1998 SEMIANNUAL REPORT
IDS
Emerging
Markets Fund
The goal of IDS Emerging Markets Fund, a part of IDS Global Series, Inc.,
is long-term growth of capital.
American Express Financial Advisors
Distributed by American Express Financial Advisors Inc.
<PAGE>
(icon of) world globe
Expanding your opportunities
As free enterprise expands around the world, so do investment
opportunities. Some of the most exciting ones can be found in the
so-called "emerging markets" - smaller economies located largely in Asia,
Latin America and Eastern Europe. Attracted by their rapid growth
potential, many aggressive investors have made these markets, which have a
higher-than-average risk level, an integral part of their portfolios.
Contents
From the chairman 3
From the portfolio manager 3
The Portfolio's ten largest holdings 5
Financial statements (Fund) 6
Notes to financial statements (Fund) 9
Financial statements (Portfolio) 17
Notes to financial statements (Portfolio) 20
Investments in securities 30
Board members and officers 34
IDS mutual funds 35
<PAGE>
To our shareholders
From the chairman
If you're an experienced investor, you know that the past few years have
been unusually strong in many financial markets. Perhaps just as
important, history shows that bull markets don't last forever. Though
they're often unpredictable, declines -- whether they're brief or
long-lasting, moderate or substantial -- are always a possibility. We saw
evidence of that in late October, when declines in Asian stock markets
spawned a sharp drop in markets worldwide, including the U.S.
That fact reinforces the need for investors to review periodically their
long-term goals and examine whether their investment program remains on
track to achieving them. Your quarterly investment statements are one part
of that monitoring process. The other is a meeting with your American
Express financial advisor. That becomes even more important if there's a
major change in your financial situation or in the financial markets.
William R. Pearce
(picture of) William R. Pearce
William R. Pearce
Chairman of the board
<PAGE>
From the portfolio manager
The past six months was another volatile period in emerging markets around
the world. Nevertheless, IDS Emerging Markets Fund's Class A shares
produced a positive return of 4.1% for the first half of the fiscal year,
which ran from November 1997 through April 1998. The gain exceeded that of
the Morgan Stanley Emerging Market Fund Index, a commonly used benchmark
for evaluating the performance of mutual funds such as this one.
The period began with much of the world still reeling from a meltdown in
Asian markets that occurred last October. Although the financial crisis
was actually confined to Asia, many smaller markets in other parts of the
world suffered as well, as worried investors hastily dumped shares in any
market that appeared susceptible to a spreading of the "Asian flu."
Two such markets were Latin America, including Mexico, Brazil and
Argentina, and Russia. While the Fund's exposure to Asia was quite small
(I had greatly reduced Asian holdings prior to last October's downturn),
it did have considerable holdings in Latin America and Russia, which
remained under selling pressure for most of the winter. One of the few
emerging markets that bucked the trend was Hungary, where the Fund's
investments were modest but rewarding.
A cash cushion
Also benefiting the Fund's performance was the high level of cash reserves
in the portfolio -- nearly 20% of assets at times. The cash provided
something of a cushion for the Fund's value amid the market upheaval,
especially during the first few months of the period.
The brightest part of the past six months came in February, when the
Fund's holdings in Brazil and Eastern Europe, both of which are benefiting
from a shift toward market economies and the privatization of several
industries, rebounded strongly. This allowed the Fund to more than recoup
the losses incurred in the previous months.
As we enter the second half of the fiscal year, it appears that the worst
is over in the Asian markets, which, if so, should lift at least some of
the cloud hovering over emerging markets as a whole. While that should
allow more independent market performance in the months ahead, I think the
potential for volatility is very high. Therefore, I am continuing to avoid
Asia, except for relatively modest holdings in China and Taiwan, whose
economies still enjoy good health. The bulk of the investments, though,
continue to be spread among markets in Latin America and Eastern Europe,
where the forces of free enterprise remain hard at work.
Ian King
(picture of) Ian King
Ian King
Portfolio manager
<PAGE>
To our shareholders
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 1998 $ 5.41
Oct. 31, 1997 $ 5.33
Increase $ 0.08
Distributions
Nov. 1, 1997 - April 30, 1998
From income $ 0.14
From capital gains $ --
Total distributions $ 0.14
Total return* +4.1%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 1998 $ 5.35
Oct. 31, 1997 $ 5.29
Increase $ 0.06
Distributions
Nov. 1, 1997 - April 30, 1998
From income $ .14
From capital gains $ --
Total distributions $ .14
Total return* +3.7%**
Class Y
6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 1998 $ 5.41
Oct. 31, 1997 $ 5.33
Increase $ 0.08
Distributions
Nov. 1, 1997 - April 30, 1998
From income $ 0.14
From capital gains $ --
Total distributions $ 0.14
Total return* +4.1%**
*The prospectus discusses the effect of sales charges, if any, on the
various classes.
**The total return is a hypothetical investment in the Fund with all
distributions reinvested.
<PAGE>
The Portfolio's ten largest holdings
Percent Value
(of Portfolio's net assets)(as of April 30, 1998)
Telecomunicacoes Brasileiras-
Telebras ADR (Brazil) 3.89% $17,662,812
National Bank of Greece (Greece) 3.88 17,594,100
Petroleo Brasileiro ADR (Brazil) 3.06 13,867,414
Telefonos de Mexico ADR Cl L (Mexico) 2.37 10,758,750
Centrais Eletricas Brasileiras ADR (Brazil) 2.20 9,985,608
Shanghai Industrial Holdings (Hong Kong) 2.09 9,467,031
Samsung Electronics (South Korea) 1.93 8,742,686
Bank Hapoalim (Israel) 1.89 8,573,120
China Telecom (Hong Kong) 1.88 8,540,100
Grupo Carso (Mexico) 1.87 8,496,170
Note: Certain foreign investment risks include: changes in currency
exchange rates, adverse political or economic order, and lack of similar
regulatory requirements followed by U.S. companies.
