Class A
shares.
- - The sales charges and distribution fee are structured so that
you will have approximately the same total return at the end of
8 years regardless of which class you chose.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
ONGOING EXPENSES
<S> <C>
- - Your shares will have a lower - The distribution and transfer
expense ratio than Class B agent fees for Class B will
shares because Class A does cause your shares to have a
not pay a distribution fee and higher expense ratio and to
the transfer agent fee for pay lower dividends than Class
Class A is lower than the fee A shares. After 8 years, Class
for Class B. As a result, B shares will convert to Class
Class A shares will pay higher A shares and will no longer be
dividends than Class B shares. subject to higher fees.
</TABLE>
You should consider how long you plan to hold your shares and whether the
accumulated higher fees and CDSC on Class B shares prior to conversion would be
less than the initial sales charge on Class A shares. Also consider to what
extent the difference would be offset by the lower expenses on Class A shares.
To help you in this analysis, the Example in the "Sales charge and fund
expenses" section of the prospectus illustrates the charges applicable to each
class of shares.
CLASS Y SHARES -- Class Y shares are offered to certain institutional investors.
Class Y shares are sold without a front-end sales charge or a CDSC and are not
subject to either a service fee or a distribution fee. The following investors
are eligible to purchase Class Y shares:
- - Qualified employee benefit plans* if the plan:
-- uses a daily transfer recordkeeping service offering participants daily
access to IDS funds and has
-- at least $10 million in plan assets or
-- 500 or more participants; or
-- does not use daily transfer recordkeeping and has
-- at least $3 million invested in funds of the IDS MUTUAL FUND GROUP or
-- 500 or more participants.
- - Trust companies or similar institutions, and charitable organizations that
meet the definition in Section 501(c)(3) of the Internal Revenue Code.* These
must have at least $10 million invested in funds of the IDS MUTUAL FUND GROUP.
- - Nonqualified deferred compensation plans* whose participants are included in a
qualified employee benefit plan described above.
*Eligibility must be determined in advance by AEFC. To do so, contact your
financial advisor.
Financial advisors may receive different compensation for selling Class A, Class
B and Class Y shares.
HOW TO BUY SHARES
If you're investing in this fund for the first time, you'll need to set up an
account. Your financial advisor will help you fill out and submit an
application. Once your account is set up, you can choose among several
convenient ways to invest.
IMPORTANT: When opening an account, you must provide AEFC with your correct
Taxpayer Identification Number (Social Security or Employer Identification
number). See "Distributions and taxes."
11
<PAGE>
When you buy shares for a new or existing account, the price you pay per share
is determined at the close of business on the day your investment is received
and accepted at the Minneapolis headquarters.
PURCHASE POLICIES:
- - Investments must be received and accepted in the Minneapolis headquarters on a
business day before 3 p.m. Central time to be included in your account that
day and to receive that day's share price. Otherwise your purchase will be
processed the next business day and you will pay the next day's share price.
- - The minimums allowed for investment may change from time to time.
- - Wire orders can be accepted only on days when your bank, AEFC the fund and
Norwest Bank Minneapolis are open for business.
- - Wire purchases are completed when wired payment is received and the fund
accepts the purchase.
- - AEFC and the fund are not responsible for any delays that occur in wiring
funds, including delays in processing by the bank.
- - You must pay any fee the bank charges for wiring.
- - The fund reserves the right to reject any application for any reason.
- - If your application does not specify which class of share you are purchasing,
it will be assumed that you are investing in Class A shares.
THREE WAYS TO INVEST
<TABLE>
<S> <C> <C>
1 Send your check and application MINIMUM AMOUNTS
BY REGULAR (or your name and account number Initial investment: $2,000
ACCOUNT if you have an established Additional investments: $100
account) to: Account balances: $300*
American Express Financial Qualified retirement
Advisors Inc. accounts: none
P.O. Box 74
Minneapolis, MN 55440-0074
Your financial advisor will help
you with this process.
2 Contact your financial advisor MINIMUM AMOUNTS
BY SCHEDULED to set up one of the following Initial investments: $100
INVESTMENT scheduled plans: Additional investments: $100/mo.
PLAN automatic payroll deduction Account balances: none
- bank authorization (on active plans of monthly
- direct deposit of Social payments)
Security check
- other plan approved by the
fund
</TABLE>
12
<PAGE>
<TABLE>
<S> <C> <C>
3 If you have an established If this information is not
BY WIRE account, you may wire money to: included, the order may be
Norwest Bank Minneapolis rejected and all money received
Routing No. 091000019 by the fund, less any costs the
Minneapolis, MN fund or AEFC incurs, will be
Attn: Domestic Wire Dept. returned promptly.
Give these instructions: MINIMUM AMOUNTS
Credit IDS Account #00-30-015 Each wire investment: $1,000
for personal account # (your
account number) for (your
name).
<FN>
*If your account balance falls below $300, AEFC will ask you in writing to bring
it up to $300 or establish a scheduled investment plan. If you don't do so
within 30 days, your shares can be redeemed and the proceeds mailed to you.
</TABLE>
HOW TO EXCHANGE SHARES
You can exchange your shares of the fund at no charge for shares of the same
class of any other publicly offered fund in the IDS MUTUAL FUND GROUP available
in your state. For complete information, including fees and expenses, read the
prospectus carefully before exchanging into a new fund.
If your exchange request arrives at the Minneapolis headquarters before the
close of business, your shares will be redeemed at the net asset value set for
that day. The proceeds will be used to purchase new fund shares the same day.
Otherwise, your exchange will take place the next business day at that day's net
asset value.
For tax purposes, an exchange represents a sale and purchase and may result in a
gain or loss. However, you cannot create a tax loss (or reduce a taxable gain)
by exchanging from the fund within 91 days of your purchase. For further
explanation, see the SAI.
HOW TO SELL SHARES
You can sell (redeem) your shares at any time. American Express Shareholder
Service will mail payment within seven days after receiving your request.
When you sell shares, the amount you receive may be more or less than the amount
you invested. Your shares will be redeemed at net asset value, minus any
applicable sales charge, at the close of business on the day your request is
accepted at the Minneapolis headquarters. If your request arrives after the
close of business, the price per share will be the net asset value, minus any
applicable sales charge, at the close of business on the next business day.
A redemption is a taxable transaction. If the fund's net asset value when you
sell shares is more or less than the cost of your shares, you will have a gain
or loss, which can affect your tax liability. Redeeming shares held in an IRA or
qualified retirement account may subject you to certain federal taxes, penalties
and reporting requirements. Consult your tax advisor.
13
<PAGE>
TWO WAYS TO REQUEST AN EXCHANGE OR SALE OF SHARES
<TABLE>
<S> <C> <C>
1 Include in your letter:
BY LETTER - the name of the fund(s)
- the class of shares to be redeemed
- your account number(s) (for exchanges, both
funds must be registered in the same ownership)
- your Taxpayer Identification Number (TIN)
- the dollar amount or number of shares you want
to exchange or sell
- signature of all registered account owners
- for redemptions, indicate how you want your
sales proceeds delivered to you
- any paper certificates of shares you hold
REGULAR MAIL:
American Express Shareholder Service
Attn: Redemptions
P.O. Box 534
Minneapolis, MN 55440-0534
EXPRESS MAIL:
American Express Shareholder Service
Attn: Redemptions
733 Marquette Ave.
Minneapolis, MN 55402
2 - The fund and AEFC will honor any telephone
BY PHONE exchange or redemption request believed to be
American Express Telephone authentic and will use reasonable procedures to
Transaction Service: confirm that they are. This includes asking
800-437-3133 or identifying questions and tape recording calls.
612-671-3800 So long as reasonable procedures are followed,
neither the fund nor AEFC will be liable for any
loss resulting from fraudulent requests.
- Phone exchange and redemption privileges
automatically apply to all accounts except
custodial, corporate or qualified retirement
accounts unless you request these privileges NOT
apply by writing American Express Shareholder
Service. Each registered owner must sign the
request.
- AEFC answers phone requests promptly, but you
may experience delays when call volume is high.
If you are unable to get through, use mail
procedure as an alternative.
- Phone privileges may be modified or discontinued
at any time.
MINIMUM AMOUNT
Redemption: $100
MAXIMUM AMOUNT
Redemption: $50,000
</TABLE>
EXCHANGE POLICIES:
- - You may make up to three exchanges within any 30-day period, with each limited
to $300,000. These limits do not apply to scheduled exchange programs and
certain employee benefit plans or other arrangements through which one
shareholder represents the interests of several. Exceptions may be allowed
with pre-approval of the fund.
- - Exchanges must be made into the same class in the new fund.
- - If your exchange creates a new account, it must satisfy the minimum investment
amount for new purchases.
- - Once we receive your exchange request, you cannot cancel it.
14
<PAGE>
- - Shares of the new fund may not be used on the same day for another exchange.
- - If your shares are pledged as collateral, the exchange will be delayed until
written approval is obtained from the secured party.
- - AEFC and the fund reserve the right to reject any exchange, limit the amount,
or modify or discontinue the exchange privilege, to prevent abuse or adverse
effects on the fund and its shareholders. For example, if exchanges are too
numerous or too large, they may disrupt the fund's investment strategies or
increase its costs.
REDEMPTION POLICIES:
- - A "change of mind" option allows you to change your mind after requesting a
redemption and to use all or part of the proceeds to buy new shares in the
same account at the net asset value, rather than the offering price on the
date of a new purchase. If you reinvest in this manner, any CDSC you paid on
the amount you are reinvesting also will be reinvested in the fund. To take
advantage of this option, send a written request within 30 days of the date
your redemption request was received. Include your account number and mention
this option. This privilege may be limited or withdrawn at any time, and it
may have tax consequences.
- - A telephone redemption request will not be allowed within 30 days of a
phoned-in address change.
IMPORTANT: If you request a redemption of shares you recently purchased by a
check or money order that is not guaranteed, the fund will wait for your check
to clear. Please expect a minimum of 10 days from the date of purchase before
AEFC mails a check to you. (A check may be mailed earlier if your bank provides
evidence satisfactory to the fund and AEFC that your check has cleared.)
THREE WAYS TO RECEIVE PAYMENT WHEN YOU SELL SHARES
<TABLE>
<S> <C> <C>
1 - Mailed to the address on record.
BY REGULAR OR EXPRESS MAIL - Payable to names listed on the account.
NOTE: The express mail delivery charges you pay
will vary depending on the courier you select.
2 - Minimum wire redemption: $1,000.
BY WIRE - Request that money be wired to your bank.
- Bank account must be in the same ownership as
the IDS fund account.
NOTE: Pre-authorization required. For
instructions, contact your financial advisor or
American Express Shareholder Service.
3 - Minimum payment: $50.
BY SCHEDULED PAYOUT PLAN - Contact your financial advisor or American
Express Shareholder Service to set up regular
payments to you on a monthly, bimonthly,
quarterly, semiannual or annual basis.
- Buying new shares while under a payout plan may
be disadvantageous because of the sales charges.
</TABLE>
15
<PAGE>
CLASS A -- INITIAL SALES CHARGE ALTERNATIVE
On purchases of Class A shares, you pay a 5% sales charge on the first $50,000
of your total investment and less on investments after the first $50,000:
<TABLE>
<CAPTION>
Sales charge as a percent
of:*
---------------------------
Public
offering Net amount
Total investment price invested
- ------------------------ ------------- ------------
<S> <C> <C>
Up to $50,000 5.0% 5.26%
Next $50,000 4.5 4.71
Next $400,000 3.8 3.95
Next $500,000 2.0 2.04
More than $1,000,000 0.0 0.00
<FN>
*To calculate the actual sales charge on an investment greater than $50,000,
amounts for each applicable increment must be totaled. See the SAI.
</TABLE>
REDUCTIONS OF THE SALES CHARGE ON CLASS A SHARES
Your sales charge may be reduced, depending on the totals of:
- - the amount you are investing in this fund now,
- - the amount of your existing investment in this fund, if any, and
- - the amount you and your immediate family (spouse or unmarried children under
21) are investing or have in other funds in the IDS MUTUAL FUND GROUP that
carry a sales charge.
Other policies that affect your sales charge:
- - IDS Tax-Free Money Fund and Class A shares of IDS Cash Management Fund do not
carry sales charges. However, you may count investments in these funds if you
acquired shares in them by exchanging shares from IDS funds that carry sales
charges.
- - IRA purchases or other employee benefit plan purchases made through a payroll
deduction plan or through a plan sponsored by an employer, association of
employers, employee organization or other similar entity, may be added
together to reduce sales charges for all shares purchased through that plan.
For more details, see the SAI.
WAIVERS OF THE SALES CHARGE FOR CLASS A SHARES
Sales charges do not apply to:
- - Current or retired trustees, directors, officers or employees of the fund or
AEFC or its subsidiaries, their spouses and unmarried children under 21.
- - Current or retired American Express financial advisors, their spouses and
unmarried children under 21.
- - Qualified employee benefit plans* using a daily transfer recordkeeping system
offering participants daily access to IDS funds.
(Participants in certain qualified plans for which the initial sales charge is
waived may be subject to a deferred sales charge of up to 4% on certain
redemptions. For more information, see the SAI.)
16
<PAGE>
- - Shareholders who have at least $1 million invested in funds of the IDS MUTUAL
FUND GROUP. If the investment is redeemed in the first year after purchase, a
CDSC of 1% will be charged on the redemption.
- - Purchases made within 30 days after a redemption of shares (up to the amount
redeemed):
-- of a product distributed by American Express Financial Advisors in a
qualified plan subject to a deferred sales charge or
-- in a qualified plan where American Express Trust Company acts as trustee
or recordkeeper.
Send the fund a written request along with your payment, indicating the amount
of the redemption and the date on which it occurred.
- - Purchases made with dividend or capital gain distributions from another fund
in the IDS MUTUAL FUND GROUP that has a sales charge.
*Eligibility must be determined in advance by AEFC. To do so, contact your
financial advisor.
CLASS B -- CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE
Where a CDSC is imposed on a redemption, it is based on the amount of the
redemption and the number of calendar years, including the year of purchase,
between purchase and redemption. The following table shows the declining scale
of percentages that apply to redemptions during each year after a purchase:
<TABLE>
<CAPTION>
If a
redemption
is made The percentage rate
during the for the CDSC is:
- -------------- --------------------
<S> <C>
First year 5%
Second year 4%
Third year 4%
Fourth year 3%
Fifth year 2%
Sixth year 1%
Seventh year 0%
</TABLE>
If the amount you are redeeming reduces the current net asset value of your
investment in Class B shares below the total dollar amount of all your purchase
payments during the last 6 years (including the year in which your redemption is
made), the CDSC is based on the lower of the redeemed purchase payments or
market value.
The following example illustrates how the CDSC is applied. Assume you had
invested $10,000 in Class B shares and that your investment had appreciated in
value to $12,000 after 15 months, including reinvested dividend and capital gain
distributions. You could redeem any amount up to $2,000 without paying a CDSC
($12,000 current value less $10,000 purchase amount). If you redeemed $2,500,
the CDSC would apply only to the $500 that represented part of your original
purchase price. The CDSC rate would be 4% because a redemption after 15 months
would take place during the second year after purchase.
Because the CDSC is imposed only on redemptions that reduce the total of your
purchase payments, you never have to pay a CDSC on any amount you redeem that
represents appreciation in the value of your shares, income earned by your
shares or capital gains. In addition, when determining the rate of any CDSC,
your redemption will be made from the oldest purchase
17
<PAGE>
payment you made. Of course, once a purchase payment is considered to have been
redeemed, the next amount redeemed is the next oldest purchase payment. By
redeeming the oldest purchase payments first, lower CDSCs are imposed than would
otherwise be the case.
WAIVERS OF THE SALES CHARGE FOR CLASS B SHARES
The CDSC on Class B shares will be waived on redemptions of shares:
- - In the event of the shareholder's death,
- - Purchased by any trustee, director, officer or employee of a fund or AEFC or
its subsidiaries,
- - Purchased by any American Express financial advisor,
- - Held in a trusteed employee benefit plan,
- - Held in IRAs or certain qualified plans for which AEFC acts as custodian, such
as Keogh plans, tax-sheltered custodial accounts or corporate pension plans,
provided that the shareholder is:
-- at least 59-1/2 years old, and
-- taking a retirement distribution (if the redemption is part of a
transfer to an IRA or qualified plan in a product distributed by
American Express Financial Advisors, or a custodian-to-custodian
transfer to a product not distributed by American Express Financial
Advisors, the CDSC will not be waived), or
-- redeeming under an approved substantially equal periodic payment
arrangement.
SPECIAL SHAREHOLDER SERVICES
SERVICES
To help you track and evaluate the performance of your investments, AEFC
provides these services:
QUARTERLY STATEMENTS listing all of your holdings and transactions during the
previous three months.
YEARLY TAX STATEMENTS featuring average-cost-basis reporting of capital gains or
losses if you redeem your shares along with distribution information which
simplifies tax calculations.
A PERSONALIZED MUTUAL FUND PROGRESS REPORT detailing returns on your initial
investment and cash-flow activity in your account. It calculates a total return
to reflect your individual history in owning fund shares. This report is
available from your financial advisor.
QUICK TELEPHONE REFERENCE
AMERICAN EXPRESS TELEPHONE TRANSACTION SERVICE
Redemptions and exchanges, dividend payments or reinvestments and automatic
payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
AMERICAN EXPRESS SHAREHOLDER SERVICE
Fund performance, objectives and account inquiries
612-671-3733
18
<PAGE>
TTY SERVICE
For the hearing impaired
800-846-4852
AMERICAN EXPRESS INFOLINE
Automated account information (TouchTone-R- phones only), including current fund
prices and performance, account values and recent account transactions
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 671-1630
DISTRIBUTIONS AND TAXES
The fund distributes to shareholders investment income and net capital gains. It
does so to qualify as a regulated investment company and to avoid paying
corporate income and excise taxes. Dividend and capital gains distributions will
have tax consequences you should know about.
DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS
The fund distributes its net investment income (dividends and interest earned on
securities held by the fund, less operating expenses) to shareholders of record
at the end of each calendar quarter. Short-term capital gains distributed are
included in net investment income. Net realized capital gains, if any, from
selling securities are distributed at the end of the calendar year. Before
they're distributed, net capital gains are included in the value of each share.
After they're distributed, the value of each share drops by the per-share amount
of the distribution. (If your distributions are reinvested, the total value of
your holdings will not change.)
Dividends paid by each class will be calculated at the same time, in the same
manner and in the same amount, except the expenses attributable solely to Class
A, Class B and Class Y will be paid exclusively by that class. Class B
shareholders will receive lower per share dividends than Class A and Class Y
shareholders because expenses for Class B are higher than for Class A or Class
Y. Class A shareholders will receive lower per share dividends than Class Y
shareholders because expenses for Class A are higher than for Class Y.
REINVESTMENTS
Dividends and capital gain distributions are automatically reinvested in
additional shares in the same class of the fund, unless:
- - you request the fund in writing or by phone to pay distributions to you in
cash, or
- - you direct the fund to invest your distributions in any publicly available IDS
fund for which you've previously opened an account. You pay no sales charge on
shares purchased through reinvestment from this fund into any IDS fund.
The reinvestment price is the net asset value at close of business on the day
the distribution is paid. (Your quarterly statement will confirm the amount
invested and the number of shares purchased.)
If you choose cash distributions, you will receive only those declared after
your request has been processed.
19
<PAGE>
If the U.S. Postal Service cannot deliver the checks for the cash distributions,
we will reinvest the checks into your account at the then-current net asset
value and make future distributions in the form of additional shares.
TAXES
Distributions are subject to federal income tax and also may be subject to state
and local taxes. Distributions are taxable in the year the fund pays them
regardless of whether you take them in cash or reinvest them.
Corporate shareholders of the fund generally are entitled to a deduction equal
to 70% of that portion of the fund's dividend that is attributable to dividends
the fund received from domestic securities. To calculate any dividends-received
deduction the fund will report to corporate shareholders annually the percentage
of the fund's income that comes from dividends from domestic securities. Receipt
of income that qualifies for the dividends-received deduction is incidental to
the fund's investment activity.
Each January, AEFC sends you a statement showing the kinds and total amount of
all distributions you received during the previous year. You must report all
distributions on your tax returns, even if they are reinvested in additional
shares.
"Buying a dividend" creates a tax liability. This means buying shares shortly
before a net investment income or a capital gain distribution. You pay the full
pre-distribution price for the shares, then receive a portion of your investment
back as a distribution, which is taxable.
Redemptions and exchanges subject you to a tax on any capital gain. If you sell
shares for more than their cost, the difference is a capital gain. Your gain may
be either short term (for shares held for one year or less) or long term (for
shares held for more than one year).
YOUR TAXPAYER IDENTIFICATION NUMBER (TIN) IS IMPORTANT. As with any financial
account you open, you must list your current and correct Taxpayer Identification
Number (TIN) -- either your Social Security or Employer Identification number.
