<IMS-DOCUMENT>0000820027-95-000401.txt : 19950817
<IMS-HEADER>0000820027-95-000401.hdr.sgml : 19950817
ACCESSION NUMBER:		0000820027-95-000401
CONFORMED SUBMISSION TYPE:	485APOS
PUBLIC DOCUMENT COUNT:		6
FILED AS OF DATE:		19950816
SROS:			NONE

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			IDS LIFE INVESTMENT SERIES INC
		CENTRAL INDEX KEY:			0000353968
		STANDARD INDUSTRIAL CLASSIFICATION:	UNKNOWN SIC - 0000 [0000]
		IRS NUMBER:				411409539
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			0831

	FILING VALUES:
		FORM TYPE:		485APOS
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	002-73115
		FILM NUMBER:		95564469

	BUSINESS ADDRESS:	
		STREET 1:		80 SOUTH 8TH STREET
		STREET 2:		IDS TOWER 10
		CITY:			MINNEAPOLIS
		STATE:			MN
		ZIP:			55440
		BUSINESS PHONE:		6126718626

	MAIL ADDRESS:	
		STREET 1:		IDS FINANCIAL SERVICES INC
		STREET 2:		IDS TOWER 10
		CITY:			MINNEAPOLIS
		STATE:			MN
		ZIP:			55440

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	IDS LIFE CAPITAL RESOURCE FUND INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	IDS LIFE CAPITAL RESOURCE FUND II INC
		DATE OF NAME CHANGE:	19851104
</IMS-HEADER>
<DOCUMENT>
<TYPE>485APOS
<SEQUENCE>1
<DESCRIPTION>IDS LIFE INVESTMENT SERIES, INC.
<TEXT>

<PAGE>
PAGE 1
                  SECURITIES AND EXCHANGE COMMISSION

                     Washington, D.C.  20549-1004

                               Form N-1A


REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Post-Effective Amendment No.  28  (File No. 2-73115)            X  

                              and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY 
ACT OF 1940

Amendment No.  30  (File No. 811-3218)                          X  

IDS LIFE INVESTMENT SERIES, INC. 
IDS Tower 10, Minneapolis, Minnesota  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 October 30, 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.

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 will file
its 24f-2 Notice for the fiscal year ending Aug. 31, 1995, on or
about Oct. 31, 1995.
<PAGE>
PAGE 2
                       CROSS REFERENCE SHEET

Cross reference sheet for the Retirement Annuity Mutual Funds
showing the location in the prospectus and Statement of Additional
Information of the information called for by the items enumerated
in Parts A and B of Form N-1A.

Negative answers omitted from prospectus are so indicated.
<TABLE>
<CAPTION>

PART A

Item No.    Location in Prospectus
<C>         <C>
1           Cover page of prospectus

2           The funds in brief; Sales charge and expenses

3(a)        Performance
 (b)        NA
 (c)        Performance
 (d)        Performance

4(a)        The fund in brief; Investment policies and risk;  How the funds are organized
 (b)        Investment policies and risk
 (c)        Investment policies and risk

5(a)        How the funds are organized
 (b)        How the funds are organized; About AEFC
 (b)(i)     About AEFC
 (b)(ii)    Investment manager
 (b)(iii)   Investment manager
 (c)        Portfolio managers
 (d)        The funds in brief
 (e)        How the fund is organized:  Investment manager
 (f)        NA
 (g)        How the fund is organized:  Investment manager

5A(a)       *
  (b)       *

6(a)        How the funds are organized:  Shares; Voting rights
 (b)        NA
 (c)        NA
 (d)        NA
 (e)        Cover page
 (f)        Distribution and taxes:  Dividends and capital gain distributions
 (g)        Distribution and taxes:  Taxes
 (h)        NA

7(a)        NA
 (b)        Performance:  Key terms; Investment policies and their risks: Valuing assets
 (c)        NA
 (d)        NA
 (e)        NA
 (f)        NA
                                                                  
8(a)        NA
 (b)        NA
 (c)        NA
 (d)        NA

9           None
<PAGE>
PAGE 3
PART B

Item No.    Location in Statement of Additional Information

10          Cover page of SAI

11          Table of contents

12          NA

13(a)       Additional Investment Policies; all appendices except Dollar Cost Averaging
  (b)       Additional Investment Policies
  (c)       "Unless changed by the board of directors..." in Additional Investment Policies
  (d)       Portfolio Turnover, last 2 paragraphs of Portfolio Transactions

14(a)       Directors and officers of the fund**; Directors and officers
  (b)       Directors and officers
  (c)       Directors and officers (last paragraph)

15(a)       NA
  (b)       NA
  (c)       Directors and Officers** (last paragraph)

16(a)(i)    How the fund is organized**; About IDS Life and AEFC**
  (a)(ii)   Agreements with IDS Life and AEFC
  (a)(iii)  Agreements with IDS Life and AEFC
  (b)       Agreements with IDS Life and AEFC
  (c)       NA
  (d)       None
  (e)       NA
  (f)       NA
  (g)       NA
  (h)       Custodian; Independent Auditors
  (i)       Custodian

17(a)       Portfolio Transactions
  (b)       Brokerage Commissions Paid to Brokers Affiliated with IDS Life
  (c)       Portfolio Transactions
  (d)       Portfolio Transactions
  (e)       Portfolio Transactions

18(a)       How the fund is organized:  Shares and Voting rights
  (b)       NA

19(a)       Investing in the Funds
  (b)       Valuing Fund Shares; Investing in the Funds
  (c)       NA

20          Taxes

21(a)       NA
  (b)       NA
  (c)       NA

22(a)       Performance Information:  Calculation of Yield
  (b)       Performance Information:  Calculation of Total Return and/or Yield

23          Financial Statements

* Designates information is located in annual report.
**Designates location in prospectus, which is hereby incorporated by reference in the Statement of Additional Information.
</TABLE>
<PAGE>
PAGE 4
   
Retirement Annuity Mutual Funds
Prospectus/Oct. 30, 1995
    
This prospectus describes six Funds that receive payments from the
variable accounts of your variable annuity contract.  Each of these
Funds has different investment objectives and policies.

IDS Life Aggressive Growth Fund is a stock fund investing primarily
in common stocks of small and medium-size companies.

IDS Life International Equity Fund is an international stock fund.

IDS Life Capital Resource Fund is a stock fund.

IDS Life Managed Fund is a managed fund.

IDS Life Special Income Fund is a bond fund.

IDS Life Moneyshare Fund is a money market fund.  An investment in
Moneyshare Fund is neither insured nor guaranteed by the U.S.
government and there can be no assurance that the fund will be able
to maintain a stable net asset value of $1 per share.

This prospectus contains facts that can help you decide if the
Funds are the right investment for you.  Read this along with your
variable annuity prospectus before you invest and keep both
prospectuses for future reference.
   
Additional facts about the Funds are in a Statement of Additional
Information (SAI), filed with the Securities and Exchange
Commission.  The SAI, dated Oct. 30, 1995, is incorporated here by
reference.  For a free copy, contact IDS Life Insurance Company.
    
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.
   
IDS LIFE IS NOT A FINANCIAL INSTITUTION, AND THE SECURITIES IT
OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY FINANCIAL INSTITUTION, NOR ARE THEY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER AGENCY.

IDS Life Investment Series, Inc.
   IDS Life Aggressive Growth Fund
   IDS Life International Equity Fund
   IDS Life Capital Resource Fund
IDS Life Managed Fund, Inc.
IDS Life Special Income Fund, Inc.
IDS Life Moneyshare Fund, Inc.
    
<PAGE>
PAGE 5
Retirement Annuity Mutual Funds
IDS Tower 10
Minneapolis, MN 55440-0010
612-671-3733
TTY: 800-285-8846
<PAGE>
PAGE 6
Table of contents

The Funds in brief
Goals and types of Fund investments
Manager and distributor
Variable accounts
   
Sales charge and expenses
Sales charge
Expenses
    
Performance
Financial highlights
Total returns
Yield calculation
Key terms
   
Investment policies and risk
Facts about investments and their risks
Alternative investment options
Valuing assets
    
How to invest, transfer or redeem shares 
How to invest
How to transfer among variable accounts
Redeeming shares

Distributions and taxes
Dividend and capital gain distributions
Taxes
   
How the Funds are organized
Shares
Voting rights
Shareholder meetings
Portfolio managers
Directors and officers
Investment manager
Administrative services agreement
Investment advisory agreements

About American Express Financial Corporation
General information
    
<PAGE>
PAGE 7
The Funds in brief

Goals and types of Fund investments

Capital Resource Fund's goal is capital appreciation and it invests
primarily in U.S. common stocks.

International Equity Fund's goal is capital appreciation and it
invests primarily in common stocks of foreign issuers.

Aggressive Growth Fund's goal is capital appreciation and it
invests primarily in common stocks of small and medium-size
companies.

Special Income Fund's goal is to provide a high level of current
income while conserving the value of the investment for the longest
period of time.  It invests primarily in investment-grade bonds.

Moneyshare Fund's goal is to provide maximum current income
consistent with liquidity and conservation of capital.  It invests
in money market securities.

Managed Fund's goal is maximum total investment return through a
combination of capital growth and current income.  It invests
primarily in stocks, convertible securities, bonds, and money
market instruments.  

Because any investment involves risk, achieving these goals cannot
be guaranteed.  Only the contract owners can change the goals.  See
Voting rights.

Manager and distributor
   
The Funds are managed by IDS Life, a subsidiary of American Express
Financial Corporation (AEFC).  AEFC has an agreement with IDS Life
to furnish investment advice for the Funds managed by IDS Life.
    
Variable accounts

You may not buy (nor will you own) shares of the Fund directly. 
You invest by buying a variable annuity and allocating your
purchase payments among the variable accounts that invest in the
Funds.
   
Sales charge and expenses
    
Sales charge

There is no sales charge for the sale or redemption of fund shares,
but there may be charges associated with your redemption (surrender
or withdrawal) of your annuity contract.  Any charges that apply to
the variable accounts and your annuity contract are described in
the variable annuity prospectus.  
<PAGE>
PAGE 8
Expenses
   
The Funds pay IDS Life a fee for managing their investment
portfolios.  The Funds pay AEFC for administrative and accounting
services.  The Funds also pay certain nonadvisory expense.  See
"Investment manager" and "Administrative services agreement" under
"How the funds are organized".

Performance

Financial highlights

<TABLE>
<CAPTION>
Capital Resouce Fund
Financial highlights

Fiscal year ended August 31,

Per share income and capital changes*

                                                1995    1994    1993    1992    1991   1990     1989    1988    1987    1986
<S>                                           <C>     <C>     <C>     <C>    <C>      <C>     <C>     <C>     <C>     <C>
Net asset value, beginning
of year                                               $24.58  $23.90  $23.15  $17.54 $20.17   $15.06  $17.71  $15.97  $14.71

Income (loss) from investment operations:
Net investment income                                    .29     .23     .21     .40    .52      .39     .31     .52     .61

Net gains (losses) on securities (both realized
and unrealized)                                         1.56    1.89    1.75    6.61  (2.06)    5.38   (2.54)   4.23    2.87

Total from investment operations                        1.85    2.12    1.96    7.01  (1.54)    5.77   (2.23)   4.75    3.48

Less distributions:
Dividends from net investment income                    (.29)   (.23)   (.21)   (.40)  (.52)    (.39)   (.31)   (.52)   (.61)

Distributions from realized gains                      (2.71)  (1.21)  (1.00)  (1.00)  (.57)    (.27)   (.11)  (2.49)  (1.61)

Total distributions                                    (3.00)  (1.44)  (1.21)  (1.40)  (1.09)   (.66)   (.42)  (3.01)  (2.22)

Net asset value, end of year                          $23.43  $24.58  $23.90  $23.15  $17.54  $20.17  $15.06  $17.71  $15.97


Ratios/supplemental data
                                                1995    1994    1993    1992    1991   1990     1989    1988    1987    1986
Net assets, end of year
(in millions)                                         $2,899  $2,308  $1,681  $1,191 $  702   $  660  $  454  $  493  $  301

Ratio of expenses to average
daily net assets                                         .68%    .68%    .70%    .70%    .70%    .73%    .69%    .59%    .54%

Ratio of net income to average
daily net assets                                        1.20%   0.94%   0.91%   1.94%   2.69%   2.22%   2.01%   2.94%   3.74%

Portfolio turnover rate
(excluding short-term
securities)                                               85%     65%     63%     74%     82%     42%    111%    171%    115%

Total Return**                                          7.61%   8.87%   8.54%  40.68%  (7.79)% 38.72% (12.59)% 30.32%  23.90%

 *For a share outstanding throughout the year.  Rounded to the nearest cent.
**Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
    
<PAGE>
PAGE 9
   
<TABLE>
<CAPTION>
International Equity Fund
Financial highlights

Fiscal period ended August 31,
Per share income and capital changes*

                                            1995        1994        1993        1992**
<S>                                                    <C>         <C>         <C>
Net asset value, beginning of period                   $11.60      $10.01      $10.00
_____________________________________________________________________________________________
Income from investment operations:
Net investment income                                     .14         .15         .05
Net gains on securities (both
realized and unrealized)                                 1.61        1.81         .01
_____________________________________________________________________________________________
Total from investment operations                         1.75        1.96         .06
_____________________________________________________________________________________________
Less distributions:
Dividends from net investment income                     (.08)       (.15)       (.05)
Distributions from realized gains                        (.29)       (.22)          -
Excess distributions from realized gains                 (.07)          -           -
_____________________________________________________________________________________________
Total distributions                                      (.44)       (.37)       (.05)
_____________________________________________________________________________________________
Net asset value, end of period                         $12.91      $11.60      $10.01
_____________________________________________________________________________________________

Ratios/supplemental data
                                                        1994        1993        1992**
Net assets, end of period (in millions)                $1,111      $  291      $   39
_____________________________________________________________________________________________
Ratio of expenses to average
daily net assets                                          .98%       1.10%       1.57%***
Ratio of net income to average
daily net assets                                         1.09%       1.37%       0.93%***
Portfolio turnover rate (excluding
short-term securities)                                     51%         62%         22%
_____________________________________________________________________________________________
Total Return##                                          15.11%      19.76%       0.55%#
_____________________________________________________________________________________________
  *For a share outstanding throughout the period.  Rounded to the nearest cent.
 **Commencement of operations.  Period from Jan. 13, 1992 to Aug. 31, 1992.
***Adjusted to an annual basis.
  #For the period from Jan. 13, 1992 to Aug. 31, 1992, the annualized total return is  0.87%.
 ##Total return does not reflect payment of the expenses that apply to the variable accounts
   or any annuity charges.
</TABLE>
    
<PAGE>
PAGE 10
   
<TABLE>
<CAPTION>
Aggressive Growth Fund
Financial highlights

Fiscal period ended August 31,
Per share income and capital changes*

                                            1995        1994        1993        1992**
<S>                                                    <C>         <C>         <C>
Net asset value, beginning of period                   $11.68      $9.00       $10.00
_____________________________________________________________________________________________
Income (loss) from investment operations:
Net investment income                                     .01         .02         .02
Net gains (losses) on securities (both
realized and unrealized)                                 (.22)       2.68       (1.00)
_____________________________________________________________________________________________
Total from investment operations                         (.21)       2.70       (0.98)
_____________________________________________________________________________________________
Less distributions:
Dividends from net investment income                     (.01)       (.02)       (.02)
_____________________________________________________________________________________________
Net asset value, end of period                         $11.46      $11.68      $ 9.00
_____________________________________________________________________________________________

Ratios/supplemental data
                                                        1994        1993        1992**

Net assets, end of period (in millions)                $  763      $  299      $   57
_____________________________________________________________________________________________
Ratio of expenses to average
daily net assets                                          .69%        .75%        .98%***
Ratio of net income to average
daily net assets                                         0.14%       0.28%       0.21%***
Portfolio turnover rate (excluding
short-term securities)                                     59%         55%         28%
_____________________________________________________________________________________________
Total Return##                                          (1.77)%     29.98%      (9.76)%#
_____________________________________________________________________________________________
  *For a share outstanding throughout the period.  Rounded to the nearest cent.
 **Commencement of operations.  Period from Jan. 13, 1992 to Aug. 31, 1992.
***Adjusted to an annual basis.
  #For the period from Jan. 13, 1992 to Aug. 31, 1992, the annualized total return is (14.98)%.
 ##Total return does not reflect payment of the expenses that apply to the variable accounts or
   any annuity charges.
</TABLE>
    
<PAGE>
PAGE 11
   
<TABLE>
<CAPTION>
Special Income Fund
Financial highlights

Fiscal year ended August 31,
Per share income and capital changes*

                                              1995    1994    1993    1992    1991   1990     1989    1988    1987    1986
<S>                                          <C>     <C>     <C>     <C>    <C>      <C>     <C>     <C>     <C>     <C>
Net asset value, beginning
of year                                              $12.08  $11.26  $10.72  $10.10 $11.11   $10.88  $11.09  $11.91  $11.34
___________________________________________________________________________________________________________________________
Income (loss) from investment operations:
Net investment income                                   .84     .85     .90     .97    .99     1.03    1.03    1.08    1.16
Net gains (losses) on securities (both
realized and unrealized)                               (.99)    .82     .54     .62  (1.01)     .23    (.21)   (.56)   1.26
___________________________________________________________________________________________________________________________
Total from investment operations                       (.15)   1.67    1.44    1.59   (.02)    1.26     .82     .52    2.42
___________________________________________________________________________________________________________________________
Less distributions:
Dividends from net investment income                   (.85)   (.85)   (.90)   (.97)  (.99)   (1.03)  (1.03)  (1.08)  (1.16)
Distributions from realized gains                      (.02)      -       -       -      -        -       -    (.26)   (.69)
Excess distributions from net investment
income                                                 (.01)      -       -       -      -        -       -       -       -
___________________________________________________________________________________________________________________________
Total distributions                                    (.88)   (.85)   (.90)   (.97)  (.99)   (1.03)  (1.03)  (1.34)  (1.85)
___________________________________________________________________________________________________________________________
Net asset value, end of period                       $11.05  $12.08  $11.26  $10.72 $10.10   $11.11  $10.88  $11.09  $11.91
___________________________________________________________________________________________________________________________

Ratios/supplemental data
                                              1995    1994    1993    1992    1991   1990     1989    1988    1987    1986
Net assets, end of year
(in millions)                                        $1,559  $1,551  $1,136  $  800 $  641   $  565  $  428  $  409  $  307
Ratio of expenses to
average daily net assets                                .67%    .69%    .71%    .70%   .71%     .73%    .69%    .58%    .55%
Ratio of net income to
average daily net assets                               7.20%   7.41%   8.22%   9.31%  9.42%    9.37%   9.45%   9.11%  10.27%
Portfolio turnover rate
(excluding short-term
securities)                                              57%     77%     92%     97%   118%     132%    169%    101%    170%
___________________________________________________________________________________________________________________________
Total Return**                                        (1.30)% 15.47%  13.96%  16.54% (0.12)%  12.19%   7.76%   4.48%  23.17%
___________________________________________________________________________________________________________________________
 *For a share outstanding thourghout the period.  Rounded to the nearest cent.
**Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
    
<PAGE>
PAGE 12
   
<TABLE>
<CAPTION>
Moneyshare Fund
Financial highlights

Fiscal year ended August 31,
Per share income and capital changes*

                                            1995    1994    1993    1992    1991   1990     1989    1988    1987    1986
<S>                                        <C>     <C>     <C>     <C>    <C>      <C>     <C>     <C>     <C>     <C>
Net asset value, beginning of
year                                               $1.00   $1.00   $1.00   $1.00  $1.00    $1.00   $1.00   $1.00   $1.00
_________________________________________________________________________________________________________________________
Income from investment operations:
Net investment income                                .03     .03     .04     .07    .08      .09     .07     .06     .07
_________________________________________________________________________________________________________________________
Total from investment
operations                                           .03     .03     .04     .07    .08      .09     .07     .06     .07
_________________________________________________________________________________________________________________________
Less distributions:
Dividends from net investment
income                                              (.03)   (.03)   (.04)   (.07)  (.08)    (.09)   (.07)   (.06)   (.07)
_________________________________________________________________________________________________________________________
Net asset value, end of year                       $1.00   $1.00   $1.00   $1.00  $1.00    $1.00   $1.00   $1.00   $1.00
_________________________________________________________________________________________________________________________

Ratios/supplemental data
                                            1995    1994    1993    1992    1991   1990     1989    1988    1987    1986
Net assets, end of year
(in millions)                                      $ 179   $ 180   $ 246   $ 285  $ 274    $ 160   $ 102   $  67   $  61
_________________________________________________________________________________________________________________________
Ratio of expenses to average
daily net assets                                     .57%    .60%    .60%    .57%   .62%     .54%    .58%    .54%    .62%
_________________________________________________________________________________________________________________________
Ratio of net income to average
daily net assets                                    3.12%   2.67%   3.93%   6.55%  7.85%    8.68%   6.77%   5.87%   7.00%
_________________________________________________________________________________________________________________________
Total Return**                                      3.15%   2.73%   3.98%   6.77%  8.18%    8.99%   7.01%   6.01%   7.20%
_________________________________________________________________________________________________________________________
 *For a share outstanding throughout the year.  Rounded to the nearest cent.
**Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
    
<PAGE>
PAGE 13
   
<TABLE><CAPTION>
Managed Fund
Financial highlights

Fiscal period ended August 31,
Per share income and capital changes*

                                               1995    1994    1993    1992    1991   1990     1989    1988    1987    1986**
<S>                                           <C>     <C>     <C>     <C>    <C>      <C>     <C>     <C>     <C>     <C>
Net asset value, beginning of period                  $14.32  $13.08  $12.59  $10.93 $12.08   $9.87   $11.34  $10.10  $10.00

Income (loss) from investment operations:
Net investment income                                    .47     .49     .56     .58    .65     .48      .42     .45     .16

Net gains(losses) on securities (both
realized and unrealized)                                (.26)   1.60     .95    2.11   (.67)   2.25    (1.47)   1.45     .10

Total from investment operations                         .21    2.09    1.51    2.69   (.02)   2.73    (1.05)   1.90     .26

Less distributions:
Dividends from net investment income                    (.47)   (.49)   (.56)   (.58)  (.65)   (.48)    (.42)   (.45)   (.16)

Distributions from net realized gains                   (.41)   (.36)   (.46)   (.45)  (.48)   (.04)       -    (.21)      -

Total distributions                                     (.88)   (.85)  (1.02)  (1.03) (1.13)   (.52)    (.42)   (.66)   (.16)

Net asset value, end of period                        $13.65  $14.32  $13.08  $12.59 $10.93   $12.08  $ 9.87  $11.34  $10.10

Ratios/supplemental data
                                               1995    1994    1993    1992    1991   1990     1989    1988    1987    1986**

Net assets, end of period (in millions)               $2,499  $1,858  $1,169  $  810 $  545   $  462  $  381  $  340  $   48

Ratio of expenses to average daily net
assets                                                   .68%    .69%    .71%    .70%   .71%     .73%    .69%    .67%    .64%***

Ratio of net income to average
daily net assets                                        3.46%   3.70%   4.35%   4.86%  5.42%    5.06%   4.42%   4.10%   4.48%***

Portfolio turnover rate (excluding
short-term securities)                                    79%     58%     50%     52%    37%      69%     62%     48%     10%

Total Return++                                          1.51%# 16.33%  12.14%  25.24% (0.23)%  28.47%  (9.06)% 19.13%   2.55%+

  *For a share outstanding throughout the period. Rounded to the nearest cent.
 **Commencement of operations. Period from April 30, 1986 to Aug. 31 31, 1986.
***Adjusted to an annual basis.
  +For the period from April 30, 1986 to Aug. 31, 1986, the annualized total return is 7.57%.
 ++Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
     
The information in these tables has been audited by KPMG Peat
Marwick LLP, independent auditors.  The independent auditors'
report and additional information about the performance of the
Funds is contained in the fund's annual report which, if not
included with this prospectus, may be obtained without charge. 