For further detail about these holdings, please refer to the section
entitled "Investments in securities" herein.
(icon of) pie chart
The ten holdings listed here make up 25.06% of the Portfolio's net assets
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Emerging Markets Fund
April 30, 1998
Assets
(Unaudited)
<S> <C>
Investment in Emerging Markets Portfolio (Note 1) $453,040,285
Organizational cost 33
Total assets $453,040,318
------------
Liabilities
Disbursements in excess of cash on demand deposit 2,000
Accrued distribution fee 3,124
Accrued service fee 2,134
Accrued transfer agency fee 1,709
Accrued administrative services fee 1,166
Other accrued expenses 112,295
-------
Total liabilities 122,428
-------
Net assets applicable to outstanding capital stock $452,917,890
------------
Represented by
Capital stock-- $.01 par value (Note 1) $ 840,919
Additional paid-in capital 485,058,270
Net operating loss (1,216,177)
Accumulated net realized gain (loss) (39,360,405)
Unrealized appreciation (depreciation) on investments and on translation
of assets and liabilities in foreign currencies 7,595,283
---------
Total-- representing net assets applicable to outstanding capital stock $452,917,890
============
Net assets applicable to outstanding shares: Class A $298,126,900
Class B $154,742,628
Class Y $ 48,362
Net asset value per share of outstanding capital stock: Class A shares 55,148,594 $ 5.41
Class B shares 28,934,396 $ 5.35
Class Y shares 8,941 $ 5.41
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of operations
IDS Emerging Markets Fund
Six months ended April 30, 1998
Investment income
(Unaudited)
Income:
<S> <C>
Dividends $1,165,483
Interest 1,882,020
Less foreign taxes withheld (95,405)
-------
Total income 2,952,098
---------
Expenses (Note 2):
Expenses allocated from Emerging Markets Portfolio 2,420,710
Distribution fee -- Class B 491,839
Transfer agency fee 548,481
Incremental transfer agency fee-- Class B 13,294
Service fee
Class A 228,709
Class B 114,547
Class Y 8
Administrative services fees and expenses 190,310
Compensation of board members 4,594
Postage 38,527
Registration fees 113,125
Reports to shareholders 11,927
Audit fees 2,250
Other 1,774
-----
Total expenses 4,180,095
Earnings credits on cash balances (Note 2) (8,054)
------
Total net expenses 4,172,041
---------
Investment income (loss) -- net (1,219,943)
----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (35,258,680)
Foreign currency transactions (2,120,798)
----------
Net realized gain (loss) on investments (37,379,478)
Net change in unrealized appreciation (depreciation) on investments and
on translation of assets and liabilities in foreign currencies 57,005,821
----------
Net gain (loss) on investments and foreign currencies 19,626,343
----------
Net increase (decrease) in net assets resulting from operations $18,406,400
===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statement of changes in net assets
IDS Emerging Markets Fund
Operations and distributions
April 30, 1998 For the period
Six months ended from Nov. 13, 1996*
(Unaudited) to Oct. 31, 1997
<S> <C> <C>
Investment income (loss)-- net $ (1,219,943) $ 79,761
Net realized gain (loss) on investments (37,379,478) 8,025,874
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 57,005,821 (49,410,538)
---------- -----------
Net increase (decrease) in net assets resulting from operations 18,406,400 (41,304,903)
---------- -----------
Distributions to shareholders from:
Net investment income
Class A -- (22,017)
Class B -- (5,559)
Class Y -- (2)
Net realized gain
Class A (6,690,800) --
Class B (3,376,827) --
Class Y (29) --
--- ---
Total distributions (10,067,656) (27,578)
----------- -------
Capital share transactions (Note 3)
Proceeds from sales
Class A shares (Note 2) 92,770,928 311,266,815
Class B shares 47,799,129 134,661,568
Class Y shares 44,981 --
Reinvestment of distributions at net asset value
Class A shares 6,532,270 21,345
Class B shares 3,367,500 5,556
Class Y shares 28 2
Payments for redemptions
Class A shares (50,167,006) (40,884,846)
Class B shares (Note 2) (13,395,937) (6,113,706)
----------- ----------
Increase (decrease) in net assets from capital share transactions 86,951,893 398,956,734
---------- -----------
Total increase (decrease) in net assets 95,290,637 357,624,253
Net assets at beginning of period 357,627,253 3,000
Net assets at end of period $452,917,890 $357,627,253
============ ============
*Commencement of operations.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
IDS Emerging Markets Fund
(Unaudited as to April 30, 1998)
1
Summary of
significant
accounting policies
IDS Emerging Markets Fund (a series of IDS Global Series, Inc.) is
registered under the Investment Company Act of 1940 (as amended) as a
diversified, open-end management investment company. IDS Global Series,
Inc. has 10 billion authorized shares of capital stock that can be
allocated among the separate series as designated by the board. On Nov.
12, 1996, American Express Financial Corporation (AEFC) invested $3,000 in
the Fund which represented 200 shares for Class A, Class B and Class Y,
respectively. Operations commenced on Nov. 13, 1996.
The Fund offers Class A, Class B and Class Y shares. Class A shares are
sold with a front-end sales charge. Class B shares may be subject to a
contingent deferred sales charge and such shares automatically convert to
Class A shares during the ninth calendar year of ownership. Class Y shares
have no sales charge and are offered only to qualifying institutional
investors.
All classes of shares have identical voting, dividend, liquidation and
other rights, and the same terms and conditions, except that the level of
distribution fee, transfer agency fee and service fee (class specific
expenses) differs among classes. Income, expenses (other than class
specific expenses) and realized and unrealized gains or losses on
investments are allocated to each class of shares based upon its relative
net assets.