The TIN must be certified under penalties of perjury on your application when
you open an account at AEFC.
If you don't provide the TIN to AEFC, or the TIN you report is incorrect, you
could be subject to backup withholding of 31% of taxable distributions and
proceeds from certain sales and exchanges. You also could be subject to further
penalties, such as:
- - a $50 penalty for each failure to supply your correct TIN
- - a civil penalty of $500 if you make a false statement that results in no
backup withholding
- - criminal penalties for falsifying information
You also could be subject to backup withholding because you failed to report
interest or dividends on your tax return as required.
20
<PAGE>
HOW TO DETERMINE THE CORRECT TIN
<TABLE>
<CAPTION>
Use the Social Security or Employer
For this type of account: Identification number of:
- --------------------------------------- ---------------------------------------
<S> <C>
Individual or joint account The individual or first person listed
on the account
Custodian account of a minor (Uniform The minor
Gifts/Transfers to Minors Act)
A living trust The grantor-trustee (the person who
puts the money into the trust)
An irrevocable trust, pension trust or
estate ta]The legal entity (not the
personal representative or trustee,
unless no legal entity is designated in
the account title)
Sole proprietorship or partnership The owner or partnership
Corporate The corporation
Association, club or tax-exempt The organization
organization
</TABLE>
For details on TIN requirements, ask your financial advisor or local American
Express Financial Advisors office for Federal Form W-9, "Request for Taxpayer
Identification Number and Certification."
IMPORTANT: This information is a brief and selective summary of certain federal
tax rules that apply to this fund. Tax matters are highly individual and
complex, and you should consult a qualified tax advisor about your personal
situation.
HOW THE FUND IS ORGANIZED
The fund is a diversified, open-end management investment company, as defined in
the Investment Company Act of 1940. It was incorporated March 25, 1988 in
Minnesota. The fund headquarters are at 901 S. Marquette Ave., Suite 2810,
Minneapolis, MN 55402-3268.
SHARES
The fund is owned by its shareholders. The fund issues shares in three classes
- -- Class A, Class B and Class Y. Each class has different sales arrangements and
bears different expenses. Each class represents interests in the assets of the
fund. Par value is 1 cent per share. Both full and fractional shares can be
issued.
The fund no longer issues stock certificates.
VOTING RIGHTS
As a shareholder, you have voting rights over the fund's management and
fundamental policies. You are entitled to one vote for each share you own. Each
class has exclusive voting rights with respect to the provisions of the fund's
distribution plan that pertain to a particular class and other matters for which
separate class voting is appropriate under applicable law.
21
<PAGE>
SHAREHOLDER MEETINGS
The fund does not hold annual shareholder meetings. However, the directors may
call meetings at their discretion, or on demand by holders of 10% or more of the
outstanding shares, to elect or remove directors.
DIRECTORS AND OFFICERS
Shareholders elect a board of directors that oversees the operations of the fund
and chooses its officers. Its officers are responsible for day-to-day business
decisions based on policies set by the board. The board has named an executive
committee that has authority to act on its behalf between meetings. The
directors also serve on the boards of all of the other funds in the IDS MUTUAL
FUND GROUP, except for Mr. Dudley, who is a director of all publicly offered
funds.
DIRECTORS AND OFFICERS OF THE FUND
PRESIDENT AND INTERESTED DIRECTOR
WILLIAM R. PEARCE
President of all funds in the IDS MUTUAL FUND GROUP.
INDEPENDENT DIRECTORS
LYNNE V. CHENEY
Distinguished fellow, American Enterprise Institute for Public Policy Research.
ROBERT F. FROEHLKE
Former president of all funds in the IDS MUTUAL FUND GROUP.
HEINZ F. HUTTER
Former president and chief operating officer, Cargill, Inc.
ANNE P. JONES
Attorney and telecommunications consultant.
DONALD M. KENDALL
Former chairman and chief executive officer, PepsiCo, Inc.
MELVIN R. LAIRD
Senior counsellor for national and international affairs, The Reader's Digest
Association, Inc.
LEWIS W. LEHR
Former chairman and chief executive officer, Minnesota Mining and Manufacturing
Company (3M).
EDSON W. SPENCER
Former chairman and chief executive officer, Honeywell, Inc.
WHEELOCK WHITNEY
Chairman, Whitney Management Company.
C. ANGUS WURTELE
Chairman of the board and chief executive officer, The Valspar Corporation.
22
<PAGE>
INTERESTED DIRECTORS WHO ARE OFFICERS AND/OR EMPLOYEES OF AEFC
WILLIAM H. DUDLEY
Executive vice president, AEFC.
DAVID R. HUBERS
President and chief executive officer, AEFC.
JOHN R. THOMAS
Senior vice president, AEFC.
OTHER OFFICER
LESLIE L. OGG
Vice president of all funds in the IDS MUTUAL FUND GROUP and general counsel and
treasurer of the publicly offered funds.
Refer to the SAI for the directors' and officers' biographies.
INVESTMENT MANAGER AND TRANSFER AGENT
The fund pays AEFC for managing its portfolio, providing administrative services
and serving as transfer agent (handling shareholder accounts).
Under its Investment Management Services Agreement, AEFC determines which
securities will be purchased, held or sold (subject to the direction and control
of the fund's board of directors). Effective March 3, 1995, the fund pays AEFC a
fee for these services based on the average daily net assets of the fund, as
follows:
<TABLE>
<CAPTION>
Assets Annual rate
(billions) at each asset level
- ----------- -------------------
<S> <C> <C>
First $0.50 0.530%
Next 0.50 0.505
Next 1.0 0.480
Next 1.0 0.455
Next 3.0 0.430
Over 6.0 0.400
</TABLE>
For the fiscal year ended June 30, 1994, under a prior agreement, the fund paid
AEFC a total investment management fee of 0.54% of its average daily net assets.
Under the Agreement, the fund also pays taxes, brokerage commissions and
nonadvisory expenses.
Under an Administrative Services Agreement, the fund pays AEFC for
administration and accounting services at an annual rate of 0.04% decreasing in
gradual percentages to 0.02% as assets increase.
In addition, under a separate Transfer Agency Agreement, AEFC maintains
shareholder accounts and records. The fund pays AEFC an annual fee per
shareholder account for this service as follows:
- Class A $15
- Class B $16
- Class Y $15
23
<PAGE>
DISTRIBUTOR
The fund sells shares through American Express Financial Advisors, a wholly
owned subsidiary of AEFC, under a Distribution Agreement. Financial advisors
representing American Express Financial Advisors provide information to
investors about individual investment programs, the fund and its operations, new
account applications, exchange and redemption requests. The cost of these
services is paid partially by the fund's sales charge.
Portions of sales charges may be paid to securities dealers who have sold the
fund's shares, or to banks and other financial institutions. The proceeds paid
to others range from 0.8% to 4% of the fund's offering price depending on the
monthly sales volume.
For Class B shares, to help defray costs not covered by sales charges, including
costs for marketing, sales administration, training, overhead, direct marketing
programs, advertising and related functions, the fund pays American Express
Financial Advisors a distribution fee, also known as a 12b-1 fee. This fee is
paid under a Plan and Agreement of Distribution that follows the terms of Rule
12b-1 of the Investment Company Act of 1940. Under this Agreement, the fund pays
a distribution fee at an annual rate of 0.75% of the fund's average daily net
assets attributable to Class B shares for distribution-related services. The
total 12b-1 fee paid by the fund under a prior agreement for the fiscal year
ended June 30, 1994 was 0.06% of its average daily net assets. This fee will not
cover all of the costs incurred by American Express Financial Advisors.
Under a Shareholder Service Agreement, the fund also 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 the fund's average daily net assets
attributable to Class A and Class B shares.
Total expenses paid by the fund in the fiscal year ended June 30, 1994 were
0.82% of its average daily net assets.
Total fees and expenses (excluding taxes and brokerage commissions) cannot
exceed the most restrictive applicable state expense limitation.
ABOUT AEFC
GENERAL INFORMATION
The AEFC family of companies offers not only mutual funds but also insurance,
annuities, investment certificates and a broad range of financial management
services.
Besides managing investments for all publicly offered funds in the IDS MUTUAL
FUND GROUP, AEFC also manages investments for itself and its subsidiaries, IDS
Certificate Company and IDS Life Insurance Company. Total assets under
management on June 30, 1994 were more than $100 billion.
American Express Financial Advisors serves individuals and businesses through
its nationwide network of more than 175 offices and more than 7,800 advisors.
Other AEFC subsidiaries provide investment management and related services for
pension, profit sharing, employee savings and endowment funds of businesses and
institutions.
24
<PAGE>
AEFC is located at IDS Tower 10, Minneapolis, MN 55440-0010. It is a wholly
owned subsidiary of American Express Company, a financial services company with
headquarters at American Express Tower, World Financial Center, New York, NY
10285. The fund may pay brokerage commissions to broker-dealer affiliates of
American Express and AEFC.
25
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
FOR
IDS UTILITIES INCOME FUND
August 29, 1994 as revised March 3, 1995
This Statement of Additional Information (SAI) is not a prospectus.
It should be read together with the prospectus and the financial
statements contained in the Annual Report which may be obtained
from your American Express financial advisor or by writing to
American Express Shareholder Service, P.O. Box 534, Minneapolis, MN
55440-0534.
This SAI is dated August 29, 1994 as revised March 3, 1995, and it
is to be used with the prospectus dated August 29, 1994 as revised
March 3, 1995, and the Annual Report for the fiscal year ended June
30, 1994.
-1-
<PAGE>
TABLE OF CONTENTS
Goals and Investment Policies.........................See Prospectus
Additional Investment Policies................................p.
Portfolio Transactions........................................p.
Brokerage Commissions Paid to Brokers Affiliated with AEFC....p.
Performance Information.......................................p.
Valuing Fund Shares...........................................p.
Investing in the Fund.........................................p.
Redeeming Shares..............................................p.
Pay-out Plans.................................................p.
Exchanges.....................................................p.
Taxes.........................................................p.
Agreements....................................................p.
Directors and Officers........................................p.
Custodian.....................................................p.
Independent Auditors..........................................p.
Financial Statements..............................See Annual Report
Prospectus....................................................p.
Appendix A: Description of the Three Highest Corporate
Bond Ratings and Additional Information on
Investment Policies..............................p.
Appendix B: Foreign Currency Transactions....................p.
Appendix C: Options and Futures Contracts....................p.
Appendix D: Dollar-Cost Averaging............................p.
-2-
<PAGE>
ADDITIONAL INVESTMENT POLICIES
These are investment policies in addition to those presented in the
prospectus. Unless holders of a majority of the outstanding shares
agree to make the change the fund will not:
'Act as an underwriter (sell securities for others). However,
under the securities laws, the fund may be deemed to be an
underwriter when it purchases securities directly from the issuer
and later resells them.
'Borrow money or property, except as a temporary measure for
extraordinary or emergency purposes, in an amount not exceeding
one-third of the market value of its total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing. The fund has not borrowed in the past and has
no present intention to borrow.
'Make cash loans if the total commitment amount exceeds 5% of the
fund's total assets.
'Purchase more than 10% of the outstanding voting securities of an
issuer.
'Invest more than 5% of its total assets, at market value, in
securities of any one company, government or political subdivision
thereof, except the limitation will not apply to investments in
securities issued by the U.S. government, its agencies or
instrumentalities, and except that up to 25% of the fund's total
assets may be invested without regard to this limitation.
'Buy or sell real estate, unless acquired as a result of ownership
of securities or other instruments, except this shall not prevent
the fund from investing in securities or other instruments backed
by real estate or securities of companies engaged in the real
estate business.
'Buy or sell physical commodities unless acquired as a result of
ownership of securities or other instruments, except this shall not
prevent the fund from buying or selling options and futures
contracts or from investing in securities or other instruments
backed by, or whose value is derived from, physical commodities.
'Lend portfolio securities in excess of 30% of its net assets.
This policy may not be changed without shareholder approval. The
current policy of the fund's board of directors is to make these
loans, either long- or short-term, to broker-dealers. In making
such loans the fund gets the market price in cash, U.S. government
securities, letters of credit or such other collateral as may be
permitted by regulatory agencies and approved by the board of
directors. If the market price of the loaned securities goes up,
the fund will get additional collateral on a daily basis. The
risks are that the borrower may not provide additional collateral
when required or return the securities when due. During the
-3-
<PAGE>
existence of the loan, the fund receives cash payments equivalent
to all interest or other distributions paid on the loaned
securities. A loan will not be made unless the investment manager
believes the opportunity for additional income outweighs the risks.
Unless changed by the board of directors the fund will not:
'Buy on margin or sell short, but it may make margin payments in
connection with transactions in stock index futures contracts.
'Pledge or mortgage its assets beyond 15% of the cost of total
assets. If the fund were ever to do so, valuation of the pledged
or mortgaged assets would be based on market value. For purposes
of this policy, collateral arrangements for margin deposits on
stock index futures contracts are not deemed to be a pledge of
assets.
'Invest more than 5% of its total assets, at cost, in securities of
companies, including any predecessors, that have a record of less
than three years continuous operations.
'Invest in a company to control or manage it.
'Invest more than 5% of its net assets in warrants. Under one
state's law no more than 2% of the fund's net assets may be
invested in warrants not listed on an Exchange.
'Invest in exploration or development programs, such as oil, gas or
mineral programs.
'Invest in a company if the fund's investments would result in the
total holdings of all IDS MUTUAL FUND GROUP funds being in excess
of 15% of that company's issued shares.
'Invest more than 10% of the fund's net assets in securities and
derivative instruments that are illiquid. For purposes of this
policy illiquid securities include some privately placed
securities, public securities and Rule 144A securities that for one
reason or another may no longer have readily available markets,
loans and loan participations, repurchase agreements with
maturities greater than seven days, non-negotiable fixed-time
deposits and over-the-counter options.
In determining the liquidity of Rule 144A securities, which are
unregistered securities offered to qualified institutional buyers,
and interest-only and principal-only fixed mortgage-backed
securities (IOs and POs) issued by the United States government or
its agencies and instrumentalities, the investment manager, under
guidelines established by the board of directors, will consider any
relevant factors including the frequency of trades, the number of
dealers willing to purchase or sell the security and the nature of
marketplace trades.
In determining the liquidity of commercial paper issued in
transactions not involving a public offering under Section 4(2) of
the Securities Act of 1933, the investment manager, under
guidelines established by the board of directors, will evaluate
-4-
<PAGE>
relevant factors such as the issuer and the size and nature of its
commercial paper programs, the willingness and ability of the
issuer or dealer to repurchase the paper, and the nature of the
clearance and settlement procedures for the paper.
The fund may maintain a portion of its assets in cash and cash-
equivalent investments. The cash-equivalent investments the fund
may use are short-term U.S. and Canadian government securities and
negotiable certificates of deposit, non-negotiable fixed-time
deposits, bankers' acceptances and letters of credit of banks or
savings and loan associations having capital, surplus and undivided
profits (as of the date of its most recently published annual
financial statements) in excess of $100 million (or the equivalent
in the instance of a foreign branch of a U.S. bank) at the date of
investment. Any cash-equivalent investments in foreign securities
will be subject to the limitations on foreign investments described
in the prospectus. The fund also may purchase short-term corporate
notes and obligations rated in the top two classifications by
Moody's Investors Service, Inc. or Standard & Poor's Corporation or
the equivalent and may use repurchase agreements with broker-
dealers registered under the Securities Exchange Act of 1934 and
with commercial banks. A risk of a repurchase agreement is that if
the seller seeks the protection of the bankruptcy laws, the fund's
ability to liquidate the security involved could be impaired.
The fund may make contracts to purchase securities for a fixed
price at a future date beyond normal settlement time (when-issued
securities or forward commitments). Under normal market
conditions, the fund does not intend to commit more than 5% of its
total assets to these practices. The fund does not pay for the
securities or receive dividends or interest on them until the
contractual settlement date. The fund will designate cash or
liquid high-grade debt securities at least equal in value to its
commitments to purchase the securities. When-issued securities or
forward commitments are subject to market fluctuations and they may
affect the fund's total assets the same as owned securities.
Notwithstanding any of the fund's other investment policies, the
fund may invest its assets in an open-end management investment
company having substantially the same investment objectives,
policies and restrictions as the fund for the purpose of having
those assets managed as part of a combined pool.
For a description of corporate bond ratings and additional
information on investment policies, see Appendix A. For a
discussion about foreign currency transactions, see Appendix B.
For a discussion on options and stock index futures contracts, see
Appendix C.
PORTFOLIO TRANSACTIONS
Subject to policies set by the board of directors, AEFC is
authorized to determine, consistent with the fund's investment goal
and policies, which securities will be purchased, held or sold. In
determining where the buy and sell orders are to be placed, AEFC
has been directed to use its best efforts to obtain the best
available price and the most favorable execution except where
-5-
<PAGE>
otherwise authorized by the board of directors. In selecting
broker-dealers to execute transactions, AEFC may consider the price
of the security, including commission or mark-up, the size and
difficulty of the order, the reliability, integrity, financial
soundness and general operation and execution capabilities of the
broker, the broker's expertise in particular markets, and research
services provided by the broker.
On occasion, it may be desirable to compensate a broker for
research services or for brokerage services by paying a commission
that might not otherwise be charged or a commission in excess of
the amount another broker might charge. The board of directors has
adopted a policy authorizing AEFC to do so to the extent authorized
by law, if AEFC determines, in good faith, that such commission is
reasonable in relation to the value of the brokerage or research
services provided by a broker or dealer, viewed either in the light
of that transaction or AEFC's overall responsibilities to the funds
in the IDS MUTUAL FUND GROUP and other funds for which it acts as
investment advisor.
Research provided by brokers supplements AEFC's own research
activities. Such services include economic data on, and analysis
of, U.S. and foreign economies; information on specific industries;
information about specific companies, including earnings estimates;
purchase recommendations for stocks and bonds; portfolio strategy
services; political, economic, business and industry trend
assessments; historical statistical information; market data
services providing information on specific issues and prices; and
technical analysis of various aspects of the securities markets,
including technical charts. Research services may take the form of
written reports, computer software or personal contact by telephone
or at seminars or other meetings. AEFC has obtained, and in the
future may obtain, computer hardware from brokers, including but
not limited to personal computers that will be used exclusively for
investment decision-making purposes, which include the research,
portfolio management and trading functions and other services to
the extent permitted under an interpretation by the Securities and
Exchange Commission (SEC).
When paying a commission that might not otherwise be charged or a
commission in excess of the amount another broker might charge,
AEFC must follow procedures authorized by the board of directors.
To date, three procedures have been authorized. One procedure
permits AEFC to direct an order to buy or sell a security traded on
a national securities exchange to a specific broker for research
services it has provided. The second procedure permits AEFC, in
order to obtain research, to direct an order on an agency basis to
buy or sell a security traded in the over-the-counter market to a
firm that does not make a market in that security. The commission
paid generally includes compensation for research services. The
third procedure permits AEFC, in order to obtain research and
brokerage services, to cause the fund to pay a commission in excess
of the amount another broker might have charged. AEFC has advised
the fund it is necessary to do business with a number of brokerage
firms on a continuing basis to obtain such services as the handling
of large orders, the willingness of a broker to risk its own money
by taking a position in a security, and the specialized handling of
-6-
<PAGE>
a particular group of securities that only certain brokers may be
able to offer. As a result of this arrangement, some portfolio
transactions may not be effected at the lowest commission, but AEFC
believes it may obtain better overall execution. AEFC has assured
the fund that under all three procedures the amount of commission
paid will be reasonable and competitive in relation to the value of
the brokerage services performed or research provided.
All other transactions shall be placed on the basis of obtaining
the best available price and the most favorable execution. In so
doing, if in the professional opinion of the person responsible for
selecting the broker or dealer, several firms can execute the
transaction on the same basis, consideration will be given by such
person to those firms offering research services. Such services
may be used by AEFC in providing advice to all the funds in the IDS
MUTUAL FUND GROUP even though it is not possible to relate the
benefits to any particular fund or account.
Each investment decision made for the fund is made independently
from any decision made for another fund in the IDS MUTUAL FUND
GROUP or other account advised by AEFC or any AEFC subsidiary.
When the fund buys or sells the same security as another fund or
account, AEFC carries out the purchase or sale in a way the fund
agrees in advance is fair. Although sharing in large transactions
may adversely affect the price or volume purchased or sold by the
fund, the fund hopes to gain an overall advantage in execution.
AEFC has assured the fund it will continue to seek ways to reduce
brokerage costs.
On a periodic basis, AEFC makes a comprehensive review of the
broker-dealers and the overall reasonableness of their commissions.
The review evaluates execution, operational efficiency and research
services.
The fund paid total brokerage commissions of $2,898,264 for the
fiscal year ended June 30, 1994, $1,538,413 for fiscal year 1993,
and $835,113 for fiscal year 1992. Substantially all firms through
whom transactions were executed provide research services. In
fiscal year 1994, transactions amounting to $299,000,000, on which
$2,994,000 in commissions were imputed or paid, were specifically
directed to firms.