Total returns
   
Average annual total returns as of Aug. 31, 1995
    
Purchase               1 year    5 years       10 years
made                   ago       ago           ago        

Capital Resource       
Fund

S&P 500                
<PAGE>
PAGE 14
   
Cumulative total returns as of Aug. 31, 1995

Purchase               1 year    5 years       10 years
made                   ago       ago           ago        

Capital Resource       
Fund

S&P 500                

Average annual total returns as of Aug. 31, 1995

                                 Since      
Purchase               1 year    inception
made                   ago       Jan. 13, 1992    

International          
Equity Fund

Morgan Stanley         
Capital International
World Index

Cumulative total returns as of Aug. 31, 1995

                                 Since      
Purchase               1 year    inception
made                   ago       Jan. 13, 1992    

International          
Equity Fund

Morgan Stanley         
Capital International
World Index

Average annual total returns as of Aug. 31, 1995

                                 Since      
Purchase               1 year    inception
made                   ago       Jan. 13, 1992    

Aggressive Growth      
Fund

S&P 500                
    
<PAGE>
PAGE 15
   
Cumulative total returns as of Aug. 31, 1995

                                 Since      
Purchase               1 year    inception
made                   ago       Jan. 13, 1992    

Aggressive Growth      
Fund

S&P 500                 

Average annual total returns as of Aug. 31, 1995

Purchase               1 year    5 years       10 years
made                   ago       ago           ago        

Special Income Fund    

Lehman Aggregate       
Bond Index

Cumulative total returns as of Aug. 31, 1995

Purchase               1 year    5 years       10 years
made                   ago       ago           ago        

Special Income Fund    

Lehman Aggregate       
Bond Index

Average annual total returns as of Aug. 31, 1995

                                                Since
Purchase               1 year    5 Years        inception
made                   ago       ago            April 30, 1986

Managed Fund           

S&P 500                

Cumulative total returns as of Aug. 31, 1995

                                                Since
Purchase               1 year    5 Years        inception
made                   ago       ago            April 30, 1986

Managed Fund           

S&P 500                
    
<PAGE>
PAGE 16
These examples show total returns from hypothetical investments in
each Fund.  These returns are compared to those of popular indexes
for the same periods.  The results do not reflect the expenses that
apply to the variable accounts or the annuity contract.  Inclusion
of these charges would reduce total return for all periods shown.

For purposes of calculation, information about each Fund assumes
the deduction of applicable fund expenses, makes no adjustments for
taxes that may have been paid on the reinvested income and capital 
gains, and covers a period of widely fluctuating securities prices. 
Returns shown should not be considered a representation of the
Fund's future performance.

Each Fund's investments may be different from those in the indexes. 
The indexes reflect reinvestment of all distributions and changes
in market prices, but exclude 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.

The Morgan Stanley Capital International World Index, compiled from
a composite of securities listed on the markets of North America,
Europe, Australasia and the Far East is widely recognized by
investors as the measurement index for portfolios that invest in
the major markets of the world.

Lehman Aggregate Bond Index is made up of a representative list of
government and corporate bonds as well as asset-backed securities 
and mortgage-backed securities.  The index is frequently used as a
general measure of bond market performance.  However, the
securities used to create the index may not be representative of
the bonds held in Special Income Fund.

Yield calculation

Special Income Fund may calculate a 30-day annualized yield by
dividing:

o     net investment income per share deemed earned during a 30-day
      period by

o     the net asset value per share on the last day of the period,
      and

o     converting the result to a yearly equivalent figure.

This yield calculation does not include any annuity charges or
contingent deferred sales charges, which would reduce the yield
quoted.

A fund's yield varies from day to day, mainly because share values
and net asset values (which are calculated daily) vary in response
to changes in interest rates.  Net investment income normally 
<PAGE>
PAGE 17
changes much less in the short run.  Thus, when interest rates rise
and share values fall, yield tends to rise.  When interest rates
fall, yield tends to follow.

Moneyshare Fund calculates annualized simple and compound yields
based on a seven-day period.

Past yields should not be considered an indicator of future yields.

Key terms

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.

Capital gains or losses - Increase or decrease in value of the
securities the funds hold.  Gains are realized when securities that
have increased in value are sold.  A fund also may have unrealized
gains or losses when securities increase or decrease in value but
are not sold.

Close of business - Normally 3 p.m. Central time each business day
(any day the New York Stock Exchange is open).

Distributions - Payments to the variable accounts of two types:
investment income (dividends) and realized net long-term capital
gains (capital gains distributions).  

Investment income - Dividends and interest earned on securities
held by the funds.

Net asset value (NAV) - Value of a single fund share.  It is the
total market value of all of a fund's investments and other assets,
less any liabilities, divided by the number of shares outstanding.

The NAV is the price the variable account receives when it sells
shares. It usually changes from day to day, and is calculated at
the close of business.  For Special Income Fund, NAV generally
declines as interest rates increase and rises as interest rates
decline.

Total return - Sum of all returns for a given period, assuming
reinvestment of all distributions.  Calculated by taking the total
value of shares at the end of the period (including shares acquired
by reinvestment), less the price of shares purchased at the
beginning of the period.

Variable accounts - The separate accounts or subaccounts, each of
which invests in shares of one of the funds.

Yield - Net investment income earned per share for a specified time
period, divided by the net asset value at the end of the period.
<PAGE>
PAGE 18
Investment policies and risk

Capital Resource Fund - Under normal market conditions, Capital
Resource Fund invests in U.S. common stocks listed on national
securities exchanges and other securities convertible into common
stock.  The portfolio manager selects investments believed to have
potential for capital growth.

The Fund also may invest in preferred stocks, bonds, debt
securities, foreign securities, money market instruments and
derivative instruments.  The Fund does not have a minimum rating
requirement for corporate bonds.
   
International Equity Fund - Under normal market conditions,
International Equity Fund invests at least 65% of its total assets
in foreign equity securities having a potential for superior
growth.  Superior means fund performance better than the Morgan
Stanley Capital International World Index.
    
The Fund's investments will be primarily in common stocks and
securities convertible into common stocks of foreign issuers. 
However, if the investment manager believes they have more
potential for capital growth, the Fund may invest in bonds issued
or guaranteed either by countries that are members of the
Organization for Economic Cooperation and Development (OECD) or by
international agencies such as the World Bank or the European 
Investment Bank.  These bonds will not be purchased unless, in the
judgment of the investment manager, they are comparable in quality
to bonds rated AA by Standard & Poor's Corporation (S&P).

The percentage of Fund assets invested in particular countries or
regions of the world will change according to their political
stability and economic condition.  Ordinarily, the Fund will invest
in companies domiciled in at least three foreign countries.

Normally, investments in U.S. issuers will constitute less than 20%
of the Fund's portfolio.  However, as a temporary measure, the Fund
may invest any portion of its assets in securities of U.S. issuers 
that appear to have greater potential for superior growth than
foreign securities.  U.S. investments would include common stocks,
convertible securities and corporate and government bonds.  The 
bonds must bear one of the four highest ratings given by Moody's or
S&P or must be of comparable quality.  The Fund also may invest in
money market instruments and derivative instruments.  No more than
5% of the Fund's total assets may be invested in options on
individual securities.

Aggressive Growth Fund - Under normal market conditions, Aggressive
Growth Fund invests primarily in common stocks of U.S. and foreign
companies that are small and medium size growth companies.  Many of
these companies emphasize technological innovation or productivity
improvements.
<PAGE>
PAGE 19
The Fund invests in warrants to purchase common stock, debt
securities or in securities of large, well-established companies
when the portfolio manager believes those investments offer the
best opportunity for capital growth.  The Fund also may invest in
foreign securities, derivative instruments and money market
instruments.

Special Income Fund - Under normal market conditions, Special
Income Fund primarily invests in debt securities.  At least 50% of
its net assets are invested in corporate bonds of the four highest
ratings, in other corporate bonds the investment manager believes
have the same investment qualities, and in government bonds.

The Fund also may invest in corporate bonds with lower ratings,
convertible securities, preferred stocks, derivative instruments,
money market instruments and foreign bonds.  The Fund does not have
a minimum rating requirement for corporate bonds.

Moneyshare Fund - Under normal market conditions, Moneyshare Fund
invests primarily in high-quality, short-term, debt securities and
other money market instruments denominated in U.S. dollars.  The
Fund intends to maintain a constant net asset value of $1 per 
share, although there is no assurance it will be able to do so. 
The Fund will not purchase any security with a remaining maturity
of more than 13 months and will maintain a dollar-weighted average
portfolio maturity of 90 days or less.  The Fund also may invest in
foreign securities.  For a description of money market securities,
see Appendix C in the SAI.

Managed Fund - Under normal market conditions, Managed Fund invests
at least 50% of its total assets in common stocks.  The Fund also
invests in preferred stocks, convertible securities, warrants,
bonds and money market instruments.  Ordinarily, investments other
than common stock would constitute 50% or less of the Fund's
portfolio.  However, the Fund may invest any portion of its assets
in securities other than common stocks.  This allows the investment
manager flexibility to best achieve the Fund's goal.

The Fund does not have a minimum rating requirement for corporate
bonds.  The Fund also may invest in derivative instruments and
foreign securities.

The various types of investments the portfolio managers use to
achieve investment performance are described in more detail in the
next section and in the SAI.

Facts about investments and their risks

Common stocks:  Stock prices are subject to market fluctuations. 
Stocks of smaller or foreign companies may be subject to abrupt or
erratic price movements.  Also, small companies often have limited 
product lines, smaller markets or fewer financial resources. 
Therefore, some of the securities in which a fund invests involve
substantial risk and may be considered speculative.
<PAGE>
PAGE 20
Preferred stocks:  If a company earns a profit, it generally must
pay its preferred stockholders a dividend at a pre-established
rate.

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 price of an investment grade bond fluctuates
as interest rates change or if its credit rating is upgraded or
downgraded.
    
Debt securities below investment grade:  The price of these bonds
may react more to the ability of a company to pay interest and
principal when due than to changes in interest rates.  They have
greater price fluctuations, are more likely to experience a
default, and sometimes are referred to as "junk bonds."  Reduced
market liquidity for these bonds may occasionally make it more
difficult to value them.  In valuing bonds, a fund relies both on
independent rating agencies and the investment manager's credit 
analysis.  Securities that are subsequently downgraded in quality
may continue to be held and will be sold only when the fund's
investment manager believes it is advantageous to do so.
   
   Bond ratings and holdings for fiscal year ended Aug. 31, 1995
                      For Special Income Fund
<TABLE>
<CAPTION>
                                                                       IDS
                S&P Rating              Protection of               Assessment
Percent of      (or Moody's             principal and               of unrated
net assets      equivalent)             interest                    securities
<S>             <C>                     <C>                         <C>
                AAA                     Highest quality             
                AA                      High quality                
                A                       Upper medium grade          
                BBB                     Medium grade                
                BB                      Moderately speculative      
                B                       Speculative                 
                CCC                     Highly speculative          
                CC                      Poor quality                  
                C                       Lowest quality                
                D                       In default                  

                Unrated                 Unrated securities          
</TABLE>
(See Appendix to the SAI for further information regarding
ratings.)
    
Debt securities sold at a deep discount:  Some bonds are sold at
deep discounts because they do not pay interest until maturity. 
They include zero coupon bonds and PIK (pay-in-kind) bonds.  To 
comply with tax laws, a fund has to recognize a computed amount of 
interest income and pay dividends to shareholders even though no
cash has been received.  In some instances, a fund may have to sell
securities to have sufficient cash to pay the dividends.
<PAGE>
PAGE 21
Mortgage-backed securities:  All Funds except Moneyshare may invest
in U.S. government securities representing part ownership of pools
of mortgage loans.  A pool, or group, of mortgage loans issued by 
such lenders as mortgage bankers, commercial banks and savings and
loan associations, is assembled and mortgage pass-through
certificates are offered to investors through securities dealers. 
In pass-through certificates, both principal and interest payments,
including prepayments, are passed through to the holder of the
certificate.  Prepayments on underlying mortgages result in a loss
of anticipated interest, and the actual yield (or total return) to
the Fund, which is influenced by both stated interest rates and
market conditions, may be different than the quoted yield on the
certificates.
   
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.  Each Fund, except International Equity Fund may
invest up to 25% of its total assets at the time of purchase in
securities of foreign issuers.
    
Derivative instruments:  The portfolio managers 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 a portfolio manager to change the investment performance 
<PAGE>
PAGE 22
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.  A 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's custodian will maintain, in a segregated
account, cash or liquid high-grade debt securities that are marked
to market daily and are at least equal in value to the Fund's
obligations to the extent such obligations are not covered.  No
more than 5% of each Fund's net assets can be used at any one time
for good faith deposits on futures and premiums for options on
futures that do not offset existing investment positions.  For
further information, see the options and futures appendixes 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.  Each
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 each Fund's
net assets (15% for Capital Resource) 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 each of Capital Resource, International
Equity, Aggressive Growth, Special Income and Managed 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:  Each 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
a Fund's net assets.
<PAGE>
PAGE 23
   
Alternative investment options

In the future, the board of the Funds 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

Moneyshare Fund's securities are valued at amortized cost.  In
valuing assets of Capital Resource, International Equity,
Aggressive Growth, Special Income and Managed Funds:

o    Securities and assets with available market values are valued
     on that basis.

o    Securities maturing in 60 days or less are valued at amortized
     cost. 

o    Securities and assets without readily available market values
     are valued according to methods selected in good faith by the
     board of directors.

o    Assets and liabilities denominated in foreign currencies are
     translated daily into U.S. dollars at a rate of exchange set
     as near to the close of the day as practicable.

How to invest, transfer or redeem shares

How to invest

You may invest in the Funds only by buying a variable annuity
contract.  For further information concerning maximum and minimum
payments and submitting and acceptance of your application, see
your annuity prospectus.

How to transfer among variable accounts

You can transfer all or part of your value in a variable account to
one or more of the other variable accounts with different
investment objectives.  Please refer to your variable annuity
prospectus for more information about transfers.

Redeeming shares

The Funds will buy (redeem) any shares presented by the variable
accounts.  Surrender or withdrawal details are described in your
variable annuity prospectus.

Payment generally will be mailed within seven days of the
redemption request.  The amount may be more or less than the amount
invested.  Shares will be redeemed at net asset value at the close
of business on the day the request is accepted at the Minneapolis 
<PAGE>
PAGE 24
office.  If the request arrives after the close of business, the
price per share will be the net asset value at the close of
business on the next business day.

Distributions and taxes

The Funds distribute to shareholders (the variable accounts) net
investment income and net capital gains.  They do so to qualify as
regulated investment companies and to avoid paying corporate income
and excise taxes.

Dividend and capital gain distributions

Capital Resource, International Equity, Aggressive Growth and
Managed Funds distribute their net investment income (dividends and
interest earned on securities held by the Fund, less operating 
expenses) to shareholders (the variable accounts) at the end of
each calendar quarter.  For Special Income and Moneyshare Funds,
net investment income is distributed monthly.  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 are
distributed, both net investment income and net capital gains are
included in the value of each share.  After they are distributed,
the value of each share drops by the per-share amount of the
distribution.  (Since the distributions are reinvested, the total
value of the holdings will not change.)  The reinvestment price is
the net asset value at close of business on the day the
distribution is paid.

Taxes

The Internal Revenue Service has issued final regulations relating
to the diversification requirements under section 817(h) of the
Internal Revenue Code.  Each Fund intends to comply with these
requirements.

Federal income taxation of variable accounts, life insurance
companies and annuities is discussed in your annuity prospectus.

Income received by International Equity Fund may be subject to
foreign tax and withholding.  Tax conventions between certain
countries and the United States may reduce or eliminate those
taxes.

How the funds are organized
   
IDS Life Investment Series, Inc. formerly known as IDS Life Capital
Resource Fund, Inc., is a series mutual fund.  It has three series
of stock representing three separate, diversified funds - Capital
Resource, International Equity and Aggressive Growth.  It was
incorporated in Nevada on April 27, 1981, but changed its state of
incorporation to Minnesota on June 13, 1986.  International Equity
and Aggressive Growth Funds began operations on Jan. 13, 1992.  IDS
Life Special Income Fund, Inc. and IDS Life Moneyshare Fund, Inc. 
<PAGE>
PAGE 25
were originally incorporated in Nevada on April 27, 1981, but
changed their state of incorporation to Minnesota on June 13, 1986. 
IDS Life Managed Fund, Inc. was incorporated in Minnesota on March
5, 1985.
    
All Funds are open-end management investment companies as defined
in the Investment Company Act of 1940.  The headquarters of the
Funds is IDS Tower 10, Minneapolis, MN 55440-0010.  The Funds are
part of the IDS MUTUAL FUND GROUP, a family of funds that began in
1940.

Shares

A fund is owned by the variable accounts, its shareholders.  All
shares issued by each Fund are of the same class -- capital stock. 
Par value is 1 cent per share ($.001 for Managed Fund).  Both full
and fractional shares can be issued.

Voting rights

For a discussion of the rights of annuity contract owners
concerning the voting of shares held by the variable accounts,
please see your annuity prospectus.  All shares have equal voting
rights.  In any matter requiring the vote of shareholders (the
fund's management and fundamental policies), IDS Life and its
affiliates will ask for instructions from the person with voting
rights.  The number of votes you have is in proportion to the
amount you have allocated to each variable account.  Your
instructions will be weighted in the same proportion and IDS Life
and its affiliates will vote them that way.  If you do not give us
instructions, and for the shares for which we have voting rights,
we will vote your shares in the same proportion as those for which
we have received instructions.

Shareholder meetings

The Funds do 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.  Meetings of the shareholders also may be called
on demand by the holders of 3% or more of the outstanding shares of
each Fund if no meeting has been held during the preceding 15
months.

Portfolio managers

Capital Resource
   
Curt Weaver joined AEFC in 1979 and serves as senior portfolio
manager.  He has managed this Fund since 1987.  He also serves as a
member of the Growth Income team.
    
<PAGE>
PAGE 26
International Equity
   
Peter Lamaison joined AEFC in 1981 and serves as president and
chief executive officer of IDS International, Inc. and senior
portfolio manager.  He has managed this Fund since 1992.  He also
serves as portfolio manager of IDS International Fund and
Strategy - Worldwide Growth Fund.

Wes Wadman joined AEFC in 1964 and serves as executive vice
president of IDS International, Inc. and as executive vice
president of IDS Advisory Group Inc.  He has served as portfolio
manager of this Fund since its inception.

Paul Hopkins joined AEFC in 1992 and serves as chief investment
officer and executive vice president of IDS International, Inc.  He
was appointed to the portfolio management team of this Fund in
January 1994.  He also serves as portfolio manager of IDS
International Fund and IDS Strategy-Worldwide Growth Fund.  Prior
to joining AEFC, he was director of international equities for
Bankers Trust.

Aggressive Growth

Marty Hurwitz joined AEFC in 1987 and serves as portfolio manager. 
He was appointed to manage this Fund in January 1995.  He has
managed IDS Life Series Equity Portfolio since July 1993 and also
manages accounts for IDS Advisory Portfolio Management Group.

Special Income

Steve Merrel joined AEFC in 1988 as a quantitative investment
analyst.  He became portfolio manager of this Fund in January 1995. 
From 1990 to 1991, Steve worked for JP Morgan Futures, Inc.
marketing futures-based investment strategies.  Rejoining AEFC in
1991 as an associate portfolio manager, Steve was promoted to
portfolio manager in 1993.  He manages a number of fixed-income
portfolios and also works as part of a team with IDS Global Bond
Fund.

Moneyshare

Terry Fettig joined AEFC in 1986.  He serves as portfolio manager
for this Fund, IDS Cash Management Fund and IDS Tax-Free Money
Fund.  From 1986 to 1992 he was a fixed income securities analyst. 
From 1992 to 1993 he was an associate portfolio manager.

Managed

Mike Ducar joined AEFC in 1974 and serves as senior portfolio
manager.  He has managed the equity portfolio of this Fund since
1991.  He had served as director-investment research and vice
president of investment services.  He also is a member of IDS
Growth Income team.
    
<PAGE>
PAGE 27
   
Deb Pederson joined AEFC in 1986 and serves as portfolio manager. 
She has managed the fixed income portfolio of this Fund since
January 1994.  She also manages the fixed income portfolio of IDS
Life Series Fund, Inc. - Managed Portfolio and the low grade
invested assets of IDS Life, IDS Life Insurance Company of New York
and American Enterprise Life Insurance Company.

Directors and officers

Shareholders elect a board of directors who oversee the operations
of the Funds and choose 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.  On Aug. 31, 1995, the Fund's directors and
officers did not own any shares of the Funds.
    
Directors and officers of the Funds

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,
Incorporated.
   
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.
<PAGE>
PAGE 28
Wheelock Whitney
Chairman, Whitney Management Company.

C. Angus Wurtele
Chairman of the board and chief executive officer, The Valspar
Corporation.
   
Interested directors who are officers and/or employees of AEFC

David R. Hubers
President and chief executive officer, AEFC.

James A. Mitchell
Executive Vice President, AEFC.

John R. Thomas
Senior vice president, AEFC.

Officers who also are officers and/or employees of AEFC

Peter J. Anderson
Vice president of all funds in the IDS MUTUAL FUND GROUP.

Melinda S. Urion
Treasurer of all funds in the IDS MUTUAL FUND GROUP.

Other officer

Leslie L. Ogg
Vice president, general counsel and secretary of all funds in the
IDS MUTUAL FUND GROUP.

Refer to the SAI for the directors' and officers' biographies.

Investment manager

Each Fund pays IDS Life for managing its portfolio, and serving as
transfer agent.