Investment in Emerging Markets Portfolio
The Fund invests all of its assets in Emerging Markets Portfolio (the
Portfolio), a series of World Trust (the Trust), an open-end investment
company that has the same objectives as the Fund. Emerging Markets
Portfolio seeks to provide shareholders with long-term growth of capital
by investing primarily in stocks of companies in developing countries
throughout the world that are believed to offer growth potential.
The Fund records daily its share of the Portfolio's income, expenses and
realized and unrealized gains and losses. The financial statements of the
Portfolio are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements.
The Fund records its investment in the Portfolio at value which is equal
to the Fund's proportionate ownership interest in the net assets of the
Portfolio. The percentage of the Portfolio owned by the Fund at April 30,
1998 was 99.85%. Valuation of securities held by the Portfolio is
discussed in Note 1 of the Portfolio's "Notes to financial statements,"
which are included elsewhere in this report.
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.
Federal taxes
Since the Fund's policy is to comply with all sections of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to the shareholders, no provision for
income or excise taxes is required.
Net investment income (loss) and net realized gains (losses) allocated
from the Portfolio may differ for financial statement and tax purposes
primarily because of the deferral of losses on certain futures contracts,
the recognition of certain foreign currency gains (losses) as ordinary
income (loss) for tax purposes, and losses deferred due to "wash sale"
transactions. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing
of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gains
(losses) were recorded by the Fund.
Dividends to shareholders
An annual dividend from net investment income, declared and paid at the
end of the calendar year, when available, is reinvested in additional
shares of the Fund at net asset value or payable in cash. Capital gains,
when available, are distributed along with the income dividend.
2
Expenses and
sales charges
In addition to the expenses allocated from the Portfolio, the Fund accrues
its own expenses as follows:
The Fund entered into an agreement with American Express Financial
Corporation (AEFC) for providing administrative services. Under its
Administrative Services Agreement, the Fund pays AEFC a fee for
administration and accounting services at a percentage of the Fund's
average daily net assets in reducing percentages from 0.10% to 0.05%
annually. Additional administrative service expenses paid by the Fund are
office expenses, consultants' fees and compensation of officers and
employees. Under this agreement, the Fund also pays taxes, audit and
certain legal fees, registration fees for shares, compensation of board
members, corporate filing fees, organizational expenses and any other
expenses properly payable by the Fund and approved by the board.
Under a separate Transfer Agency Agreement, American Express Client
Service Corporation (AECSC) maintains shareholder accounts and records.
The Fund pays AECSC an annual fee per shareholder account for this service
as follows:
oClass A $15
oClass B $16
oClass Y $15
The Fund entered into agreements with American Express Financial Advisors
Inc. for distribution and shareholder servicing-related services. Under a
Plan and Agreement of Distribution, 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.
Under a 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 and commencing on May 9,
1997, the fee is calculated at a rate of 0.10% of the Funds average daily
net assets attributable to Class Y shares.
Sales charges received by American Express Financial Advisors Inc. for
distributing Fund shares were $1,227,579 for Class A and $63,947 for Class
B for the six months ended April 30, 1998.
During the six months ended April 30, 1998, the Fund's transfer agency
fees were reduced by $8,054 as a result of earnings credits from overnight
cash balances.
3
Capital share
transactions
Transactions in shares of capital stock for the periods indicated are as
follows:
Six months ended April 30, 1998
Class A Class B Class Y
Sold 17,894,785 9,271,712 8,736
Issued for reinvested 1,259,840 654,773 5
distributions
Redeemed (9,643,240) (2,602,783) --
Net increase 9,511,385 7,323,702 8,741
Period ended Oct. 31, 1997*
Class A Class B Class Y
Sold 52,439,540 22,629,543 --
Issued for reinvested 4,182 1,089 --
distributions
Redeemed (6,806,713) (1,020,138) --
Net increase 45,637,009 21,610,494 --
* Inception date was Nov. 13, 1996.
<PAGE>
<TABLE>
<CAPTION>
Notes to financial statements
IDS Emerging Markets Fund
4. Financial highlights
The table below shows certain important financial information for
evaluating the Fund's results.
Fiscal period ended Oct. 31,
Per share income and capital changes(a)
Class A Class B Class Y
1998(c) 1997(b) 1998(c) 1997(b) 1998(c) 1997(b)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $5.33 $5.00 $5.29 $5.00 $5.33 $5.00
beginning of period
Income from investment
operations:
Net investment income (loss) (.01) .01 (.03) (.04) (.01) .01
Net gains (both realized .23 .33 .23 .33 .23 .33
and unrealized)
Total from investment .22 .34 .20 .29 .22 .34
operations
Less distributions:
Distributions from net -- (.01) -- -- -- (.01)
investment income
Distributions from
realized gains (.14) -- (.14) -- (.14) --
Total distibutions (.14) (.01) (.14) -- (.14) (.01)
Net asset value, $5.41 $5.33 $5.35 $5.29 $5.41 $5.33
end of period
Ratios/supplemental data
Class A Class B Class Y
1998(c) 1997(b) 1998(c) 1997(b) 1998(c) 1997(b)
Net assets, end of period $298 $243 $155 $114 $-- $--
(in millions)
Ratio of expenses to 1.87% d 1.90%d,f 2.64%d 2.67%d,f 1.75%d 1.75%d,f
average daily net assetse
Ratio of net income (loss) (.36%)d .28%d (1.13%)d (.50%)d (.43%)d .33%d
to average daily net assets
Portfolio turnover rate 69% 87% 69% 87% 69% 87%
(excluding short-term
securities)
Total returng 4.1% 6.8% 3.7% 6.1% 4.1% 6.9%
Average brokerage commission $.0015 $.0034 $.0015 $.0034 $.0015 $.0034
rate for the underlying
Portfolioh
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Period from Nov. 13, 1996 (inception date) to Oct. 31, 1997.
c Six months ended April 30, 1998 (Unaudited).
d Adjusted to an annual basis.
e Expense ratio is based on total expense of the Fund before reduction of
earning credits on cash balances.
f During the period from Nov. 13, 1996 to Oct. 31, 1997, AEFC reimbursed the
Fund for certain expenses. Had AEFC not done so, the annual ratios of expenses
would have been 1.92%, 2.69% and 1.77% for Class A, B and Y, respectively.
g Total return does not reflect payment of a sales charge.
h The Fund is required to disclose an average brokerage commission rate per
share for security trades on which commissions are charged. The comparability
of this information may be affected by the fact that commission rates per
share vary significantly among foreign countries.