The fund acquired no securities of its regular brokers or dealers
or of the parents of those brokers or dealers that derived more
than 15% of gross revenue from securities-related activities during
the fiscal year ended June 30, 1994.
The portfolio turnover rate was 102% in the fiscal year ended June
30, 1994, and 64% in fiscal year 1993.
BROKERAGE COMMISSIONS PAID TO BROKERS AFFILIATED WITH AEFC
Affiliates of American Express Company (American Express) (of which
AEFC is a wholly owned subsidiary) may engage in brokerage and
other securities transactions on behalf of the fund according to
procedures adopted by the fund's board of directors and to the
extent consistent with applicable provisions of the federal
-7-
<PAGE>
securities laws. AEFC will use an American Express affiliate only
if (i) AEFC determines that the fund will receive prices and
executions at least as favorable as those offered by qualified
independent brokers performing similar brokerage and other services
for the fund and (ii) the affiliate charges the fund commission
rates consistent with those the affiliate charges comparable
unaffiliated customers in similar transactions and if such use is
consistent with terms of the Investment Management Services
Agreement.
Information about brokerage commissions paid by the fund for the
last three fiscal years to brokers affiliated with AEFC is
contained in the following table:
<TABLE>
<CAPTION>
For the Fiscal Year Ended June 30,
1994 1993 1992
-------------------------------------------------- ------------ -----------
Aggregate Percent of Aggregate Aggregate
Dollar Aggregate Dollar Dollar Dollar
Amount of Percent of Amount of Amount of Amount of
Nature Commissions Aggregate Transactions Commissions Commissions
of Paid to Brokerage Involving Payment Paid to Paid to
Broker Affiliation Broker Commissions of Commissions Broker Broker
------ ----------- ----------- ----------- ----------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shearson Lehman
Brothers Inc. (1) 34,768 1.20% 1.50% 96,068 73,413
Lehman
Brothers Inc. (2) $27,771 0.96% 0.94% $ -0- $ -0-
American
Enterprise
Investment
Services Inc. (3) 37,275 1.29% 2.30% 73,949 37,675
The Robinson-
Humphrey
Company, Inc. (4) 29,674 1.03% 1.68% -0- -0-
<FN>
(1) Under common control with IDS as a subsidiary of American Express until
July 30, 1993.
(2) Until May 31, 1994, under common control with AEFC as a subsidiary of
American Express. As of May 31, 1994 is no longer is subsidiary of
American Express.
(3) Wholly owned subsidiary of IDS.
(4) Under common control with IDS as an indirect subsidiary of American Express
until July 30, 1993.
</TABLE>
PERFORMANCE INFORMATION
The fund may quote various performance figures to illustrate past
performance. Average annual total return and current yield
quotations used by the fund are based on standardized methods of
computing performance as required by the SEC. An explanation of
these and any other methods used by the fund to compute performance
follows below.
AVERAGE ANNUAL TOTAL RETURN
The fund may calculate average annual total return for a class for
certain periods by finding the average annual compounded rates of
return over the period that would equate the initial amount
-8-
<PAGE>
invested to the ending redeemable value, according to the following
formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment, made at the beginning of a period, at the
end of the period (or fractional portion thereof)
AGGREGATE TOTAL RETURN
The fund may calculate aggregate total return for a class for
certain periods representing the cumulative change in the value of
an investment in the fund over a specified period of time according
to the following formula:
ERV - P
-------
P
where: P = a hypothetical initial payment of $1,000
ERV = ending redeemable value of a hypothetical $1,000
payment, made at the beginning of a period, at the
end of the period (or fractional portion thereof)
ANNUALIZED YIELD
The fund may calculate an annualized yield for a class by dividing
the net investment income per share deemed earned during a period
by the net asset value per share on the last day of the period and
annualizing the results.
Yield is calculated according to the following formula:
6
Yield = 2[(a-b + 1) - 1]
---
cd
where: a = dividends and interest earned during the period
b = expenses accrued for the period (net of
reimbursements)
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends
d = the maximum offering price per share on the last
day of the period
The fund's annualized yield was 4.87% for the 30-day period ended
June 30, 1994.
The fund's yield, calculated as described above according to the
formula prescribed by the SEC, is a hypothetical return based on
market value yield to maturity for the fund's securities. It is
not necessarily indicative of the amount which was or may be paid
to the fund's shareholders. Actual amounts paid to fund
shareholders are reflected in the distribution yield.
-9-
<PAGE>
DISTRIBUTION YIELD
Distribution yield is calculated according to the following
formula:
D divided by POP F equals DY
-- ---
30 30
where: D = sum of dividends for 30-day period
POP = sum of public offering price for 30-day period
F = annualizing factor
DY = distribution yield
The fund's distribution yield was 5.82% for the 30-day period ended
June 30, 1994.
In its sales material and other communications, the fund may quote,
compare or refer to rankings, yields or returns as published by
independent statistical services or publishers and publications
such as The Bank Rate Monitor National Index, Barron's, Business
Week, Donoghue's Money Market Fund Report, Financial Services Week,
Financial Times, Financial World, Forbes, Fortune, Global Investor,
Institutional Investor, Investor's Daily, Kiplinger's Personal
Finance, Lipper Analytical Services, Money, Mutual Fund Forecaster,
Newsweek, The New York Times, Personal Investor, Stanger Report,
Sylvia Porter's Personal Finance, USA Today, U.S. News and World
Report, The Wall Street Journal and Wiesenberger Investment
Companies Service.
VALUING FUND SHARES
The value of an individual share for each class is determined by
using the net asset value before shareholder transactions for the
day. On July 1, 1994, the first business day following the end of
the fiscal year, the computation looked like this:
<TABLE>
<CAPTION>
Net assets before Shares outstanding Net asset value
shareholder transactions at end of previous day of one share
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A* $650,657,357 divided by 104,484,521 equals $6.24
<FN>
*Shares of Class B and Class Y were not outstanding on that date.
</TABLE>
In determining net assets before shareholder transactions, the
fund's portfolio securities are valued as follows as of the close
of business of the New York Stock Exchange:
'Securities, except bonds other than convertibles, traded on a
securities exchange for which a last-quoted sales price is readily
available are valued at the last-quoted sales price on the exchange
where such security is primarily traded.
'Securities traded on a securities exchange for which a last-quoted
sales price is not readily available are valued at the mean of the
closing bid and asked prices, looking first to the bid and asked
prices on the exchange where the security is primarily traded and,
if none exist, to the over-the-counter market.
-10-
<PAGE>
'Securities included in the NASDAQ National Market System are
valued at the last-quoted sales price in this market.
'Securities included in the NASDAQ National Market System for which
a last-quoted sales price is not readily available, and other
securities traded over-the-counter but not included in the NASDAQ
National Market System are valued at the mean of the closing bid
and asked prices.
'Futures and options traded on major exchanges are valued at the
last-quoted sales price on their primary exchange.
'Foreign securities traded outside the United States are generally
valued as of the time their trading is complete, which is usually
different from the close of the New York Stock Exchange (the
"Exchange"). Foreign securities quoted in foreign currencies are
translated into U.S. dollars at the current rate of exchange.
Occasionally, events affecting the value of such securities may
occur between such times and the close of the Exchange that will
not be reflected in the computation of the fund's net asset value.
If events materially affecting the value of such securities occur
during such period, these securities will be valued at their fair
value according to procedures decided upon in good faith by the
fund's board of directors (the "board").
'Short-term securities maturing more than 60 days from the
valuation date are valued at the readily available market price or
approximate market value based on current interest rates. Short-
term securities maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at
amortized cost using the market value on the 61st day before
maturity. Short-term securities maturing in 60 days or less at
acquisition date are valued at amortized cost. Amortized cost is
an approximation of market value determined by systematically
increasing the carrying value of a security if acquired at a
discount, or reducing the carrying value if acquired at a premium,
so that the carrying value is equal to maturity value on the
maturity date.
'Securities without a readily available market price, bonds other
than convertibles and other assets are valued at fair value as in
good faith by the board. The board is responsible for selecting
methods it believes provide fair value. When possible, bonds are
valued by a pricing service independent from the fund. If a
valuation of a bond is not available from a pricing service, the
bond will be valued by a dealer knowledgeable about the bond if
such a dealer is available.
The New York Stock Exchange, AEFC and the fund will be closed on
the following holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
-11-
<PAGE>
INVESTING IN THE FUND
Sales Charge
Shares of the fund are sold at the public offering price determined
at the close of business on the day an application is accepted.
The public offering price is the net asset value of one share plus
a sales charge, if applicable. For Class B and Class Y, there is
no initial sales charge so the public offering price is the same as
the net asset value. For Class A, the public offering price for an
investment of less than $50,000, made July 1, 1994 was determined
by dividing the net asset value of one share, $6.24, by 0.95 (1.00-
0.05 for a maximum 5% sales charge) for a public offering price of
$6.57. The sales charge is paid to American Express Financial
Advisors by the person buying the shares.
Class A - Calculation of the Sales Charge
Sales charges are determined as follows:
<TABLE>
<CAPTION>
Within each increment,
sales charge as a
percentage of:
----------------------------------------
Public Net
Amount of Investment Offering Price Amount Invested
- -------------------- -------------- ---------------
<S> <C> <C>
First $ 50,000 5.0% 5.26%
Next 50,000 4.5 4.71
Next 400,000 3.8 3.95
Next 500,000 2.0 2.04
More than 1,000,000 0.0 0.00
</TABLE>
Sales charges on an investment greater than $50,000 are calculated
for each increment separately and then totaled. The resulting
total sales charge, expressed as a percentage of the public
offering price and of the net amount invested, will vary depending
on the proportion of the investment at different sales charge
levels.
For example, compare an investment of $60,000 with an investment of
$85,000. The $60,000 investment is composed of $50,000 that incurs
a sales charge of $2,500 (5.0% x $50,000) and $10,000 that incurs a
sales charge of $450 (4.5% x $10,000). The total sales charge of
$2,950 is 4.92% of the public offering price and 5.17% of the net
amount invested.
In the case of the $85,000 investment, the first $50,000 also
incurs a sales charge of $2,500 (5.0% x $50,000) and $35,000 incurs
a sales charge of $1,575 (4.5% x $35,000). The total sales charge
of $4,075 is 4.79% of the public offering price and 5.04% of the
net amount invested.
-12-
<PAGE>
The following table shows the range of sales charges as a
percentage of the public offering price and of the net amount
invested on total investments at each applicable level.
<TABLE>
<CAPTION>
On total investment, sales
charge as a percentage of
-------------------------------------------
Public Net
Offering Price Amount Invested
-------------- ---------------
Amount of Investment ranges from:
- -------------------- -------------------------------------------
<S> <C> <C>
First $ 50,000 5.00% 5.26%
More than 50,000 to 100,000 5.00-4.50 5.26-4.71
More than 100,000 to 500,000 4.50-3.75 4.71-3.90
More than 500,000 to 1,000,000 3.75-2.00 3.90-2.04
More than 1,000,000 0.00 0.00
</TABLE>
The initial sales charge is waived for certain qualified plans that
meet the requirements described in the prospectus. Participants in
these qualified plans may be subject to a deferred sales charge on
certain redemptions. The deferred sales charge on certain
redemptions will be waived if the redemption is a result of a
participant's death, disability, retirement, attaining age 59 1/2,
loans or hardship withdrawals. The deferred sales charge varies
depending on the number of participants in the qualified plan and
total plan assets as follows:
Deferred Sales Charge
Number of Participants
----------------------
Total Plan Assets 1-99 100 or more
- ----------------- ---- -----------
Less than $1 million 4% 0%
$1 million or more 0% 0%
- ---------------------------------------------------------
Class A - Reducing the Sales Charge
Sales charges are based on the total amount of your investments in
the fund. The amount of all prior investments plus any new
purchase is referred to as your "total amount invested." For
example, suppose you have made an investment of $20,000 and later
decide to invest $40,000 more. Your total amount invested would be
$60,000. As a result, $10,000 of your $40,000 investment qualifies
for the lower 4.5% sales charge that applies to investments of more
than $50,000 to $100,000.
The total amount invested includes any shares held in the fund in
the name of a member of your immediate family (spouse and unmarried
children under 21). For instance, if your spouse already has
invested $20,000 and you want to invest $40,000, your total amount
invested will be $60,000 and therefore you will pay the lower
charge of 4.5% on $10,000 of the $40,000.
-13-
<PAGE>
Until a spouse remarries, the sales charge is waived for spouses
and unmarried children under 21 of deceased trustees, directors,
officers or employees of the fund or AEFC or its subsidiaries and
deceased advisors.
The total amount invested also includes any investment you or your
immediate family already have in the other publicly offered funds
in the IDS MUTUAL FUND GROUP where the investment is subject to a
sales charge. For example, suppose you already have an investment
of $25,000 in IDS Growth Fund and $5,000 in this fund. If you
invest $40,000 more in this fund, your total amount invested in the
funds will be $70,000 and therefore $20,000 of your $40,000
investment will incur a 4.5% sales charge.
Finally, Individual Retirement Account (IRA) purchases, or other
employee benefit plan purchases made through a payroll deduction
plan or through a plan sponsored by an employer, association of
employers, employee organization or other similar entity, may be
added together to reduce sales charges for shares purchased through
that plan.
Class A - Letter of Intent
You can reduce the sales charges in Class A by filing a letter-of-
intent stating that you intend to invest $1 million over a period
of 13 months. The agreement can start at any time and will remain
in effect for 13 months. Your investment will be charged normal
sales charges until you have invested $1 million. At that time,
the sales charges previously paid will be reversed. If you do not
invest $1 million by the end of 13 months, there is no penalty,
you'll just miss out on the sales charge adjustment. A letter-of-
intent is not an option (absolute right) to buy shares.
Here's an example. You file a letter-of-intent to invest $1
million and make an investment of $100,000 at that time. You pay
the normal 5% sales charge on the first $50,000 and 4.5% sales
charge on the next $50,000 of this investment. Let's say you make
a second investment of $900,000 (bringing the total up to $1
million) one month before the 13-month period is up. What sales
charge do you pay? AEFC makes an adjustment on your last purchase
so that there's no sales charge on the total $1 million investment,
just as if you had invested $1 million all at once.
Systematic Investment Programs
After you make your initial investment of $2,000 or more, you can
arrange to make additional payments of $100 or more on a regular
basis. These minimums do not apply to all systematic investment
programs. You decide how often to make payments - monthly,
quarterly or semiannually. You are not obligated to make any
payments. You can omit payments or discontinue the investment.
For a discussion on dollar-cost averaging, see Appendix D.
-14-
<PAGE>
Automatic Directed Dividends
Dividends, including capital gain distributions, paid by another
fund in the IDS MUTUAL FUND GROUP subject to a sales charge, may be
used to automatically purchase shares in the same class of this
fund without paying a sales charge. Dividends may be directed to
existing accounts only. Dividends declared by a fund are exchanged
to this fund the following day. Dividends can be exchanged into
one fund but cannot be split to make purchases in two or more
funds. Automatic directed dividends are available between accounts
of any ownership EXCEPT:
'Between a non-custodial account and an IRA, or 401(k) plan account
or other qualified retirement account of which American Express
Trust Company acts as custodian;
'Between two American Express Trust Company custodial accounts with
different owners (for example, you may not exchange dividends from
your IRA to the IRA of your spouse);
'Between different kinds of custodial accounts with the same
ownership (for example, you may not exchange dividends from your
IRA to your 401(k) plan account, although you may exchange
dividends from one IRA to another IRA).
Dividends may be directed from accounts established under the
Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors
Act (UTMA) only into other UGMA or UTMA accounts with identical
ownership.
The fund's investment goals are described in its prospectus along
with other information, including fees and expense ratios. Before
exchanging dividends into another fund, you should read its
prospectus. You will receive a confirmation that the automatic
directed dividend service has been set up for your account.
REDEEMING SHARES
You have a right to redeem your shares at any time. For an
explanation of redemption procedures, please see the prospectus.
DURING AN EMERGENCY, the board of directors (the "board") can
suspend the computation of net asset value, stop accepting payments
for purchase of shares or suspend the duty of the fund to redeem
shares for more than seven days. Such emergency situations would
occur if:
'The New York Stock Exchange (the "Exchange") closes for reasons
other than the usual weekend and holiday closings or trading on the
Exchange is restricted, or
'Disposal of the fund's securities is not reasonably practicable or
it is not reasonably practicable for the fund to determine the fair
value of its net assets, or
-15-
<PAGE>
'The SEC, under the provisions of the Investment Company Act of
1940, as amended, declares a period of emergency to exist.
Should the fund stop selling shares, the board may make a deduction
from the value of the assets held by the fund to cover the cost of
future liquidations of the assets so as to distribute fairly these
costs among all shareholders.
PAY-OUT PLANS
You can use any of several pay-out plans to redeem your investment
in regular installments. If you redeem Class B shares you may be
subject to a contingent deferred sales charge as discussed in the
prospectus. While the plans differ on how the pay-out is figured,
they all are based on the redemption of your investment. Net
investment income dividends and any capital gain distributions will
automatically be reinvested, unless you elect to receive them in
cash. If you are redeeming a tax-qualified plan account for which
American Express Trust Company acts as custodian, you can elect to
receive your dividends and other distributions in cash when
permitted by law. If you redeem an IRA or a qualified retirement
account, certain restrictions, federal tax penalties and special
federal income tax reporting requirements may apply. You should
consult your tax advisor about this complex area of the tax law.
Applications for a systematic investment in a class of the fund
subject to a sales charge normally will not be accepted while a
pay-out plan for any of those funds is in effect. Occasional
investments, however, may be accepted.
To start any of these plans, please write or call American Express
Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534, 612-
671-3733. Your authorization must be received in the Minneapolis
headquarters at least five days before the date you want your
payments to begin. The initial payment must be at least $50.
Payments will be made on a monthly, bimonthly, quarterly,
semiannual or annual basis. Your choice is effective until you
change or cancel it.
The following pay-out plans are designed to take care of the needs
of most shareholders in a way AEFC can handle efficiently and at a
reasonable cost. If you need a more irregular schedule of
payments, it may be necessary for you to make a series of
individual redemptions, in which case you'll have to send in a
separate redemption request for each pay-out. The fund reserves
the right to change or stop any pay-out plan and to stop making
such plans available.
Plan #1: Pay-out for a fixed period of time
If you choose this plan, a varying number of shares will be
redeemed at regular intervals during the time period you choose.
This plan is designed to end in complete redemption of all shares
in your account by the end of the fixed period.
-16-
<PAGE>
Plan #2: Redemption of a fixed number of shares
If you choose this plan, a fixed number of shares will be redeemed
for each payment and that amount will be sent to you. The length
of time these payments continue is based on the number of shares in
your account.
Plan #3: Redemption of a fixed dollar amount
If you decide on a fixed dollar amount, whatever number of shares
is necessary to make the payment will be redeemed in regular
installments until the account is closed.
Plan #4: Redemption of a percentage of net asset value
Payments are made based on a fixed percentage of the net asset
value of the shares in the account computed on the day of each
payment. Percentages range from 0.25% to 0.75%. For example, if
you are on this plan and arrange to take 0.5% each month, you will
get $50 if the value of your account is $10,000 on the payment
date.
EXCHANGES
If you buy shares in the fund and then exchange into another fund,
it is considered a sale and subsequent purchase of shares. Under
the tax laws, if this exchange is done within 91 days, any sales
charge waived on Class A shares on a subsequent purchase of shares
applies to the new shares acquired in the exchange. Therefore, you
cannot create a tax loss or reduce a tax gain attributable to the
sales charge when exchanging shares within 91 days.
Retirement Accounts
If you have a nonqualified investment in the fund and you wish to
move part or all of those shares to an IRA or qualified retirement
account in the fund, you can do so without paying a sales charge.
However, this type of exchange is considered a sale of shares and
may result in a gain or loss for tax purposes. In addition, this
type of exchange may result in an excess contribution under IRA or
qualified plan regulations if the amount exchanged plus the amount
of the initial sales charge applied to the amount exchanged exceeds
annual contribution limitations. For example: If you were to
exchange $2,000 in Class A shares from a nonqualified account to an
IRA without considering the 5% ($100) initial sales charge
applicable to that $2,000, you may be deemed to have exceeded
current IRA annual contribution limitations. You should consult
your tax advisor for further details about this complex subject.
TAXES
Net investment income dividends received should be treated as
dividend income for federal income tax purposes. Corporate
shareholders are generally entitled to a deduction equal to 70% of
that portion of the fund's dividend that is attributable to
-17-
<PAGE>
dividends the fund received from domestic (U.S.) securities. For
the fiscal year ended June 30, 1994, 59.08% of the fund's net
investment income dividends qualified for the corporate deduction.