Under its Investment Management Services Agreement, IDS Life
determines which securities will be purchased, held or sold
(subject to the direction and control of the Fund's board of
directors).  Under the current agreement, the Funds pays IDS Life a
fee for these services based on the average daily net assets of
each Fund, as follows:

Capital Resource

  Assets                 Annual rate at
(billions)              each asset level
First $1                     0.630%
Next  $1                     0.615
Next  $1                     0.600
Next  $3                     0.585
Over  $6                     0.570
    
<PAGE>
PAGE 29
   
International Equity

  Assets                 Annual rate at
(billions)              each asset level
First $0.25                  0.870%
Next  $0.25                  0.855
Next  $0.25                  0.840
Next  $0.25                  0.825
Next  $1                     0.810
Over  $2                     0.795

Aggressive Growth

  Assets                 Annual rate at
(billions)              each asset level
First $0.25                  0.650%
Next  $0.25                  0.635
Next  $0.25                  0.620
Next  $0.25                  0.605
Next  $1                     0.590
Over  $2                     0.575

Special Income

  Assets                 Annual rate at
(billions)              each asset level
First $1                     0.610%
Next  $1                     0.595
Next  $1                     0.580
Next  $3                     0.565
Next  $3                     0.550
Over  $9                     0.535

Moneyshare

  Assets                 Annual rate at
(billions)              each asset level
First $1                     0.510%
Next  $0.5                   0.493
Next  $0.5                   0.475
Next  $0.5                   0.458
Over  $2.5                   0.440

Managed

  Assets                 Annual rate at
(billions)              each asset level
First $0.5                   0.630%
Next  $0.5                   0.615
Next  $1                     0.600
Next  $1                     0.585
Next  $3                     0.570
Over  $6                     0.550
    
<PAGE>
PAGE 30
   
For the fiscal year ended Aug. 31, 1995, under the prior and
current agreements Aggressive Growth paid IDS Life a total
investment management fee of .____% of its average daily net
assets.  International Equity paid .____%, Capital Resource paid
 .____%, Managed paid .____%, Special Income paid .____% and
Moneyshare paid ____%.  Under this Agreement, each Fund also pays
taxes, brokerage commissions and nonadvisory expenses.  Total fees
and expenses for fiscal year 1995 were .____% for Aggressive
Growth, .____% for International Equity, .____% for Capital
Resource, .____% for Managed, .____% for Special Income and ____%
for Moneyshare.

Administrative Services Agreement

Under an Administrative Services Agreement, each Fund pays AEFC for
administration and accounting services as follows:

Capital Resource

  Assets                 Annual rate at
(billions)              each asset level
First $1                     0.050%
Next  $1                     0.045
Next  $1                     0.040
Next  $3                     0.035
Over  $6                     0.030

International Equity

  Assets                 Annual rate at
(billions)              each asset level
First $0.25                  0.060%
Next  $0.25                  0.055
Next  $0.25                  0.050
Next  $0.25                  0.045
Next  $1                     0.040
Over  $2                     0.035

Aggressive Growth

  Assets                 Annual rate at
(billions)              each asset level
First $0.25                  0.060%
Next  $0.25                  0.055
Next  $0.25                  0.050
Next  $0.25                  0.045
Next  $1                     0.040
Over  $2                     0.035
    
<PAGE>
PAGE 31
   
Special Income

  Assets                 Annual rate at
(billions)              each asset level
First $1                     0.050%
Next  $1                     0.045
Next  $1                     0.040
Next  $3                     0.035
Next  $3                     0.030
Over  $9                     0.025

Moneyshare

  Assets                 Annual rate at
(billions)              each asset level
First $1                     0.030%
Next  $0.5                   0.027
Next  $0.5                   0.025
Next  $0.5                   0.022
Over  $2.5                   0.020

Managed

  Assets                 Annual rate at
(billions)              each asset level
First $0.5                   0.040%
Next  $0.5                   0.035
Next  $1                     0.030
Next  $1                     0.025
Next  $3                     0.020
Over  $6                     0.020

Investment advisory agreements

IDS Life and AEFC have an Investment Advisory Agreement under which
AEFC executes purchases and sales and negotiates brokerage as
directed by IDS Life.  For its services, IDS Life pays AEFC a fee
based on a percentage of each Fund's average daily net assets for
the year.  This fee is equal to 0.50% for International Equity Fund
and 0.25% for each remaining Fund.

AEFC has a Sub-investment Advisory Agreement with IDS
International, Inc. (International), a wholly owned subsidiary of
AEFC.

International's principal place of business is located at IDS Tower
10, Minneapolis, MN 55440-0010 while it also conducts investment
advisory business in London, England.  International has had assets
under management since 1981.  International determines the
securities which will be purchased, held or sold and executes 
purchases and sales for International Equity Fund as directed by
AEFC.  For its services, AEFC pays International a fee equal on an
annual basis to 0.50% of International Equity Fund's net assets.
    
<PAGE>
PAGE 32
   
About American Express Financial Corporation

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 Aug. 31, 1995 were more
than $____ billion.
    
IDS Life is a stock life insurance company organized in 1957 under
the laws of the State of Minnesota and located at IDS Tower 10,
Minneapolis, MN 55440-0010.  IDS Life conducts a conventional life
insurance business in the District of Columbia and all states
except New York.
   
Other AEFC subsidiaries provide investment management and related
services for pension, profit sharing, employee savings and
endowment funds of businesses and institutions.

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.
    
Retirement Annuity Mutual Funds
IDS Tower 10
Minneapolis, MN
55440-0010

Managed by IDS Life Insurance Company
<PAGE>
PAGE 33
   
Retirement Annuity Mutual Funds - Symphony
Prospectus/Oct. 30, 1995
    
This prospectus describes three Funds that receive payments from
the variable accounts of your variable annuity contract.  Each of
these Funds has different investment objectives and policies.

IDS Life Capital Resource Fund is a stock fund.

IDS Life Managed Fund is a managed fund.

IDS Life Special Income Fund is a bond fund.

This prospectus contains facts that can help you decide if the
Funds are the right investment for you.  Read this along with your
variable annuity prospectus before you invest and keep both
prospectuses for future reference.
   
Additional facts about the Funds are in a Statement of Additional
Information (SAI), filed with the Securities and Exchange
Commission.  The SAI, dated Oct. 30, 1995, is incorporated here by
reference.  For a free copy, contact IDS Life Insurance Company.
    
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.
   
IDS LIFE IS NOT A FINANCIAL INSTITUTION, AND THE SECURITIES IT
OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY FINANCIAL INSTITUTION, NOR ARE THEY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER AGENCY.

IDS Life Investment Series, Inc.
  IDS Life Capital Resource Fund
IDS Life Managed Fund, Inc.
IDS Life Special Income Fund, Inc.
    
IDS Life Insurance Company
P.O. Box 458
Minneapolis, MN 55440
800-422-3542
<PAGE>
PAGE 34
Table of contents

The Funds in brief
Goals and types of Fund investments
Manager and distributor
Variable accounts
   
Sales charge and expenses
Sales charge
Expenses
    
Performance
Financial highlights
Total returns
Yield calculation
Key terms
   
Investment policies and risk
Facts about investments and their risks
Alternative investment options
Valuing assets
    
How to invest, transfer or redeem shares 
How to invest
How to transfer among variable accounts
Redeeming shares

Distributions and taxes
Dividend and capital gain distributions
Taxes
   
How the Funds are organized
Shares
Voting rights
Shareholder meetings
Portfolio managers
Directors and officers
Investment manager
Administrative services agreement
Investment advisory agreements

About American Express Financial Corporation
General information
    
<PAGE>
PAGE 35
The Funds in brief

Goals and types of Fund investments

Capital Resource Fund's goal is capital appreciation and it invests
primarily in U.S. common stocks.

Managed Fund's goal is maximum total investment return through a
combination of capital growth and current income.  It invests
primarily in stocks, convertible securities, bonds, and money
market instruments.  

Special Income Fund's goal is to provide a high level of current
income while conserving the value of the investment for the longest
period of time.  It invests primarily in investment-grade bonds.

Because any investment involves risk, achieving these goals cannot
be guaranteed.  Only the contract owners can change the goals.  See
Voting rights.

Manager and distributor
   
The Funds are managed by IDS Life, a subsidiary of American Express
Financial Corporation (AEFC).  AEFC has an agreement with IDS Life
to furnish investment advice for the Funds managed by IDS Life.
    
Variable accounts

You may not buy (nor will you own) shares of the Fund directly. 
You invest by buying a variable annuity and allocating your
purchase payments among the variable accounts that invest in the
Funds.
   
Sales charge and expenses
    
Sales charge

There is no sales charge for the sale or redemption of fund shares,
but there may be charges associated with your redemption (surrender
or withdrawal) of your annuity contract.  Any charges that apply to
the variable accounts and your annuity contract are described in
the variable annuity prospectus.  

Expenses
   
The funds pay IDS Life a fee for managing their investment
portfolios.  The Funds pay AEFC for administrative and accounting
services.  The Funds also pay certain nonadvisory expense.  See
"Investment manager" and "Administrative services agreement" under
"How the funds are organized".
    
<PAGE>
PAGE 36
Performance

Financial highlights
   
<TABLE>
<CAPTION>
Capital Resouce Fund
Financial highlights

Fiscal year ended August 31,

Per share income and capital changes*

                                                1995    1994    1993    1992    1991   1990     1989    1988    1987    1986
<S>                                             <C>   <C>     <C>     <C>     <C>    <C>      <C>     <C>     <C>     <C>
Net asset value, beginning
of year                                               $24.58  $23.90  $23.15  $17.54 $20.17   $15.06  $17.71  $15.97  $14.71

Income (loss) from investment operations:
Net investment income                                    .29     .23     .21     .40    .52      .39     .31     .52     .61

Net gains (losses) on securities (both realized
and unrealized)                                         1.56    1.89    1.75    6.61  (2.06)    5.38   (2.54)   4.23    2.87

Total from investment operations                        1.85    2.12    1.96    7.01  (1.54)    5.77   (2.23)   4.75    3.48

Less distributions:
Dividends from net investment income                    (.29)   (.23)   (.21)   (.40)  (.52)    (.39)   (.31)   (.52)   (.61)

Distributions from realized gains                      (2.71)  (1.21)  (1.00)  (1.00)  (.57)    (.27)   (.11)  (2.49)  (1.61)

Total distributions                                    (3.00)  (1.44)  (1.21)  (1.40)  (1.09)   (.66)   (.42)  (3.01)  (2.22)

Net asset value, end of year                          $23.43  $24.58  $23.90  $23.15  $17.54  $20.17  $15.06  $17.71  $15.97


Ratios/supplemental data
                                                1995    1994    1993    1992    1991   1990     1989    1988    1987    1986
Net assets, end of year
(in millions)                                         $2,899  $2,308  $1,681  $1,191 $  702   $  660  $  454  $  493  $  301

Ratio of expenses to average
daily net assets                                         .68%    .68%    .70%    .70%    .70%    .73%    .69%    .59%    .54%

Ratio of net income to average
daily net assets                                        1.20%   0.94%   0.91%   1.94%   2.69%   2.22%   2.01%   2.94%   3.74%

Portfolio turnover rate                    
(excluding short-term      
securities)                                               85%     65%     63%     74%     82%     42%    111%    171%    115%

Total Return**                                          7.61%   8.87%   8.54%  40.68%  (7.79)% 38.72% (12.59)% 30.32%  23.90%

 *For a share outstanding throughout the year.  Rounded to the nearest cent.
**Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
    
<PAGE>
PAGE 37
   
<TABLE>
<CAPTION>
Managed Fund
Financial highlights

Fiscal period ended August 31,
Per share income and capital changes*

                                               1995    1994    1993    1992    1991   1990     1989    1988    1987    1986**
<S>                                           <C>     <C>     <C>     <C>     <C>    <C>      <C>     <C>     <C>     <C>
Net asset value, beginning of period                  $14.32  $13.08  $12.59  $10.93 $12.08   $9.87   $11.34  $10.10  $10.00

Income (loss) from investment operations:
Net investment income                                    .47     .49     .56     .58    .65     .48      .42     .45     .16

Net gains(losses) on securities (both
realized and unrealized)                                (.26)   1.60     .95    2.11   (.67)   2.25    (1.47)   1.45     .10

Total from investment operations                         .21    2.09    1.51    2.69   (.02)   2.73    (1.05)   1.90     .26

Less distributions:
Dividends from net investment income                    (.47)   (.49)   (.56)   (.58)  (.65)   (.48)    (.42)   (.45)   (.16)

Distributions from net realized gains                   (.41)   (.36)   (.46)   (.45)  (.48)   (.04)       -    (.21)      -

Total distributions                                     (.88)   (.85)  (1.02)  (1.03) (1.13)   (.52)    (.42)   (.66)   (.16)

Net asset value, end of period                        $13.65  $14.32  $13.08  $12.59 $10.93   $12.08  $ 9.87  $11.34  $10.10


Ratios/supplemental data
                                               1995    1994    1993    1992    1991   1990     1989    1988    1987    1986**

Net assets, end of period (in millions)               $2,499  $1,858  $1,169  $810   $545     $462    $381    $340    $48

Ratio of expenses to average daily net
assets                                                   .68%    .69%    .71%    .70%    .71%    .73%    .69%    .67%    .64%***

Ratio of net income to average
daily net assets                                        3.46%   3.70%   4.35%   4.86%   5.42%   5.06%   4.42%   4.10%   4.48%***

Portfolio turnover rate (excluding
short-term securities)                                    79%     58%     50%     52%     37%     69%     62%     48%     10%

Total Return++                                          1.51%# 16.33%  12.14%  25.24%  (0.23)% 28.47%  (9.06)% 19.13%   2.55%+

  *For a share outstanding throughout the period. Rounded to the nearest cent.
 **Commencement of operations. Period from April 30, 1986 to Aug. 31 31, 1986.
***Adjusted to an annual basis.
  +For the period from April 30, 1986 to Aug. 31, 1986, the annualized total return is 7.57%.
 ++Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
    
<PAGE>
PAGE 38
   
<TABLE>
<CAPTION>
Special Income Fund
Financial highlights

Fiscal year ended August 31,
Per share income and capital changes*

                                        1995    1994    1993    1992    1991   1990     1989    1988    1987    1986
<S>                                    <C>     <C>     <C>     <C>     <C>    <C>      <C>     <C>     <C>     <C>
Net asset value, beginning
of year                                        $12.08  $11.26  $10.72  $10.10 $11.11   $10.88  $11.09  $11.91  $11.34
______________________________________________________________________________________________________________________
Income (loss) from investment operations:
Net investment income                             .84     .85     .90     .97    .99     1.03    1.03    1.08    1.16
Net gains (losses) on securities (both
realized and unrealized)                         (.99)    .82     .54     .62  (1.01)     .23    (.21)   (.56)   1.26
______________________________________________________________________________________________________________________
Total from investment operations                 (.15)   1.67    1.44    1.59   (.02)    1.26     .82     .52    2.42
______________________________________________________________________________________________________________________
Less distributions:
Dividends from net investment income             (.85)   (.85)   (.90)   (.97)  (.99)   (1.03)  (1.03)  (1.08)  (1.16)
Distributions from realized gains                (.02)      -       -       -      -        -       -    (.26)   (.69)
Excess distributions from net investment
income                                           (.01)      -       -       -      -        -       -       -       -
_______________________________________________________________________________________________________________________
Total distributions                              (.88)   (.85)   (.90)   (.97)  (.99)   (1.03)  (1.03)  (1.34)  (1.85)
_______________________________________________________________________________________________________________________
Net asset value, end of period                 $11.05  $12.08  $11.26  $10.72 $10.10   $11.11  $10.88  $11.09  $11.91
_______________________________________________________________________________________________________________________

Ratios/supplemental data
                                        1995    1994    1993    1992    1991   1990     1989    1988    1987    1986
Net assets, end of year
(in millions)                                  $1,559  $1,551  $1,136  $  800 $  641   $  565  $  428  $  409  $  307
Ratio of expenses to
average daily net assets                          .67%    .69%    .71%    .70%   .71%     .73%    .69%    .58%    .55%
Ratio of net income to
average daily net assets                         7.20%   7.41%   8.22%   9.31%  9.42%    9.37%   9.45%   9.11%  10.27%
Portfolio turnover rate
(excluding short-term
securities)                                        57%     77%     92%     97%   118%     132%    169%    101%    170%
_______________________________________________________________________________________________________________________
Total Return**                                  (1.30)% 15.47%  13.96%  16.54% (0.12)%  12.19%   7.76%   4.48%  23.17%
_______________________________________________________________________________________________________________________
 *For a share outstanding thourghout the period.  Rounded to the nearest cent.
**Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
    
The information in these tables has been audited by KPMG Peat
Marwick LLP, independent auditors.  The independent auditors'
report and additional information about the performance of the
Funds is contained in the fund's annual report which, if not
included with this prospectus, may be obtained without charge.

Total returns
   
Average annual total returns as of Aug. 31, 1995
    
Purchase               1 year    5 years       10 years
made                   ago       ago           ago        

Capital Resource       
Fund

S&P 500                
<PAGE>
PAGE 39
   
Cumulative total returns as of Aug. 31, 1995

Purchase               1 year    5 years       10 years
made                   ago       ago           ago        

Capital Resource       
Fund

S&P 500                

Average annual total returns as of Aug. 31, 1995

                                                Since
Purchase               1 year    5 Years        inception
made                   ago       ago            April 30, 1986

Managed Fund           

S&P 500                

Cumulative total returns as of Aug. 31, 1995

                                                Since
Purchase               1 year    5 Years        inception
made                   ago       ago            April 30, 1986

Managed Fund           

S&P 500                

Average annual total returns as of Aug. 31, 1995

Purchase               1 year    5 years       10 years
made                   ago       ago           ago        

Special Income Fund    

Lehman Aggregate       
Bond Index

Cumulative total returns as of Aug. 31, 1995

Purchase               1 year    5 years       10 years
made                   ago       ago           ago        

Special Income Fund    

Lehman Aggregate       
Bond Index
    
These examples show total returns from hypothetical investments in
each Fund.  These returns are compared to those of popular indexes
for the same periods.  The results do not reflect the expenses that
apply to the variable accounts or the annuity contracts.  Inclusion
of these charges would reduce total return for all periods shown.
<PAGE>
PAGE 40
For purposes of calculation, information about each Fund assumes 
the deduction of applicable fund expenses, makes no adjustments for
taxes that may have been paid on the reinvested income and capital
gains, and covers a period of widely fluctuating securities prices. 
Returns shown should not be considered a representation of the
Fund's future performance.

Each Fund's investments may be different from those in the indexes. 
The indexes reflect reinvestment of all distributions and changes
in market prices, but exclude 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.

Lehman Aggregate Bond Index is made up of a representative list of
government and corporate bonds as well as asset-backed securities 
and mortgage-backed securities.  The index is frequently used as a
general measure of bond market performance.  However, the
securities used to create the index may not be representative of
the bonds held in Special Income Fund.

Yield calculation

Special Income Fund may calculate a 30-day annualized yield by
dividing:

o     net investment income per share deemed earned during a 30-day
      period by

o     the net asset value per share on the last day of the period,
      and

o     converting the result to a yearly equivalent figure.

This yield calculation does not include any annuity charges or
contingent deferred sales charges, which would reduce the yield
quoted.

A fund's yield varies from day to day, mainly because share values
and net asset values (which are calculated daily) vary in response
to changes in interest rates.  Net investment income normally
changes much less in the short run.  Thus, when interest rates rise
and share values fall, yield tends to rise.  When interest rates
fall, yield tends to follow.

Past yields should not be considered an indicator of future yields.

Key terms

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.
<PAGE>
PAGE 41
Capital gains or losses - Increase or decrease in value of the
securities the funds hold.  Gains are realized when securities that
have increased in value are sold.  A fund also may have unrealized
gains or losses when securities increase or decrease in value but
are not sold.

Close of business - Normally 3 p.m. Central time each business day
(any day the New York Stock Exchange is open).

Distributions - Payments to the variable accounts of two types:
investment income (dividends) and realized net long-term capital
gains (capital gains distributions).  

Investment income - Dividends and interest earned on securities
held by the funds.

Net asset value (NAV) - Value of a single fund share.  It is the
total market value of all of a fund's investments and other assets,
less any liabilities, divided by the number of shares outstanding.

The NAV is the price the variable account receives when it sells
shares. It usually changes from day to day, and is calculated at
the close of business.  For Special Income Fund, NAV generally
declines as interest rates increase and rises as interest rates
decline.

Total return - Sum of all returns for a given period, assuming
reinvestment of all distributions.  Calculated by taking the total
value of shares at the end of the period (including shares acquired
by reinvestment), less the price of shares purchased at the
beginning of the period.

Variable accounts - The separate accounts or subaccounts, each of
which invests in shares of one of the funds.

Yield - Net investment income earned per share for a specified time
period, divided by the net asset value at the end of the period.

Investment policies and risk

Capital Resource Fund - Under normal market conditions, Capital
Resource Fund invests in U.S. common stocks listed on national
securities exchanges and other securities convertible into common
stock.  The portfolio manager selects investments believed to have
potential for capital growth.

The Fund also may invest in preferred stocks, bonds, debt
securities, foreign securities, money market instruments and
derivative instruments.  The Fund does not have a minimum rating
requirement for corporate bonds.

Managed Fund - Under normal market conditions, Managed Fund invests
at least 50% of its total assets in common stocks.  The Fund also
invests in preferred stocks, convertible securities, warrants,
bonds and money market instruments.  Ordinarily, investments other
than common stock would constitute 50% or less of the Fund's 
<PAGE>
PAGE 42
portfolio.  However, the Fund may invest any portion of its assets
in securities other than common stocks.  This allows the investment
manager flexibility to best achieve the Fund's goal.

The Fund does not have a minimum rating requirement for corporate
bonds.  The Fund also may invest in derivative instruments and
foreign securities.

Special Income Fund - Under normal market conditions, Special
Income Fund primarily invests in debt securities.  At least 50% of
its net assets are invested in corporate bonds of the four highest
ratings, in other corporate bonds the investment manager believes
have the same investment qualities, and in government bonds.

The Fund also may invest in corporate bonds with lower ratings,
convertible securities, preferred stocks, derivative instruments,
money market instruments and foreign bonds.  The Fund does not have
a minimum rating requirement for corporate bonds.

The various types of investments the portfolio managers use to
achieve investment performance are described in more detail in the
next section and in the SAI.

Facts about investments and their risks

Common stocks:  Stock prices are subject to market fluctuations. 
Stocks of smaller or foreign companies may be subject to abrupt or
erratic price movements.  Also, small companies often have limited
product lines, smaller markets or fewer financial resources. 
Therefore, some of the securities in which a fund invests 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.

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 price of an investment grade bond fluctuates
as interest rates change or if its credit rating is upgraded or
downgraded.
    