</TABLE>
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<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
Emerging Markets Portfolio
April 30, 1998
Assets
(Unaudited)
Investments in securities, at value (Note 1)
<S> <C>
(identified cost $488,584,583) $496,296,281
Cash in bank on demand deposit 750,992
Dividends and accrued interest receivable 178,170
Receivable for investment securities sold 6,809,528
Unrealized appreciation on foreign currency contracts held, at value (Notes 1 and 5) 1,994
U.S. government securities held as collateral (Note 4) 10,323,518
----------
Total assets 514,360,483
-----------
Liabilities
Payable for investment securities purchased 6,655,767
Unrealized depreciation on foreign currency contracts held, at value (Notes 1 and 5) 14,526
Payable upon return of securities loaned (Note 4) 53,910,168
Accrued investment management services fee 13,338
Other accrued expenses 37,833
------
Total liabilities 60,631,632
----------
Net assets $453,728,851
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statement of operations
Emerging Markets Portfolio
Six months ended April 30, 1998
Investment income
(Unaudited)
Income:
<S> <C>
Dividends $ 1,167,429
Interest 1,881,883
Less foreign taxes withheld (95,566)
-------
Total income 2,953,746
---------
Expenses (Note 2):
Investment management services fee 2,154,672
Compensation of board members 4,594
Custodian fees 256,828
Audit fees 6,750
Other 11,992
------
Total expenses 2,434,836
Earnings credits on cash balances (Note 2) (10,058)
-------
Total net expenses 2,424,778
---------
Investment income (loss) -- net 528,968
-------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) (35,322,147)
Foreign currency transactions (2,126,113)
----------
Net realized gain (loss) on investments (37,448,260)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 57,104,332
----------
Net gain (loss) on investments and foreign currencies 19,656,072
----------
Net increase (decrease) in net assets resulting from operations $20,185,040
===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
Emerging Markets Portfolio
Operations
April 30, 1998 For the period
Six months ended from Nov. 13, 1996*
(Unaudited) to Oct. 31, 1997
<S> <C> <C>
Investment income (loss)-- net $ 528,968 $ 1,745,263
Net realized gain (loss) on investments (37,448,260) 8,130,275
Net change in unrealized appreciation (depreciation ) on investments
and on translation of assets and liabilities in foreign currencies 57,104,332 (49,497,497)
---------- -----------
Net increase (decrease) in net assets resulting from operations 20,185,040 (39,621,959)
Net contributions (withdrawals) from partners 75,085,539 398,076,231
---------- -----------
Total increase (decrease) in net assets 95,270,579 358,454,272
Net assets at beginning of period 358,458,272 4,000
----------- -----
Net assets at end of period $453,728,851 $358,458,272
============ ============
*Commencement of operations.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
Emerging Markets Portfolio
(Unaudited as to April 30, 1998)
1
Summary of
significant
accounting policies
Emerging Markets Portfolio (the Portfolio) is a series of World Trust (the
Trust) and is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company.
Emerging Markets Portfolio invests primarily in equity securities of
issuers in countries with developing or emerging markets. The Declaration
of Trust permits the Trustees to issue non-transferable interests in the
Portfolio. On Nov. 12, 1996, two funds affiliated with American Express
Financial Corporation (AEFC) invested $4,000 in the Portfolio. Operations
did not formally commence until Nov. 13, 1996.
Significant accounting policies followed by the Portfolio are summarized
below:
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.
Valuation of securities
All securities are valued at the close of each business day. Securities
traded on national securities exchanges or included in national market
systems are valued at the last quoted sales price. Debt securities are
generally traded in the over-the-counter market and are valued at a price
deemed best to reflect fair value as quoted by dealers who make markets in
these securities or by an independent pricing service. Securities for
which market quotations are not readily available are valued at fair value
according to methods selected in good faith by the board. Short-term
securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current
interest rates; those maturing in 60 days or less are valued at amortized
cost.
Option transactions
In order to produce incremental earnings, protect gains and facilitate
buying and selling of securities for investment purposes, the Portfolio
may buy and write options traded on any U.S. or foreign exchange or in the
over-the-counter market where the completion of the obligation is
dependent upon the credit standing of the other party. The Portfolio also
may buy and sell put and call options and write covered call options on
portfolio securities and may write cash-secured put options. The risk in
writing a call option is that the Portfolio gives up the opportunity of
profit if the market price of the security increases. The risk in writing
a put option is that the Portfolio may incur a loss if the market price of
the security decreases and the option is exercised. The risk in buying an
option is that the Portfolio pays a premium whether or not the option is
exercised. The Portfolio also has the additional risk of not being able to
enter into a closing transaction if a liquid secondary market does not
exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The
Portfolio will realize a gain or loss upon expiration or closing of the
option transaction. When an option is exercised, the proceeds on sales for
a written call option, the purchase cost for a written put option or the
cost of a security for a purchased put or call option is adjusted by the
amount of premium received or paid.
Futures transactions
In order to gain exposure to or protect itself from changes in the market,
the Portfolio may buy and sell financial futures contracts traded on any
U.S. or foreign exchange. The Portfolio also may buy and write put and
call options on these futures contracts. Risks of entering into futures
contracts and related options include the possibility that there may be an
illiquid market and that a change in the value of the contract or option
may not correlate with changes in the value of the underlying securities.