Capital gain distributions received by individual and corporate
shareholders, if any, should be treated as long-term capital gains
regardless of how long they owned their shares. Short-term capital
gains earned by the fund are paid to shareholders as part of their
ordinary income dividend and are taxable.
You may be able to defer taxes on current income from a fund by
investing through an IRA, 401(k) plan account or other qualified
retirement account. If you move all or part of a non-qualified
investment in the fund to a qualified account, this type of
exchange is considered a sale of shares. You pay no sales charge,
but the exchange may result in a gain or loss for tax purposes, or
excess contributions under IRA or qualified plan regulations.
Under federal tax law, by the end of a calendar year the fund must
declare and pay dividends representing 98% of ordinary income for
that calendar year and 98% of net capital gains (both long-term and
short-term) for the 12-month period ending Oct. 31 of that calendar
year. The fund is subject to an excise tax equal to 4% of the
excess, if any, of the amount required to be distributed over the
amount actually distributed. The fund intends to comply with
federal tax law and avoid any excise tax.
The fund may be subject to U.S. taxes resulting from holdings in a
passive foreign investment company (PFIC). A foreign corporation
is a PFIC when 75% or more of its gross income for the taxable year
is passive income or if 50% or more of the average value of its
assets consists of assets that produce or could produce passive
income. The fund has no current intention to invest in PFICs.
This is a brief summary that relates to federal income taxation
only. Shareholders should consult their tax advisor as to the
application of federal, state and local income tax laws to fund
distributions.
AGREEMENTS
Investment Management Services Agreement
The fund has an Investment Management Services Agreement with AEFC.
For its services, AEFC is paid a fee based on the following
schedule:
Assets Annual rate at
(billions) each asset level
- ---------- ----------------
First $0.50 0.530%
Next 0.50 0.505
Next 1.0 0.480
Next 1.0 0.455
Over 3.0 0.430
-18-
<PAGE>
On March 3, 1995, the daily rate applied to the fund's assets
is expected to be equal to approximately 0.___% on an annual
basis. The fee is calculated for each calendar day on the
basis of net assets as of the close of business two business
days prior to the day for which the calculation is made.
The management fee is paid monthly. Under a prior agreement, the
total amount paid was $3,921,286 for the fiscal year ended June 30,
1994, $2,825,609 for fiscal year 1993, and $1,865,616 for fiscal
year 1992.
Under the current Agreement, the fund also pays taxes, brokerage
commissions and nonadvisory expenses, that include custodian fees;
audit and certain legal fees; fidelity bond premiums; registration
fees for shares; fund office expenses; consultants' fees;
compensation of directors, officers and employees; corporate filing
fees; organizational expenses; expenses incurred in connection with
lending portfolio securities of the fund; and expenses properly
payable by the fund, approved by the board of directors. Under a
prior agreement, the fund paid nonadvisory expenses of $581,269 for
the fiscal year ended June 30, 1994, $492,641 for fiscal year 1993,
and $393,855 for fiscal year 1992.
Administrative Services Agreement
The fund has an Administrative Services Agreement with AEFC. Under
this agreement, the fund pays AEFC for providing administration and
accounting services. The fee is calculated as follows:
Assets Annual rate
(billions) each asset level
---------- ----------------
First $0.50 0.040%
Next 0.50 0.035
Next 1 0.030
Next 1 0.025
Next 3 0.020
Over 6 0.020
Transfer Agency Agreement
The fund has a Transfer Agency Agreement with AEFC. This agreement
governs AEFC's responsibility for administering and/or performing
transfer agent functions, for acting as service agent in connection
with dividend and distribution functions and for performing
shareholder account administration agent functions in connection
with the issuance, exchange and redemption or repurchase of the
fund's shares. Under the agreement, AEFC will earn a fee from the
fund determined by multiplying the number of shareholder accounts
at the end of the day by a rate determined for each class and
dividing by the number of days in the year. The rate for Class A
and for Class Y is $15 per year. The rate for Class B is $16 per
year. The fees paid to AEFC may be changed from time to time upon
agreement of the parties without shareholder approval. The fund
paid fees of $1,036,792 for the fiscal year ended June 30, 1994.
-19-
<PAGE>
Distribution Agreement
Under a Distribution Agreement, sales charges deducted for
distributing fund shares are paid to American Express Financial
Advisors daily. These charges amounted to $6,900,337 for the
fiscal year ended June 30, 1994. After paying commissions to
personal financial advisors, and other expenses, the amount
retained was $ 2,492,377. The amounts were $7,567,188 and
$2,735,350 for fiscal year 1993, and $5,225,222 and $1,735,845 for
fiscal year 1992.
Additional information about commissions and compensation for the
fiscal year ended June 30, 1994, is contained in the following
table:
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Net Compensation
Name of Underwriting on Redemption
Principal Discounts and and Brokerage Other
Underwriter Commissions Repurchases Commissions Compensation
- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
AEFC None None None* $417,359**
American
Express
Financial
Advisors $6,900,337 None None None
<FN>
*For further information see "Brokerage Commissions Paid to
Brokers Affiliated with AEFC."
**Distribution fees paid pursuant to the Plan and Supplemental
Agreement of Distribution.
</TABLE>
Shareholder Service Agreement
The 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 the fund's average daily net
assets attributable to Class A and Class B shares.
Plan and Agreement of Distribution
For Class B shares, to help American Express Financial Advisors
defray the cost of distribution and servicing, not covered by the
sales charges received under the Distribution Agreement, the fund
and American Express Financial Advisors entered into a Plan and
Agreement of Distribution (Plan). These costs cover almost all
aspects of distributing the fund's shares except compensation to
the sales force. A substantial portion of the costs are not
specifically identified to any one fund in the IDS MUTUAL FUND
GROUP. Under the Plan, American Express Financial Advisors is paid
a fee at an annual rate of 0.75% of the fund's average daily net
assets attributable to Class B shares.
The Plan must be approved annually by the board of directors (the
"directors"), including a majority of the disinterested directors,
if it is to continue for more than a year. At least quarterly, the
-20-
<PAGE>
directors must review written reports concerning the amounts
expended under the Plan and the purposes for which such
expenditures were made. The Plan and any agreement related to it
may be terminated at any time by vote of a majority of directors
who are not interested persons of the fund and have no direct or
indirect financial interest in the operation of the Plan or in any
agreement related to the Plan, or by vote of a majority of the
outstanding voting securities of the fund or by American Express
Financial Advisors. The Plan (or any agreement related to it) will
terminate in the event of its assignment, as that term is defined
in the Investment Company Act of 1940, as amended. The Plan may
not be amended to increase the amount to be spent for distribution
without shareholder approval, and all material amendments to the
Plan must be approved by a majority of the directors, including a
majority of the directors who are not interested persons of the
fund and who do not have a financial interest in the operation of
the Plan or any agreement related to it. The selection and
nomination of disinterested directors is the responsibility of the
other disinterested directors. No interested person of the fund,
and no director who is not an interested person, has any direct or
indirect financial interest in the operation of the Plan or any
related agreement.
`Total fees and nonadvisory expenses cannot exceed the most
restrictive applicable state limitation. Currently, the most
restrictive applicable state expense limitation, subject to
exclusion of certain expenses, is 2.5% of the first $30 million of
the fund's average daily net assets, 2% of the next $70 million and
1.5% of average daily net assets over $100 million, on an annual
basis. At the end of each month, if the fees and expenses of the
fund exceed this limitation for the fund's fiscal year in progress,
AEFC will assume all expenses in excess of the limitation. AEFC
then may bill the fund for such expenses in subsequent months up to
the end of that fiscal year, but not after that date. No interest
charges are assessed by AEFC for expenses it assumes.
DIRECTORS AND OFFICERS
The following is a list of the fund's directors who, except for Mr.
Dudley, also are directors of all other funds in the IDS MUTUAL
FUND GROUP. Mr. Dudley is a director of all publicly offered
funds. All shares have cumulative voting rights when voting on the
election of directors.
LYNNE V. CHENEY+'
American Enterprise Institute
for Public Policy Research (AEI)
1150 17th St., N.W.
Washington, D.C.
Distinguished Fellow AEI. Former Chair of National Endowment of
the Humanities. Director, The Reader's Digest Association Inc.,
Lockheed Corp., and the Interpublic Group of Companies, Inc.
(advertising).
-21-
<PAGE>
WILLIAM H. DUDLEY+**
2900 IDS Tower
Minneapolis, MN
Executive vice president and director of AEFC.
ROBERT F. FROEHLKE+
1201 Yale Place
Minneapolis, MN
Former president of all funds in the IDS MUTUAL FUND GROUP.
Director, the ICI Mutual Insurance Co., Institute for Defense
Analyses, Marshall Erdman and Associates, Inc. (architectural
engineering) and Public Oversight Board of the American Institute
of Certified Public Accountants.
DAVID R. HUBERS**
2900 IDS Tower
Minneapolis, MN
President, chief executive officer and director of AEFC.
Previously, senior vice president, finance and chief financial
officer of AEFC.
HEINZ F. HUTTER+
P.O. Box 5724
Minneapolis, MN
President and chief operating officer, Cargill, Incorporated
(commodity merchants and processors) from February 1991 to
September 1994. Executive vice president from 1981 to February
1991.
ANNE P. JONES+
5716 Bent Branch Rd.
Bethesda, MD
Attorney and telecommunications consultant. Former partner, law
firm of Sutherland, Asbill & Brennan. Director, Motorola, Inc. and
C-Cor Electronics, Inc.
DONALD M. KENDALL'
PepsiCo, Inc.
Purchase, NY
Former chairman and chief executive officer, PepsiCo, Inc.
MELVIN R. LAIRD+
Reader's Digest Association, Inc.
1730 Rhode Island Ave., N.W.
Washington, D.C.
Senior counsellor for national and international affairs, The
Reader's Digest Association, Inc. Chairman of the board, COMSAT
Corporation, former nine-term congressman, secretary of defense and
presidential counsellor. Director, Martin Marietta Corp.,
Metropolitan Life Insurance Co., The Reader's Digest Association,
-22-
<PAGE>
Inc., Science Applications International Corp., Wallace Reader's
Digest Funds and Public Oversight Board (SEC Practice Section,
American Institute of Certified Public Accountants).
LEWIS W. LEHR'
3050 Minnesota World Trade Center
30 E. Seventh St.
St. Paul, MN
Former chairman of the board and chief executive officer, Minnesota
Mining and Manufacturing Company (3M). Director, Jack Eckerd
Corporation (drugstores). Advisory Director, Peregrine Inc.
(microelectronics).
WILLIAM R. PEARCE+*
901 S. Marquette Ave.
Minneapolis, MN
President of all funds in the IDS MUTUAL FUND GROUP since June
1993. Former vice chairman of the board, Cargill, Incorporated
(commodity merchants and processors).
EDSON W. SPENCER
4900 IDS Center
80 S. 8th St.
Minneapolis, MN
President, Spencer Associates Inc. (consulting). Chairman of the
board, Mayo Foundation (healthcare). Former chairman of the board
and chief executive officer, Honeywell Inc. Director, Boise
Cascade Corporation (forest products) and CBS Inc. Member of
International Advisory Councils, Robert Bosch (Germany) and NEC
(Japan).
JOHN R. THOMAS**
2900 IDS Tower
Minneapolis, MN
Senior vice president and director of AEFC.
WHEELOCK WHITNEY+
1900 Foshay Tower
821 Marquette Ave.
Minneapolis, MN
Chairman, Whitney Management Company (manages family assets).
C. ANGUS WURTELE
1101 S. 3rd St.
Minneapolis, MN
Chairman of the board and chief executive officer, The Valspar
Corporation (paints). Director, Bemis Corporation (packaging),
Donaldson Company (air cleaners & mufflers) and General Mills, Inc.
(consumer foods).
-23-
<PAGE>
+ Member of executive committee.
' Member of joint audit committee.
* Interested person by reason of being an officer and employee of
the fund.
**Interested person by reason of being an officer, director,
employee and/or shareholder of AEFC or American Express.
The board also has appointed officers who are responsible for day-
to-day business decisions based on policies it has established.
Besides Mr. Pearce, who is president, the fund's other officer is:
LESLIE L. OGG
901 S. Marquette Ave.
Minneapolis, MN
Vice president of all funds in the IDS MUTUAL FUND GROUP and
general counsel and treasurer of the publicly offered funds.
During the fiscal year that ended June 30, 1994, the members of the
board, for attending up to 51 meetings, received the following
compensation, in total, from all funds in the IDS MUTUAL FUND
GROUP.
<TABLE>
<CAPTION>
Board compensation
Aggregate Retirement Estimated Total Cash
compensation benefits annual compensation
from the accrued as benefit on from the IDS
Board member fund fund expenses retirement MUTUAL FUND GROUP
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lynne V. Cheney $ 467 $ --- $ 500 $25,600
Robert F. Frehlke 1,414 1,021 463 77,400
(part of year)
Anne P. Jones 1,269 277 500 71,300
Donald M. Kendall 1,190 873 363 68,000
Melvin R. Laird 1,264 781 438 71,100
Lewis W. Lehr 1,274 885 358 71,500
William R. Pearce --- 480 500 ---
(part of year)
Edson W. Spencer 1,267 590 267 71,200
Wheelock Whitney 1,329 535 500 73,800
</TABLE>
On June 30, 1994, the funds directors and officers as a group owned
less than 1% of the outstanding shares. During the fiscal year
ended June 30, 1994, no director or officer earned more than
$60,000 from this fund. All directors and officers as a group
earned $14,056 including $5,694 of retirement plan expense, from
this fund.
CUSTODIAN
The fund's securities and cash are held by American Express Trust
Company, 1200 Northstar Center West, 625 Marquette Ave.,
Minneapolis, MN 55402-2307, through a custodian agreement. The
custodian is permitted to deposit some or all of its securities in
central depository systems as allowed by federal law.
The custodian has entered into a sub-custodian arrangement with the
Morgan Stanley Trust Company, One Pierrpont Plaza, 8th Floor,
Brooklyn, NY 11201-2775. As part of this arrangement, portfolio
-24-
<PAGE>
securities purchased outside the United States are maintained in
the custody of various foreign branches of Morgan Stanley or in
such other financial institutions as may be permitted by law and by
the fund's sub-custodian agreement.
INDEPENDENT AUDITORS
The financial statements contained in the Annual Report to
shareholders, for the fiscal year ended June 30, 1994, were audited
by independent auditors, KPMG Peat Marwick LLP, 4200 Norwest
Center, 90 S. Seventh St., Minneapolis, MN 55402-3900. The
independent auditors also provide other accounting and tax-related
services as requested by the fund.
FINANCIAL STATEMENTS
The Independent Auditors' Report and the Financial Statements,
including Notes to the Financial Statements and the Schedule of
Investments in Securities, contained in the 1994 Annual Report to
shareholders, pursuant to Section 30(d) of the Investment Company
Act of 1940, as amended, are hereby incorporated in this SAI by
reference. No other portion of the Annual Report however, is
incorporated by reference.
PROSPECTUS
The prospectus for IDS Utilities Income Fund dated August 29, 1994
as revised March 3, 1995, is incorporated in this SAI by reference.
-25-
<PAGE>
APPENDIX A
DESCRIPTION OF THE THREE HIGHEST CORPORATE BOND RATINGS AND
ADDITIONAL INFORMATION ON INVESTMENT POLICIES
The ratings concern the quality of the issuing corporation. They
are not an opinion of the market value of the security. Such
ratings are opinions on whether the principal and interest will be
repaid when due. A security's rating may change which could affect
its price. The three highest ratings by Moody's Investors Service,
Inc. are Aaa, Aa and A. The three highest by Standard & Poor's
Corporation are AAA, AA and A.
Bonds rated Aaa and AAA are judged to be of the best quality.
Capacity to pay interest and repay principal is extremely strong.
Prices are responsive only to interest rate fluctuations.
Bonds rated Aa and AA are also judged to be high-grade although
margins of protection for interest and principal may not be quite
as good as Aaa or AAA rated securities. Long-term risk may appear
greater than the Aaa or AAA group. Prices are primarily responsive
to interest rate fluctuations.
Bonds rated A are considered upper-medium grade. Protection for
interest and principal are deemed adequate but susceptible to
future impairment. The market prices of such obligations move
primarily with interest rate fluctuations but also with changing
economic or trade conditions.
STRIPPED MORTGAGE-BACKED SECURITIES
The fund may invest in stripped mortgage-backed securities.
Generally, there are two classes of stripped mortgage-backed
securities: Interest Only (IO) and Principal Only (PO). IOs
entitle the holder to receive distributions consisting of all or a
portion of the interest on the underlying pool of mortgage loans or
mortgage-backed securities. POs entitle the holder to receive
distributions consisting of all or a portion of the principal of
the underlying pool of mortgage loans or mortgage-backed
securities. The cash flows and yields on IOs and POs are extremely
sensitive to the rate of principal payments (including prepayments)
on the underlying mortgage loans or mortgage-backed securities. A
rapid rate of principal payments may adversely affect the yield to
maturity of IOs. A slow rate of principal payments may adversely
affect the yield to maturity of POs. If prepayments of principal
are greater than anticipated, an investor may incur substantial
losses. If prepayments of principal are slower than anticipated,
the yield on a PO will be affected more severely than would be the
case with a traditional mortgage-backed security.
-26-
<PAGE>
APPENDIX B
FOREIGN CURRENCY TRANSACTIONS
Since investments in foreign countries usually involve currencies
of foreign countries, and since the fund may hold cash and cash-
equivalent investments in foreign currencies, the value of the
fund's assets as measured in U.S. dollars may be affected favorably
or unfavorably by changes in currency exchange rates and exchange
control regulations. Also, the fund may incur costs in connection
with conversions between various currencies.
SPOT RATES AND FORWARD CONTRACTS. The fund conducts its foreign
currency exchange transactions either at the spot (cash) rate
prevailing in the foreign currency exchange market or by entering
into forward currency exchange contracts (forward contracts) as a
hedge against fluctuations in future foreign exchange rates. A
forward contract involves an obligation to buy or sell a specific
currency at a future date, which may be any fixed number of days
from the contract date, at a price set at the time of the contract.
These contracts are traded in the interbank market conducted
directly between currency traders (usually large commercial banks)
and their customers. A forward contract generally has no deposit
requirements. No commissions are charged at any stage for trades.
The fund may enter into forward contracts to settle a security
transaction or handle dividend and interest collection. When the
fund enters into a contract for the purchase or sale of a security
denominated in a foreign currency or has been notified of a
dividend or interest payment, it may desire to lock in the price of
the security or the amount of the payment in dollars. By entering
into a forward contract, the fund will be able to protect itself
against a possible loss resulting from an adverse change in the
relationship between different currencies from the date the
security is purchased or sold to the date on which payment is made
or received or when the dividend or interest is actually received.
The fund also may enter into forward contracts when management of
the fund believes the currency of a particular foreign country may
suffer a substantial decline against another currency. It may
enter into a forward contract to sell, for a fixed amount of
dollars, the amount of foreign currency approximating the value of
some or all of the fund's portfolio securities denominated in such
foreign currency. The precise matching of forward contract amounts
and the value of securities involved generally will not be possible
since the future value of such securities in foreign currencies
more than likely will change between the date the forward contract
is entered into and the date it matures. The projection of short-
term currency market movements is extremely difficult and
successful execution of a short-term hedging strategy is highly
uncertain. The fund will not enter into such forward contracts or
maintain a net exposure to such contracts when consummating the
contracts would obligate the fund to deliver an amount of foreign
currency in excess of the value of the fund's portfolio securities
or other assets denominated in that currency.
-27-
<PAGE>
The fund will designate cash or securities in an amount equal to
the value of the fund's total assets committed to consummating
forward contracts entered into under the second circumstance set
forth above. If the value of the securities declines, additional
cash or securities will be designated on a daily basis so that the
value of the cash or securities will equal the amount of the fund's
commitments on such contracts.
At maturity of a forward contract, the fund may either sell the
portfolio security and make delivery of the foreign currency or
retain the security and terminate its contractual obligation to
deliver the foreign currency by purchasing an offsetting contract
with the same currency trader obligating it to buy, on the same
maturity date, the same amount of foreign currency.
If the fund retains the portfolio security and engages in an
offsetting transaction, the fund will incur a gain or a loss (as
described below) to the extent there has been movement in forward
contract prices. If the fund engages in an offsetting transaction,
it may subsequently enter into a new forward contract to sell the
foreign currency. Should forward prices decline between the date
the fund enters into a forward contract for selling foreign
currency and the date it enters into an offsetting contract for
purchasing the foreign currency, the fund will realize a gain to
the extent that the price of the currency it has agreed to sell
exceeds the price of the currency it has agreed to buy. Should
forward prices increase, the fund will suffer a loss to the extent
the price of the currency it has agreed to buy exceeds the price of
the currency it has agreed to sell.