Debt securities below investment grade:  The price of these bonds
may react more to the ability of a company to pay interest and
principal when due than to changes in interest rates.  They have
greater price fluctuations, are more likely to experience a
default, and sometimes are referred to as "junk bonds."  Reduced 
market liquidity for these bonds may occasionally make it more
difficult to value them.  In valuing bonds, a fund relies both on
independent rating agencies and the investment manager's credit 
<PAGE>
PAGE 43
analysis.  Securities that are subsequently downgraded in quality
may continue to be held and will be sold only when the fund's
investment manager believes it is advantageous to do so.
   
   Bond ratings and holdings for fiscal year ended Aug. 31, 1995
                      For Special Income Fund
<TABLE>
<CAPTION>
                                                                       IDS
                S&P Rating              Protection of               Assessment
Percent of      (or Moody's             principal and               of unrated
net assets      equivalent)             interest                    securities
<S>             <C>                     <C>                         <C>
     %          AAA                     Highest quality                 %
                AA                      High quality                
                A                       Upper medium grade          
                BBB                     Medium grade                
                BB                      Moderately speculative      
                B                       Speculative                 
                CCC                     Highly speculative          
                CC                      Poor quality                  
                C                       Lowest quality                
                D                       In default                  

                Unrated                 Unrated securities          
</TABLE>
(See Appendix to the SAI for further information regarding
ratings.)
    
Debt securities sold at a deep discount:  Some bonds are sold at
deep discounts because they do not pay interest until maturity. 
They include zero coupon bonds and PIK (pay-in-kind) bonds.  To
comply with tax laws, a fund has to recognize a computed amount of
interest income and pay dividends to shareholders even though no
cash has been received.  In some instances, a fund may have to sell
securities to have sufficient cash to pay the dividends.

Mortgage-backed securities:  All Funds may invest in U.S.
government securities representing part ownership of pools of
mortgage loans.  A pool, or group, of mortgage loans issued by 
such lenders as mortgage bankers, commercial banks and savings and
loan associations, is assembled and mortgage pass-through
certificates are offered to investors through securities dealers. 
In pass-through certificates, both principal and interest payments,
including prepayments, are passed through to the holder of the
certificate.  Prepayments on underlying mortgages result in a loss
of anticipated interest, and the actual yield (or total return) to
the Fund, which is influenced by both stated interest rates and
market conditions, may be different than the quoted yield on the
certificates.
   
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
<PAGE>
PAGE 44
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.  Each Fund may invest up to 25% of its total assets at
the time of purchase in securities of foreign issuers.
    
Derivative instruments:  The portfolio managers 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 a 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.  A 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's custodian will maintain, in a segregated
account, cash or liquid high-grade debt securities that are marked
to market daily and are at least equal in value to the fund's
obligations to the extent such obligations are not covered.  No
more than 5% of each Fund's net assets can be used at any one time
for good faith deposits on futures and premiums for options on
futures that do not offset existing investment positions.  For
further information, see the options and futures appendixes 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.  Each
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 
<PAGE>
PAGE 45
whether a security is illiquid.  No more than 10% of each Fund's
net assets (15% for Capital Resource) 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 each of the funds' 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:  Each 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
a Fund's net assets.
   
Alternative investment options

In the future, the board of the Funds 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

In valuing assets of each fund:

o    Securities and assets with available market values are valued
     on that basis.

o    Securities maturing in 60 days or less are valued at amortized
     cost. 

o    Securities and assets without readily available market values
     are valued according to methods selected in good faith by the
     board of directors.

o    Assets and liabilities denominated in foreign currencies are
     translated daily into U.S. dollars at a rate of exchange set
     as near to the close of the day as practicable.

How to invest, transfer or redeem shares

How to invest

You may invest in the Funds only by buying a variable annuity
contract.  For further information concerning maximum and minimum
payments and submitting and acceptance of your application, see
your annuity prospectus.
<PAGE>
PAGE 46
How to transfer among variable accounts

You can transfer all or part of your value in a variable account to
one or more of the other variable accounts with different
investment objectives.  Please refer to your variable annuity
prospectus for more information about transfers.

Redeeming shares

The Funds will buy (redeem) any shares presented by the variable
accounts.  Surrender or withdrawal details are described in your
variable annuity prospectus.

Payment generally will be mailed within seven days of the
redemption request.  The amount may be more or less than the amount
invested.  Shares will be redeemed at net asset value at the close
of business on the day the request is accepted at the Minneapolis
office.  If the request arrives after the close of business, the
price per share will be the net asset value at the close of
business on the next business day.

Distributions and taxes

The Funds distribute to shareholders (the variable accounts) net
investment income and net capital gains.  They do so to qualify as
regulated investment companies and to avoid paying corporate income
and excise taxes.

Dividend and capital gain distributions

Capital Resource and Managed Funds distribute their net investment
income (dividends and interest earned on securities held by the
Fund, less operating expenses) to shareholders (the variable
accounts) at the end of each calendar quarter.  For Special Income,
net investment income is distributed monthly.  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 are
distributed, both net investment income and net capital gains are
included in the value of each share.  After they are distributed,
the value of each share drops by the per-share amount of the
distribution.  (Since the distributions are reinvested, the total
value of the holdings will not change.)  The reinvestment price is
the net asset value at close of business on the day the
distribution is paid.

Taxes

The Internal Revenue Service has issued final regulations relating
to the diversification requirements under section 817(h) of the
Internal Revenue Code.  Each Fund intends to comply with these
requirements.

Federal income taxation of variable accounts, life insurance
companies and annuities is discussed in your annuity prospectus.
<PAGE>
PAGE 47
How the funds are organized
   
Capital Resource Fund is a portfolio of IDS Life Investment Series,
Inc., formerly known as IDS Capital Resource Fund, Inc., a series
mutual fund which was incorporated in Nevada on April 27, 1981, but
changed its state of incorporation to Minnesota on June 13, 1986. 
IDS Life Special Income Fund, Inc. was originally incorporated in
Nevada on April 27, 1981, but changed its state of incorporation to
Minnesota on June 13, 1986.  IDS Life Managed Fund, Inc. was
incorporated in Minnesota on March 5, 1985.
    
All Funds are open-end management investment companies as defined
in the Investment Company Act of 1940.  The headquarters of the
Funds is IDS Tower 10, Minneapolis, MN 55440-0010.  The Funds are
part of the IDS MUTUAL FUND GROUP, a family of funds that began in
1940.

Shares

A fund is owned by the variable accounts, its shareholders.  All
shares issued by each Fund are of the same class -- capital stock. 
Par value is 1 cent per share ($.001 for Managed Fund).  Both full
and fractional shares can be issued.

Voting rights

For a discussion of the rights of annuity contract owners
concerning the voting of shares held by the variable accounts,
please see your annuity prospectus.  All shares have equal voting
rights.  In any matter requiring the vote of shareholders (the
fund's management and fundamental policies), IDS Life and its
affiliates will ask for instructions from the person with voting
rights.  The number of votes you have is in proportion to the
amount you have allocated to each variable account.  Your
instructions will be weighted in the same proportion and IDS Life 
and its affiliates will vote them that way.  If you do not give us
instructions, and for the shares for which we have voting rights,
we will vote your shares in the same proportion as those for which
we have received instructions.

Shareholder meetings

The Funds do 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.  Meetings of the shareholders also may be called
on demand by the holders of 3% or more of the outstanding shares of
each Fund if no meeting has been held during the preceding 15
months.

Portfolio managers

Capital Resource
   
Curt Weaver joined AEFC in 1979 and serves as senior portfolio
manager.  He has managed this Fund since 1987.  He also serves as a
member of the Growth Income team.
    
<PAGE>
PAGE 48
Managed
   
Mike Ducar joined AEFC in 1974 and serves as senior portfolio
manager.  He has managed the equity portfolio of this Fund since
1991.  He had served as director-investment research and vice
president of investment services.  He also is a member of IDS
Growth Income team.

Deb Pederson joined AEFC in 1986 and serves as portfolio manager. 
She has managed the fixed income portfolio of this Fund since
January 1994.  She also manages the fixed income portfolio of IDS
Life Series Fund, Inc. - Managed Portfolio and the low grade
invested assets of IDS Life, IDS Life Insurance Company of New York
and American Enterprise Life Insurance Company.

Special Income

Steve Merrel joined AEFC in 1988 as a quantitative investment
analyst.  He became portfolio manager of this Fund in January 1995. 
From 1990 to 1991, Steve worked for JP Morgan Futures, Inc.
marketing futures-based investment strategies.  Rejoining AEFC in
1991 as an associate portfolio manager, Steve was promoted to
portfolio manager in 1993.  He manages a number of fixed-income
portfolios and also works as part of a team with IDS Global Bond
Fund.

Directors and officers

Shareholders elect a board of directors who oversee the operations
of the Funds and choose 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.  On Aug. 31, 1995, the Fund's directors and
officers did not own any shares of the Funds.
    
Directors and officers of the Funds

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,
Incorporated.
<PAGE>
PAGE 49
   
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.
   
Interested directors who are officers and/or employees of AEFC

David R. Hubers
President and chief executive officer, AEFC.

James A. Mitchell
Executive Vice President, AEFC.

John R. Thomas
Senior vice president, AEFC.

Officers who also are officers and/or employees of AEFC

Peter J. Anderson
Vice president of all funds in the IDS MUTUAL FUND GROUP.

Melinda S. Urion
Treasurer of all funds in the IDS MUTUAL FUND GROUP.

Other officer

Leslie L. Ogg
Vice president, general counsel and secretary of all funds in the
IDS MUTUAL FUND GROUP.

Refer to the SAI for the directors' and officers' biographies.

Investment manager

Each Fund pays IDS Life for managing its portfolio and serving as
transfer agent.
    
<PAGE>
PAGE 50
   
Under its Investment Management Services Agreement, IDS Life
determines which securities will be purchased, held or sold
(subject to the direction and control of the Fund's board of
directors).  Under the current agreement, the Fund pays IDS Life a
fee for these services based on the average daily net assets of
each Fund, as follows:

Capital Resource

  Assets             Annual rate at
(billions)          each asset level
First $1                 0.630%
Next  $1                 0.615
Next  $1                 0.600
Next  $3                 0.585
Over  $6                 0.570

Managed

  Assets             Annual rate at
(billions)          each asset level
First $0.5               0.630%
Next  $0.5               0.615
Next  $1                 0.600
Next  $1                 0.585
Next  $3                 0.570
Over  $6                 0.550

Special Income

  Assets             Annual rate at
(billions)          each asset level
First $1                 0.610%
Next  $1                 0.595
Next  $1                 0.580
Next  $3                 0.565
Next  $3                 0.550
Over  $9                 0.535

For the fiscal year ended Aug. 31, 1995, under the prior and
current agreements Capital Resource paid IDS Life a total
investment management fee of .____% of its average daily net
assets.  Managed paid .____% and Special Income paid .____%.  Under
this Agreement, each Fund also pays taxes, brokerage commissions
and nonadvisory expenses.  Total fees and expenses for fiscal year
1995 were .____% for Capital Resource, .____% for Managed and
 .____% for Special Income.

Administrative Services Agreement

Under an Administrative Services Agreement, each Fund pays AEFC for
administration and accounting services as follows:
    
<PAGE>
PAGE 51
   
Capital Resource

  Assets             Annual rate at
(billions)          each asset level
First $1                 0.050%
Next  $1                 0.045
Next  $1                 0.040
Next  $3                 0.035
Over  $6                 0.030

Managed

  Assets             Annual rate at
(billions)          each asset level
First $0.5               0.040%
Next  $0.5               0.035
Next  $1                 0.030
Next  $1                 0.025
Next  $3                 0.020
Over  $6                 0.020

Special Income

  Assets             Annual rate at
(billions)          each asset level
First $1                 0.050%
Next  $1                 0.045
Next  $1                 0.040
Next  $3                 0.035
Next  $3                 0.030
Over  $9                 0.025

Investment advisory agreements

IDS Life and AEFC have an Investment Advisory Agreement under which
AEFC executes purchases and sales and negotiates brokerage as
directed by IDS Life.  For its services, IDS Life pays IDS a fee
based on a percentage of each Fund's average daily net assets for
the year.  This fee is equal to 0.25% for each Fund.

About American Express Financial Corporation

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 Aug. 31, 1995 were more
than $___ billion.
    
<PAGE>
PAGE 52
IDS Life is a stock life insurance company organized in 1957 under
the laws of the State of Minnesota and located at IDS Tower 10,
Minneapolis, MN 55440-0010.  IDS Life conducts a conventional life
insurance business in the District of Columbia and all states
except New York.
   
Other AEFC subsidiaries provide investment management and related
services for pension, profit sharing, employee savings and
endowment funds of businesses and institutions.

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.
    
Retirement Annuity Mutual Funds - Symphony
IDS Tower 10
Minneapolis, MN
55440-0010

Managed by IDS Life Insurance Company
<PAGE>
PAGE 53


               STATEMENT OF ADDITIONAL INFORMATION

                              FOR 
   
              IDS Life Investment Series, Inc.
                  IDS Life Capital Resource Fund
                  IDS Life International Equity Fund
                  IDS Life Aggressive Growth Fund
              IDS Life Special Income Fund, Inc.
              IDS Life Moneyshare Fund, Inc.
              IDS Life Managed Fund, Inc.

                         Oct. 30, 1995
    

This Statement of Additional Information (SAI), is not a
prospectus.  It should be read together with the Funds' prospectus
and the financial statements contained in the Funds' Annual Report
which, if not included with your prospectus, may be obtained
without charge.
   
This SAI is dated Oct. 30, 1995, and it is to be used with the
Funds' prospectus dated Oct. 30, 1995.  It is also to be used with
the Funds' Annual Report for the fiscal year ended Aug. 31, 1995.
    

IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN  55440-0010
(612) 671-3733
<PAGE>
PAGE 54
                         TABLE OF CONTENTS

Goals and Investment Policies........................See Prospectus
   
Additional Investment Policies................................p. 

Portfolio Transactions........................................p. 

Brokerage Commissions Paid to Brokers 
Affiliated with IDS Life......................................p. 

Performance Information.......................................p. 
 
Valuing Each Fund's Shares....................................p. 

Investing in the Funds........................................p. 

Redeeming Shares..............................................p. 
 
Capital Loss Carryover........................................p. 
 
Taxes.........................................................p. 

Agreements with IDS Life and American Express Financial
Corporation...................................................p. 
    
Directors and Officers........................................p. 

Custodian.....................................................p. 
 
Independent Auditors..........................................p. 

Financial Statements....................See Annual Report and p. 

Prospectus....................................................p. 

Appendix A:  Description of Corporate Bond Ratings and
             Additional Information on Investment Policies
             for Investments of Capital Resource and Special
             Income Funds.....................................p. 
   
Appendix B:  Foreign Currency Transactions....................p. 
    
Appendix C:  Description of Money Market Securities...........p. 

Appendix D:  Options and Stock Index Futures Contracts for
             Investments of Capital Resource, International
             Equity, Aggressive Growth and Managed Funds......p. 
 
Appendix E:  Options and Interest Rate Futures Contracts
             for Investments of Special Income and Managed
             Funds............................................p. 
<PAGE>
PAGE 55
Appendix F:  Mortgage-backed securities and Additional
             Information on Investment Policies for all
             Funds except Moneyshare..........................p. 

Appendix G:  Dollar-Cost Averaging............................p. 
<PAGE>
PAGE 56
ADDITIONAL INVESTMENT POLICIES

In addition to the investment goals and policies presented in the
prospectus, each Fund has the investment policies stated below.
   
Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of Capital Resource agree to a change, Capital Resource will not:

'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.  Up to 25% of the Fund's total assets may be
invested without regard to this 5% limitation.

'Purchase securities of an issuer if the directors and officers of
the Fund, American Express Financial Corporation (AEFC) and IDS
Life Insurance Company (IDS Life) hold more than a certain
percentage of the issuer's outstanding securities.  The holdings of
all officers and directors of the Fund, AEFC and IDS Life who own
more than 0.5% of an issuer's securities are added together, and if
in total they own more than 5%, the Fund will not purchase
securities of that issuer.

'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 the Fund's total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing.  The Fund will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceed 5%.  The Fund has not borrowed in the past and has no
present intention to borrow.

'Lend portfolio securities in excess of 30% of the Fund's net
assets, at market value.  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.  A loan will not be made unless the opportunity for additional
income outweighs the risks.  During the existence of the loan, the
Fund receives cash payments equivalent to all interest or other
distributions paid on the loaned securities.

'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.  It may be considered an underwriter under
securities laws when it sells restricted securities.
<PAGE>
PAGE 57
'Concentrate in any one industry.  According to the present
interpretation by the Securities and Exchange Commission (SEC),
this means no more than 25% of a Fund's total assets, based on
current market value at time of purchase, can be invested in any
one industry.

'Purchase more than 10% of the outstanding voting securities of an
issuer.

'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.

'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.

'Make cash loans if the total commitment amount exceeds 5% of the
fund's total assets.

Unless changed by the board of directors, the following policies
apply to Capital Resource, Capital Resource will not:

'Buy on margin or sell short, except it may enter into interest
rate futures contracts.

'Invest in a company to control or manage it.

'Invest in exploration or development programs, such as oil, gas or
mineral programs.

'Invest more than 10% of its total assets in securities of
investment companies.

'Invest more than 5% of its net assets in warrants.  If required by
law, no more than 2% of the Fund's net assets may be invested in
warrants not listed on an exchange.

'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 a readily available market,
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 
<PAGE>
PAGE 58
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
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 Fund may purchase short-term U.S. and
Canadian government securities.  The Fund may purchase short-term
corporate notes and obligations rated in the top two
classifications by Moody's and S&P or the equivalent.  The Fund may
invest in bank obligations including negotiable certificates of
deposit (CDs), 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 that Fund's limitations on foreign investments. 
The Fund may use repurchase agreements with broker-dealers
registered under the Securities Exchange Act of 1934 and with
commercial U.S. 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).  A Fund does not pay for the
securities or receive dividends or interest on them until the
contractual settlement date.  The Fund's custodian will maintain,
in a segregated account, cash or liquid high-grade debt securities
that are marked to market daily and are at least equal in value to
the Fund's 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.

Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of International Equity agree to a change, International Equity
will not:

'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 
<PAGE>
PAGE 59
securities issued by the U.S. government, its agencies or
instrumentalities.  Up to 25% of the Fund's total assets may be
invested without regard to this 5% limitation.

'Purchase securities of an issuer if the directors and officers of
the Fund, AEFC and IDS Life hold more than a certain percentage of
the issuer's outstanding securities.  The holdings of all officers
and directors of the Fund, AEFC and IDS Life who own more than 0.5%
of an issuer's securities are added together, and if in total they
own more than 5%, the Fund will not purchase securities of that
issuer.

'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 the Fund's total assets (including
borrowings) less liabilities (other than borrowings) immediately 
after the borrowing.  The Fund will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceeds 5%.  The Fund has not borrowed in the past and has no
present intention to borrow.

'Lend portfolio securities in excess of 30% of the Fund's net
assets, at market value.  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.  A loan will not be made unless the opportunity for additional
income outweighs the risks.  During the existence of the loan, the
Fund receives cash payments equivalent to all interest or other
distributions paid on the loaned securities.

'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.  It may be considered an underwriter under
securities laws when it sells restricted securities.

'Concentrate in any one industry.  According to the present
interpretation by the SEC, this means no more than 25% of a Fund's
total assets, based on current market value at time of purchase,
can be invested in any one industry.

'Purchase more than 10% of the outstanding voting securities of an
issuer.

'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.
<PAGE>
PAGE 60
'Make cash loans if the total commitment amount exceeds 5% of the
Fund's total assets.

'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.

'Make a loan of any part of its assets to AEFC, to its directors
and officers or to its own directors and officers.

'Issue senior securities, except to the extent that borrowing from
banks, lending its securities, or entering into repurchase
agreements or options or futures contracts may be deemed to
constitute issuing a senior security.

Unless changed by the board of directors, the following policies
apply to International Equity, International Equity will not:

'Buy on margin or sell short, except it may enter into interest
rate futures contracts.

'Invest in a company to control or manage it.

'Invest in exploration or development programs, such as oil, gas or
mineral programs.

'Invest more than 5% of its net assets in securities of domestic or
foreign companies, including any predecessors, that have a record
of less than three years continuous operations.

'Pledge or mortgage its assets beyond 15% of total assets.  If the
Fund were ever to do so, valuation of the pledged or mortgaged
assets would be based on market values.  For purposes of this
restriction, collateral arrangements for margin deposits on a
futures contract are not deemed to be a pledge of assets.

'Invest more than 5% of its net assets in warrants.  If required by
law, no more than 2% of the Fund's net assets may be invested in
warrants not listed on an exchange.

'Invest in securities that are not readily marketable (whether or
not registration or the filing of a notification under the
Securities Act of 1933, or the taking of similar action under other
securities laws relating to the sale of securities is required), if
immediately after the making of any such investment more than 10%
of the Fund's net assets (taken at market) would be invested in
such securities.

'Invest in securities of investment companies except by purchase in
the open market where the dealer's or sponsor's profit is the
regular commission.  If any such investment is ever made, not more
than 10% of the Fund's net assets, at market, will be so invested.
<PAGE>
PAGE 61
To the extent the Fund were to make such investments, the
shareholders may be subject to duplicate advisory, administrative
and distribution fees.

'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 a readily available market,
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
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 Fund may purchase short-term U.S. and
Canadian government securities.  The Fund may invest in short-term
obligations or currencies of the U.S. government (and its agencies
and instrumentalities) and of the Canadian and United Kingdom
governments.  The Fund may purchase short-term corporate notes and
obligations rated in the top two classifications by Moody's and S&P
or the equivalent.  The Fund also may purchase high grade notes and
obligations of U.S. banks (including their branches located outside
of the United States and U.S. branches of foreign banks).  On a
day-to-day basis, the Fund also may maintain a portion of its
assets in currencies of countries other than the United States,
Canada and the United Kingdom.  As a temporary investment, during
periods of weak or declining market values for the securities the
Fund invests in, any portion of its assets may be converted to cash
(in foreign currencies or U.S. dollars) or to short-term debt
securities.  The Fund may invest in bank obligations including
negotiable certificates of deposit (CDs), 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 
<PAGE>
PAGE 62
will be subject to that Fund's limitations on foreign investments. 
The Fund may use repurchase agreements with broker-dealers
registered under the Securities Exchange Act of 1934 and with
commercial U.S. 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).  A Fund does not pay for the
securities or receive dividends or interest on them until the
contractual settlement date.  The Fund's custodian will maintain,
in a segregated account, cash or liquid high-grade debt securities
that are marked to market daily and are at least equal in value to
the Fund's 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.

Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of Aggressive Growth agree to a change, Aggressive Growth will not:

'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.  Up to 25% of the Fund's total assets may be
invested without regard to this 5% limitation.