Upon entering into a futures contract, the Portfolio is required to
deposit either cash or securities in an amount (initial margin) equal to a
certain percentage of the contract value. Subsequent payments (variation
margin) are made or received by the Portfolio each day. The variation
margin payments are equal to the daily changes in the contract value and
are recorded as unrealized gains and losses. The Portfolio recognizes a
realized gain or loss when the contract is closed or expires.
Foreign currency translations
and foreign currency contracts
Securities and other assets and liabilities denominated in foreign
currencies are translated daily into U.S. dollars at the closing rate of
exchange. Foreign currency amounts related to the purchase or sale of
securities and income and expenses are translated at the exchange rate on
the transaction date. The effect of changes in foreign exchange rates on
realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the statement of operations, net
realized gains or losses from foreign currency transactions may arise from
sales of foreign currency, closed forward contracts, exchange gains or
losses realized between the trade date and settlement dates on securities
transactions, and other translation gains or losses on dividends, interest
income and foreign withholding taxes.
The Portfolio may enter into forward foreign currency exchange contracts
for operational purposes and to protect against adverse exchange rate
fluctuation. The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the Portfolio and the resulting unrealized
appreciation or depreciation are determined using foreign currency
exchange rates from an independent pricing service. The Portfolio is
subject to the credit risk that the other party will not complete the
obligations of the contract.
Federal taxes
For federal income tax purposes the Portfolio qualifies as a partnership
and each investor in the Portfolio is treated as the owner of its
proportionate share of the net assets, income, expenses and realized and
unrealized gains and losses of the Portfolio. Accordingly, as a
"pass-through" entity, the Portfolio does not pay any income dividends or
capital gain distributions.
Other
Security transactions are accounted for on the date securities are
purchased or sold. Dividend income is recognized on the ex-dividend date
or upon receipt of ex-dividend notification in the case of certain foreign
securities. Interest income, including level-yield amortization of premium
and discount, is accrued daily.
2
Fees and
expenses
The Trust, on behalf of the Portfolio, has entered into an Investment
Management Services Agreement with AEFC for managing its portfolio. Under
this agreement, AEFC determines which securities will be purchased, held
or sold. The management fee is a percentage of the Portfolio's average
daily net assets in reducing percentages from 1.10% to 1.00% annually.
Under the agreement, the Trust also pays taxes, brokerage commissions and
nonadvisory expenses, which include custodian fees, audit and certain
legal fees, fidelity bond premiums, registration fees for units, office
expenses, consultants' fees, compensation of trustees, corporate filing
fees, expenses incurred in connection with lending securities of the
Portfolio and any other expenses properly payable by the Trust or
Portfolio and approved by the board.
During the six months ended April 30, 1998, the Portfolio's custodian fees
were reduced by $10,058 as a result of earnings credits from overnight
cash balances.
Pursuant to a Placement Agency Agreement, American Express Financial
Advisors Inc. acts as placement agent of the units of the Trust.
3
Securities
transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $243,180,295 and $128,631,796,
respectively, for the six months ended April 30, 1998. For the same
period, the portfolio turnover rate was 69%. Realized gains and losses are
determined on an identified cost basis.
4
Lending of
portfolio securities
At April 30, 1998, securities valued at $50,721,737 were on loan to
brokers. For collateral, the Portfolio received $43,586,650 in cash and
U.S. government securities valued at $10,323,518. Income from securities
lending amounted to $233,065 for the six months ended April 30, 1998. The
risks to the Portfolio of securities lending are that the borrower may not
provide additional collateral when required or return the securities when
due.
5
Foreign currency
contracts
At April 30, 1998, the Portfolio had entered into foreign currency
exchange contracts that obligate the Portfolio to deliver currency at a
specified future date. The unrealized appreciation and/or depreciation on
these contracts is included in the accompanying financial statements. See
"Summary of significant accounting policies." The terms of the open
contracts are as follows:
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
May 1, 1998 31,162,223 4,024,567 $1,559 $ --
Hong Kong Dollar U.S. Dollar
May 1, 1998 1,294,498,163 160,230 -- 1,582
Indonesian Rupiah U.S. Dollar
May 4, 1998 6,668,699 257,411,771 -- 12,932
U.S. Dollar Thailand Baht
May 4, 1998 15,360,382 1,982,803 435 --
Hong Kong Dollar U.S. Dollar
May 4, 1998 15,923 13,912 -- 12
Brazilian Real U.S. Dollar
Total $1,994 $14,526
<PAGE>
Investments in securities
Emerging Markets Portfolio
April 30, 1998 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Common stocks (87.4%)
Issuer Shares Value(a)
Argentina (3.2%)
Energy (1.4%)