It is impossible to forecast what the market value of portfolio
securities will be at the expiration of a contract. Accordingly,
it may be necessary for the fund to buy additional foreign currency
on the spot market (and bear the expense of such purchase) if the
market value of the security is less than the amount of foreign
currency the fund is obligated to deliver and a decision is made to
sell the security and make delivery of the foreign currency.
Conversely, it may be necessary to sell on the spot market some of
the foreign currency received on the sale of the portfolio security
if its market value exceeds the amount of foreign currency the fund
is obligated to deliver.
The fund's dealing in forward contracts will be limited to the
transactions described above. This method of protecting the value
of the fund's portfolio securities against a decline in the value
of a currency does not eliminate fluctuations in the underlying
prices of the securities. It simply establishes a rate of exchange
that can be achieved at some point in time. Although such forward
contracts tend to minimize the risk of loss due to a decline in
value of hedged currency, they tend to limit any potential gain
that might result should the value of such currency increase.
Although the fund values its assets each business day in terms of
U.S. dollars, it does not intend to convert its foreign currencies
into U.S. dollars on a daily basis. It will do so from time to
time, and shareholders should be aware of currency conversion
costs. Although foreign exchange dealers do not charge a fee for
-28-
<PAGE>
conversion, they do realize a profit based on the difference
(spread) between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency to the fund at one rate, while offering a lesser rate of
exchange should the fund desire to resell that currency to the
dealer.
OPTIONS ON FOREIGN CURRENCIES. The fund may buy put and write
covered call options on foreign currencies for hedging purposes.
For example, a decline in the dollar value of a foreign currency in
which portfolio securities are denominated will reduce the dollar
value of such securities, even if their value in the foreign
currency remains constant. In order to protect against such
diminutions in the value of portfolio securities, the fund may buy
put options on the foreign currency. If the value of the currency
does decline, the fund will have the right to sell such currency
for a fixed amount in dollars and will thereby offset, in whole or
in part, the adverse effect on its portfolio which otherwise would
have resulted.
As in the case of other types of options, however, the benefit to
the fund derived from purchases of foreign currency options will be
reduced by the amount of the premium and related transaction costs.
In addition, where currency exchange rates do not move in the
direction or to the extent anticipated, the fund could sustain
losses on transactions in foreign currency options which would
require it to forego a portion or all of the benefits of
advantageous changes in such rates.
The fund may write options on foreign currencies for the same types
of hedging purposes. For example, when the fund anticipates a
decline in the dollar value of foreign-denominated securities due
to adverse fluctuations in exchange rates, it could, instead of
purchasing a put option, write a call option on the relevant
currency. If the expected decline occurs, the option will most
likely not be exercised and the diminution in value of portfolio
securities will be fully or partially offset by the amount of the
premium received.
As in the case of other types of options, however, the writing of a
foreign currency option will constitute only a partial hedge up to
the amount of the premium, and only if rates move in the expected
direction. If this does not occur, the option may be exercised and
the fund would be required to buy or sell the underlying currency
at a loss which may not be offset by the amount of the premium.
Through the writing of options on foreign currencies, the fund also
may be required to forego all or a portion of the benefits which
might otherwise have been obtained from favorable movements on
exchange rates.
All options written on foreign currencies will be covered. An
option written on foreign currencies is covered if the fund holds
currency sufficient to cover the option or has an absolute and
immediate right to acquire that currency without additional cash
consideration upon conversion of assets denominated in that
currency or exchange of other currency held in its portfolio. An
-29-
<PAGE>
option writer could lose amounts substantially in excess of its
initial investments, due to the margin and collateral requirements
associated with such positions.
Options on foreign currencies are traded through financial
institutions acting as market-makers, although foreign currency
options also are traded on certain national securities exchanges,
such as the Philadelphia Stock Exchange and the Chicago Board
Options Exchange, subject to SEC regulation. In an over-the-
counter trading environment, many of the protections afforded to
exchange participants will not be available. For example, there
are no daily price fluctuation limits, and adverse market movements
could therefore continue to an unlimited extent over a period of
time. Although the purchaser of an option cannot lose more than
the amount of the premium plus related transaction costs, this
entire amount could be lost.
Foreign currency option positions entered into on a national
securities exchange are cleared and guaranteed by the OCC, thereby
reducing the risk of counterparty default. Further, a liquid
secondary market in options traded on a national securities
exchange may be more readily available than in the over-the-counter
market, potentially permitting the fund to liquidate open positions
at a profit prior to exercise or expiration, or to limit losses in
the event of adverse market movements.
The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of availability of a liquid
secondary market described above, as well as the risks regarding
adverse market movements, margining of options written, the nature
of the foreign currency market, possible intervention by
governmental authorities and the effects of other political and
economic events. In addition, exchange-traded options on foreign
currencies involve certain risks not presented by the over-the-
counter market. For example, exercise and settlement of such
options must be made exclusively through the OCC, which has
established banking relationships in certain foreign countries for
the purpose. As a result, the OCC may, if it determines that
foreign governmental restrictions or taxes would prevent the
orderly settlement of foreign currency option exercises, or would
result in undue burdens on OCC or its clearing member, impose
special procedures on exercise and settlement, such as technical
changes in the mechanics of delivery of currency, the fixing of
dollar settlement prices or prohibitions on exercise.
FOREIGN CURRENCY FUTURES AND RELATED OPTIONS. The fund may enter
into currency futures contracts to sell currencies. It also may
buy put and write covered call options on currency futures.
Currency futures contracts are similar to currency forward
contracts, except that they are traded on exchanges (and have
margin requirements) and are standardized as to contract size and
delivery date. Most currency futures call for payment of delivery
in U.S. dollars. The fund may use currency futures for the same
purposes as currency forward contracts, subject to CFTC
limitations, including the limitation on the percentage of assets
-30-
<PAGE>
that may be used, described in the prospectus. All futures
contracts are aggregated for purposes of the percentage
limitations.
Currency futures and options on futures values can be expected to
correlate with exchange rates, but will not reflect other factors
that may affect the values of the fund's investments. A currency
hedge, for example, should protect a Yen-denominated bond against a
decline in the Yen, but will not protect the fund against price
decline if the issuer's creditworthiness deteriorates. Because the
value of the fund's investments denominated in foreign currency
will change in response to many factors other than exchange rates,
it may not be possible to match the amount of a forward contract to
the value of the fund's investments denominated in that currency
over time.
The fund will not use leverage in its currency options and futures
strategies. The fund will hold securities or other options or
futures positions whose values are expected to offset its
obligations. The fund will not enter into an option or futures
position that exposes the fund to an obligation to another party
unless it owns either (i) an offsetting position in securities or
(ii) cash, receivables and short-term debt securities with a value
sufficient to cover its potential obligations.
-31-
<PAGE>
APPENDIX C
OPTIONS AND FUTURES CONTRACTS
The fund may buy or write options traded on any U.S. or foreign
exchange or in the over-the-counter market. The fund may enter
into interest rate futures contracts and stock index futures
contracts traded on any U.S. or foreign exchange. The fund also
may buy or write put and call options on these futures and on stock
indexes. Bond options in the over-the-counter market will be
purchased only when the investment manager believes a liquid
secondary market exists for the options and only from dealers and
institutions the investment manager believes present a minimal
credit risk. Some options are exercisable only on a specific date.
In that case, or if a liquid secondary market does not exist, the
fund could be required to buy or sell securities at disadvantageous
prices, thereby incurring losses. Under normal market conditions,
the fund will invest no more than ___% of its net assets in
derivatives.
OPTIONS. An option is a contract. A person who buys a call option
for a security has the right to buy the security at a set price for
the length of the contract. A person who sells a call option is
called a writer. The writer of a call option agrees to sell the
security at the set price when the buyer wants to exercise the
option, no matter what the market price of the security is at that
time. A person who buys a put option has the right to sell a
security at a set price for the length of the contract. A person
who writes a put option agrees to buy the security at the set price
if the purchaser wants to exercise the option, no matter what the
market price of the security is at that time. An option is covered
if the writer owns the security (in the case of a call) or sets
aside the cash or securities of equivalent value (in the case of a
put) that would be required upon exercise.
The price paid by the buyer for an option is called a premium. In
addition, the buyer generally pays a broker a commission. The
writer receives a premium, less another commission, at the time the
option is written. The cash received is retained by the writer
whether or not the option is exercised. A writer of a call option
may have to sell the security for a below-market price if the
market price rises above the exercise price. A writer of a put
option may have to pay an above-market price for the security if
its market price decreases below the exercise price. The risk of
the writer is potentially unlimited, unless the option is covered.
Options can be used to produce incremental earnings, protect gains
and facilitate buying and selling securities for investment
purposes. The use of options and futures contracts may benefit the
fund and its shareholders by improving the fund's liquidity and by
helping to stabilize the value of its net assets.
BUYING OPTIONS. Put and call options may be used as a trading
technique to facilitate buying and selling securities for
investment reasons. They also may be for investment. Options are
-32-
<PAGE>
used as a trading technique to take advantage of any disparity
between the price of the underlying security in the securities
market and its price on the options market. It is anticipated the
trading technique will be utilized only to effect a transaction
when the price of the security plus the option price will be as
good or better than the price at which the security could be bought
or sold directly. When the option is purchased, the fund pays a
premium and a commission. It then pays a second commission on the
purchase or sale of the underlying security when the option is
exercised. For record keeping and tax purposes, the price obtained
on the purchase of the underlying security will be the combination
of the exercise price, the premium and both commissions. When
using options as a trading technique, commissions on the option
will be set as if only the underlying securities were traded.
Put and call options also may be held by the fund for investment
purposes. Options permit the fund to experience the change in the
value of a security with a relatively small initial cash
investment.
The risk the fund assumes when it buys an option is the loss of the
premium. To be beneficial to the fund, the price of the underlying
security must change within the time set by the option contract.
Furthermore, the change must be sufficient to cover the premium
paid, the commissions paid both in the acquisition of the option
and in a closing transaction or in the exercise of the option and
subsequent sale (in the case of a call) or purchase (in the case of
a put) of the underlying security. Even then, the price change in
the underlying security does not ensure a profit since prices in
the option market may not reflect such a change.
WRITING COVERED OPTIONS. The fund will write covered options when
it feels it is appropriate and will follow these guidelines:
'Underlying securities will continue to be bought or sold solely on
the basis of investment considerations consistent with the fund's
goal.
'All options written by the fund will be covered. For covered call
options, if a decision is made to sell the security, or for put
options if a decision is made to buy the security, the fund will
attempt to terminate the option contract through a closing purchase
transaction.
'The fund will write options only as permitted under federal or
state laws or regulations, such as those that limit the amount of
total assets subject to the options. While no limit has been set
by the fund, it will conform to the requirements of those states.
For example, California limits the writing of options to 50% of the
assets of a fund.
Net premiums on call options closed or premiums on expired call
options are treated as short-term capital gains. Since the fund is
taxed as a regulated investment company under the Internal Revenue
Code, any gains on options and other securities held less than
three months must be limited to less than 30% of its annual gross
income.
-33-
<PAGE>
If a covered call option is exercised, the security is sold by the
fund. The premium received upon writing the option is added to the
proceeds received from the sale of the security. The fund will
recognize a capital gain or loss based upon the difference between
the proceeds and the security's basis. Premiums received from
writing outstanding options are included as a deferred credit in
the Statement of Assets and Liabilities and adjusted daily to the
current market value.
Options on many securities are listed on options exchanges. If the
fund writes listed options, it will follow the rules of the options
exchange. Options are valued at the close of the New York Stock
Exchange. An option listed on a national exchange, CBOE or NASDAQ
will be valued at the last-quoted sales price or, if such a price
is not readily available, at the mean of the last bid and ask
prices.
Options on certain securities are not actively traded on any
exchange, but may be entered into directly with a dealer. When the
fund writes such an option, the Custodian will segregate assets as
appropriate to cover the option. These options may be more
difficult to close. If the fund is unable to effect a closing
purchase transaction, it will not be able to sell the underlying
security until the call written by the fund expires or is
exercised.
FUTURES CONTRACTS. A futures contract is an agreement between two
parties to buy and sell a security for a set price on a future
date. Futures contracts trade in a manner similar to the way a
stock trades on a stock exchange and the commodity exchanges,
through their clearing corporations, guarantee performance of the
contracts. Futures contracts are commodity contracts listed on
commodity exchanges. They include contracts based on U.S. Treasury
bonds and on Standard and Poor's 500 Index (S&P 500 Index). In the
case of S&P 500 index futures contracts, the specified multiple is
$500. Thus, if the value of the S&P 500 Index were 150, the value
of one contract would be $75,000 (150 x $500).
Unlike other futures contracts, a stock index futures contract
specifies that no delivery of the actual stocks making up the index
will take place. Instead, settlement in cash must occur upon the
termination of the contract. For example, excluding any
transaction costs, if the fund enters into one futures contract to
buy the S&P 500 Index at a specified future date at a contract
value of 150 and the S&P 500 Index is at 154 on that future date,
the fund will gain $500 x (154-150) or $2,000. If the fund enters
into one futures contract to sell the S&P 500 Index at a specified
future date at a contract value of 150 and the S&P 500 Index is at
152 on that future date, the fund will lose $500 x (152-150) or
$1,000.
Generally, a futures contract is terminated by entering into an
offsetting transaction. An offsetting transaction is effected by
the fund taking an opposite position. At the time a futures
contract is made, a good faith deposit called initial margin is set
up within a segregated account at the fund's custodian bank. Daily
-34-
<PAGE>
thereafter, the futures contract is valued and the payment of
variation margin is required so that each day the fund would pay
out cash in an amount equal to any decline in the contract's value
or receive cash equal to any increase. At the time a futures
contract is closed out, a nominal commission is paid, which is
generally lower than the commission on a comparable transaction in
the cash markets.
The purpose of a futures contract is to allow the fund to gain
rapid exposure to or protect itself from changes in the market
without actually buying or selling securities. For example, if the
fund owned long-term bonds and interest rates were expected to
increase, it might enter into futures contracts to sell securities
which would have much the same effect as selling some of the long-
term bonds it owned. If interest rates did increase, the value of
the debt securities in the portfolio would decline, but the value
of the fund's futures contracts would increase at approximately the
same rate, thereby keeping the net asset value of the fund from
declining as much as it otherwise would have. If, on the other
hand, the fund held cash reserves and interest rates were expected
to decline, the fund might enter into interest rate futures
contracts for the purchase of securities. If short-term rates were
higher than long-term rates, the ability to continue holding these
cash reserves would have a very beneficial impact on the fund's
earnings. Even if short-term rates were not higher, the fund would
still benefit from the income earned by holding these short-term
investments. At the same time, by entering into futures contracts
for the purchase of securities, the fund could take advantage of
the anticipated rise in the value of long-term bonds without
actually buying them until the market had stabilized. At that
time, the futures contracts could be liquidated and the fund's cash
reserves could then be used to buy long-term bonds on the cash
market. The fund could accomplish similar results by selling bonds
with long maturities and investing in bonds with short maturities
when interest rates are expected to increase or by buying bonds
with long maturities and selling bonds with short maturities when
interest rates are expected to decline. But by using futures
contracts as an investment tool, given the greater liquidity in the
futures market than in the cash market, it might be possible to
accomplish the same result more easily and more quickly.
RISKS OF TRANSACTIONS IN FUTURES CONTRACTS. The fund may elect to
close some or all of its contracts prior to expiration. Although
the fund intends to enter into futures contracts only on exchanges
or boards of trade where there appears to be an active secondary
market, there is no assurance that a liquid secondary market will
exist for any particular contract at any particular time. In such
event, it may not be possible to close a futures contract position,
and in the event of adverse price movements, the fund would have to
make daily cash payments of variation margin. Such price
movements, however, will be offset all or in part by the price
movements of the securities owned by the fund. Of course, there is
no guarantee the price of the securities will correlate with the
price movements in the futures contract and thus provide an offset
to losses on a futures contract.
-35-
<PAGE>
Another risk in employing futures contracts to protect against the
price volatility of portfolio securities is that the prices of
securities subject to futures contracts may not correlate perfectly
with the behavior of the cash prices of the fund's portfolio
securities. The correlation may be distorted because the futures
market is dominated by short-term traders seeking to profit from
the difference between a contract or security price and their cost
of borrowed funds. Such distortions are generally minor and would
diminish as the contract approached maturity.
In addition, the fund's investment manager could be incorrect in
its expectations as to the direction or extent of various interest
rate or market movements or the time span within which the
movements take place. For example, if the fund sold futures
contracts for the sale of securities in anticipation of an increase
in interest rates, and interest rates declined instead, the fund
would lose money on the sale.
OPTIONS ON FUTURES CONTRACTS. Options give the holder a right to
buy or sell futures contracts in the future. Unlike a futures
contract, which requires the parties to the contract to buy and
sell a security on a set date, an option on a futures contract
merely entitles its holder to decide on or before a future date
(within nine months of the date of issue) whether to enter into
such a contract. If the holder decides not to enter into the
contract, all that is lost is the amount (premium) paid for the
option. Further, because the value of the option is fixed at the
point of sale, there are not daily payments of cash to reflect the
change in the value of the underlying contract. However, since an
option gives the buyer the right to enter into a contract at a set
price for a fixed period of time, its value does change daily and
that change is reflected in the net asset value of the fund.
The risk the fund assumes when it buys an option is the loss of the
premium paid for the option. The risk involved in writing options
on futures contracts the fund owns, or on securities held in its
portfolio, is that there could be an increase in the market value
of such contracts or securities. If that occurred, the option
would be exercised and the asset sold at a lower price than the
cash market price. To some extent, the risk of not realizing a
gain could be reduced by entering into a closing transaction. The
fund could enter into a closing transaction by purchasing an option
with the same terms as the one it had previously sold. The cost to
close the option and terminate the fund's obligation, however,
might be more or less than the premium received when it originally
wrote the option. Further, the fund might not be able to close the
option because of insufficient activity in the options market.
Purchasing options also limits the use of monies that might
otherwise be available for long-term investments.
OPTIONS ON STOCK INDEXES. Options on stock indexes are securities
traded on national securities exchanges. An option on a stock
index is similar to an option on a futures contract except all
settlements are in cash. A fund exercising a put, for example,
-36-
<PAGE>
would receive the difference between the exercise price and the
current index level. Such options would be used in the same manner
as options on futures contracts.
TAX TREATMENT. As permitted under federal income tax laws, the
fund intends to identify futures contracts as mixed straddles and
not mark them to market, that is, not treat them as having been
sold at the end of the year at market value. Such an election may
result in the fund being required to defer recognizing losses
incurred by entering into futures contracts and losses on
underlying securities identified as being hedged against.
Federal income-tax treatment of gains or losses from transactions
in options on futures contracts and indexes is presently unclear,
although the fund's tax advisers currently believe marking to
market is not required. Depending on developments, and although no
assurance is given, the fund may seek Internal Revenue Service
(IRS) rulings clarifying questions concerning such treatment.
Certain provisions of the Internal Revenue Code may also limit the
fund's ability to engage in futures contracts and related options
transactions. For example, at the close of each quarter of the
fund's taxable year, at least 50% of the value of its assets must
consist of cash, government securities and other securities,
subject to certain diversification requirements. Less than 30% of
its gross income must be derived from sales of securities held less
than three months.
The IRS has ruled publicly that an exchange-traded call option is a
security for purposes of the 50%-of-assets test and that its issuer
is the issuer of the underlying security, not the writer of the
option, for purposes of the diversification requirements. In order
to avoid realizing a gain within the three-month period, the fund
may be required to defer closing out a contract beyond the time
when it might otherwise be advantageous to do so. The fund also
may be restricted in purchasing put options for the purpose of
hedging underlying securities because of applying the short sale
holding period rules with respect to such underlying securities.
Accounting for futures contracts will be according to generally
accepted accounting principles. Initial margin deposits will be
recognized as assets due from a broker (the fund's agent in
acquiring the futures position). During the period the futures
contract is open, changes in value of the contract will be
recognized as unrealized gains or losses by marking to market on a
daily basis to reflect the market value of the contract at the end
of each day's trading. Variation margin payments will be made or
received depending upon whether gains or losses are incurred. All
contracts and options will be valued at the last-quoted sales price
on their primary exchange.
-37-
<PAGE>
APPENDIX D
DOLLAR-COST AVERAGING
A technique that works well for many investors is one that
eliminates random buy and sell decisions. One such system is
dollar-cost averaging. Dollar-cost averaging involves building a
portfolio through the investment of fixed amounts of money on a
regular basis regardless of the price or market condition. This
may enable an investor to smooth out the effects of the volatility
of the financial markets. By using this strategy, more shares will
be purchased when the price is low and less when the price is high.
As the accompanying chart illustrates, dollar-cost averaging tends
to keep the average price paid for the shares lower than the
average market price of shares purchased, although there is no
guarantee.
While this does not ensure a profit and does not protect against a
loss if the market declines, it is an effective way for many
shareholders who can continue investing through changing market
conditions to accumulate shares in a fund to meet long term goals.