'Purchase securities of an issuer if the directors and officers of
the Fund, AEFC and IDS Life hold more than a certain percentage of
the issuer's outstanding securities.  The holdings of all officers
and directors of the Fund, AEFC and IDS Life who own more than 0.5%
of an issuer's securities are added together, and if in total they
own more than 5%, the Fund will not purchase securities of that
issuer.

'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 the Fund's total assets (including
borrowings) less liabilities (other than borrowings) immediately 
after the borrowing.  The Fund will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceeds 5%.  The Fund has not borrowed in the past and has no
present intention to borrow.

'Lend portfolio securities in excess of 30% of the Fund's net
assets, at market value.  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
<PAGE>
PAGE 63
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.  A loan will not be made unless the opportunity for additional
income outweighs the risks.  During the existence of the loan, the
Fund receives cash payments equivalent to all interest or other
distributions paid on the loaned securities.

'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.  It may be considered an underwriter under
securities laws when it sells restricted securities.

'Concentrate in any one industry.  According to the present
interpretation by the SEC, this means no more than 25% of a Fund's
total assets, based on current market value at time of purchase,
can be invested in any one industry.

'Purchase more than 10% of the outstanding voting securities of an
issuer.

'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.

'Make cash loans if the total commitment amount exceeds 5% of the
Fund's total assets.

'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.

'Make a loan of any part of its assets to AEFC, to its directors
and officers or to its own directors and officers.

Unless changed by the board of directors, the following policies
apply to Aggressive Growth, Aggressive Growth will not:

'Buy on margin or sell short, except it may enter into interest
rate futures contracts.

'Invest in a company to control or manage it.

'Invest in exploration or development programs, such as oil, gas or
mineral programs.

'Invest more than 10% of its total assets in securities of
investment companies.
<PAGE>
PAGE 64
'Invest more than 5% of its total assets in securities of domestic
or foreign companies, including any predecessors, that have a
record of less than three years continuous operations.

'Pledge or mortgage its assets beyond 15% of total assets.  If the
Fund were ever to do so, valuation of the pledged or mortgaged
assets would be based on market values.  For purposes of this
restriction, collateral arrangements for margin deposits on a
futures contract are not deemed to be a pledge of assets.

'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 securities that are not readily marketable (whether or
not registration or the filing of a notification under the
Securities Act of 1933, or the taking of similar action under other
securities laws relating to the sale of securities is required), if
immediately after the making of any such investment more than 10%
of the Fund's net assets (taken at market) would be invested in
such securities.

'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 a readily available market,
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
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 Fund may purchase short-term U.S. and
Canadian government securities.  The Fund may purchase short-term
corporate notes and obligations rated in the top two
classifications by Moody's and S&P or the equivalent.  The Fund may
invest in bank obligations including negotiable certificates of 
<PAGE>
PAGE 65
deposit (CDs), 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 that Fund's limitations on foreign investments. 
The Fund may use repurchase agreements with broker-dealers
registered under the Securities Exchange Act of 1934 and with
commercial U.S. 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).  A Fund does not pay for the
securities or receive dividends or interest on them until the
contractual settlement date.  The Fund's custodian will maintain,
in a segregated account, cash or liquid high-grade debt securities
that are marked to market daily and are at least equal in value to
the Fund's 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.

Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of Managed agree to a change, Managed will not:

'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.  Up to 25% of the Fund's total assets may be
invested without regard to this 5% limitation.

'Purchase securities of an issuer if the directors and officers of
the Fund, AEFC and IDS Life hold more than a certain percentage of
the issuer's outstanding securities.  The holdings of all officers 
and directors of the Fund, AEFC and IDS Life who own more than 0.5%
of an issuer's securities are added together, and if in total they
own more than 5%, the Fund will not purchase securities of that
issuer.

'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 the Fund's total assets (including
borrowings) less liabilities (other than borrowings) immediately 
after the borrowing.  The Fund will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceeds 5%.  The Fund has not borrowed in the past and has no
present intention to borrow.
<PAGE>
PAGE 66
'Lend portfolio securities in excess of 30% of the Fund's net
assets, at market value.  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.  A loan will not be made unless the opportunity for additional
income outweighs the risks.  During the existence of the loan, the
Fund receives cash payments equivalent to all interest or other
distributions paid on the loaned securities.

'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.  It may be considered an underwriter under
securities laws when it sells restricted securities.

'Concentrate in any one industry.  According to the present
interpretation by the SEC, this means no more than 25% of a Fund's
total assets, based on current market value at time of purchase,
can be invested in any one industry.

'Purchase more than 10% of the outstanding voting securities of an
issuer.

'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.

'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.

'Make cash loans if the total commitment amount exceeds 5% of the
Fund's total assets.

'Make a loan of any part of its assets to AEFC, to its directors
and officers or to its own directors and officers.

'Issue senior securities, except to the extent that borrowing from
banks, lending its securities, or entering into repurchase
agreements or options or futures contracts may be deemed to
constitute issuing a senior security.

Unless changed by the board of directors, the following policies
apply to Managed, Managed will not:
<PAGE>
PAGE 67
'Buy on margin or sell short, except it may enter into interest
rate futures contracts.

'Invest in a company to control or manage it.

'Invest more than 10% of its total assets in securities of
investment companies.

'Invest more than 5% of its total assets in securities of domestic
or foreign companies, including any predecessors, that have a
record of less than three years continuous operations.

'Pledge or mortgage its assets beyond 15% of total assets.  If the
Fund were ever to do so, valuation of the pledged or mortgaged
assets would be based on market values.  For purposes of this
restriction, collateral arrangements for margin deposits on a
futures contract are not deemed to be a pledge of assets.

'Invest more than 5% of its net assets in warrants.  If required by
law, no more than 2% of the Fund's net assets may be invested in
warrants not listed on an exchange.

'Invest in securities that are not readily marketable (whether or
not registration or the filing of a notification under the
Securities Act of 1933, or the taking of similar action under other
securities laws relating to the sale of securities is required), if
immediately after the making of any such investment more than 5% of
the Fund's net assets (taken at market) would be invested in such
securities.

'Invest in a company if its investments would result in the total
holdings of all the funds in the IDS MUTUAL FUND GROUP 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 a readily available market,
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 
<PAGE>
PAGE 68
guidelines established by the board of directors, will evaluate
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 Fund may purchase short-term U.S. and
Canadian government securities.  The Fund may purchase short-term
corporate notes and obligations rated in the top two
classifications by Moody's and S&P or the equivalent.  The Fund may
invest in bank obligations including negotiable certificates of
deposit (CDs), 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 that Fund's limitations on foreign investments. 
The Fund may use repurchase agreements with broker-dealers
registered under the Securities Exchange Act of 1934 and with
commercial U.S. 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).  A Fund does not pay for the
securities or receive dividends or interest on them until the
contractual settlement date.  The Fund's custodian will maintain,
in a segregated account, cash or liquid high-grade debt securities
that are marked to market daily and are at least equal in value to
the Fund's 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.

Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of Special Income agree to a change, Special Income will not:

'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.  Up to 25% of the Fund's total assets may be
invested without regard to this 5% limitation.

'Purchase securities of an issuer if the directors and officers of
the fund, AEFC and IDS Life hold more than a certain percentage of
the issuer's outstanding securities.  The holdings of all officers 
and directors of the Fund, AEFC and IDS Life who own more than 0.5%
<PAGE>
PAGE 69
of an issuer's securities are added together, and if in total they
own more than 5%, the Fund will not purchase securities of that
issuer.

'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 the Fund's total assets (including
borrowings) less liabilities (other than borrowings) immediately 
after the borrowing.  The Fund will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceeds 5%.  The Fund has not borrowed in the past and has no
present intention to borrow.

'Lend portfolio securities in excess of 30% of the Fund's net
assets, at market value.  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.  A loan will not be made unless the opportunity for additional
income outweighs the risks.  During the existence of the loan, the
Fund receives cash payments equivalent to all interest or other
distributions paid on the loaned securities.

'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.  It may be considered an underwriter under
securities laws when it sells restricted securities.

'Concentrate in any one industry.  According to the present
interpretation by the SEC, this means no more than 25% of a Fund's
total assets, based on current market value at time of purchase,
can be invested in any one industry.

'Purchase more than 10% of the outstanding voting securities of an
issuer.

'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.

'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.

'Make cash loans if the total commitment amount exceeds 5% of the
Fund's total assets.
<PAGE>
PAGE 70
Unless changed by the board of directors, the following policies
apply to Special Income, Special Income will not:

'Buy on margin or sell short, except it may enter into interest
rate futures contracts.

'Invest in a company to control or manage it.

'Invest in exploration or development programs, such as oil, gas or
mineral programs.

'Invest more than 10% of its total assets in securities of
investment companies.

'Invest more than 5% of its net assets in warrants.  If required by
law, no more than 2% of the fund's net assets may be invested in
warrants not listed on an exchange.

'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 a readily available market,
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
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 purchase short-term corporate notes and obligations
rated in the top two classifications by Moody's and S&P or the
equivalent.  The Fund may maintain a portion of its assets in cash
and cash-equivalent investments.  The Fund may purchase short-term
U.S. and Canadian government securities.  The Fund may invest in
bank obligations including negotiable certificates of deposit
(CDs), 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 
<PAGE>
PAGE 71
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 that Fund's
limitations on foreign investments.  The Fund may use repurchase
agreements with broker-dealers registered under the Securities
Exchange Act of 1934 and with commercial U.S. 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).  A Fund does not pay for the
securities or receive dividends or interest on them until the
contractual settlement date.  The Fund's custodian will maintain,
in a segregated account, cash or liquid high-grade debt securities
that are marked to market daily and are at least equal in value to
the fund's 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.

Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of Moneyshare agree to a change, Moneyshare will not:

'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.

'Buy on margin or sell short, except it may enter into interest
rate futures contracts.

'Invest in a company to control or manage it.

'Purchase securities of an issuer if the directors and officers of
the Fund, AEFC and IDS Life hold more than a certain percentage of
the issuer's outstanding securities.  The holdings of all officers 
and directors of the Fund, AEFC and IDS Life who own more than 0.5%
of an issuer's securities are added together, and if in total they
own more than 5%, the Fund will not purchase securities of that
issuer.

'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 the fund's total assets (including
borrowings) less liabilities (other than borrowings) immediately 
after the borrowing.  The Fund will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceeds 5%.  The Fund has not borrowed in the past and has no
present intention to borrow.
<PAGE>
PAGE 72
'Lend portfolio securities in excess of 30% of the Fund's net
assets, at market value.  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.  A loan will not be made unless the opportunity for additional
income outweighs the risks.  During the existence of the loan, the
Fund receives cash payments equivalent to all interest or other
distributions paid on the loaned securities.

'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.  It may be considered an underwriter under
securities laws when it sells restricted securities.

'Invest in exploration or development programs, such as oil, gas or
mineral programs.

'Purchase common stocks, preferred stocks, warrants, other equity
securities, corporate bonds or debentures, state bonds, municipal
bonds, or industrial revenue bonds.

'Make cash loans.  However, the Fund does make short-term
investments which it may have an agreement with the seller to
reacquire (See Appendix C).

'Invest in a investment company beyond 5% of its total assets taken
at market and then only on the open market where the dealer's or
sponsor's profit is limited to the regular commission.  However,
the Fund will not purchase or retain the securities of other open-
end investment companies.

'Buy or sell real estate, commodities or commodity contracts.

'Intentionally invest more than 25% of the Fund's assets taken at
market value in any particular industry, except with respect to
investing in U.S. government or agency securities and bank
obligations.  Investments are varied according to what is judged
advantageous under different economic conditions.

Unless changed by the board of directors, the following policies
apply to Moneyshare, Moneyshare will not:

'Invest in securities that are not readily marketable (whether or
not registration or the filing of a notification under the
Securities Act of 1933, or the taking of similar action under other
securities laws relating to the sale of securities is required).
<PAGE>
PAGE 73
The Fund may maintain a portion of its assets in cash and cash-
equivalent investments.  The Fund may purchase short-term U.S. and
Canadian government securities.  The Fund may purchase short-term
corporate notes and obligations rated in the top two
classifications by Moody's and S&P or the equivalent.  The fund may
invest in bank obligations including negotiable certificates of
deposit (CDs), 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 that Fund's limitations on foreign investments. 
The Fund may use repurchase agreements with broker-dealers
registered under the Securities Exchange Act of 1934 and with
commercial U.S. 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
security acquired by the Fund in a repurchase agreement can be any
security the Fund can purchase directly and it may have a maturity
of more than 13 months.

The Fund may invest in commercial paper rated in the highest rating
category by at least two nationally recognized statistical rating
organizations (or by one, if only one rating is assigned) and in
unrated paper determined by the board of directors to be of
comparable quality.  The Fund also may invest up to 5% of its
assets in commercial paper receiving the second highest rating or
in unrated paper determined to be of comparable quality.
    
For a discussion on corporate bond ratings and additional
information on investment policies, see Appendix A.  For a
discussion on foreign currency transactions, see Appendix B.  For a
discussion on money market securities, see Appendix C.  For a
discussion on options and stock index futures contracts, see
Appendix D.  For a discussion on options and interest rate futures
contracts, see Appendix E.  For a discussion on dollar-cost
averaging, see Appendix F.

PORTFOLIO TRANSACTIONS
   
Subject to policies set by the board of directors, AEFC, IDS
International, Inc. (International) and IDS Life are authorized to
determine, consistent with the Funds' investment goals and
policies, which securities will be purchased, held or sold.  In
determining where buy and sell orders are to be placed, AEFC,
International and IDS Life have been directed to use their best
efforts to obtain the best available price and the most favorable
execution except where otherwise authorized by the board of
directors.  IDS Life intends to direct AEFC and International to
execute trades and negotiate commissions on its behalf.  These 
services are covered by the Investment Advisory Agreement between
AEFC and IDS Life and the Sub-Investment Advisory Agreement between
<PAGE>
PAGE 74
AEFC and International.  When AEFC and International act on IDS
Life's behalf for the Funds, they follow the rules described here
for IDS Life.

On occasion, it may be desirable for Capital Resource,
International Equity, Aggressive Growth, Special Income or Managed
Funds 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 boards of directors have adopted a policy authorizing
IDS Life to do so to the extent authorized by law, if IDS Life 
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 IDS Life's, AEFC's or International's overall
responsibilities to the funds in the IDS MUTUAL FUND GROUP.

Research provided by brokers supplements AEFC's and International's
own research activities.  Research services include economic data
on, and analysis of:  the U.S. economy and specific industries
within the economy; information about specific companies, including
earning 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 includes
the research, portfolio management and trading functions and such
other services to the extent permitted under an interpretation by
the SEC.
    
When paying a commission that might not otherwise be charged or a
commission in excess of the amount another broker might charge, IDS
Life must follow procedures authorized by the board of directors.
To date, three procedures have been authorized.  One procedure
permits IDS Life 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
IDS Life, 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 the
security.  The commission paid generally includes compensation for
research services.  The third procedure permits IDS Life, in order 
to obtain research and brokerage services, to cause each fund to
pay a commission in excess of the amount another broker might have
charged. 

IDS Life has advised the Funds that it is necessary to do business
with a number of brokerage firms on a continuing basis to obtain
such services as:  handling of large orders; willingness of a 
<PAGE>
PAGE 75
broker to risk its own money by taking a position in a security; 
and specialized handling of 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 IDS Life believes it may obtain better
overall execution.  IDS Life has assured the Funds 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 IDS Life, AEFC and International in providing advice
to all the funds in the IDS MUTUAL FUND GROUP and other accounts
advised by IDS Life, AEFC and International, even though it is not
possible to relate the benefits to any particular fund or account.

Normally, the securities of Special Income and Moneyshare Funds are
traded on a principal rather than an agency basis.  In other words,
AEFC will trade directly with the issuer or with a dealer who buys
or sells for its own account, rather than acting on behalf of
another client.  AEFC does not pay the dealer commissions. 
Instead, the dealer's profit, if any, is the difference, or spread,
between the dealer's purchase and sale price for the security.

Each investment decision made for each 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 a fund buys or sells the same security as another fund or
account, AEFC or International 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 a fund, the fund hopes to gain an overall
advantage in execution.  AEFC and International have assured the
Funds they will continue to seek ways to reduce brokerage costs.

On a periodic basis, AEFC and International make a comprehensive
review of the broker-dealers and the overall reasonableness of
their commissions.  The review evaluates execution, operational
efficiency and research services.

The Funds have paid the following brokerage commissions:
<TABLE>
<CAPTION>
  Fiscal year ended      Capital      International    Aggressive    Special
  Aug. 31,               Resource        Equity          Growth      Income      Managed 
  <S>                     <C>           <C>             <C>           <C>       <C>
  1993                    2,957,827       820,299       225,254       14,954    1,487,314

  1994                    5,296,360     3,039,515       756,105       19,938    2,543,362

  1995
</TABLE>
    
<PAGE>
PAGE 76
   
Transactions amounting to $______________, $________________ and
$_____________ with related commissions of $________, $________ and
$_________ were directed to brokers by Capital Resource, Aggressive
Growth and Managed Funds, respectively, because of research
services received for the fiscal year ended Aug. 31, 1995.

No transactions were directed to brokers because of research
services they provided to International Equity for the fiscal year
ended Aug. 31, 1995.

Capital Resource Fund's acquisition during the fiscal year ended 
Aug. 31, 1995, of 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 is
presented below:

                                     Value of Securities
                                      Owned at End of
Name of Issuer                           Fiscal Year     
BankAmerica                             $
First Chicago                            

International Equity Fund's acquisition during the fiscal year
ended Aug. 31, 1995, of 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
is presented below:

                                     Value of Securities
                                      Owned at End of
Name of Issuer                           Fiscal Year     
Goldman Sachs                           $

Special Income Fund's acquisition during the fiscal year ended 
Aug. 31, 1995, of 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 is
presented below:

                                     Value of Securities
                                      Owned at End of
Name of Issuer                           Fiscal Year     
Goldman Sachs                           $
BankAmerica                              
Chase Manhattan                          

Moneyshare Fund's acquisition during the fiscal year ended 
Aug. 31, 1995, of 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 is
presented below:

                                     Value of Securities
                                      Owned at End of
Name of Issuer                           Fiscal Year     
Goldman Sachs                           $
    
<PAGE>
PAGE 77
   
Managed Fund's acquisition during the fiscal year ended Aug. 31,
1995, of 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 is presented
below:

                                     Value of Securities
                                      Owned at End of
Name of Issuer                           Fiscal Year     
BankAmerica                             $
First Chicago                            
Goldman Sachs                            
Merrill Lynch                            

Aggressive Growth Fund did not acquire 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 Aug. 31, 1995.

Because certain groups of bonds have different yields, Special
Income Fund may do some short-term trading.  As a result, the
portfolio turnover rate may be greater than 100% annually which may
be higher than the rate of other funds with similar goals.  A
turnover rate of 100% would occur, for example, if all the
securities in the Fund's portfolio were replaced in the period of
one year.  The Fund's turnover rate was 57% in fiscal year ended
Aug. 31, 1994 and ____% in fiscal year ended Aug. 31, 1995.

The portfolio turnover rate for Capital Resource Fund was 85% in
fiscal year ended Aug. 31, 1994 and ____% in fiscal year ended Aug.
31, 1995.  The portfolio turnover rate for Managed Fund was 79% in
fiscal year ended Aug. 31, 1994 and ____% in fiscal year ended Aug.
31, 1995.

The portfolio turnover rate for International Equity Fund was 51%
in fiscal year ended Aug. 31, 1994 and ____% in fiscal year ended
Aug. 31, 1995.  The portfolio turnover rate for Aggressive Growth
Fund was 59% in fiscal year ended Aug. 31, 1994 and ____% in fiscal
year ended Aug. 31, 1995.

BROKERAGE COMMISSIONS PAID TO BROKERS AFFILIATED WITH IDS LIFE

Affiliates of American Express Company (American Express) (of which
IDS Life is a wholly owned indirect subsidiary) may engage in
brokerage and other securities transactions on behalf of Capital
Resource, International Equity, Aggressive Growth, Special Income
and Managed Funds in accordance with procedures adopted by the
Funds' boards of directors and to the extent consistent with
applicable provisions of the federal securities laws.  IDS Life
will use an American Express affiliate only if (i) IDS Life
determines that a 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 
<PAGE>
PAGE 78
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.

AEFC may direct brokerage to compensate an affiliate.  AEFC will
receive research on South Africa from New Africa Advisors, a
wholly-owned subsidiary of Sloan Financial Group.  AEFC owns 100%
of IDS Capital Holdings Inc. which in turn owns 40% of Sloan
Financial Group.  New Africa Advisors will send research to AEFC
and in turn American Express Financial Corporation will direct
trades to a particular broker.  The broker will have an agreement
to pay New Africa Advisors.  All transactions will be on a best
execution basis.  Compensation received will be reasonable for the
services rendered.

No brokerage commissions were paid by Moneyshare Fund to brokers
affiliated with IDS Life for the fiscal year ended Aug. 31, 1995.
    
Information about brokerage commissions paid by Capital Resource
Fund for the last three fiscal years to brokers affiliated with IDS
Life is contained in the following table:
   
<TABLE>
<CAPTION>
                   For the Fiscal Year Ended Aug. 31,

                                                      1995                            1994            1993   
                                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>
  Lehman             (1)        $                    %               %             $ 71,398        $ 79,780
  Brothers,
  Inc.

  The Robinson       (2)                                                              6,300           None
  Humphrey
  Company, Inc.

  American           (3)                                                            412,316         245,330
  Enterprise
  Investment
  Services, Inc.
</TABLE>
(1) Until May 31, 1994, under common control with AEFC as a
subsidiary of American Express Company (American Express).  As of
May 31, 1994, is no longer a subsidiary of American Express.
(2) Under common control with AEFC as an indirect subsidiary of
American Express until July 30, 1993.
(3) Wholly owned subsidiary of AEFC.
    
Information about brokerage commissions paid by Aggressive Growth
Fund for the last three fiscal periods to brokers affiliated with
IDS Life is contained in the following table:
<PAGE>
PAGE 79
   
<TABLE>
<CAPTION>
                  For the Fiscal Period Ended Aug. 31,

                                                      1995                            1994            1993   
                                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>
  Lehman             (1)        $                    %               %             $15,342         $ 7,748
  Brothers,
  Inc.               

  The Robinson       (2)                                                             3,150            None
  Humphrey
  Company, Inc.

  American           (3)                                                            41,833          30,150
  Enterprise
  Investment
  Services, Inc.
</TABLE>
(1) Until May 31, 1994, under common control with AEFC as a
subsidiary of American Express.  As of May 31, 1994, is no longer a
subsidiary of American Express.
(2) Under common control with AEFC as an indirect subsidiary of
American Express until July 30, 1993.
(3) Wholly owned subsidiary of AEFC.
    