Perez Companc 1,060,000 $6,360,636
Utilities -- telephone (1.8%)
Telefonica de Argentina
ADR 210,000(c) 8,098,125
Brazil (16.3%)
Banks and savings & loans (1.5%)
Garanti Banking 130,000,000(b) 6,890,000
Beverages & tobacco (1.4%)
Companhia Cervejaria
Brahma ADR 10,000,000 6,514,230
Chemicals (0.9%)
Companhia de Saneamento
Basico do Estado
de Sao Paulo 17,000,000 3,864,814
Energy (3.1%)
Petroleo Brasileiro ADR 548,000(c) 13,867,414
Utilities -- electric (4.4%)
Centrais Eletricas
Brasileiras ADR 481,000 9,985,608
Companhia Energetica
de Brasilia 60,000,000(b) 2,691,360
Light Servicos de
Eletricidade 17,995,000 7,237,967
Total 19,914,935
Utilities -- telephone (5.0%)
Telecomunicacoes
Brasileiras-Telebras ADR145,000 17,662,812
Telecomunicacoes de
Minas Gerais Cl B 32,900,000(b) 5,077,457
Total 22,740,269
Chile (1.7%)
Multi-industry conglomerates (--%)
Quinenco ADR 12,370 127,566
Utilities -- telephone (1.7%)
Compania de Telecomunicaciones
de Chile ADR 315,000(c) 7,894,687
China (1.1%)
Utilities -- electric (1.1%)
Beijing Datang Power
Generation Cl H 12,390,000(b) $5,039,013
Egypt (1.4%)
Building materials & construction
Suez Cement GDR 320,000 6,528,000
Greece (5.3%)
Banks and savings & loans (3.9%)
National Bank of Greece 100,000(b) 17,594,100
Building materials & construction (1.4%)
Titan Cement 73,000(b) 6,247,654
Hong Kong (7.0%)
Communications equipment & services (1.9%)
China Telecom 4,500,000(b,c) 8,540,100
Computers & office equipment (0.6%)
Legend Holdings 6,072,000(b) 2,606,710
Industrial equipment & services (0.5%)
First Tractor 3,800,000(b) 2,121,920
Multi-industry conglomerates (4.0%)
China Merchants
Holdings Intl 4,314,000(b,c) 3,425,316
China Resources
Enterprises 2,948,000(b) 5,061,716
Shanghai Industrial
Holdings 2,762,000(b,c) 9,467,031
Total 17,954,063
Hungary (3.6%)
Chemicals (0.8%)
Borsod Chemical 100,000(d) 3,740,000
Health care (1.9%)
EGIS 63,000(b) 3,286,622
Gedeon Richter 48,000 5,112,000
Total 8,398,622
Utilities -- telephone (0.9%)
Matav ADR 135,000(b) 3,982,500
India (1.6%)
Automotive & related (0.9%)
Tata Engineering
& Locomotive GDR 551,000 $4,008,525
Utilities -- telephone (0.7%)
Mahanagar Telephone
Nigam GDR 218,000 3,389,900
Indonesia (0.3%)
Utilities -- telephone (0.3%)
Indosat 886,000 1,295,775
Israel (4.9%)
Banks and savings & loans (1.9%)
Bank Hapoalim 3,200,000(b) 8,573,120
Chemicals (1.6%)
Israel Chemical 2,550,000 3,068,415
Makhteshim
Chemical Works 520,000(b) 4,405,284
Total 7,473,699
Communications equipment & services (0.9%)
Tadiran
Telecommunications 100,000 3,885,120
Computers & office equipment (0.5%)
Formula Systems 64,711(b) 2,494,894
Malaysia (1.2%)
Energy
Petronas Gas Berhad 2,208,000(b) 5,342,035
Mexico (13.1%)
Beverages & tobacco (4.2%)
Coca-Cola Femsa ADR 343,200 5,834,400
Fomento Economico
Mexicano Cl B 959,000 7,097,843
Panamerican Beverages Cl A 149,400 5,957,325
Total 18,889,568
Financial services (1.7%)
Grupo Financiero
Bancomer Cl B 11,500,000(b) 7,942,257
Media (1.0%)
Grupo Televisa 115,000(b) 4,715,000
Multi-industry conglomerates (1.9%)
Grupo Carso 1,350,000(b) $8,496,170
Paper & packaging (1.9%)
Kimberly-Clark de Mexico
ADR 345,000 8,401,957
Utilities -- telephone (2.4%)
Telefonos de
Mexico ADR Cl L 190,000 10,758,750
Peru (1.4%)
Metals
Compania de Minas
Buenaventura ADR 400,000(c) 6,200,000
Russia (7.3%)
Communications equipment & services (1.3%)
Vimpel-Communications
ADR 113,000(b,c) 6,102,000
Energy (2.4%)
AO Tatneft ADR 300,000(b,c) 5,812,500
Lukoil Holding ADR 80,000(c) 5,272,560
Total 11,085,060
Utilities -- electric (2.0%)
Mosenergo ADR 155,000(b,c) 5,502,500
Unified Energy
Systems GDR 11,500,000(b) 3,785,800
Total 9,288,300
Utilities -- telephone (1.6%)
Rostelecom ADR 337,000(b) 7,224,438
South Africa (1.6%)
Energy equipment & services (1.1%)
Sasol 500,000 5,045,500
Metals (0.5%)
Anglogold ADR 456,870 2,312,904
South Korea (1.9%)
Electronics
Samsung Electronics 157,900(b) 8,742,686
Taiwan (6.3%)
Computers & office equipment (2.7%)
D-Link 2,378,000(b) 6,093,863
Synnex Technology Intl 1,120,000(b) 6,385,568
Total 12,479,431
Electronics (3.0%)
Acer Peripherals 1,200,000(b) $2,183,520
Compal Electronics 1,419,000(b) 6,175,204
Taiwan Secom 700,000(b) 2,282,070
Yageo 1,285,000(b) 3,059,071
Total 13,699,865
Textiles & apparel (0.6%)
Far Eastern Textile 3,100,000(b) 2,820,380
Thailand (1.7%)
Banks and savings & loans
Bangkok Bank 1,613,000(b) 4,045,565
Thai Farmers Bank 1,506,000(b) 3,446,180
Total 7,491,745
Turkey (5.2%)
Automotive & related (1.2%)
Otosan Otomobil Sanayii 7,288,000 5,248,089
Banks and savings & loans (2.4%)
Akbank T.A.S. 61,600,000(b) 5,236,000
Yapi Kredit Finance 115,000,000(b) 5,635,000
Total 10,871,000
Multi-industry conglomerates (1.6%)
Dogan Sirketler
Grubu Holdings 125,000,000(b) 7,125,000
Venezuela (1.3%)
Utilities -- telephone
Compania Anonima Nacional
Telefonos de
Venezuela ADR 180,000 6,030,000
Total common stocks
(Cost: $391,059,752) $396,458,526
Preferred stocks & other (4.1%)
Issuer Shares Value(a)
Brazil (3.0%)
Companhia Vale do
Rio Doce 350,000(b) 8,263,010
Telecomunicacoes do
Rio de Janeiro 35,000,000(b) 5,324,900
Total 13,587,910
Philippines (1.0%)
Jollibee Foods
Warrants 10,142,000 $4,609,539
South Korea (0.1%)
Samsung Electronics
Rights 12,562 242,499
Taiwan (0.0%)
Yageo
Rights 99,471(e) --
Total preferred stocks & other
(Cost: $16,127,024) $18,439,948
Short-term securities (17.9%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
U.S. government agencies (4.6%)
Federal Home Loan Mtge Corp Disc Nts