DOLLAR-COST AVERAGING
<TABLE>
<CAPTION>
- -----------------------------------------------------
REGULAR MARKET PRICE SHARES
INVESTMENT OF A SHARE ACQUIRED
- -----------------------------------------------------
<S> <C> <C>
$100 $ 6.00 16.7
100 4.00 25.0
100 4.00 25.0
100 6.00 16.7
100 5.00 20.0
---- ------ -----
$500 $25.00 103.4
</TABLE>
AVERAGE MARKET PRICE OF A SHARE OVER 5 PERIODS:
$5.00 ($25.00 DIVIDED BY 5).
THE AVERAGE PRICE YOU PAID FOR EACH SHARE:
$4.84 ($500 DIVIDED BY 103.4).
-38-
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<C> <C> <S>
(a) FINANCIAL STATEMENTS:
Registrant's annual report to shareholders filed electronically pursuant to Section
270.30d-1 on or about August 29, 1994 is incorporated herein by reference.
(b) EXHIBITS:
1. Copy of Articles of Incorporation, dated March 25, 1988, filed as Exhibit 1 to
Registration Statement No. 33-20872, is incorporated herein by reference.
2. Copy of By-laws filed as Exhibit 2 to Registrant's Pre-Effective Amendment No.
1 to Registration Statement No. 33-20872, is incorporated herein by reference.
3. Not Applicable.
4. Form of Stock Certificate for common stock, filed as Exhibit 4 on Form SE on
June 28, 1988, to Registrant's Pre-Effective Amendment No. 1 to Registration
Statement No. 33-20872, is incorporated herein by reference.
5. Copy of Investment Management and Services Agreement between Registrant and
IDS Financial Corporation, dated Nov. 14, 1991, filed as Exhibit 5 to
Registrant's Post-Effective Amendment No. 6 to Registration Statement No.
33-20872, is incorporated herein by reference.
6. Copy of Distribution Agreement, dated July 14, 1988, filed as Exhibit 6 to
Registration Statement No. 33-20872, is incorporated herein by reference.
7. All employees are eligible to participate in a profit sharing plan. Entry into
the plan is Jan. 1 or July 1. The Registrant contributes each year an amount
up to 15 percent of their annual salaries, the maximum deductible amount
permitted under Section 404(a) of the Internal Revenue Code.
8(a). Copy of Custodian Agreement, dated July 22, 1988, filed as Exhibit 8(a) to
Registration Statement No. 33-20872, is incorporated herein by reference.
8(b). Copy of Subcustodian Agreement, dated July 1, 1992, filed as Exhibit 8(b) to
Registrant's Post-Effective Amendment No. 8 to Registration Statement No.
33-20872, is incorporated herein by reference.
9(a). Copy of Transfer Agency Agreement between Registrant and IDS Financial
Corporation, dated Nov. 14, 1991, filed as Exhibit 9(a) to Registrant's
Post-Effective Amendment No. 6 to Registration Statement No. 33-20872, is
incorporated herein by reference.
9(b). Copy of License Agreement between Registrant and IDS Financial Corporation,
dated June 15, 1992, filed as Exhibit 9(b) to Registrant's Post-Effective
Amendment No. 6 to Registration Statement No. 33-20872, is incorporated herein
by reference.
10. An Opinion and Consent of counsel as to the legality of the securities
registered filed as Exhibit 10 to Registration Statement No. 33-20872, is
incorporated herein by reference.
11. Not Applicable.
12. None.
13. Copy of Agreement made in consideration for providing initial capital, between
Registrant and IDS Financial Corporation filed as Exhibit 13 to Registration
Statement No. 33-20872, is incorporated herein by reference.
14. Forms of Keogh, IRA and other retirement plans, filed as Exhibits 14(a)
through 14(n) to IDS Growth Fund, Inc., Post-Effective Amendment No. 34 to
Registration Statement No. 2-38355 on Sept. 8, 1986, are incorporated herein
by reference.
15. Copy of Plan and Supplemental Agreement of Distribution, dated July 14, 1988,
filed as Exhibit 15 to Registration Statement No. 33-20872, is incorporated
herein by reference.
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <C> <S>
16. Copy of schedule for computation of each performance quotation provided in the
Registration Statement in response to Item 22(b), filed as Exhibit 16 to
Registrant's Post-Effective Amendment No. 7 to Registration Statement No.
33-20872, is incorporated herein by reference.
17. Not Applicable.
18(a). Directors' Power of Attorney, dated Nov. 10, 1994, is filed electronically
herewith.
18(b). Officers' Power of Attorney, dated June 1, 1993, filed as Exhibit 17(b) to
Registrant's Post-Effective Amendment No. 8 to Registration Statement No.
33-20872, is incorporated herein by reference.
</TABLE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
(1) (2)
Number of
Record
Holders as of
Title of Class Dec. 5, 1994
- -------------- --------------
<S> <C>
Common Stock 61,506
</TABLE>
II-2
<PAGE>
Item 27. Indemnification
The Articles of Incorporation of the registrant provide that the
Fund shall indemnify any person who was or is a party or is
threatened to be made a party, by reason of the fact that she or he
is or was a director, officer, employee or agent of the Fund, or is
or was serving at the request of the Fund as a director, officer,
employee or agent of another company, partnership, joint venture,
trust or other enterprise, to any threatened, pending or completed
action, suit or proceeding, wherever brought, and the Fund may
purchase liability insurance and advance legal expenses, all to the
fullest extent permitted by the laws of the State of Minnesota, as
now existing or hereafter amended. The By-laws of the registrant
provide that present or former directors or officers of the Fund
made or threatened to be made a party to or involved (including as
a witness) in an actual or threatened action, suit or proceeding
shall be indemnified by the Fund to the full extent authorized by
the Minnesota Business Corporation Act, all as more fully set forth
in the By-laws filed as an exhibit to this registration statement.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
Any indemnification hereunder shall not be exclusive of any other
rights of indemnification to which the directors, officers,
employees or agents might otherwise be entitled. No
indemnification shall be made in violation of the Investment
Company Act of 1940.
<PAGE>
<PAGE>
PAGE 1
<TABLE><CAPTION>
Item 28a. Business and Other Connections of Investment Adviser (IDS Financial Corporation)
Directors and officers of IDS Financial Corporation who are directors and/or officers of one
or more other companies:
<S> <C> <C>
Ronald G. Abrahamson, Vice President--Field Administration
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-Field
Administration
Douglas A. Alger, Vice President--Total Compensation
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Total Compensation
Jerome R. Amundson, Vice President and Controller--Mutual Funds Operations
IDS Financial Services Inc. IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller-Mutual Funds
Operations
Peter J. Anderson, Director and Senior Vice President--Investments
IDS Advisory Group Inc. IDS Tower 10 Director and Chairman
Minneapolis, MN 55440 of the Board
IDS Capital Holdings Inc. Director and President
IDS Financial Services Inc. Senior Vice President-
Investments
IDS Fund Management Limited Director
IDS International, Inc. Director, Chairman of the
Board and Executive Vice
President
IDS Securities Corporation Executive Vice President-
Investments
NCM Capital Management Group, Inc. 2 Mutual Plaza Director
501 Willard Street
Durham, NC 27701
Ward D. Armstrong, Vice President--Sales and Marketing, IDS Institutional Retirement Services
IDS Financial Services Inc. IDS Tower 10 Vice President-Sales and
Minneapolis, MN 55440 Marketing, IDS
Institutional Retirement
Services
Alvan D. Arthur, Region Vice President--Pacific Northwest Region
American Express Service Corporation IDS Tower 10 Vice President
IDS Financial Services Inc. Minneapolis, MN 55440 Region Vice President-
Pacific Northwest Region
<PAGE>
PAGE 2
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Kent L. Ashton, Vice President--Financial Education Services
IDS Financial Services Inc. IDS Tower 10 Vice President-Financial
Minneapolis, MN 55440 Education Services
Joseph M. Barsky III, Vice President--Senior Portfolio Manager
IDS Advisory Group Inc. IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-Senior
Portfolio Manager
Robert C. Basten, Vice President--Tax and Business Services
IDS Financial Services Inc. IDS Tower 10 Vice President-Tax
Minneapolis, MN 55440 and Business Services
Timothy V. Bechtold, Vice President--Insurance Product Development
IDS Financial Services Inc. IDS Tower 10 Vice President-Insurance
Minneapolis, MN 55440 Product Development
IDS Life Insurance Company Vice President-Insurance
Product Development
John D. Begley, Region Vice President--Mid-Central Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Mid-Central Region
IDS Insurance Agency of Alabama Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of Arkansas Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of Massachusetts Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of Nevada Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of New Mexico Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of North Carolina Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of Ohio Inc. Vice President-Mid-Central
Region
IDS Insurance Agency of Wyoming Inc. Vice President-Mid-Central
Region
Carl E. Beihl, Vice President--Strategic Technology Planning
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Strategic Technology
Planning
<PAGE>
PAGE 3
Item 28a. Business and Other Connections of Investment Adviser (IDS Financial
Corporation)(cont'd)
Alan F. Bignall, Vice President--Financial Planning Systems
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-
Financial Planning
Systems
Brent L. Bisson, Region Vice President--Northwest Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Northwest Region
IDS Insurance Agency of Alabama Inc. Vice President-
Northwest Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Northwest Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Northwest Region
IDS Insurance Agency of Nevada, Inc. Vice President-
Northwest Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Northwest Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Northwest Region
IDS Insurance Agency of Ohio Inc. Vice President-
Northwest Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Northwest Region
John C. Boeder, Vice President--Mature Market Group
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Mature Market Group
IDS Life Insurance Company of New York Box 5144 Director
Albany, NY 12205
Karl J. Breyer, Director, Senior Vice President--Corporate Affairs and General Counsel
American Express Minnesota Foundation IDS Tower 10 Director
Minneapolis, MN 55440
IDS Aircraft Services Corporation Director and President
IDS Financial Services Inc. Senior Vice President-
Corporate Affairs and
Special Counsel
Harold E. Burke, Vice President and Assistant General Counsel
American Express Service Corporation IDS Tower 10 Vice President
IDS Financial Services Inc. Minneapolis, MN 55440 Vice President and
Assistant General Counsel
<PAGE>
PAGE 4
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Daniel J. Candura, Vice President--Marketing Support
IDS Financial Services Inc. IDS Tower 10 Vice President-Marketing
Minneapolis, MN 55440 Support
Cynthia M. Carlson, Vice President--IDS Securities Services
American Enterprise Investment IDS Tower 10 Director, President and
Services Inc. Minneapolis, MN 55440 Chief Executive Officer
IDS Financial Services Inc. Vice President-IDS
Securities Services
Orison Y. Chaffee III, Vice President--Field Real Estate
IDS Financial Services Inc. IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Real Estate
James E. Choat, Director and Senior Vice President--Field Management
American Express Minnesota Foundation IDS Tower 10 Director
American Express Service Corporation Minneapolis, MN 55440 Vice President
IDS Financial Services Inc. Senior Vice President-
Field Management
IDS Insurance Agency of Alabama Inc. Vice President--North
Central Region
IDS Insurance Agency of Arkansas Inc. Vice President--North
Central Region
IDS Insurance Agency of Massachusetts Inc. Vice President--North
Central Region
IDS Insurance Agency of Nevada Inc. Vice President--North
Central Region
IDS Insurance Agency of New Mexico Inc. Vice President--North
Central Region
IDS Insurance Agency of North Carolina Inc. Vice President--North
Central Region
IDS Insurance Agency of Ohio Inc. Vice President--North
Central Region
IDS Insurance Agency of Wyoming Inc. Vice President-- North
Central Region
IDS Property Casualty Insurance Co. Director
Kenneth J. Ciak, Vice President and General Manager--IDS Property Casualty
IDS Financial Services Inc. IDS Tower 10 Vice President and General
Minneapolis, MN 55440 Manager-IDS Property
Casualty
IDS Property Casualty Insurance Co. I WEG Blvd. Director and President
DePere, Wisconsin 54115
<PAGE>
PAGE 5
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Roger C. Corea, Region Vice President--Northeast Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Northeast Region
IDS Insurance Agency of Alabama Inc. Vice President -
Northeast Region
IDS Insurance Agency of Arkansas Inc. Vice President -
Northeast Region
IDS Insurance Agency of Massachusetts Inc. Vice President -
Northeast Region
IDS Insurance Agency of Nevada Inc. Vice President -
Northeast Region
IDS Insurance Agency of New Mexico Inc. Vice President -
Northeast Region
IDS Insurance Agency of North Carolina Inc. Vice President -
Northeast Region
IDS Insurance Agency of Ohio, Inc. Vice President -
Northeast Region
IDS Insurance Agency of Wyoming Inc. Vice President -
Northeast Region
IDS Life Insurance Co. of New York Box 5144 Director
Albany, NY 12205
Kevin F. Crowe, Region Vice President--Atlantic Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President -
Atlantic Region
Alan R. Dakay, Vice President--Institutional Insurance Marketing
American Enterprise Life Insurance Co. IDS Tower 10 Director and President
Minneapolis, MN 55440
American Partners Life Insurance Co. Director and President
IDS Financial Services Inc. Vice President -
Institutional Insurance
Marketing
IDS Life Insurance Company Vice President -
Institutional Insurance
Marketing
William F. Darland, Region Vice President--South Central Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
South Central Region
IDS Insurance Agency of Alabama Inc. Vice President-
South Central Region
IDS Insurance Agency of Arkansas Inc. Vice President -
South Central Region
<PAGE>
PAGE 6
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
IDS Insurance Agency of Massachusetts Inc. Vice President-
South Central Region
IDS Insurance Agency of Nevada Inc. Vice President-
South Central Region
IDS Insurance Agency of New Mexico Inc. Vice President-
South Central Region
IDS Insurance Agency of North Carolina Inc. Vice President-
South Central Region
IDS Insurance Agency of Ohio Inc. Vice President-
South Central Region
IDS Insurance Agency of Wyoming Inc. Vice President-
South Central Region
William H. Dudley, Director and Executive Vice President--Investment Operations
IDS Advisory Group Inc. IDS Tower 10 Director
Minneapolis, MN 55440
IDS Capital Holdings Inc. Director
IDS Financial Services Inc. Director and Executive
Vice President-
Investment Operations
IDS Futures Corporation Director
IDS Futures III Corporation Director
IDS International, Inc. Director
IDS Securities Corporation Director, Chairman of the
Board, President and
Chief Executive Officer
Roger S. Edgar, Director and Senior Vice President--Information Systems
IDS Financial Services Inc. IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Information Systems
Gordon L. Eid, Director, Senior Vice President and Deputy General Counsel
IDS Financial Services Inc. IDS Tower 10 Senior Vice President and
General Counsel
IDS Insurance Agency of Alabama Inc. Director and Vice President
IDS Insurance Agency of Arkansas Inc. Director and Vice President
IDS Insurance Agency of Massachusetts Inc. Director and Vice President
IDS Insurance Agency of Nevada Inc. Director and Vice President
IDS Insurance Agency of New Mexico Inc. Director and Vice President
IDS Insurance Agency of North Carolina Inc. Director and Vice President
IDS Insurance Agency of Ohio Inc. Director and Vice President
IDS Insurance Agency of Wyoming Inc. Director and Vice President
IDS Real Estate Services, Inc. Vice President
Investors Syndicate Development Corp. Director
Robert M. Elconin, Vice President--Government Relations
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Government Relations
IDS Life Insurance Company Vice President
<PAGE>
PAGE 7
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Mark A. Ernst, Vice President--Retail Services
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-
Retail Services
Gordon M. Fines, Vice President--Mutual Fund Equity Investments
IDS Advisory Group Inc. IDS Tower 10 Executive Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-
Mutual Fund Equity
Investments
IDS International Inc. Vice President and
Portfolio Manager
Louis C. Fornetti, Director, Senior Vice President and Chief Financial Officer
American Enterprise Investment IDS Tower 10 Vice President
Services Inc. Minneapolis, MN 55440
IDS Cable Corporation Director
IDS Cable II Corporation Director
IDS Capital Holdings Inc. Senior Vice President
IDS Certificate Company Vice President
IDS Financial Services Inc. Senior Vice President and
Chief Financial Officer
IDS Insurance Agency of Alabama Inc. Vice President
IDS Insurance Agency of Arkansas Inc. Vice President
IDS Insurance Agency of Massachusetts Inc. Vice President
IDS Insurance Agency of Nevada Inc. Vice President
IDS Insurance Agency of New Mexico Inc. Vice President
IDS Insurance Agency of North Carolina Inc. Vice President
IDS Insurance Agency of Ohio Inc. Vice President
IDS Insurance Agency of Wyoming Inc. Vice President
IDS Life Insurance Company Director
IDS Life Series Fund, Inc. Vice President
IDS Life Variable Annuity Funds A&B Vice President
IDS Property Casualty Insurance Co. Director and Vice President
IDS Real Estate Services, Inc. Vice President
IDS Sales Support Inc. Director
IDS Securities Corporation Vice President
IDS Trust Company Director
Investors Syndicate Development Corp. Vice President
Douglas L. Forsberg, Vice President--Securities Services
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Securities Services
<PAGE>
PAGE 8
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Carl W. Gans, Region Vice President--North Central Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
North Central Region
Robert G. Gilbert, Vice President--Real Estate
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Real Estate
John J. Golden, Vice President--Field Compensation Development
IDS Financial Services Inc. IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Compensation Development
Harvey Golub, Director
American Express Company American Express Tower Chairman and Chief
World Financial Center Executive Officer
New York, New York 10285
American Express Travel Chairman and Chief
Related Services Company, Inc. Executive Officer
National Computer Systems, Inc. 11000 Prairie Lakes Drive Director
Minneapolis, MN 55440
Morris Goodwin Jr., Vice President and Corporate Treasurer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Treasurer
American Enterprise Life Insurance Co. Vice President and
Treasurer
American Express Minnesota Foundation Director, Vice President
and Treasurer
American Express Service Corporation Vice President and
Treasurer
IDS Advisory Group Inc. Vice President and
Treasurer
IDS Aircraft Services Corporation Vice President and
Treasurer
IDS Cable Corporation Vice President and
Treasurer
IDS Cable II Corporation Vice President and
Treasurer
IDS Capital Holdings Inc. Vice President and
Treasurer
IDS Certificate Company Vice President and
Treasurer
IDS Deposit Corp. Director, President
and Treasurer
IDS Financial Services Inc. Vice President and
Corporate Treasurer
<PAGE>
PAGE 9
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
IDS Insurance Agency of Alabama Inc. Vice President and
Treasurer
IDS Insurance Agency of Arkansas Inc. Vice President and
Treasurer
IDS Insurance Agency of Massachusetts Inc. Vice President and
Treasurer
IDS Insurance Agency of Nevada Inc. Vice President and
Treasurer
IDS Insurance Agency of New Mexico Inc. Vice President and
Treasurer
IDS Insurance Agency of North Carolina Inc. Vice President and
Treasurer
IDS Insurance Agency of Ohio Inc. Vice President and
Treasurer
IDS Insurance Agency of Wyoming Inc. Vice President and
Treasurer
IDS International, Inc. Vice President and
Treasurer
IDS Life Insurance Company Vice President and
Treasurer
IDS Life Series Fund, Inc. Vice President and
Treasurer
IDS Life Variable Annuity Funds A&B Vice President and
Treasurer
IDS Management Corporation Vice President and
Treasurer
IDS Partnership Services Corporation Vice President and
Treasurer
IDS Plan Services of California, Inc. Vice President and
Treasurer
IDS Property Casualty Insurance Co. Vice President and
Treasurer
IDS Real Estate Services, Inc Vice President and
Treasurer
IDS Realty Corporation Vice President and
Treasurer
IDS Sales Support Inc. Director, Vice President
and Treasurer
IDS Securities Corporation Vice President and
Treasurer
Investors Syndicate Development Corp. Vice President and
Treasurer
NCM Capital Management Group, Inc. 2 Mutual Plaza Director
501 Willard Street
Durham, NC 27701
Sloan Financial Group, Inc. Director
Suzanne Graf, Vice President--Systems Services
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Systems Services
<PAGE>
PAGE 10
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
David A. Hammer, Vice President and Marketing Controller
IDS Financial Services Inc. IDS Tower 10 Vice President and
Minneapolis, MN 55440 Marketing Controller
IDS Plan Services of California, Inc. Director and Vice President
Robert L. Harden, Region Vice President--Mid-Atlantic Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Mid Atlantic Region
IDS Insurance Agency of Alabama Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of Nevada Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of Ohio Inc. Vice President-
Mid Atlantic Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Mid Atlantic Region
Lorraine R. Hart, Vice President--Insurance Investments
American Enterprise Life IDS Tower 10 Vice President-Investments
Insurance Company Minneapolis, MN 55440
American Partners Life Insurance Co. Director and Vice
President-Investments
IDS Certificate Company Vice President-Investments
IDS Financial Services Inc. Vice President-Insurance
Investments
IDS Life Insurance Company Vice President-Investments
Investors Syndicate Development Corp. Vice President-Investments
Mark S. Hays, Vice President--Senior Portfolio Manager, IDS International
IDS Financial Services Inc. IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager, IDS
International
IDS Fund Management Limited Director
IDS International, Inc. Senior Vice President
<PAGE>
PAGE 11
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Brian M. Heath, Region Vice President--Southwest Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Southwest Region
IDS Insurance Agency of Alabama Inc. Vice President-
Southwest Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Southwest Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Southwest Region
IDS Insurance Agency of Nevada Inc. Vice President-