Information about brokerage commissions paid by Managed Fund during
the last three fiscal years to brokers affiliated with IDS Life is
contained in the following table:
   
<TABLE><CAPTION>
                   For the Fiscal Year Ended Aug. 31,

                                                      1995                            1994            1993   
                                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>
  Lehman             (1)        $                    %               %             $ 86,076        $ 48,467
  Brothers,
  Inc.               

  The Robinson       (2)                                                             24,338           None
  Humphrey
  Company, Inc.

  American           (3)                                                            127,304         177,107
  Enterprise
  Investment
  Services, Inc.
</TABLE>
(1) Until May 31, 1994, under common control with AEFC as a
subsidiary of American Express.  As of May 31, 1994, is no longer a
subsidiary of American Express.
(2) Under common control with AEFC as an indirect subsidiary of
American Express until July 30, 1993.
(3) Wholly owned subsidiary of AEFC.
    
Information about brokerage commissions paid by Special Income Fund
during the last three fiscal years to brokers affiliated with IDS
Life is contained in the following table:<PAGE>
PAGE 80
   
<TABLE>
<CAPTION>
                   For the Fiscal Year Ended Aug. 31,

                                                      1995                            1994            1993   
                                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>
  American           (1)        $                    %               %             $666             None
  Enterprise
  Investment
  Services, Inc.
</TABLE>
(1) Wholly owned subsidiary of AEFC.
    
Information about brokerage commissions paid by International
Equity Fund during the last three fiscal periods to brokers
affiliated with IDS Life is contained in the following table:
   
<TABLE>
<CAPTION>
                  For the Fiscal Period Ended Aug. 31,

                                                      1995                            1994            1993   
                                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>
  American           (1)        $                    %               %             $4,372           None
  Enterprise
  Investment
  Services, Inc.
</TABLE>
(1) Wholly owned subsidiary of AEFC.
    
PERFORMANCE INFORMATION

Each Fund may quote various performance figures to illustrate past
performance.  Average annual total return and current yield
quotations used by a fund are based on standardized methods of 
computing performance as required by the SEC.  An explanation of
these and any other methods used by each Fund to compute
performance follows below.

Average annual total return

Each Fund may calculate average annual total return for certain
periods by finding the average annual compounded rates of return
over the period that would equate the initial amount 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)<PAGE>
PAGE 81
Aggregate total return

Each Fund may calculate aggregate total return for certain periods
representing the cumulative change in the value of an investment in
a 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 and Distribution yield

Special Income Fund may calculate an annualized yield by dividing
the net investment income per share deemed earned during a 31-day
period by the public offering price per share (including the
maximum sales charge) on the last day of the period and annualizing
the results.

Yield is calculated according to the following formula:

                     Yield = 2[(a-b + 1)6 - 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 ____% for the 31-day period ended
Aug. 31, 1995.
    
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 contract owners.  Actual amounts paid to contract owners are
reflected in the distribution yield.

Distribution yield is calculated according to the following
formula:

                        D   x   F   =  DY
                       NAV      31   
<PAGE>
PAGE 82
where:    D  =  sum of dividends for 31 day period
        NAV  =  beginning of period net asset value
          F  =  annualizing factor
         DY  =  distribution yield
   
The Fund's distribution yield was ____% for the 31-day period ended
Aug. 31, 1995.
    
Moneyshare Fund calculates annualized simple and compound yields
based on a seven-day period.

The simple yield is calculated by determining the net change in the
value of a hypothetical account having a balance of one share at
the beginning of the seven-day period, dividing the net change in
account value by the value of the account at the beginning of the
period to obtain the return for the period, and multiplying that 
return by 365/7 to obtain an annualized figure.  The value of the
hypothetical account includes the amount of any declared dividends,
the value of any shares purchased with any dividend paid during the
period and any dividends declared for such shares.  The Fund's
yield does not include any realized or unrealized gains or losses.

Moneyshare Fund calculates its compound yield according to the
following formula:

Compound Yield = (return for seven day period + 1) 365/7 - 1
   
Moneyshare Fund's simple annualized yield was ____% and its
compound yield was ____% for the seven days ended Aug. 31, 1995,
the last business day of the Fund's fiscal year.  The Fund's simple
yield was ____% and the compound yield was ____% for the seven days
ended Sept. 30, 1995.
    
Yield, or rate of return, on Moneyshare Fund shares may fluctuate
daily and does not provide a basis for determining future yields. 
However, it may be used as one element in assessing how the Fund is
meeting its goal.  When comparing an investment in the Fund with
savings accounts and similar investment alternatives, you must
consider that such alternatives often provide an agreed to or
guaranteed fixed yield for a stated period of time, whereas the 
fund's yield fluctuates.  In comparing the yield of one money
market fund to another, you should consider each fund's investment
policies, including the types of investments permitted.

REMEMBER THAT THESE YIELDS ARE THE RETURN TO THE SHAREHOLDER (THE
VARIABLE ACCOUNTS), NOT TO THE VARIABLE ANNUITY CONTRACT OWNER. 
SEE YOUR ANNUITY PROSPECTUS FOR A DISCUSSION OF THE DIFFERENCES.

In sales material and other communications, the Funds 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,
<PAGE>
PAGE 83
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 EACH FUND'S SHARES
   
On Aug. 31, 1995, the computation of the value of an individual
share looked like this:

Capital Resource Fund
                                                   Net asset value
     Net assets              Shares outstanding    of one share   
$                   divided by                   =   $
    
International Equity Fund
                                                   Net asset value
     Net assets              Shares outstanding    of one share   
$                   divided by                   =   $


Aggressive Growth Fund

     Net assets              Shares outstanding    of one share   
$                   divided by                   =   $


Special Income Fund
                                                   Net asset value
     Net assets              Shares outstanding    of one share     
$                   divided by                   =   $


Managed Fund
                                                   Net asset value
     Net assets              Shares outstanding    of one share   
$                   divided by                   =   $

Capital Resource, International Equity, Aggressive Growth, Special
Income and Managed Funds' 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 exists, to the over-the-counter market.
<PAGE>
PAGE 84
'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.  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 New York Stock Exchange that will not be
reflected in the computation of a 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
funds' boards of directors.

'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
determined in good faith by the boards of directors.  The boards of
directors are responsible for selecting methods they believe
provide fair value.  When possible, bonds are valued by a pricing 
service independent from a 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.

Moneyshare Fund intends to use its best efforts to maintain a
constant net asset value of $1 per share although there is no
assurance it will be able to do so.  Accordingly, the Fund uses the
amortized cost method in valuing its portfolio.
<PAGE>
PAGE 85
Short-term securities maturing in 60 days or less 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.  It does not take into
consideration unrealized capital gains or losses.  All of the
securities in the Fund's portfolio will be valued at their
amortized cost.

In addition, Moneyshare Fund must abide by certain conditions.  It
must only invest in securities of high quality which present
minimal credit risks as determined by the board of directors.  This
means that the rated commercial paper in the Fund's portfolio will
be issues that have been rated in the highest rating category by at
least two nationally recognized statistical rating organizations
(or by one if only one rating is assigned) and in unrated paper
determined by the Fund's board of directors to be comparable.  The
fund must also purchase securities with original or remaining 
maturities of 13 months or less, and maintain a dollar-weighted 
average portfolio maturity of 90 days or less.  In addition, the
board of directors must establish procedures designed to stabilize
the Fund's price per share for purposes of sales and redemptions at
$1 to the extent that it is reasonably possible to do so.  These
procedures include review of the Fund's portfolio securities by the
Board, at intervals deemed appropriate by it, to determine whether
the Fund's net asset value per share computed by using the 
available market quotations deviates from a share value of $1 as
computed using the amortized cost method.  The board must consider
any deviation that appears, and if it exceeds 0.5%, it must
determine what action, if any, needs to be taken.  If the board
determines that a deviation exists that may result in a material
dilution of the holdings of the Separate Accounts or investors, or
in other unfair consequences for such people, it must undertake
remedial action that it deems necessary and appropriate.  Such
action may include withholding dividends, calculating net asset
value per share for purposes of sales and redemptions in kind, and
selling portfolio securities before maturity in order to realize
capital gain or loss or to shorten average portfolio maturity.

In other words, while the amortized cost method provides certainty
and consistency in portfolio valuation, it may, from time to time,
result in valuations of portfolio securities that are either
somewhat higher or lower than the prices at which the securities
could be sold.  This means that during times of declining interest
rates, the yield on Moneyshare Fund's shares may be higher than if 
valuations of portfolio securities were made based on actual market
prices and estimates of market prices.  Accordingly, if use of the
amortized cost method were to result in a lower portfolio value at
a given time, a prospective investor in the Fund would be able to 
obtain a somewhat higher yield than if portfolio valuation were
based on actual market values.  The Variable Accounts, on the other
hand, would receive a somewhat lower yield than they would
otherwise receive.  The opposite would happen during a period of
rising interest rates.
<PAGE>
PAGE 86
The New York Stock Exchange, AEFC, IDS Life and the Funds 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.

INVESTING IN THE FUNDS

You cannot buy shares of the Funds directly.  The only way you can
invest in the Funds at the current time is by buying an annuity
contract and directing the allocation of part or all of your net
purchase payment to the variable accounts, which will invest in
shares of Capital Resource, International Equity, Aggressive
Growth, Special Income, Moneyshare or Managed Funds.  Please read
the Funds' prospectus along with your annuity prospectus for
further information.

Sales Charges and Surrender or Withdrawal Charges

The Funds do not assess sales charges, either when they sell or
when they redeem securities.  The surrender or withdrawal charges
that may be assessed under your annuity contract are described in
your annuity prospectus, as are the other charges that apply to
your annuity contract and to the variable accounts.

REDEEMING SHARES

The Funds will redeem any shares presented by a shareholder
(Variable Account) for redemption.  The Variable Accounts' policies
on when or whether to buy or redeem fund shares are described in
your annuity prospectus.

During an emergency, the boards of directors can suspend the
computation of net asset value, stop accepting payments for
purchase of shares or suspend the duty of the Funds to redeem
shares for more than 7 days.  Such emergency situations would occur
if:

'The New York Stock Exchange closes for reasons other than the
usual weekend and holiday closings or trading on the Exchange is
restricted,

'Disposal of a 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

'The Securities and Exchange Commission, under the provisions of
the Investment Company Act of 1940, as amended, declares a period
of emergency to exist.

Should a Fund stop selling shares, the directors 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 contract owners.
<PAGE>
PAGE 87
CAPITAL LOSS CARRYOVER
   
For federal income tax purposes, Aggressive Growth Fund had capital
loss carryover of $_______________ at Aug. 31, 1995, which, if not 
offset by subsequent capital gains, will expire in 2001 through 
2003.  It is unlikely the board of directors will authorize a
distribution of any net realized capital gain for these Funds until
the capital loss carryover has been offset or expires except as
required by IRS rules.
    
TAXES

International Equity 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.
   
AGREEMENTS WITH IDS LIFE AND AMERICAN EXPRESS FINANCIAL CORPORATION

Investment Management Services Agreement

Each Fund has an Investment Management Services Agreement with IDS
Life.  The Funds have retained IDS Life to, among other things,
counsel and advise the Funds and their directors in connection with
the formulation of investment programs designed to accomplish the
Funds' investment objectives, and to determine, consistent with the
Funds' investment objectives and policies, which securities in IDS
Life's discretion shall be purchased, held or sold, subject always
to the direction and control of the boards of directors.  The Funds
do not maintain their own research departments or record-keeping
services.  These services are provided by IDS Life under the
Investment Management Services Agreement.  
    
The Agreement provides that, in addition to paying its own
management fee, brokerage costs and certain taxes, each Fund pays
IDS Life an amount equal to the cost of certain expenses incurred
and paid by IDS Life in connection with the Fund's operations.
   
For its services, IDS Life is paid a fee based on the following
schedules:

Capital Resource

  assets                 Annual rate at
(billions)              each asset level
First $1                     0.630%
Next  $1                     0.615
Next  $1                     0.600
Next  $3                     0.585
Over  $6                     0.570
<PAGE>
PAGE 88
International Equity

  assets                 Annual rate at
(billions)              each asset level
First $0.25                  0.870%
Next  $0.25                  0.855
Next  $0.25                  0.840
Next  $0.25                  0.825
Next  $1                     0.810
Over  $2                     0.795

Aggressive Growth

  assets                 Annual rate at
(billions)              each asset level
First $0.25                  0.650%
Next  $0.25                  0.635
Next  $0.25                  0.620
Next  $0.25                  0.605
Next  $1                     0.590
Over  $2                     0.575

Special Income

  assets                 Annual rate at
(billions)              each asset level
First $1                     0.610%
Next  $1                     0.595
Next  $1                     0.580
Next  $3                     0.565
Next  $3                     0.550
Over  $9                     0.535

Moneyshare

  assets                 Annual rate at
(billions)              each asset level
First $1                     0.510%
Next  $0.5                   0.493
Next  $0.5                   0.475
Next  $0.5                   0.458
Over  $2.5                   0.440

Managed

  assets                 Annual rate at
(billions)              each asset level
First $0.5                   0.630%
Next  $0.5                   0.615
Next  $1                     0.600
Next  $1                     0.585
Next  $3                     0.570
Over  $6                     0.550
<PAGE>
PAGE 89
On Aug. 31, 1995, the daily rate applied to the Fund's assets on an
annual basis, was ___% for Capital Resource, ___% for International
Equity, ____% for Aggressive Growth, ____% for Special Income,
____% for Moneyshare and ____% for Managed.  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 the prior and current
agreements, the total amount paid for Capital Resource was
$___________ for the fiscal year ended August 31, 1995, $__________
for fiscal year 1994, and $____________ for fiscal year 1993.

Under the prior and current agreements, the total amount paid for
International Equity was $_____________ for the fiscal year ended
August 31, 1995, $_____________ for fiscal year 1994, and
$____________ for fiscal year 1993.

Under the prior and current agreements, the total amount paid for
Aggressive Growth was $_____________ for the fiscal year ended
August 31, 1995, $_____________ for fiscal year 1994, and
$____________ for fiscal year 1993.

Under the prior and current agreements, the total amount paid for
Special Income was $_____________ for the fiscal year ended August
31, 1995, $_____________ for fiscal year 1994, and $____________
for fiscal year 1993.

Under the prior and current agreements, the total amount paid for
Moneyshare was $_____________ for the fiscal year ended August 31,
1995, $_____________ for fiscal year 1994, and $____________ for
fiscal year 1993.

Under the prior and current agreements, the total amount paid for
Managed was $_____________ for the fiscal year ended August 31,
1995, $_____________ for fiscal year 1994, and $____________ for
fiscal year 1993.

Under the current Agreement, the expenses of IDS Life that each
Fund has agreed to reimburse are: taxes, brokerage commissions,
custodian fees and expenses, audit expenses, cost of items sent to
contract owners, postage, fees and expenses paid to directors who
are not officers or employees of IDS Life or AEFC fees and expenses
of attorneys, costs of fidelity and surety bonds, SEC registration
fees, expenses of preparing prospectuses and of printing and
distributing prospectuses to existing contract owners, losses due
to theft or other wrong doing or due to liabilities not covered by
bond or agreement, expenses incurred in connection with lending
portfolio securities of the funds and expenses properly payable by
the funds, approved by the boards of directors.  All other expenses
are borne by IDS Life.
<PAGE>
PAGE 90
Under a prior agreement:

Capital Resource paid nonadvisory expenses of $________ for the
fiscal year ended August 31, 1995, $__________ for fiscal year
1994, and $__________ for fiscal year 1993;

International Equity paid nonadvisory expenses of $____________ for
the fiscal year ended August 31, 1995, $____________ for fiscal
year 1994, and $______________ for fiscal year 1993;

Aggressive Growth paid nonadvisory expenses of $____________ for
the fiscal year ended August 31, 1995, $____________ for fiscal
year 1994, and $______________ for fiscal year 1993;

Special Income paid nonadvisory expenses of $____________ for the
fiscal year ended August 31, 1995, $____________ for fiscal year
1994, and $______________ for fiscal year 1993;

Moneyshare paid nonadvisory expenses of $____________ for the
fiscal year ended August 31, 1995, $____________ for fiscal year
1994, and $______________ for fiscal year 1993; and

Managed paid nonadvisory expenses of $____________ for the fiscal
year ended August 31, 1995, $____________ for fiscal year 1994, and
$______________ for fiscal year 1993.

Administrative Services Agreement

The Funds have an Administrative Services Agreement with AEFC. 
Under this agreement, the Funds pay AEFC for providing
administration and accounting services.  The fee is calculated as
follows:

Capital Resource

  Assets                 Annual rate at
(billions)              each asset level
First $1                     0.050%
Next  $1                     0.045
Next  $1                     0.040
Next  $3                     0.035
Over  $6                     0.030

International Equity

  Assets                 Annual rate at
(billions)              each asset level
First $0.25                  0.060%
Next  $0.25                  0.055
Next  $0.25                  0.050
Next  $0.25                  0.045
Next  $1                     0.040
Over  $2                     0.035
<PAGE>
PAGE 91
Aggressive Growth

  Assets                 Annual rate at
(billions)              each asset level
First $0.25                  0.060%
Next  $0.25                  0.055
Next  $0.25                  0.050
Next  $0.25                  0.045
Next  $1                     0.040
Over  $2                     0.035

Special Income

  Assets                 Annual rate at
(billions)              each asset level
First $1                     0.050%
Next  $1                     0.045
Next  $1                     0.040
Next  $3                     0.035
Next  $3                     0.030
Over  $9                     0.025

Moneyshare

  Assets                 Annual rate at
(billions)              each asset level
First $1                     0.030%
Next  $0.5                   0.027
Next  $0.5                   0.025
Next  $0.5                   0.022
Over  $2.5                   0.020

Managed

  Assets                 Annual rate at
(billions)              each asset level
First $0.5                   0.040%
Next  $0.5                   0.035
Next  $1                     0.030
Next  $1                     0.025
Next  $3                     0.020
Over  $6                     0.020

The aggregate net assets of all non-money market funds in the IDS
MUTUAL FUND GROUP were $________________ on Aug. 31, 1995, and the
daily rate applied to each Fund's assets was equal to approximately
____% on an annual basis.

Investment Advisory Agreements

IDS Life and AEFC have an Investment Advisory Agreement under which 
AEFC executes purchases and sales and negotiates brokerage as
directed by IDS Life.  For its services, IDS Life pays AEFC a fee 
based on a percentage of each Fund's average daily net assets for
the year.  This fee is equal to 0.50% for International Equity Fund
and 0.25% for each remaining fund.
<PAGE>
PAGE 92
AEFC has a Sub-Investment Advisory Agreement with IDS
International, Inc. under which AEFC pays IDS International, Inc. a
fee equal on an annual basis to 0.50% of International Equity
Fund's daily net assets for providing investment advice for the
Fund.

For the fiscal year ended Aug. 31, 1993, Capital Resource Fund paid
IDS Life $13,224,140 and IDS Life paid AEFC $5,025,362 for its
services.  For fiscal year 1994, the amounts were $16,497,309 and
$6,382,698 and for fiscal year 1995, they were $______________ and
$__________________.

For the fiscal period ended Aug. 31, 1993, International Equity
Fund paid IDS Life $1,032,426 and IDS Life paid AEFC $569,659 for
its services.  For fiscal year 1994, the amounts were $6,212,919
and $3,468,822 and for fiscal year 1995, they were $____________
and $______________.

For the fiscal period ended Aug. 31, 1993, Aggressive Growth Fund
paid IDS Life $1,091,156 and IDS Life paid AEFC $415,541 for its
services.  For fiscal year 1994, the amounts were $3,298,361 and
$1,276,540 and for fiscal year 1995, they were $____________ and
$_____________.

For the fiscal year ended Aug. 31, 1993, Special Income Fund paid
IDS Life $8,479,379 and IDS Life paid AEFC $3,222,653 for its
services.  For fiscal year 1994, the amounts were $10,547,321 and
$4,080,208 and for fiscal year 1995, they were $_____________ and
$________________.

For the fiscal year ended Aug. 31, 1993, Moneyshare Fund paid IDS
Life $1,141,272 and IDS Life paid AEFC $879,494 for its services. 
For fiscal year 1994, the amounts were $936,246 and $433,482 and
for fiscal year 1995, they were $___________ and $____________.

For the fiscal year end Aug. 31, 1993, Managed Fund paid IDS Life
$9,652,553 and IDS Life paid AEFC $3,669,394 for its services.  For
fiscal year 1994, the amounts were $14,142,061 and $5,471,820 and
for fiscal year 1995, they were $______________ and $_____________.

Information concerning other funds advised by IDS Life or AEFC is
contained in the prospectus.
    
DIRECTORS AND OFFICERS

The following is a list of the Fund's directors who also are
directors of all other funds in the IDS MUTUAL FUND GROUP.  All
shares have cumulative voting rights when voting on the election of
directors.
<PAGE>
PAGE 93
   
Lynne V. Cheney+'
Born in 1941
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-Martin and the Interpublic Group of Companies, Inc.
(advertising).
   
Robert F. Froehlke+
Born in 1922.
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. (architectual
engineering) and Public Oversight Board of the American Institute
of Certified Public Accountants.
   
David R. Hubers**
Born in 1943.
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+
Born in 1929.
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+
Born in 1935.
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'
Born in 1921.
PepsiCo, Inc.
Purchase, NY
    
Former chairman and chief executive officer, PepsiCo, Inc.
<PAGE>
PAGE 94
   
Melvin R. Laird+
Born in 1922.
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, 
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'
Born in 1921.
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).
   
James A. Mitchell**
Born in 1941.
2900 IDS Tower
Minneapolis, MN
    
Executive Vice President, AEFC.  Director, chairman of the board
and chief executive officer, IDS Life.
   
William R. Pearce+*
Born in 1927.
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
Born in 1926.
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).
<PAGE>
PAGE 95
   
John R. Thomas**
Born in 1937.
2900 IDS Tower
Minneapolis, MN
    
Senior vice president and director of AEFC.
   
Wheelock Whitney+
Born in 1926.
1900 Foshay Tower
821 Marquette Ave.
Minneapolis, MN
    
Chairman, Whitney Management Company (manages family assets).
   
C. Angus Wurtele
Born in 1934.
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).
   
+ 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. 
   
OFFICERS WHO ALSO ARE OFFICERS AND/OR EMPLOYEES OF AEFC

Peter J. Anderson
Born in 1942.
IDS Tower 10
Minneapolis, MN

Vice president-investments of all funds in the IDS MUTUAL FUND
GROUP.  Director and senior vice president-investments of AEFC.

Melinda S. Urion
Born in 1953.
IDS Tower 10
Minneapolis, MN

Treasurer of all funds in the IDS MUTUAL FUND GROUP.  Vice
president and corporate controller of AEFC.  Director and executive
vice president and controller of IDS Life Insurance Company.
    