05-20-98 5.43% $700,000 $697,998
05-29-98 5.45 4,500,000 4,481,048
Federal Natl Mtge Assn Disc Nts
05-11-98 5.43 1,700,000 1,697,445
05-13-98 5.41 10,000,000 9,982,000
05-15-98 5.44 4,300,000 4,290,945
Total 21,149,436
Commercial paper (12.0%)
Ciesco LP
05-15-98 5.53 1,800,000 1,796,150
Delaware Funding
05-22-98 5.54 3,400,000(f) 3,389,052
Dresdner US Finance
05-21-98 5.53 4,200,000 4,187,143
Fleet Funding
05-29-98 5.54 8,500,000(f) 8,463,573
Glaxo Wellcome
05-05-98 5.52 8,100,000(f) 8,095,050
Goldman Sachs Group
05-15-98 5.54 12,500,000 12,473,215
GTE Funding
06-02-98 5.54 1,100,000 1,094,612
Reed Elsevier
05-11-98 5.54 7,600,000(f) 7,588,389
Toyota Motor Credit
05-19-98 5.55 4,700,000 4,687,028
Xerox
05-01-98 5.55 2,600,000 2,600,000
Total 54,374,212
Letters of credit (1.3%)
Bank of America-
AES Hawaii
05-14-98 5.53% $1,700,000 $1,696,617
06-05-98 5.53 4,200,000 4,177,542
Total 5,874,159
Total short-term securities
(Cost: $81,397,807) $81,397,807
Total investments in securities
(Cost: $488,584,583)(g) $496,296,281
See accompanying notes to investments in securities.
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements. Foreign security values are stated in U.S. dollars.
(b) Non-income producing.
(c) Security is partially or fully on loan. See Note 4 to the financial
statements.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(e) Negligible market value.
(f) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(g) At April 30, 1998, the cost of securities for federal income tax purposes
was approximately $488,585,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation......................................$43,318,000
Unrealized depreciation......................................(35,607,000)
Net unrealized appreciation...................................$7,711,000
<PAGE>
Board members and officers
Independent board members and officers
Chairman William R. Pearce*
of the board Chairman of the board, Board Services Corporation (provides
administrative services to boards including the boards of the
IDS and IDSLife funds and Master Trust portfolios).
H. Brewster Atwater, Jr.
Former chairman and chief executive officer, General Mills,
Inc.
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for Public
Policy Research.
Heinz F. Hutter
Former president and chief operating officer, Cargill, Inc.
Anne P. Jones
Attorney and telecommunications consultant.
Alan K. Simpson
Former United States senator for Wyoming.
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
C. Angus Wurtele
Chairman of the board, The Valspar Corporation.
Officer
Vice president, Leslie L. Ogg*
general counsel President, treasurer and corporate secretary of Board Services
and secretary Corporation.
Board members and officers associated with AEFC
President John R. Thomas*
Senior vice president, AEFC.
William H. Dudley*
Senior advisor to the chief executive officer, AEFC.
David R. Hubers*
President and chief executive officer, AEFC.
Officers associated with AEFC
Vice president Peter J. Anderson*
Senior vice president, AEFC
Treasurer Matthew N. Karstetter*
Vice president, AEFC
* Interested person as defined by the Investment Company Act of 1940.
<PAGE>
IDS mutual funds
Global/International funds
Funds in this group seek capital growth and/or income by investing primarily in
foreign securities. Foreign investments may be subject to currency fluctuations
and political and economic risks of the countries in which the investments are
made. They are high risk mutual funds with a potential for high reward.
IDS Emerging Markets Fund
Invests in a Portfolio comprised primarily of stocks of companies in developing
countries throughout the world that are believed to offer growth potential.
Seeks to provide long-term growth of capital.
(icon of) world with countries
IDS Global Growth Fund
Invests in a Portfolio comprised primarily of stocks of companies throughout the
world that are positioned to meet market needs in a changing world economy.
These companies offer above-average potential for long-term growth.
(icon of) world
IDS International Fund
Invests primarily in common stocks of foreign companies that offer potential for
superior growth. The Fund may invest up to 20% of its assets in the U.S. market.
(icon of) three flags
IDS Global Balanced Fund
Invests in stocks and bonds in, for the most part, major markets throughout the
world, including the U.S. Seeks to provide a balance of growth of capital and
current income.
(icon of) scale of globes
IDS Global Bond Fund
Invests in a Portfolio comprised primarily of debt securities of U.S. and
foreign issuers to seek high total return through income and growth of capital.
(icon of) globe
Growth funds
Funds in this group seek capital growth, primarily from common stocks. They are
high risk mutual funds with a potential for high reward.
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic companies that
explore for, mine and process or distribute gold and other precious metals. A
highly aggressive and speculative fund that seeks long-term growth of capital.
(icon of) cart of precious gems
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies emphasizing
technological innovation and productivity enhancement. Buys and holds larger
growth-oriented stocks.
(icon of) ship
IDS Small Company Index Fund
Invests in all or a representative group of the equity securities comprising the
S&P SmallCap 600 Index, as it strives to provide long-term capital appreciation.