Southwest Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Southwest Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Southwest Region
IDS Insurance Agency of Ohio Inc. Vice President-
Southwest Region
IDS Insurance Agency of Texas Inc. Director and President
IDS Insurance Agency of Wyoming Inc. Vice President-
Southwest Region
Raymond E. Hirsch, Vice President--Senior Portfolio Manager
IDS Advisory Group Inc. IDS Tower 10 Vice President
IDS Financial Services Inc. Minneapolis, MN 55440 Vice President-Senior
Portfolio Manager
James G. Hirsh, Vice President and Assistant General Counsel
IDS Financial Services Inc. IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
IDS Securities Corporation Director, Vice President
and General Counsel
Paul C. Hopkins, Vice President--Senior Portfolio Manager-IDS International
IDS Financial Services Inc. IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager-IDS
International
IDS International, Inc. Senior Vice President
Kevin P. Howe, Vice President--Government and Customer Relations and Chief Compliance Officer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Compliance Officer
American Express Service Corporation Vice President
IDS Financial Services Inc. Vice President-
Government and
Customer Relations
IDS Securities Corporation Vice President and Chief
Compliance Officer
<PAGE>
PAGE 12
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
David R. Hubers, Director, President and Chief Executive Officer
American Express Service Corporation IDS Tower 10 Director and President
Minneapolis, MN 55440
IDS Aircraft Services Corporation Director
IDS Certificate Company Director
IDS Financial Services Inc. Chairman, Chief Executive
Officer and President
IDS Life Insurance Company Director
IDS Plan Services of California, Inc. Director and President
IDS Property Casualty Insurance Co. Director
Marietta L. Johns, Director and Senior Vice President--Field Management
IDS Financial Services Inc. IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
Douglas R. Jordal, Vice President--Taxes
IDS Aircraft Services Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-Taxes
Craig A. Junkins, Vice President--IDS 1994 Implementation Planning and Financial Planning
Development
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-IDS 1994
Implementation Planning
and Financial Planning
Development
James E. Kaarre, Vice President--Marketing Information
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Marketing Information
G. Michael Kennedy, Vice President--Investment Services and Investment Research
IDS Financial Services Inc. IDS Tower 10 Vice President-Investment
Minneapolis, MN 55440 Services and Investment
Research
Susan D. Kinder, Director and Senior Vice President--Human Resources
American Express Minnesota Foundation IDS Tower 10 Director
Minneapolis, MN 55440
American Express Service Corporation Vice President
IDS Financial Services Inc. Senior Vice President-
Human Resources
<PAGE>
PAGE 13
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Richard W. Kling, Director and Senior Vice President--Risk Management Products
American Enterprise Life Insurance Co. IDS Tower 10 Director and Chairman of
Minneapolis, MN 55440 the Board
American Partners Life Insurance Co. Director and Chairman of
the Board
IDS Financial Services Inc. Senior Vice President-
Risk Management Products
IDS Insurance Agency of Alabama Inc. Director and President
IDS Insurance Agency of Arkansas Inc. Director and President
IDS Insurance Agency of Massachusetts Inc. Director and President
IDS Insurance Agency of Nevada Inc. Director and President
IDS Insurance Agency of New Mexico Inc. Director and President
IDS Insurance Agency of North Carolina Inc. Director and President
IDS Insurance Agency of Ohio Inc. Director and President
IDS Insurance Agency of Wyoming Inc. Director and President
IDS Life Insurance Company Director and President
IDS Life Series Fund, Inc. Director and President
IDS Life Variable Annuity Funds A&B Member of Board of
Managers, Chairman of the
Board and President
IDS Property Casualty Insurance Co. Director and Chairman of
the Board
IDS Life Insurance Company P.O. Box 5144 Director, Chairman of the
of New York Albany, NY 12205 Board and President
Harold D. Knutson, Vice President--System Services
IDS Financial Services Inc. IDS Tower 10 Vice President--
Minneapolis, MN 55440 System Services
Paul F. Kolkman, Vice President--Actuarial Finance
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Actuarial Finance
IDS Life Insurance Company Director and Executive
Vice President
IDS Life Series Fund, Inc. Vice President and Chief
Actuary
Claire Kolmodin, Vice President--Service Quality
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Service Quality
David S. Kreager, Vice President--Field Management Development
IDS Financial Services Inc. IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management Development
Christopher R. Kudrna, Vice President--Systems and Technology Development
IDS Financial Services Inc. IDS Tower 10 Vice President-Systems and
Minneapolis, MN 55440 Technology Development
<PAGE>
PAGE 14
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Steven C. Kumagai, Director and Senior Vice President--Field Management and Business Systems
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Director and Senior Vice
President-Field
Management and Business
Systems
Mitre Kutanovski, Region Vice President--Midwest Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Midwest Region
Edward Labenski, Vice President--Senior Portfolio Manager
IDS Advisory Group Inc. IDS Tower 10 Senior Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-
Senior Portfolio
Manager
Peter L. Lamaison, Vice President--IDS International Division
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 IDS International
Division
IDS Fund Management Limited Director and Chairman of
the Board
IDS International, Inc. Director, President and
Chief Executive Officer
Kurt A. Larson, Vice President--Senior Portfolio Manager
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio Manager
Ryan R. Larson, Vice President--IPG Product Development
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 IPG Product Development
IDS Life Insurance Company Vice President-
Annuity Product
Development
Daniel E. Laufenberg, Vice President and Chief U.S. Economist
IDS Financial Services Inc. IDS Tower 10 Vice President and
Minneapolis, MN 55440 Chief U.S. Economist
<PAGE>
PAGE 15
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Peter A. Lefferts, Director, Senior Vice President and Chief Marketing Officer
IDS Financial Services Inc. IDS Tower 10 Senior Vice President and
Minneapolis, MN 55440 Chief Marketing Officer
IDS Life Insurance Company Director and Executive
Vice President-Marketing
IDS Plan Services of California, Inc. Director
IDS Trust Company Director and Chairman of
the Board
Investors Syndicate Development Corp. Director
Douglas A. Lennick, Director and Executive Vice President--Private Client Group
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Director and Executive
Vice President-Private
Client Group
Mary J. Malevich, Vice President--Senior Portfolio Manager
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio
Manager
IDS International Inc. Vice President and
Portfolio Manager
Fred A. Mandell, Vice President--Field Marketing Readiness
IDS Financial Services Inc. IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Marketing Readiness
William J. McKinney, Vice President--Field Management Support
IDS Financial Services Inc. IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management Support
Thomas W. Medcalf, Vice President--Senior Portfolio Manager
IDS Financial Services Inc. IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
William C. Melton, Vice President-International Research and Chief International Economist
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 International Research
and Chief International
Economist
<PAGE>
PAGE 16
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Janis E. Miller, Vice President--Variable Assets
IDS Cable Corporation IDS Tower 10 Director and President
Minneapolis, MN 55440
IDS Cable II Corporation Director and President
IDS Financial Services Inc. Vice President-
Variable Assets
IDS Futures Corporation Director and President
IDS Futures III Corporation Director and President
IDS Life Insurance Company Director and Executive
Vice President-Variable
Assets
IDS Life Variable Annuity Funds A&B Director
IDS Life Series Fund, Inc. Director
IDS Management Corporation Director and President
IDS Partnership Services Corporation Director and President
IDS Realty Corporation Director and President
IDS Life Insurance Company of New York Box 5144 Executive Vice President
Albany, NY 12205
James A. Mitchell, Director and Executive Vice President--Marketing and Products
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
IDS Certificate Company Director and Chairman of
the Board
IDS Financial Services Inc. Executive Vice President-
Marketing and Products
IDS Life Insurance Company Director, Chairman of
the Board and Chief
Executive Officer
IDS Plan Services of California, Inc. Director
IDS Property Casualty Insurance Co. Director
Pamela J. Moret, Vice President--Corporate Communications
American Express Minnesota Foundation IDS Tower 10 Director and President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-
Corporate Communications
Barry J. Murphy, Director and Senior Vice President--Client Service
IDS Financial Services Inc. IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Client Service
IDS Life Insurance Company Director and Executive
Vice President-Client
Service
Robert J. Neis, Vice President--Information Systems Operations
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Information Systems
Operations
<PAGE>
PAGE 17
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Vernon F. Palen, Region Vice President--Rocky Mountain Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Rocky Mountain Region
IDS Insurance Agency of Alabama Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of Nevada Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of Ohio Inc. Vice President-
Rocky Mountain Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Rocky Mountain Region
James R. Palmer, Vice President--Insurance Operations
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Insurance Operations
IDS Life Insurance Company Vice President-Taxes
Judith A. Pennington, Vice President--Field Technology
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Field Technology
George M. Perry, Vice President--Corporate Strategy and Development
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Strategy
and Development
IDS Property Casualty Insurance Co. Director
Susan B. Plimpton, Vice President--Segmentation Development and Support
IDS Financial Services Inc. IDS Tower 10 Vice President--
Minneapolis, MN 55440 Segmentation Development
and Support
<PAGE>
PAGE 18
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Ronald W. Powell, Vice President and Assistant General Counsel
IDS Cable Corporation IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant Secretary
IDS Cable II Corporation Vice President and
Assistant Secretary
IDS Financial Services Inc. Vice President and
Assistant General Counsel
IDS Management Corporation Vice President and
Assistant Secretary
IDS Partnership Services Corporation Vice President and
Assistant Secretary
IDS Plan Services of California, Inc. Vice President and
Assistant Secretary
IDS Realty Corporation Vice President and
Assistant Secretary
James M. Punch, Vice President--TransAction Services
IDS Financial Services Inc. Vice President-Trans
Action Services
Frederick C. Quirsfeld, Vice President--Taxable Mutual Fund Investments
IDS Advisory Group Inc. IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President--
Taxable Mutual Fund
Investments
Roger B. Rogos, Region Vice President--Great Lakes Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Great Lakes Region
IDS Insurance Agency of Alabama Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of Nevada Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of Ohio Inc. Vice President-
Great Lakes Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Great Lakes Region
<PAGE>
PAGE 19
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
ReBecca K. Roloff, Vice President--1994 Program Director
IDS Financial Services Inc. IDS Tower 10 Vice President-1994
Minneapolis, MN 55440 Program Director
Stephen W. Roszell, Vice President--Advisory Institutional Marketing
IDS Advisory Group Inc. IDS Tower 10 President and Chief
Minneapolis, MN 55440 Executive Officer
IDS Financial Services Inc. Vice President-Advisory
Institutional Marketing
Robert A. Rudell, Vice President--IDS Institutional Retirement Services
IDS Financial Services Inc. IDS Tower 10 Vice President-IDS
Minneapolis, MN 55440 Institutional Retirement
Services
IDS Sales Support Inc. Director and President
IDS Trust Company Director
John P. Ryan, Vice President and General Auditor
IDS Financial Services Inc. IDS Tower 10 Vice President and General
Minneapolis, MN 55440 Auditor
Erven A. Samsel, Director and Senior Vice President--Field Management
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Senior Vice President-
Field Management
IDS Insurance Agency of Alabama Inc. Vice President-
New England Region
IDS Insurance Agency of Arkansas Inc. Vice President-
New England Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
New England Region
IDS Insurance Agency of Nevada Inc. Vice President-
New England Region
IDS Insurance Agency of New Mexico Inc. Vice President-
New England Region
IDS Insurance Agency of North Carolina Inc. Vice President-
New England Region
IDS Insurance Agency of Ohio Inc. Vice President-
New England Region
IDS Insurance Agency of Wyoming Inc. Vice President-
New England Region
<PAGE>
PAGE 20
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
R. Reed Saunders, Director and Senior Vice President--Corporate Strategy and Development
American Express Service Corporation IDS Tower 10 Director and Vice
Minneapolis, MN 55440 President
IDS Financial Services Inc. Director and Senior
Vice President-Corporate
Strategy and Development
IDS Property Casualty Insurance Co. Director
Stuart A. Sedlacek, Vice President--Assured Assets
American Enterprise Life Insurance Co. IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President, Assured
Assets
IDS Certificate Company Director and President
IDS Financial Services Inc. Vice President-
Assured Assets
IDS Life Insurance Company Director and Executive
Vice President, Assured
Assets
Investors Syndicate Development Corp. Chairman of the Board
and President
Donald K. Shanks, Vice President--Property Casualty
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Property Casualty
IDS Property Casualty Insurance Co. Senior Vice President
F. Dale Simmons, Vice President--Senior Portfolio Manager, Insurance Investments
American Enterprise Life Insurance Co. IDS Tower 10 Vice President-Real
Minneapolis, MN 55440 Estate Loan Management
American Partners Life Insurance Co. Vice President-Real
Estate Loan Management
IDS Certificate Company Vice President-Real
Estate Loan Management
IDS Financial Services Inc. Vice President-Senior
Portfolio Manager
Insurance Investments
IDS Life Insurance Company Vice President-Real
Estate Loan Management
IDS Partnership Services Corporation Vice President
IDS Real Estate Services Inc. Director and Vice President
IDS Realty Corporation Vice President
IDS Life Insurance Company of New York Box 5144 Vice President and
Albany, NY 12205 Assistant Treasurer
Judy P. Skoglund, Vice President--Human Resources and Organization Development
IDS Financial Services Inc. IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources and
Organization Development
<PAGE>
PAGE 21
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Julian W. Sloter, Region Vice President--Southeast Region
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Region Vice President-
Southeast Region
IDS Insurance Agency of Alabama Inc. Vice President-
Southeast Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Southeast Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Southeast Region
IDS Insurance Agency of Nevada Inc. Vice President-
Southeast Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Southeast Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Southeast Region
IDS Insurance Agency of Ohio Inc. Vice President-
Southeast Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Southeast Region
Ben C. Smith, Vice President--Workplace Marketing
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Workplace Marketing
William A. Smith, Vice President and Controller--Private Client Group
IDS Financial Services Inc. IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller-Private
Client Group
James B. Solberg, Vice President--Advanced Financial Planning
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Advanced Financial
Planning
Bridget Sperl, Vice President--Human Resources Management Services
IDS Financial Services Inc. IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources Management
Services
Jeffrey E. Stiefler, Director
American Express Company American Express Tower Director and President
World Financial Center
New York, NY 10285
<PAGE>
PAGE 22
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Lois A. Stilwell, Vice President--Planner Training and Development
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Planner Training and
Development
William A. Stoltzmann, Vice President and Assistant General Counsel
American Partners Life Insurance Co. IDS Tower 10 Director, Vice President,
Minneapolis, MN 55440 General Counsel and
Secretary
IDS Financial Services Inc. Vice President and
Assistant General Counsel
IDS Life Insurance Company Vice President, General
Counsel and Secretary
IDS Life Series Fund, Inc. General Counsel and
Assistant Secretary
IDS Life Variable Annuity Funds A&B General Counsel and
Assistant Secretary
American Enterprise Life Insurance P.O. Box 534 Director, Vice President,
Company Minneapolis, MN 55440 General Counsel
and Secretary
James J. Strauss, Vice President--Corporate Planning and Analysis
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Planning and
Analysis
Jeffrey J. Stremcha, Vice President--Information Resource Management/ISD
IDS Financial Services Inc. IDS Tower 10 Vice President-Information
Minneapolis, MN 55440 Resource Management/ISD
Fenton R. Talbott, Director
ACUMA Ltd. ACUMA House President and Chief
The Glanty, Egham Executive Officer
Surrey TW 20 9 AT
UK
Neil G. Taylor, Vice President--Field Business Systems
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Field Business Systems
<PAGE>
PAGE 23
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
John R. Thomas, Director and Senior Vice President--Information and Technology
IDS Bond Fund, Inc. IDS Tower 10 Director
Minneapolis, MN 55440
IDS California Tax-Exempt Trust Trustee
IDS Discovery Fund, Inc. Director
IDS Equity Plus Fund, Inc. Director
IDS Extra Income Fund, Inc. Director
IDS Federal Income Fund, Inc. Director
IDS Financial Services Inc. Senior Vice President-
Information and
Technology
IDS Global Series, Inc. Director
IDS Growth Fund, Inc. Director
IDS High Yield Tax-Exempt Fund, Inc. Director
IDS Investment Series, Inc. Director
IDS Managed Retirement Fund, Inc. Director
IDS Market Advantage Series, Inc. Director
IDS Money Market Series, Inc. Director
IDS New Dimensions Fund, Inc. Director
IDS Precious Metals Fund, Inc. Director
IDS Progressive Fund, Inc. Director
IDS Selective Fund, Inc. Director
IDS Special Tax-Exempt Series Trust Trustee
IDS Stock Fund, Inc. Director
IDS Strategy Fund, Inc. Director
IDS Tax-Exempt Bond Fund, Inc. Director
IDS Tax-Free Money Fund, Inc. Director
IDS Utilities Income Fund, Inc. Director
Melinda S. Urion, Vice President and Corporate Controller
American Enterprise Life IDS Tower 10 Vice President and
Insurance Company Minneapolis, MN 55440 Controller
American Partners Life Insurance Co. Director, Vice President,
Controller and Treasurer
IDS Financial Services Inc. Vice President and
Corporate Controller
IDS Life Insurance Company Director, Executive Vice
President and Controller
IDS Life Series Fund, Inc. Vice President and
Controller
Wesley W. Wadman, Vice President--Senior Portfolio Manager
IDS Advisory Group Inc. IDS Tower 10 Executive Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-
Senior Portfolio Manager
IDS Fund Management Limited Director
IDS International, Inc. Senior Vice President
<PAGE>
PAGE 24
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Norman Weaver, Jr., Director and Senior Vice President--Field Management
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Senior Vice President-
Field Management
IDS Insurance Agency of Alabama Inc. Vice President-
Pacific Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Pacific Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Pacific Region
IDS Insurance Agency of Nevada Inc. Vice President-
Pacific Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Pacific Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Pacific Region
IDS Insurance Agency of Ohio Inc. Vice President-
Pacific Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Pacific Region
Michael L. Weiner, Vice President--Corporate Tax Operations
IDS Capital Holdings Inc. IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Vice President-Corporate
Tax Operations
IDS Futures III Corporation Vice President, Treasurer
and Secretary
IDS Futures Brokerage Group Vice President
IDS Futures Corporation Vice President, Treasurer
and Secretary
Lawrence J. Welte, Vice President--Investment Administration
IDS Financial Services Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Investment Administration
IDS Securities Corporation Director, Executive Vice
President and Chief
Operating Officer
William N. Westhoff, Director and Senior Vice President--Fixed Income Management
American Enterprise Life Insurance IDS Tower 10 Director
Company Minneapolis, MN 55440
IDS Financial Services Inc. Senior Vice President-
Fixed Income Management
IDS Partnership Services Corporation Director and Vice President
IDS Real Estate Services Inc. Director, Chairman of the
Board and President
IDS Realty Corporation Director and Vice President
Investors Syndicate Development Corp. Director
<PAGE>
PAGE 25
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)
Edwin M. Wistrand, Vice President and Assistant General Counsel
IDS Financial Services Inc. IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
Michael R. Woodward, Director and Senior Vice President--Field Management
American Express Service Corporation IDS Tower 10 Vice President
Minneapolis, MN 55440
IDS Financial Services Inc. Senior Vice President-
Field Management
IDS Insurance Agency of Alabama Inc. Vice President-
North Region
IDS Insurance Agency of Arkansas Inc. Vice President-
North Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
North Region
IDS Insurance Agency of Nevada Inc. Vice President-
North Region
IDS Insurance Agency of New Mexico Inc. Vice President-
North Region
IDS Insurance Agency of North Carolina Inc. Vice President-
North Region
IDS Insurance Agency of Ohio Inc. Vice President-
North Region
IDS Insurance Agency of Wyoming Inc. Vice President-
North Region
IDS Life Insurance Company Box 5144 Director
of New York Albany, NY 12205
</TABLE>
<PAGE>
PAGE 26
Item 29. Principal Underwriters.