<PAGE>
PAGE 96
   
Besides Mr. Pearce, who is president, the fund's other officer is:

Leslie L. Ogg
Born in 1938.
901 S. Marquette Ave.
Minneapolis, MN

Vice president, general counsel and secretary of all funds in the
IDS MUTUAL FUND GROUP.

On Aug. 31, 1995, the Fund's directors and officers as a group
owned less than 1% of the outstanding shares.  During the fiscal
year ended Aug. 31, 1995, no director or officer earned more than
$______________ from this Fund.  All directors and officers as a
group earned $____________, including $____________ of retirement
plan expense, from these Funds.

CUSTODIAN

The Funds' 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
with sub-custodians or in central depository systems as allowed by
federal law.

INDEPENDENT AUDITORS

The Funds' financial statements contained in their Annual Report,
as of and for, the year ended Aug. 31, 1995, are audited by
independent auditors, KPMG Peat Marwick LLP, 4200 Norwest Center,
90 S. Seventh St., Minneapolis, MN  55402-3900.  IDS Life has
agreed that it will send a copy of this report and the Semiannual
Report to every annuity contract owner having an interest in the
funds.  The independent auditors also provide other accounting and
tax-related services as requested by the Funds.

FINANCIAL STATEMENTS

The Independent Auditors' Report and Financial Statements,
including Notes to the Financial Statements and the Schedule of
Investments in Securities, contained in the 1995 Annual Report to
the shareholders of Capital Resource, International Equity,
Aggressive Growth, Special Income, Moneyshare and Managed Funds,
pursuant to Section 30(d) of the Investment Company Act of 1940, as
amended, are hereby incorporated in this Statement of Additional
Information by reference.  No other portion of the Annual Report,
however, is incorporated by reference.  

PROSPECTUS

The prospectus dated Oct. 30, 1995, is hereby incorporated in this
Statement of Additional Information by reference.
    
<PAGE>
PAGE 97
APPENDIX A

DESCRIPTION OF CORPORATE BOND RATINGS AND ADDITIONAL INFORMATION ON
INVESTMENT POLICIES FOR INVESTMENTS OF CAPITAL RESOURCE AND SPECIAL
INCOME FUNDS

Bond 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.  Ratings by Moody's Investors Service, Inc. are Aaa, Aa,
A, Baa, Ba, B, Caa, Ca, C and D.  Ratings by Standard & Poor's
Corporation are AAA, AA, A, BBB, BB, B, CCC, CC, C and D.

Aaa/AAA - Judged to be of the best quality and carry the smallest
degree of investment risk.  Interest and principal are secure.

Aa/AA - 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.

A - Considered upper-medium grade.  Protection for interest and
principal is deemed adequate but may be susceptible to future
impairment.

Baa/BBB - Considered medium-grade obligations.  Protection for
interest and principal is adequate over the short-term; however,
these obligations may have certain speculative characteristics.

Ba/BB - Considered to have speculative elements.  The protection of
interest and principal payments may be very moderate.

B - Lack characteristics of the desirable investments.  There may
be small assurance over any long period of time of the payment of
interest and principal.

Caa/CCC - Are of poor standing.  Such issues may be in default or
there may be risk with respect to principal or interest.

Ca/CC - Represent obligations that are highly speculative.  Such
issues are often in default or have other marked shortcomings.

C - Are obligations with a higher degree of speculation.  These
securities have major risk exposures to default.

D - Are in payment default.  The D rating is used when interest
payments or principal payments are not made on the due date.

Non-rated securities will be considered for investment when they
possess a risk comparable to that of rated securities consistent
with the Fund's objectives and policies.  When assessing the risk
involved in each non-rated security, the Fund will consider the
financial condition of the issuer or the protection afforded by the
terms of the security.
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Definitions of Zero-Coupon and Pay-In-Kind Securities

A zero-coupon security is a security that is sold at a deep
discount from its face value and makes no periodic interest
payments.  The buyer of such a security receives a rate of return
by gradual appreciation of the security, which is redeemed at face
value on the maturity date.

A pay-in-kind security is a security in which the issuer has the
option to make interest payments in cash or in additional
securities.  The securities issued as interest usually have the
same terms, including maturity date, as the pay-in-kind securities.
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APPENDIX B
   
FOREIGN CURRENCY TRANSACTIONS
    
Since investments in foreign companies 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.
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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 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 
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time, and shareholders should be aware of currency conversion
costs.  Although foreign exchange dealers do not charge a fee for
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.
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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
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 
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PAGE 103
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 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 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.
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APPENDIX C

DESCRIPTION OF MONEY MARKET SECURITIES

Certificates of Deposit -- A certificate of deposit is a negotiable
receipt issued by a bank or savings and loan association in
exchange for the deposit of funds.  The issuer agrees to pay the
amount deposited, plus interest, on the date specified on the
certificate.

Time Deposit -- A time deposit is a non-negotiable deposit in a
bank for a fixed period of time.

Bankers' Acceptances -- A bankers' acceptance arises from a short-
term credit arrangement designed to enable businesses to obtain
funds to finance commercial transactions.  It is a time draft drawn
on a bank by an exporter or an importer to obtain a stated amount
of funds to pay for specific merchandise.  The draft is then
"accepted" by a bank that, in effect, unconditionally guarantees to
pay the face value of the instrument on its maturity date.

Commercial Paper -- Commercial paper is generally defined as
unsecured short-term notes issued in bearer form by large well-
known corporations and finance companies.  Maturities on commercial
paper range from one day to nine months.

Commercial paper rated A by Standard & Poor's Corporation has the
following characteristics:  Liquidity ratios are better than the
industry average.  Long-term senior debt rating is "A" or better. 
The issuer has access to at least two additional channels of
borrowing.  Basic earnings and cash flow have an upward trend with
allowances made for unusual circumstances.  Typically, the issuer's
industry is well established, the issuer has a strong position
within its industry and the reliability and quality of management
is unquestioned.  Issuers rated A are further rated by use of
numbers 1, 2 and 3 to denote relative strength within this highest
classification.

A Prime rating is the highest commercial paper rating assigned by
Moody's Investors Services Inc.  Issuers rated Prime are further
rated by use of numbers 1, 2 and 3 to denote relative strength
within this highest classification.  Among the factors considered
by Moody's in assigning ratings for an issuer are the following: 
(1) management; (2) economic evaluation of the industry and an
appraisal of speculative type risks which may be inherent in
certain areas; (3) competition and customer acceptance of products;
(4) liquidity; (5) amount and quality of long-term debt; (6) ten
year earnings trends; (7) financial strength of a parent company
and the relationships which exist with the issuer; and (8) 
recognition by management of obligations which may be present or
may arise as a result of public interest questions and preparations
to meet such obligations.
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PAGE 105
Letters of Credit -- A letter of credit is a short-term note issued
in bearer form with a bank letter of credit which provides that the
bank pay to the bearer the amount of the note upon presentation.

U.S. Treasury Bills -- Treasury bills are issued with maturities of
any period up to one year.  Three-month and six-month bills are
currently offered by the Treasury on 13-week and 26-week cycles
respectively and are auctioned each week by the Treasury.  Treasury
bills are issued in book entry form and are sold only on a discount
basis, i.e. the difference between the purchase price and the
maturity value constitutes interest income for the investor.  If
they are sold before maturity, a portion of the income received may
be a short-term capital gain.

U.S. Government Agency Securities -- Federal agency securities are
debt obligations which principally result from lending programs of
the U.S. government.  Housing and agriculture have traditionally
been the principal beneficiaries of Federal credit programs, and
agencies involved in providing credit to agriculture and housing
account for the bulk of the outstanding agency securities.

Repurchase Agreements -- A repurchase agreement involves the
acquisition of securities by the Portfolio, with the concurrent
agreement by a bank (or securities dealer if permitted by law or
regulation), to reacquire the securities at the portfolio's cost,
plus interest, within a specified time.  The Portfolio thereby
receives a fixed rate of return on this investment, one that is
insulated from market and rate fluctuations during the holding
period.  In these transactions, the securities acquired by the
Portfolio have a total value equal to or in excess of the value of
the repurchase agreement and are held by the Portfolio's custodian
until required.  Pursuant to guidelines established by the Fund's
board of directors, the creditworthiness of the other party to the
transaction is considered and the value of those securities held as
collateral is monitored to ensure that such value is maintained at
the required level.

If AEFC becomes aware that a security owned by a Fund is downgraded
below the second highest rating, AEFC will either sell the security
or recommend to the Fund's board of directors why it should not be
sold.
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APPENDIX D

OPTIONS AND STOCK INDEX FUTURES CONTRACTS FOR INVESTMENTS OF
CAPITAL RESOURCE, INTERNATIONAL EQUITY, AGGRESSIVE GROWTH AND
MANAGED FUNDS

Capital Resource, International Equity, Aggressive Growth and
Managed Funds 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 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.  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.  Managed Fund also may enter into interest rate futures
contracts - see Appendix E.

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 a
fund and its shareholders by improving the fund's liquidity and by
helping to stabilize the value of its net assets.
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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 used for investment.  Options
are 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, a 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 a fund for investment
purposes.  Options permit a fund to experience the change in the
value of a security with a relatively small initial cash
investment.  The risk a fund assumes when it buys an option is the
loss of the premium.  To be beneficial to a 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.  Each 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 each fund's
goal.

'All options written by a fund will be covered.  For covered call
options, if a decision is made to sell the security, each fund will
attempt to terminate the option contract through a closing purchase
transaction.

'Each Fund will deal only in standard option contracts traded on
national securities exchanges or those that may be quoted on NASDAQ
(a system of price quotations developed by the National Association
of Securities Dealers, Inc.)

'Each Fund will write options only as permitted under applicable
laws or regulations, such as those that limit the amount of total
assets subject to the options.  Some regulations also affect 
the Custodian.  When a covered option is written, the Custodian
segregates the underlying securities, and issues a receipt.  There
are certain rules regarding banks issuing such receipts that may 
<PAGE>
PAGE 108
restrict the amount of covered call options written.  Furthermore,
each fund is limited to pledging not more than 15% of the cost of
its total assets.

Net premiums on call options closed or premiums on expired call
options are treated as short-term capital gains.  Since each 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.

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 a
Fund writes listed options, it will follow the rules of the options
exchange.  The Custodian will segregate the underlying securities
and issue a receipt.  There are certain rules regarding issuing
such receipts that may restrict the amount of covered call options
written.  Further the Funds are limited to pledging not more than
15% of the cost of their total assets.  Options are valued at the
close of the New York Stock Exchange.  An option listed on a
national exchange 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 asked prices.

STOCK INDEX FUTURES CONTRACTS.  Stock index futures contracts are
commodity contracts listed on commodity exchanges.  They currently
include contracts on the Standard & Poor's 500 Stock Index (S&P 500
Index) and other broad stock market indexes such as the New York
Stock Exchange Composite Stock Index and the Value Line Composite
Stock Index, as well as narrower sub-indexes such as the S&P 100
Energy Stock Index and the New York Stock Exchange Utilities Stock
Index.  A stock index assigns relative values to common stocks
included in the index and the index fluctuates with the value of
the common stocks so included.

A futures contract is a legal agreement between a buyer or seller
and the clearinghouse of a futures exchange in which the parties
agree to make a cash settlement on a specified future date in an
amount determined by the stock index on the last trading day of the
contract.  The amount is a specified dollar amount (usually $100 or
$500) multiplied by the difference between the index value on the
last trading day and the value on the day the contract was struck.

For example, the S&P 500 Index consists of 500 selected common
stocks, most of which are listed on the New York Stock Exchange. 
The S&P 500 Index assigns relative weightings to the common stocks 
<PAGE>
PAGE 109
included in the Index, and the Index fluctuates with changes in the
market values of those stocks.  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 a 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.

Unlike the purchase or sale of an equity security, no price would
be paid or received by the Fund upon entering into stock index
futures contracts.  However, the Fund would be required to deposit
with its custodian, in a segregated account in the name of the
futures broker, an amount of cash or U.S. Treasury bills equal to
approximately 5% of the contract value.  This amount is known as
initial margin.  The nature of initial margin in futures
transactions is different from that of margin in security
transactions in that futures contract margin does not involve
borrowing funds by the Fund to finance the transactions.  Rather, 
the initial margin is in the nature of a performance bond or good-
faith deposit on the contract that is returned to the fund upon
termination of the contract, assuming all contractual obligations
have been satisfied.

Subsequent payments, called variation margin, to and from the
broker would be made on a daily basis as the price of the
underlying stock index fluctuates, making the long and short
positions in the contract more or less valuable, a process known as
marking to market.  For example, when a fund enters into a contract
in which it benefits from a rise in the value of an index and the
price of the underlying stock index has risen, the fund will
receive from the broker a variation margin payment equal to that
increase in value.  Conversely, if the price of the underlying
stock index declines, the fund would be required to make a
variation margin payment to the broker equal to the decline in
value.

How These Funds Would Use Stock Index Futures Contracts.  The Funds
intend to use stock index futures contracts and related options for
hedging and not for speculation.  Hedging permits a fund to gain
rapid exposure to or protect itself from changes in the market. 
For example, a fund may find itself with a high cash position at
the beginning of a market rally.  Conventional procedures of
purchasing a number of individual issues entail the lapse of time 
and the possibility of missing a significant market movement.  By
using futures contracts, the Fund can obtain immediate exposure to 
the market and benefit from the beginning stages of a rally.  The 
<PAGE>
PAGE 110
buying program can then proceed and once it is completed (or as it
proceeds), the contracts can be closed.  Conversely, in the early
stages of a market decline, market exposure can be promptly offset 
by entering into stock index futures contracts to sell units of an
index and individual stocks can be sold over a longer period under
cover of the resulting short contract position.

A Fund may enter into contracts with respect to any stock index or
sub-index.  To hedge the Fund's portfolio successfully, however,
the fund must enter into contracts with respect to indexes or sub-
indexes whose movements will have a significant correlation with
movements in the prices of the Fund's individual portfolio
securities.

Special Risks of Transactions in Stock Index Futures Contracts.

1.  Liquidity.  Each Fund may elect to close some or all of its
contracts prior to expiration.  The purpose of making such a move
would be to reduce or eliminate the hedge position held by the
fund.  The Fund may close its positions by taking opposite
positions.  Final determinations of variation margin are then made,
additional cash as required is paid by or to the Fund, and the Fund
realizes a gain or a loss.

Positions in stock index futures contracts may be closed only on an
exchange or board of trade providing a secondary market for such
futures contracts.  For example, futures contracts transactions can
currently be entered into with respect to the S&P 500 Stock Index
on the Chicago Mercantile Exchange, the New York Stock Exchange
Composite Stock Index on the New York Futures Exchange and the
Value Line Composite Stock Index on the Kansas City Board of Trade.

Although the Funds intend 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 subject to the hedge.  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.

2.  Hedging Risks.  There are several risks in using stock index
futures contracts as a hedging device.  One risk arises because the
prices of futures contracts may not correlate perfectly with
movements in the underlying stock index due to certain market
distortions.  First, all participants in the futures market are
subject to initial margin and variation margin requirements. 
Rather than making additional variation margin payments, investors 
may close the contracts through offsetting transactions which could
distort the normal relationship between the index and futures
markets.  Second, the margin requirements in the futures market are
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lower than margin requirements in the securities market, and as a
result the futures market may attract more speculators than does
the securities market.  Increased participation by speculators in 
the futures market also may cause temporary price distortions. 
Because of price distortion in the futures market and because of
imperfect correlation between movements in stock indexes and
movements in prices of futures contracts, even a correct forecast
of general market trends may not result in a successful hedging
transaction over a short period.

Another risk arises because of imperfect correlation between
movements in the value of the stock index futures contracts and
movements in the value of securities subject to the hedge.  If this
occurred, a fund could lose money on the contracts and also
experience a decline in the value of its portfolio securities. 
While this could occur, IDS believes that over time the value of
the Fund's portfolio will tend to move in the same direction as the
market indexes and will attempt to reduce this risk, to the extent
possible, by entering into futures contracts on indexes whose
movements it believes will have a significant correlation with
movements in the value of the fund's portfolio securities sought to
be hedged.  It is also possible that if the Fund has hedged against
a decline in the value of the stocks held in its portfolio and
stock prices increase instead, the Fund will lose part or all of
the benefit of the increased value of its stock which it has hedged
because it will have offsetting losses in its futures positions. 
In addition, in such situations, if the Fund has insufficient cash,
it may have to sell securities to meet daily variation margin
requirements.  Such sales of securities may be, but will not
necessarily be, at increased prices which reflect the rising
market.  The Fund may have to sell securities at a time when it may
be disadvantageous to do so.

OPTIONS ON STOCK INDEX FUTURES CONTRACTS.  Options on stock index
futures contracts are similar to options on stock except that
options on futures contracts give the purchaser the right, in
return for the premium paid, to assume a position in a stock index 
futures contract (a long position if the option is a call and a
short position if the option is a put) at a specified exercise 
price at any time during the period of the option.  If the option
is closed instead of exercised, the holder of the option receives
an amount that represents the amount by which the market price of
the contract exceeds (in the case of a call) or is less than (in
the case of a put) the exercise price of the option on the futures
contract.  If the option does not appreciate in value prior to the
exercise date, the fund will suffer a loss of the premium paid.

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, 
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.
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SPECIAL RISKS OF TRANSACTIONS IN OPTIONS ON STOCK INDEX FUTURES
CONTRACTS AND OPTIONS ON STOCK INDEXES.  As with options on stocks,
the holder of an option on a stock index futures contract or on a
stock index may terminate a position by selling an option covering
the same contract or index and having the same exercise price and
expiration date.  The ability to establish and close out positions
on such options will be subject to the development and maintenance
of a liquid secondary market.  The funds will not purchase options
unless the market for such options has developed sufficiently, so
that the risks in connection with options are not greater than the
risks in connection with stock index futures contracts transactions
themselves.  Compared to using futures contracts, purchasing
options involves less risk to the funds because the maximum amount
at risk is the premium paid for the options (plus transaction
costs).  There may be circumstances, however, when using an option
would result in a greater loss to a fund than using a futures
contract, such as when there is no movement in the level of the
stock index.

TAX TREATMENT.  As permitted under federal income tax laws, each
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 stock indexes is currently
unclear, although the Funds' tax advisers currently believe marking
to market is not required.  Depending on developments, a fund may
seek Internal Revenue Service (IRS) rulings clarifying questions
concerning such treatment.  Certain provisions of the Internal
Revenue Code may also limit a 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, a 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.
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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.
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APPENDIX E

OPTIONS AND INTEREST RATE FUTURES CONTRACTS FOR INVESTMENTS OF
SPECIAL INCOME AND MANAGED FUNDS

The Funds 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 traded on any U.S. or foreign
exchange.  The Fund also may buy or write put and call options on
these futures.  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.  Managed Fund also may enter into
stock index futures contracts - see Appendix D.

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 stock
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
value 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 (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.

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 a
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 used for investment.  Options
are used as a trading technique to take advantage of any disparity
between the price of the underlying security in the securities 
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PAGE 115
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 a 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 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.  A 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, the fund will
attempt to terminate the option contract through a closing purchase
transaction.

'The fund will write options only as permitted under applicable
laws or regulations, such as those that limit the amount of total
assets subject to the options.

Net premiums on call options closed or premiums on expired call
options are treated as short-term capital gains.  Since a 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.

If a covered call option is exercised, the security is sold by the
fund.  The fund will recognize a capital gain or loss based upon
the difference between the proceeds and the security's basis.  
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PAGE 116
Options on many securities are listed on options exchanges.  If a
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 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 asked prices.

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.  They have been established by boards of trade which have
been designated contract markets by the Commodity Futures Trading
Commission (CFTC).  Futures contracts trade on these markets in a
manner similar to the way a stock trades on a stock exchange, and
the boards of trade, through their clearing corporations, guarantee
performance of the contracts.  Currently, there are futures
contracts based on such debt securities as long-term U.S. Treasury
bonds, Treasury notes, GNMA modified pass-through mortgage-backed
securities, three-month U.S. Treasury bills and bank certificates
of deposit.  While futures contracts based on debt securities do
provide for the delivery and acceptance of securities, such
deliveries and acceptances are very seldom made.  Generally, the
futures contract is terminated by entering into an offsetting
transaction.  An offsetting transaction for a futures contract sale
is effected by the fund entering into a futures contract purchase
for the same aggregate amount of the specific type of financial
instrument and same delivery date.  If the price in the sale
exceeds the price in the offsetting purchase, the fund immediately
is paid the difference and realizes a gain.  If the offsetting
purchase price exceeds the sale price, the fund pays the difference
and realizes a loss.  Similarly, closing out a futures contract
purchase is effected by the fund entering into a futures contract
sale.  If the offsetting sale price exceeds the purchase price, the
fund realizes a gain, and if the offsetting sale price is less than
the purchase price, the fund realizes a loss.  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.  The initial margin deposit is approximately 1.5%
of a contract's face value.  Daily 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, in the case of a portfolio
holding long-term debt securities, is to gain the benefit of
changes in interest rates without actually buying or selling long-
term debt securities.  For example, if a 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.  Futures
contracts are based on types of debt securities referred to above,
which have historically reacted to an increase or decline in 
<PAGE>
PAGE 117
interest rates in a fashion similar to the debt securities the fund
owns.  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. 
Successful use of futures contracts depends on the investment
manager's ability to predict the future direction of interest
rates.  If the investment manager's prediction is incorrect, the
fund would have been better off had it not entered into futures
contracts.

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.  Furthermore, because the value of the option is fixed at
the point of sale, there are no 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.

Risks.  There are risks in engaging in each of the management tools
described above.  The risk a fund assumes when it buys an option is
the loss of the premium paid for the option.  Purchasing options
also limits the use of monies that might otherwise be available for
long-term investments.
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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.  Furthermore,
the fund might not be able to close the option because of
insufficient activity in the options market.  

A 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.

Another risk is that the fund's investment manager could be
incorrect in anticipating as to the direction or extent of various
interest rate 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.

TAX TREATMENT.  As permitted under federal income tax laws, each
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 currently unclear,
although the funds' tax advisers currently believe marking to
market is not required.  Depending on developments, a fund may seek
Internal Revenue Service (IRS) rulings clarifying questions
concerning such treatment.  Certain provisions of the Internal 
Revenue Code may also limit a 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.
<PAGE>
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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, a 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.
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APPENDIX F

MORTGAGE-BACKED SECURITIES AND ADDITIONAL INFORMATION ON INVESTMENT
POLICIES FOR ALL FUNDS EXCEPT MONEYSHARE

GNMA Certificates

The Government National Mortgage Association (GNMA) is a wholly
owned corporate instrumentality of the United States within the
Department of Housing and Urban Development.  GNMA certificates are
mortgage-backed securities of the modified pass-through type, which
means that both interest and principal payments (including
prepayments) are passed through monthly to the holder of the
certificate.  Each certificate evidences an interest in a specific
pool of mortgage loans insured by the Federal Housing
Administration or the Farmers Home Administration or guaranteed by
the Veterans Administration.  The National Housing Act provides
that the full faith and credit of the United States is pledged to
the timely payment of principal and interest by GNMA of amounts due
on these certificates.  GNMA is empowered to borrow without
limitation from the U.S. Treasury, if necessary, to make such
payments.