(icon of) building
IDS Strategy Aggressive Fund
Invests primarily in common stocks of companies that are selected for their
potential for above-average growth. Above-average means that their growth
potential is better, in the opinion of the portfolio's investment manager, than
the Standard & Poor's Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS Research Opportunities Fund
Invests in a Portfolio comprised primarily of equity securities of companies
included in the S&P 500 Index that are believed to have strong growth potential.
The Portfolio is managed using a research methodology by the Research Department
of AEFC. Goal is long-term appreciation.
(icon of) magnifying glass
IDS Growth Fund
Invests in a Portfolio comprised primarily of companies that have above-average
potential for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) trees
IDS New Dimensions Fund
Invests in a Portfolio comprised primarily of companies with
significant growth potential due to superiority in
technology, marketing or management. The Fund frequently
changes its industry mix.
(icon of) dimension
IDS Progressive Fund
Invests primarily in undervalued common stocks. The Fund holds stocks for the
long term with the goal of capital growth.
(icon of) shooting star
Growth & income funds
These funds focus on securities of medium to large, well-established companies
that offer long-term growth of capital and reasonable income from dividends and
interest. Foreign investments may be subject to currency fluctuations and
political and economic risks of the countries in which the investments are made.
IDS Equity Select Fund
Invests primarily in a combination of moderate growth stocks, higher-yielding
equities and bonds. Seeks growth of capital and income.
(icon of) three pine trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities purchased are
those recommended by our research analysts as the best from each industry
represented on the index. Offers potential for long-term growth as well as
dividend income.
(icon of) ribbon
IDS Managed Allocation Fund
Invests in a Portfolio comprised primarily of U.S. equity securities, U.S. and
foreign debt securities, foreign equity securities and money market instruments.
The Fund provides diversification among these major investment categories and
has a target mix that represents the way the Fund's investments will be
allocated over the long term. Seeks maximum total return.
(icon of) gyroscope
IDS Stock Fund
Invests in a Portfolio comprised primarily of common stock of companies
representing many sectors of the economy. Seeks current income and growth of
capital.
(icon of) building with columns
IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential for growth
of capital and income.
(icon of) three growing flowers
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek high current
income and growth of income and capital with reduced volatility.
(icon of) light bulb
IDS Diversified Equity Income Fund
Invests in a Portfolio comprised primarily in high-yielding common stocks to
seek high current income and, secondarily, to benefit from the growth potential
offered by stock investments.
(icon of) two puzzle pieces
IDS Mutual
Invests in a Portfolio which seeks to balance between common stocks and senior
securities (preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice
Income funds
The funds in this group invest their assets primarily in corporate bonds or
government securities to seek interest income. Secondary objective is capital
growth. Risk varies by bond quality.
IDS Extra Income Fund
Invests in a Portfolio comprised mainly of long-term, high-yielding corporate
fixed-income securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) two coins
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk
bond categories, or the equivalent, and in government bonds.
(icon of) Greek column
IDS Selective Fund
Invests in a Portfolio comprised primarily of high-quality corporate bonds and
other highly rated debt instruments including government securities and
short-term investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests in a Portfolio comprised primarily of securities issued or guaranteed as
to the timely payment of principal and interest by the U.S. government, its
agencies and instrumentalities. Seeks a high level of current income and safety
of principal consistent with its type of investments.
(icon of) shield with eagle head
Tax-exempt income funds
These funds provide tax-free income by investing in municipal bonds. The income
is generally free from federal income tax, but a portion of the income may be
subject to state and local taxes. Risk varies by bond quality.
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government units, with at
least 75% in the four highest rated, lowest risk bond categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to the timely
payment of principal and interest. The insurance feature minimizes credit risk
of the Fund but does not guarantee the market value of the Fund's shares.
(icon of) shield with star
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities to provide
income to residents of each respective state that is exempt from federal, state
and local income taxes. (New York is the only state that is exempt at the local
level.)
(icon of) shield with U.S. enclosed
IDS High Yield Tax-Exempt Fund
Invests in a Portfolio comprised primarily of medium- and lower-quality
municipal bonds and notes. Lower-quality securities generally involve greater
risk of principal and income.
(icon of) shield with basket of apples enclosed
IDS Intermediate Tax-Exempt Fund
Invests in mainly investment-grade bonds and other debt securities with
intermediate-term maturities issued by state and local government units. Goal is
to seek a high level of current income exempt from federal taxes.
(icon of) shield with tree enclosed
Money market funds
These money market funds have three main goals: conservation of capital,
constant liquidity and the highest possible current income consistent with these
objectives. An investment in these funds is neither insured nor guaranteed by
the U.S. government, and there can be no assurance that these funds will be able
to maintain a stable net asset value of $1.00 per share. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial paper,
bankers' acceptances, certificates of deposit (CDs) and other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and local
governments to seek high current income exempt from federal income taxes.
(icon of) shield with piggy bank enclosed
For more complete information about any of these funds, including charges and
expenses, you can obtain a prospectus by contacting your financial advisor or
writing to American Express Shareholder Service, P.O. Box 534, Minneapolis, MN
55440-0534. Read it carefully before you invest or send money.
<PAGE>
Quick telephone reference
American Express Redemptions and exchanges, National/Minnesota
Financial Advisors dividend payments or 800-437-3133
Telephone Transaction reinvestments and automatic
Service payment arrangements Mpls./St. Paul area:
671-3800
TTY Service For the hearing impaired 800-846-4852
American Express Automated account information 800-862-7919
Financial Advisors (TouchTone(R) phones only),
Easy Access Line including current fund prices
and performance, account values
and recent account transactions
AMERICAN EXPRESS Financial Advisors
IDS Emerging Markets Fund
IDS Tower 10
Minneapolis, MN 55440-0010