(a) IDS Financial Services Inc. acts as principal underwriter
for the following investment companies:
IDS Bond Fund, Inc.; IDS California Tax-Exempt Trust; IDS
Discovery Fund, Inc.; IDS Equity Plus Fund, Inc.; IDS Extra
Income Fund, Inc.; IDS Federal Income Fund, Inc.; IDS Global
Series, Inc.; IDS Growth Fund, Inc.; IDS High Yield Tax-Exempt
Fund, Inc.; IDS International Fund, Inc.; IDS Investment
Series, Inc.; IDS Managed Retirement Fund, Inc.; IDS Market
Advantage Series, Inc.; IDS Money Market Series, Inc.; IDS New
Dimensions Fund, Inc.; IDS Precious Metals Fund, Inc.; IDS
Progressive Fund, Inc.; IDS Selective Fund, Inc.; IDS Special
Tax-Exempt Series Trust; IDS Stock Fund, Inc.; IDS Strategy
Fund, Inc.; IDS Tax-Exempt Bond Fund, Inc.; IDS Tax-Free Money
Fund, Inc.; IDS Utilities Income Fund, Inc. and IDS
Certificate Company.
(b) As to each director, officer or partner of the principal
underwriter:
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Ronald G. Abrahamson Vice President- None
IDS Tower 10 Field Administration
Minneapolis, MN 55440
Douglas A. Alger Vice President-Total None
IDS Tower 10 Compensation
Minneapolis, MN 55440
Jerome R. Amundson Vice President and None
IDS Tower 10 Controller-Mutual Funds
Minneapolis, MN 55440 Operations
Peter J. Anderson Senior Vice President- None
IDS Tower 10 Investments
Minneapolis, MN 55440
Ward D. Armstrong Vice President- None
IDS Tower 10 Sales and Marketing,
Minneapolis, MN 55440 IDS Institutional Retirement
Services
Alvan D. Arthur Region Vice President- None
IDS Tower 10 Pacific Northwest Region
Minneapolis, MN 55440
Kent L. Ashton Vice President- None
IDS Tower 10 Financial Education
Minneapolis, MN 55440 Services
<PAGE>
PAGE 27
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Joseph M. Barsky III Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
Robert C. Basten Vice President-Tax None
IDS Tower 10 and Business Services
Minneapolis, MN 55440
Timothy V. Bechtold Vice President-Insurance None
IDS Tower 10 Product Development
Minneapolis, MN 55440
John D. Begley Region Vice President- None
Olentangy Valley Center Mid-Central Region
Suite 300
7870 Olentangy River Rd.
Columbus, OH 43235
Carl E. Beihl Vice President- None
IDS Tower 10 Strategic Technology
Minneapolis, MN 55440 Planning
Alan F. Bignall Vice President- None
IDS Tower 10 Financial Planning
Minneapolis, MN 55440 Systems
Brent L. Bisson Region Vice President- None
Seafirst Financial Northwest Region
Center, Suite 1730
601 W. Riverside Ave.
Spokane, WA 99201
John C. Boeder Vice President- None
IDS Tower 10 Mature Market Group
Minneapolis, MN 55440
Karl J. Breyer Senior Vice President- None
IDS Tower 10 Corporate Affairs and
Minneapolis, MN 55440 Special Counsel
Harold E. Burke Vice President None
IDS Tower 10 and Assistant
Minneapolis, MN 55440 General Counsel
Daniel J. Candura Vice President- None
IDS Tower 10 Marketing Support
Minneapolis, MN 55440
Cynthia M. Carlson Vice President-IDS None
IDS Tower 10 Securities Services
Minneapolis, MN 55440
<PAGE>
PAGE 28
Item 29. (continued)
Orison Y. Chaffee III Vice President-Field None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
James E. Choat Senior Vice President- None
Suite 124 Field Management
6210 Campbell Rd.
Dallas, TX 75248
Kenneth J. Ciak Vice President and None
IDS Property Casualty General Manager-
1400 Lombardi Avenue IDS Property Casualty
Green Bay, WI 54304
Roger C. Corea Region Vice President- None
345 Woodcliff Drive Northeast Region
Fairport, NY 14450
Kevin F. Crowe Region Vice President- None
IDS Tower 10 Atlantic Region
Minneapolis, MN 55440
Alan R. Dakay Vice President- None
IDS Tower 10 Institutional Insurance
Minneapolis, MN 55440 Marketing
William F. Darland Region Vice President- None
Suite 108C South Central Region
301 Sovereign Court
Manchester, MO 63011
William H. Dudley Director and Executive Director/
IDS Tower 10 Vice President- Trustee
Minneapolis MN 55440 Investment Operations
Roger S. Edgar Senior Vice President- None
IDS Tower 10 Information Systems
Minneapolis, MN 55440
Gordon L. Eid Senior Vice President None
IDS Tower 10 and General Counsel
Minneapolis, MN 55440
Robert M. Elconin Vice President- None
IDS Tower 10 Government Relations
Minneapolis, MN 55440
Mark A. Ernst Vice President- None
IDS Tower 10 Retail Services
Minneapolis, MN 55440
<PAGE>
PAGE 29
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Gordon M. Fines Vice President- None
IDS Tower 10 Mutual Fund Equity
Minneapolis MN 55440 Investments
Louis C. Fornetti Senior Vice President None
IDS Tower 10 and Chief Financial
Minneapolis, MN 55440 Officer
Douglas L. Forsberg Vice President- None
IDS Tower 10 Securities Services
Minneapolis, MN 55440
Carl W. Gans Region Vice President- None
IDS Tower 10 North Central Region
Minneapolis, MN 55440
Robert G. Gilbert Vice President- None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
John J. Golden Vice President- None
IDS Tower 10 Field Compensation
Minneapolis, MN 55440 Development
Morris Goodwin Jr. Vice President and None
IDS Tower 10 Corporate Treasurer
Minneapolis, MN 55440
Suzanne Graf Vice President- None
IDS Tower 10 Systems Services
Minneapolis, MN 55440
David A. Hammer Vice President None
IDS Tower 10 and Marketing
Minneapolis, MN 55440 Controller
Robert L. Harden Region Vice President- None
Suite 403 Mid-Atlantic Region
8500 Leesburg Pike
Vienna, VA 22180
Lorraine R. Hart Vice President- None
IDS Tower 10 Insurance Investments
Minneapolis, MN 55440
Mark S. Hays Vice President-Senior None
IDS Tower 10 Portfolio Manager, IDS
Minneapolis, MN 55440 International
Brian M. Heath Region Vice President- None
IDS Tower 10 Southwest Region
Minneapolis, MN 55440
<PAGE>
PAGE 30
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Raymond E. Hirsch Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
James G. Hirsh Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
Paul C. Hopkins Vice President- None
IDS Tower 10 Senior Portfolio Manager,
Minneapolis, MN 55440 IDS International
Kevin P. Howe Vice President- None
IDS Tower 10 Government and
Minneapolis, MN 55440 Customer Relations
David R. Hubers Chairman, Chief None
IDS Tower 10 Executive Officer and
Minneapolis, MN 55440 President
Marietta L. Johns Senior Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440
Douglas R. Jordal Vice President-Taxes None
IDS Tower 10
Minneapolis, MN 55440
Craig A. Junkins Vice President - IDS 1994 None
IDS Tower 10 Implementation Planning
Minneapolis, MN 55440 and Financial Planning
Development
James E. Kaarre Vice President- None
IDS Tower 10 Marketing Information
Minneapolis, MN 55440
G. Michael Kennedy Vice President-Investment None
IDS Tower 10 Services and Investment
Minneapolis, MN 55440 Research
Susan D. Kinder Senior Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440
Richard W. Kling Senior Vice President- None
IDS Tower 10 Risk Management Products
Minneapolis, MN 55440
Harold D. Knutson Vice President- None
IDS Tower 10 System Services
Minneapolis, MN 55440
<PAGE>
PAGE 31
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Paul F. Kolkman Vice President- None
IDS Tower 10 Actuarial Finance
Minneapolis, MN 55440
Claire Kolmodin Vice President- None
IDS Tower 10 Service Quality
Minneapolis, MN 55440
David S. Kreager Vice President-Field None
IDS Tower 10 Management Development
Minneapolis, MN 55440
Christopher R. Kudrna Vice President- None
IDS Tower 10 Systems and Technology
Minneapolis, MN 55440 Development
Steven C. Kumagai Director and Senior None
IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management and Business
Systems
Mitre Kutanovski Region Vice President- None
IDS Tower 10 Midwest Region
Minneapolis, MN 55440
Edward Labenski Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Peter L. Lamaison Vice President- None
One Broadgate IDS International
London, England Division
Kurt A. Larson Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Ryan R. Larson Vice President- None
IDS Tower 10 IPG Product Development
Minneapolis, MN 55440
Daniel E. Laufenberg Vice President and None
IDS Tower 10 Chief U.S. Economist
Minneapolis, MN 55440
Peter A. Lefferts Senior Vice President and None
IDS Tower 10 Chief Marketing Officer
Minneapolis, MN 55440
Douglas A. Lennick Director and Executive None
IDS Tower 10 Vice President-Private
Minneapolis, MN 55440 Client Group
<PAGE>
PAGE 32
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Mary J. Malevich Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Fred A. Mandell Vice President- None
IDS Tower 10 Field Marketing Readiness
Minneapolis, MN 55440
William J. McKinney Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440 Support
Thomas W. Medcalf Vice President- None
IDS Tower 10 Senior Portfolio Manager
Minneapolis, MN 55440
William C. Melton Vice President- None
IDS Tower 10 International Research
Minneapolis, MN 55440 and Chief International
Economist
Janis E. Miller Vice President- None
IDS Tower 10 Variable Assets
Minneapolis, MN 55440
James A. Mitchell Executive Vice President- None
IDS Tower 10 Marketing and Products
Minneapolis, MN 55440
Pamela J. Moret Vice President- None
IDS Tower 10 Corporate Communications
Minneapolis, MN 55440
Barry J. Murphy Senior Vice President- None
IDS Tower 10 Client Service
Minneapolis, MN 55440
Robert J. Neis Vice President- None
IDS Tower 10 Information Systems
Minneapolis, MN 55440 Operations
Vernon F. Palen Region Vice President- None
Suite D-222 Rocky Mountain Region
7100 E. Lincoln Drive
Scottsdale, AZ 85253
James R. Palmer Vice President- None
IDS Tower 10 Insurance Operations
Minneapolis, MN 55440
Judith A. Pennington Vice President- None
IDS Tower 10 Field Technology
Minneapolis, MN 55440
<PAGE>
PAGE 33
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
George M. Perry Vice President- None
IDS Tower 10 Corporate Strategy
Minneapolis, MN 55440 and Development
Susan B. Plimpton Vice President- None
IDS Tower 10 Segmentation Development
Minneapolis, MN 55440 and Support
Ronald W. Powell Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
James M. Punch Vice President- None
IDS Tower 10 TransAction Services
Minneapolis, MN 55440
Frederick C. Quirsfeld Vice President-Taxable None
IDS Tower 10 Mutual Fund Investments
Minneapolis, MN 55440
Roger B. Rogos Region Vice President- None
Suite 15, Parkside Place Great Lakes Region
945 Boardman-Canfield Rd
Youngstown, Ohio 44512
ReBecca K. Roloff Vice President-1994 None
IDS Tower 10 Program Director
Minneapolis, MN 55440
Stephen W. Roszell Vice President- None
IDS Tower 10 Advisory Institutional
Minneapolis, MN 55440 Marketing
Robert A. Rudell Vice President- None
IDS Tower 10 IDS Institutional
Minneapolis, MN 55440 Retirement Services
John P. Ryan Vice President and None
IDS Tower 10 General Auditor
Minneapolis, MN 55440
Erven A. Samsel Senior Vice President- None
45 Braintree Hill Park Field Management
Braintree, MA 02184
R. Reed Saunders Director and Senior None
IDS Tower 10 Vice President-Corporate
Minneapolis, MN 55440 Strategy and Development
Stuart A. Sedlacek Vice President- None
IDS Tower 10 Assured Assets
Minneapolis, MN 55440
<PAGE>
PAGE 34
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Donald K. Shanks Vice President- None
IDS Tower 10 Property Casualty
Minneapolis, MN 55440
F. Dale Simmons Vice President-Senior None
IDS Tower 10 Portfolio Manager,
Minneapolis, MN 55440 Insurance Investments
Judy P. Skoglund Vice President- None
IDS Tower 10 Human Resources and
Minneapolis, MN 55440 Organization Development
Julian W. Sloter Region Vice President- None
9040 Roswell Rd. Southeast Region
River Ridge-Suite 600
Atlanta, GA 30350
Ben C. Smith Vice President- None
IDS Tower 10 Workplace Marketing
Minneapolis, MN 55440
William A. Smith Vice President and None
IDS Tower 10 Controller-Private
Minneapolis, MN 55440 Client Group
James B. Solberg Vice President- None
IDS Tower 10 Advanced Financial
Minneapolis, MN 55440 Planning
Bridget Sperl Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440 Management Services
Lois A. Stilwell Vice President- None
IDS Tower 10 Planner Training and
Minneapolis, MN 55440 Development
William A. Stoltzmann Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
James J. Strauss Vice President- None
IDS Tower 10 Corporate Planning
Minneapolis, MN 55440 and Analysis
Jeffrey J. Stremcha Vice President-Information None
IDS Tower 10 Resource Management/ISD
Minneapolis, MN 55440
Neil G. Taylor Vice President- None
IDS Tower 10 Field Business Systems
Minneapolis, MN 55440
<PAGE>
PAGE 35
Item 29. (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
John R. Thomas Senior Vice President- Director/
IDS Tower 10 Information and Trustee
Minneapolis, MN 55440 Technology
Melinda S. Urion Vice President and None
IDS Tower 10 Corporate Controller
Minneapolis, MN 55440
Wesley W. Wadman Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Norman Weaver Jr. Senior Vice President- None
Suite 215 Field Management
1501 Westcliff Drive
Newport Beach, CA 92660
Michael L. Weiner Vice President- None
IDS Tower 10 Corporate Tax
Minneapolis, MN 55440 Operations
Lawrence J. Welte Vice President- None
IDS Tower 10 Investment Administration
Minneapolis, MN 55440
William N. Westhoff Senior Vice President- None
IDS Tower 10 Fixed Income Management
Minneapolis, MN 55440
Edwin M. Wistrand Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
Michael R. Woodward Senior Vice President- None
Suite 815 Field Management
8585 Broadway
Merrillville, IN 46410
Item 29(c). Not applicable.
Item 30. Location of Accounts and Records
IDS Financial Corporation
IDS Tower 10
Minneapolis, MN 55440
Item 31. Management Services
Not Applicable.
<PAGE>
PAGE 36
Item 32. Undertakings
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant undertakes to furnish each person
to whom a prospectus is delivered with a copy of
the Registrant's latest annual report to
shareholders, upon request and without charge.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant, IDS Utilities Income Fund, Inc. has duly
caused this Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Minneapolis and
State of Minnesota on the 22nd day of December 1994.
IDS UTILITIES INCOME FUND, INC.
By /s/ WILLIAM R. PEARCE**
------------------------------------
William R. Pearce,
PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
its Registration Statement has been signed below by the following persons in the
capacities indicated on the 22nd day of December 1994.
Signature Capacity
- ----------------------------------- -------------------------
/s/ WILLIAM R. PEARCE** President, Principal
- ----------------------------------- Executive Officer and
William R. Pearce Director
Treasurer, Principal
/s/ LESLIE L. OGG** Financial Officer and
- ----------------------------------- Principal Accounting
Leslie L. Ogg Officer
/s/ LYNNE V. CHENEY*
- ----------------------------------- Director
Lynne V. Cheney
/s/ WILLIAM H. DUDLEY*
- ----------------------------------- Director
William H. Dudley
/s/ ROBERT F. FROEHLKE*
- ----------------------------------- Director
Robert F. Froehlke
/s/ DAVID R. HUBERS*
- ----------------------------------- Director
David R. Hubers
/s/ HEINZ F. HUTTER*
- ----------------------------------- Director
Heinz F. Hutter
II-3
<PAGE>
Signature Capacity
- ----------------------------------- -------------------------
/s/ ANNE P. JONES*
- ----------------------------------- Director
Anne P. Jones
/s/ DONALD M. KENDALL*
- ----------------------------------- Director
Donald M. Kendall
/s/ MELVIN R. LAIRD*
- ----------------------------------- Director
Melvin R. Laird
/s/ LEWIS W. LEHR*
- ----------------------------------- Director
Lewis W. Lehr
/s/ EDSON W. SPENCER*
- ----------------------------------- Director
Edson W. Spencer
/s/ JOHN R. THOMAS*
- ----------------------------------- Director
John R. Thomas
/s/ WHEELOCK WHITNEY*
- ----------------------------------- Director
Wheelock Whitney
/s/ C. ANGUS WURTELE*
- ----------------------------------- Director
C. Angus Wurtele
*Signed pursuant to Directors' Power of Attorney, dated November 10, 1994,
filed as Exhibit 18(a) electronically herewith by:
/s/ LESLIE L. OGG
- -------------------------------------------
Leslie L. Ogg
**Signed pursuant to Officers' Power of Attorney filed as Exhibit 17(b) to
Registrant's Post-Effective Amendment No. 8 to Registration Statement No.
33-20872 by:
/s/ LESLIE L. OGG
- -------------------------------------------
Leslie L. Ogg
II-4
<PAGE>
CONTENTS OF THIS
POST-EFFECTIVE AMENDMENT NO. 12
TO REGISTRATION STATEMENT NO. 33-20872
This Post-Effective Amendment comprises the following papers and documents:
The facing sheet.
The cross reference page.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Part C.
Other information.
Exhibits.
The signatures.
<PAGE>
PAGE 1
IDS Utilities Income Fund, Inc.
Registration Number 33-20872/811-5522
EXHIBIT INDEX
Exhibit 18(a) Directors' Power of Attorney, dated Nov. 10, 1994
<PAGE>
Exhibit 18(a)
DIRECTORS/TRUSTEES POWER OF ATTORNEY
City of Minneapolis
State of Minnesota
Each of the undersigned, as directors and trustees of the
below listed open-end, diversified investment companies that
previously have filed registration statements and amendments
thereto pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940 with the Securities and
Exchange Commission:
1933 Act 1940 Act
Reg. Number Reg. Number
----------- -----------
IDS Bond Fund, Inc. 2-51586 811-2503
IDS California Tax-Exempt Trust 33-5103 811-4646
IDS Discovery Fund, Inc. 2-72174 811-3178
IDS Equity Select Fund, Inc. 2-13188 811-772
IDS Extra Income Fund, Inc. 2-86637 811-3848
IDS Federal Income Fund, Inc. 2-96512 811-4260
IDS Global Series, Inc. 33-25824 811-5696
IDS Growth Fund, Inc. 2-38355 811-2111
IDS High Yield Tax-Exempt Fund, Inc. 2-63552 811-2901
IDS International Fund, Inc. 2-92309 811-4075
IDS Investment Series, Inc. 2-11328 811-54
IDS Managed Retirement Fund, Inc. 2-93801 811-4133
IDS Market Advantage Series, Inc. 33-30770 811-5897
IDS Money Market Series, Inc. 2-54516 811-2591
IDS New Dimensions Fund, Inc. 2-28529 811-1629
IDS Precious Metals Fund, Inc. 2-93745 811-4132
IDS Progressive Fund, Inc. 2-30059 811-1714
IDS Selective Fund, Inc. 2-10700 811-499
IDS Special Tax-Exempt Series Trust 33-5102 811-4647
IDS Stock Fund, Inc. 2-11358 811-498
IDS Strategy Fund, Inc. 2-89288 811-3956
IDS Tax-Exempt Bond Fund, Inc. 2-57328 811-2686
IDS Tax-Free Money Fund, Inc. 2-66868 811-3003
IDS Utilities Income Fund, Inc. 33-20872 811-5522
hereby constitutes and appoints William R. Pearce and Leslie L. Ogg
or either one of them, as her or his attorney-in-fact and agent, to
sign for her or him in her or his name, place and stead any and all
further amendments to said registration statements filed pursuant
to said Acts and any rules and regulations thereunder, and to file
such amendments with all exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission,
granting to either of them the full power and authority to do and
perform each and every act required and necessary to be done in
connection therewith.
Dated the 10th day of November, 1994.
<PAGE>
/s/ Lynne V. Cheney /s/ Melvin R. Laird
- -------------------------- ----------------------------
Lynne V. Cheney Melvin R. Laird
/s/ William H. Dudley /s/ Lewis W. Lehr
- -------------------------- ----------------------------
William H. Dudley Lewis W. Lehr
/s/ Robert F. Froehlke /s/ William R. Pearce
- -------------------------- ----------------------------
Robert F. Froehlke William R. Pearce
/s/ David R. Hubers /s/ Edson W. Spencer
- -------------------------- ----------------------------
David R. Hubers Edson W. Spencer
/s/ Heinz F. Hutter /s/ John R. Thomas
- -------------------------- ----------------------------
Heinz F. Hutter John R. Thomas
/s/ Anne P. Jones /s/ Wheelock Whitney
- -------------------------- ----------------------------
Anne P. Jones Wheelock Whitney
/s/ Donald M. Kendall /s/ C. Angus Wurtele
- -------------------------- ----------------------------
Donald M. Kendall C. Angus Wurtele