Underlying Mortgages of the Pool.  Pools consist of whole mortgage
loans or participations in loans.  The majority of these loans are
made to purchasers of 1-4 member family homes.  The terms and
characteristics of the mortgage instruments generally are uniform 
within a pool but may vary among pools.  For example, in addition
to fixed-rate fixed-term mortgages, the Fund may purchase pools of
variable rate mortgages, growing equity mortgages, graduated
payment mortgages and other types.

All servicers apply standards for qualification to local lending
institutions which originate mortgages for the pools.  Servicers
also establish credit standards and underwriting criteria for
individual mortgages included in the pools.  In addition, many
mortgages included in pools are insured through private mortgage
insurance companies.

Average Life of GNMA Certificates.  The average life of GNMA
certificates varies with the maturities of the underlying mortgage
instruments which have maximum maturities of 30 years.  The average
life is likely to be substantially less than the original maturity
of the mortgage pools underlying the securities as the result of
prepayments or refinancing of such mortgages.  Such prepayments are
passed through to the registered holder with the regular monthly
payments of principal and interest.

As prepayment rates vary widely, it is not possible to accurately
predict the average life of a particular pool.  It is customary in
the mortgage industry in quoting yields on a pool of 30-year
mortgages to  compute the yield as if the pool were a single loan
that is amortized according to a 30-year schedule and that is 
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prepaid in full at the end of the 12th year.  For this reason, it
is standard practice to treat GNMA certificates as 30-year
mortgage-backed securities which prepay fully in the 12th year.

Calculation of Yields.  Yields on pass-through securities are
typically quoted based on the maturity of the underlying
instruments and the associated average life assumption.

Actual pre-payment experience may cause the yield to differ from
the assumed average life yield.  When mortgage rates drop, pre-
payments will increase, thus reducing the yield.  Reinvestment of
pre-payments may occur at higher or lower interest rates than the
original investment, thus affecting the yield of a fund.  The
compounding effect from reinvestments of monthly payments received
by the fund will increase the yield to shareholders compared to
bonds that pay interest semi-annually.  The yield also may be
affected if the certificate was issued at a premium or discount,
rather than at par.  This also applies after issuance to
certificates trading in the secondary market at a premium or
discount.

"When-Issued" GNMA Certificates.  Some U.S. government securities
may be purchased on a "when-issued" basis, which means that it may
take as long as 45 days after the purchase before the securities
are delivered to the fund.  Payment and interest terms, however,
are fixed at the time the purchaser enters into the commitment. 
However, the yield on a comparable GNMA certificate when the 
transaction is consummated may vary from the yield on the GNMA
certificate at the time that the when-issued transaction was made. 
A fund does not pay for the securities or start earning interest on
them until the contractual settlement date.  When-issued securities
are subject to market fluctuations and they may affect the fund's
gross assets the same as owned securities.

Market for GNMA Certificates.  Since the inception of the GNMA
mortgage-backed securities program in 1970, the amount of GNMA
certificates outstanding has grown rapidly.  The size of the market
and the active participation in the secondary market by securities
dealers and many types of investors make the GNMA certificates a
highly liquid instrument.  Prices of GNMA certificates are readily
available from securities dealers and depend on, among other
things, the level of market interest rates, the certificate's
coupon rate and the prepayment experience of the pool of mortgages
underlying each certificate.

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 
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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.

Managed and Special Income Funds may invest in securities called
"inverse floaters".  Inverse floaters are created by underwriters
using the interest payments on securities.  A portion of the
interest received is paid to holders of instruments based on
current interest rates for short-term securities.  What is left
over, less a servicing fee, is paid to holders of the inverse
floaters.  As interest rates go down, the holders of the inverse
floaters receive more income and an increase in the price for the
inverse floaters.  As interest rates go up, the holders of the
inverse floaters receive less income and a decrease in the price
for the inverse floaters.

Managed and Special Income Funds may purchase some securities in
advance of when they are issued.  Price and rate of interest are
set on the date the commitments are given but no payment is made or
interest earned until the date the securities are issued, usually
within two months, but other terms may be negotiated.  The
commitment requires the portfolio to buy the security when it is
issued so the commitment is valued daily the same way as owning a
security would be valued.  The Portfolio's custodian will maintain,
in a segregated account, cash or liquid high-grade debt securities
that are marked to market daily and are at least equal in value to
the Portfolio's commitments to purchase the securities.  The
portfolio may sell the commitment just like it can sell a security. 
Frequently, the portfolio has the opportunity to sell the
commitment back to the institution that plans to issue the security
and at the same time enter into a new commitment to purchase a
when-issued security in the future.  For rolling its commitment
forward, the portfolio realizes a gain or loss on the sale of the
current commitment or receives a fee for entering into the new
commitment.

Managed and Special Income Funds may purchase mortgage-backed
security (MBS) put spread options and write covered MBS call spread
options.  MBS spread options are based upon the changes in the
price spread between a specified mortgage-backed security and a
like-duration Treasury security.  MBS spread options are traded in
the OTC market and are of short duration, typically one to two
months.  The portfolio would buy or sell covered MBS call spread
options in situations where mortgage-backed securities are expected
to under perform like-duration Treasury securities.
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APPENDIX G

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 unit value 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
units 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 units lower
than the average price of units 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
contract owners who can continue investing through changing market
conditions to acquire units to meet long term goals.

Dollar-cost averaging 
                                                                   
Regular         Market Value of an         Accumulation 
Investment      Accumulation Unit          Units Acquired          

 $100                 $ 6                      16.7
  100                   4                      25.0
  100                   4                      25.0
  100                   6                      16.7
  100                   5                      20.0
 $500                 $25                     103.4 

Average market price of an accumulation unit over 5 periods: $5
($25 divided by 5).
The average price you paid for each accumulation unit: $4.84 
($500 divided by 103.4).
<PAGE>
PAGE 124


            RETIREMENT ANNUITY MUTUAL FUNDS - SYMPHONY

               STATEMENT OF ADDITIONAL INFORMATION

                              FOR 
   
              IDS Life Investment Series, Inc.
                IDS Life Capital Resource Fund
              IDS Life Special Income Fund, Inc.
              IDS Life Managed Fund, Inc.

                         Oct. 30, 1995
    

This Statement of Additional Information (SAI), is not a
prospectus.  It should be read together with the Funds' prospectus
and the financial statements contained in the Funds' Annual Report
which, if not included with your prospectus, may be obtained
without charge.
   
This SAI is dated Oct. 30, 1995, and it is to be used with the
Funds' prospectus dated Oct. 30, 1995.  It is also to be used with
the Funds' Annual Report for the fiscal year ended Aug. 31, 1995.
    

IDS Life Insurance Company
P.O. Box 458
Minneapolis, MN  55440
800-422-3542
<PAGE>
PAGE 125
                         TABLE OF CONTENTS

Goals and Investment Policies........................See Prospectus
   
Additional Investment Policies................................p. 
    
Portfolio Transactions........................................p. 

Brokerage Commissions Paid to Brokers 
Affiliated with IDS Life......................................p. 

Performance Information.......................................p. 
 
Valuing Each Fund's Shares....................................p. 

Investing in the Funds........................................p. 

Redeeming Shares..............................................p. 
   
Agreements with IDS Life and American Express
Financial Corporation.........................................p. 
    
Directors and Officers........................................p. 

Custodian.....................................................p. 
 
Independent Auditors..........................................p. 

Financial Statements....................See Annual Report and p. 

Prospectus....................................................p. 

Appendix A:  Description of Corporate Bond Ratings and
             Additional Information on Investment Policies
             for Investments of all funds.....................p. 
   
Appendix B:  Foreign Currency Transactions....................p. 
    
Appendix C:  Options and Stock Index Futures Contracts for
             Investments of Capital Resource and Managed
             Funds............................................p. 
 
Appendix D:  Options and Interest Rate Futures Contracts
             for Investments of Special Income and Managed
             Funds............................................p. 

Appendix E:  Mortgage-backed securities and Additional
             Information on Investment Policies for all
             Funds............................................p. 

Appendix F:  Dollar-Cost Averaging............................p. 
<PAGE>
PAGE 126
ADDITIONAL INVESTMENT POLICIES

In addition to the investment goals and policies presented in the
prospectus, each Fund has the investment policies stated below.
   
Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of Capital Resource agree to a change, Capital Resource will not:

'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.  Up to 25% of the Fund's total assets may be
invested without regard to this 5% limitation.

'Purchase securities of an issuer if the directors and officers of
the Fund, American Express Financial Corporation (AEFC) and IDS
Life Insurance Company (IDS Life) hold more than a certain
percentage of the issuer's outstanding securities.  The holdings of
all officers and directors of the Fund, AEFC and IDS Life who own
more than 0.5% of an issuer's securities are added together, and if
in total they own more than 5%, the Fund will not purchase
securities of that issuer.

'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 the Fund's total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing.  The Fund will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceed 5%.  The Fund has not borrowed in the past and has no
present intention to borrow.

'Lend portfolio securities in excess of 30% of the Fund's net
assets, at market value.  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.  A loan will not be made unless the opportunity for additional
income outweighs the risks.  During the existence of the loan, the
Fund receives cash payments equivalent to all interest or other
distributions paid on the loaned securities.

'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.  It may be considered an underwriter under
securities laws when it sells restricted securities.
<PAGE>
PAGE 127
'Concentrate in any one industry.  According to the present
interpretation by the Securities and Exchange Commission (SEC),
this means no more than 25% of a Fund's total assets, based on
current market value at time of purchase, can be invested in any
one industry.

'Purchase more than 10% of the outstanding voting securities of an
issuer.

'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.

'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.

'Make cash loans if the total commitment amount exceeds 5% of the
fund's total assets.

Unless changed by the board of directors, the following policies
apply to Capital Resource, Capital Resource will not:

'Buy on margin or sell short, except it may enter into interest
rate futures contracts.

'Invest in a company to control or manage it.

'Invest in exploration or development programs, such as oil, gas or
mineral programs.

'Invest more than 10% of its total assets in securities of
investment companies.

'Invest more than 5% of its net assets in warrants.  If required by
law, no more than 2% of the Fund's net assets may be invested in
warrants not listed on an exchange.

'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 a readily available market,
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 
<PAGE>
PAGE 128
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
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 Fund may purchase short-term U.S. and
Canadian government securities.  The Fund may purchase short-term
corporate notes and obligations rated in the top two
classifications by Moody's and S&P or the equivalent.  The Fund may
invest in bank obligations including negotiable certificates of
deposit (CDs), 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 that Fund's limitations on foreign investments. 
The Fund may use repurchase agreements with broker-dealers
registered under the Securities Exchange Act of 1934 and with
commercial U.S. 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).  A Fund does not pay for the
securities or receive dividends or interest on them until the
contractual settlement date.  The Fund's custodian will maintain,
in a segregated account, cash or liquid high-grade debt securities
that are marked to market daily and are at least equal in value to
the Fund's 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.

Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of Special Income agree to a change, Special Income will not:

'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.  Up to 25% of the Fund's total assets may be
invested without regard to this 5% limitation.
<PAGE>
PAGE 129
'Purchase securities of an issuer if the directors and officers of
the fund, AEFC and IDS Life hold more than a certain percentage of
the issuer's outstanding securities.  The holdings of all officers 
and directors of the Fund, AEFC and IDS Life who own more than 0.5%
of an issuer's securities are added together, and if in total they
own more than 5%, the Fund will not purchase securities of that
issuer.

'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 the Fund's total assets (including
borrowings) less liabilities (other than borrowings) immediately 
after the borrowing.  The Fund will not purchase additional 
portfolio securities at any time borrowing for temporary purposes
exceeds 5%.  The Fund has not borrowed in the past and has no
present intention to borrow.

'Lend portfolio securities in excess of 30% of the Fund's net
assets, at market value.  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.  A loan will not be made unless the opportunity for additional
income outweighs the risks.  During the existence of the loan, the
Fund receives cash payments equivalent to all interest or other
distributions paid on the loaned securities.

'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.  It may be considered an underwriter under
securities laws when it sells restricted securities.

'Concentrate in any one industry.  According to the present
interpretation by the SEC, this means no more than 25% of a Fund's
total assets, based on current market value at time of purchase,
can be invested in any one industry.

'Purchase more than 10% of the outstanding voting securities of an
issuer.

'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.
<PAGE>
PAGE 130
'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.

'Make cash loans if the total commitment amount exceeds 5% of the
Fund's total assets.

Unless changed by the board of directors, the following policies
apply to Special Income, Special Income will not:

'Buy on margin or sell short, except it may enter into interest
rate futures contracts.

'Invest in a company to control or manage it.

'Invest in exploration or development programs, such as oil, gas or
mineral programs.

'Invest more than 10% of its total assets in securities of
investment companies.

'Invest more than 5% of its net assets in warrants.  If required by
law, no more than 2% of the fund's net assets may be invested in
warrants not listed on an exchange.

'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 a readily available market,
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
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.
<PAGE>
PAGE 131
The Fund may purchase short-term corporate notes and obligations
rated in the top two classifications by Moody's and S&P or the
equivalent.  The Fund may maintain a portion of its assets in cash
and cash-equivalent investments.  The Fund may purchase short-term
U.S. and Canadian government securities.  The Fund may invest in
bank obligations including negotiable certificates of deposit
(CDs), 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 that Fund's 
limitations on foreign investments.  The Fund may use repurchase
agreements with broker-dealers registered under the Securities
Exchange Act of 1934 and with commercial U.S. 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).  A Fund does not pay for the
securities or receive dividends or interest on them until the
contractual settlement date.  The Fund's custodian will maintain,
in a segregated account, cash or liquid high-grade debt securities
that are marked to market daily and are at least equal in value to
the fund's 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.

Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of Managed agree to a change, Managed will not:

'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.  Up to 25% of the Fund's total assets may be
invested without regard to this 5% limitation.

'Purchase securities of an issuer if the directors and officers of
the Fund, AEFC and IDS Life hold more than a certain percentage of
the issuer's outstanding securities.  The holdings of all officers 
and directors of the Fund, AEFC and IDS Life who own more than 0.5%
of an issuer's securities are added together, and if in total they
own more than 5%, the Fund will not purchase securities of that
issuer.

'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 the Fund's total assets (including
borrowings) less liabilities (other than borrowings) immediately 
<PAGE>
PAGE 132
after the borrowing.  The Fund will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceeds 5%.  The Fund has not borrowed in the past and has no
present intention to borrow.

'Lend portfolio securities in excess of 30% of the Fund's net
assets, at market value.  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.  A loan will not be made unless the opportunity for additional
income outweighs the risks.  During the existence of the loan, the
Fund receives cash payments equivalent to all interest or other
distributions paid on the loaned securities.

'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.  It may be considered an underwriter under
securities laws when it sells restricted securities.

'Concentrate in any one industry.  According to the present
interpretation by the SEC, this means no more than 25% of a Fund's
total assets, based on current market value at time of purchase,
can be invested in any one industry.

'Purchase more than 10% of the outstanding voting securities of an
issuer.

'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.

'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.

'Make cash loans if the total commitment amount exceeds 5% of the
Fund's total assets.

'Make a loan of any part of its assets to AEFC, to its directors
and officers or to its own directors and officers.

'Issue senior securities, except to the extent that borrowing from
banks, lending its securities, or entering into repurchase
agreements or options or futures contracts may be deemed to
constitute issuing a senior security.
<PAGE>
PAGE 133
Unless changed by the board of directors, the following policies
apply to Managed, Managed will not:

'Buy on margin or sell short, except it may enter into interest
rate futures contracts.

'Invest in a company to control or manage it.

'Invest more than 10% of its total assets in securities of
investment companies.

'Invest more than 5% of its total assets in securities of domestic
or foreign companies, including any predecessors, that have a
record of less than three years continuous operations.

'Pledge or mortgage its assets beyond 15% of total assets.  If the
Fund were ever to do so, valuation of the pledged or mortgaged
assets would be based on market values.  For purposes of this
restriction, collateral arrangements for margin deposits on a
futures contract are not deemed to be a pledge of assets.

'Invest more than 5% of its net assets in warrants.  If required by
law, no more than 2% of the Fund's net assets may be invested in
warrants not listed on an exchange.

'Invest in securities that are not readily marketable (whether or
not registration or the filing of a notification under the
Securities Act of 1933, or the taking of similar action under other
securities laws relating to the sale of securities is required), if
immediately after the making of any such investment more than 5% of
the Fund's net assets (taken at market) would be invested in such
securities.

'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 a readily available market,
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 
<PAGE>
PAGE 134
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.

'Invest in a company if its investments would result in the total
holdings of all the funds in the IDS MUTUAL FUND GROUP being in
excess of 15% of that company's issued shares.

The Fund may maintain a portion of its assets in cash and cash-
equivalent investments.  The Fund may purchase short-term U.S. and
Canadian government securities.  The Fund may purchase short-term
corporate notes and obligations rated in the top two
classifications by Moody's and S&P or the equivalent.  The Fund may
invest in bank obligations including negotiable certificates of
deposit (CDs), 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 that Fund's limitations on foreign investments. 
The Fund may use repurchase agreements with broker-dealers
registered under the Securities Exchange Act of 1934 and with
commercial U.S. 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).  A Fund does not pay for the
securities or receive dividends or interest on them until the 
contractual settlement date.  The Fund's custodian will maintain,
in a segregated account, cash or liquid high-grade debt securities
that are marked to market daily and are at least equal in value to
the Fund's 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.
    
For a discussion on corporate bond ratings and additional
information on investment policies, see Appendix A.  For a
discussion on foreign currency transactions, see Appendix B.  For a
discussion on options and stock index futures contracts, see
Appendix C.  For a discussion on options and interest rate futures
contracts, see Appendix D.  For a discussion on dollar-cost
averaging, see Appendix E.

PORTFOLIO TRANSACTIONS
   
Subject to policies set by the board of directors, AEFC and IDS
Life are authorized to determine, consistent with the Funds'
investment goals and policies, which securities will be purchased,
held or sold.  In determining where buy and sell orders are to be 
<PAGE>
PAGE 135
placed, AEFC and IDS Life have been directed to use their best
efforts to obtain the best available price and the most favorable
execution except where otherwise authorized by the board of
directors.  IDS Life intends to direct AEFC to execute trades and
negotiate commissions on its behalf.  These services are covered by
the Investment Advisory Agreement between AEFC and IDS Life.  When
AEFC acts on IDS Life's behalf for the Funds, they follow the rules
described here for IDS Life.

On occasion, it may be desirable for the funds 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 boards of
directors have adopted a policy authorizing IDS Life to do so to
the extent authorized by law, if IDS Life 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 IDS
Life's or AEFC's overall responsibilities to the funds in the IDS
MUTUAL FUND GROUP.

Research provided by brokers supplements AEFC's own research
activities.  Research services include economic data on, and
analysis of:  the U.S. economy and specific industries within the
economy; information about specific companies, including earning
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 includes the research, 
portfolio management and trading functions and such other services
to the extent permitted under an interpretation by the SEC.
    
When paying a commission that might not otherwise be charged or a
commission in excess of the amount another broker might charge, IDS
Life must follow procedures authorized by the board of directors.
To date, three procedures have been authorized.  One procedure
permits IDS Life 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
IDS Life, 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 the
security.  The commission paid generally includes compensation for
research services.  The third procedure permits IDS Life, in order 
to obtain research and brokerage services, to cause each fund to
pay a commission in excess of the amount another broker might have
charged. 
<PAGE>
PAGE 136
IDS Life has advised the Funds that it is necessary to do business
with a number of brokerage firms on a continuing basis to obtain
such services as:  handling of large orders; willingness of a
broker to risk its own money by taking a position in a security; 
and specialized handling of 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 IDS Life believes it may obtain better
overall execution.  IDS Life has assured the Funds 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 IDS Life and AEFC in providing advice to all the
funds in the IDS MUTUAL FUND GROUP and other accounts advised by
IDS Life and AEFC even though it is not possible to relate the
benefits to any particular fund or account.

Normally, the securities of Special Income Fund are traded on a
principal rather than an agency basis.  In other words, AEFC will
trade directly with the issuer or with a dealer who buys or sells
for its own account, rather than acting on behalf of another
client.  AEFC does not pay the dealer commissions.  Instead, the
dealer's profit, if any, is the difference, or spread, between the
dealer's purchase and sale price for the security.

Each investment decision made for each 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 a 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 a
fund, the Fund hopes to gain an overall advantage in execution. 
AEFC has assured the Funds they 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 Funds have paid the following brokerage commissions:
<PAGE>
PAGE 137
   
Fiscal year ended      Capital          Special
Aug. 31,               Resource         Income        Managed 
1993                    2,957,827        14,954      1,487,314

1994                    5,296,360        19,938      2,543,362

1995                    

Transactions amounting to $____________ and $_____________ with
related commissions of $____________ and $_______________ were
directed to brokers by Capital Resource, and Managed Funds,
respectively, because of research services received for the fiscal
year ended Aug. 31, 1995.

Capital Resource Fund's acquisition during the fiscal year ended 
Aug. 31, 1995, of 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 is
presented below:

                                     Value of Securities
                                      Owned at End of
Name of Issuer                           Fiscal Year     
Bank America                            $
First Chicago                            

Special Income Fund's acquisition during the fiscal year ended 
Aug. 31, 1995, of 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 is
presented below:

                                     Value of Securities
                                      Owned at End of
Name of Issuer                           Fiscal Year     
Goldman Sachs                           $
Bank America                             
Chase Manhattan                          

Managed Fund's acquisition during the fiscal year ended Aug. 31,
1995, of 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 is presented
below:

                                     Value of Securities
                                      Owned at End of
Name of Issuer                           Fiscal Year     
Bank America                            $
First Chicago                            
Goldman Sachs                            
Merrill Lynch                            
    
<PAGE>
PAGE 138
   
Because certain groups of bonds have different yields, Special
Income Fund may do some short-term trading.  As a result, the
portfolio turnover rate may be greater than 100% annually which may
be higher than the rate of other funds with similar goals.  A
turnover rate of 100% would occur, for example, if all the
securities in the Fund's portfolio were replaced in the period of
one year.  The Fund's turnover rate was 57% in fiscal year ended
Aug. 31, 1994 and ____% in fiscal year ended Aug. 31, 1995.

The portfolio turnover rate for Capital Resource Fund was 85% in
fiscal year ended Aug. 31, 1994 and ____% in fiscal year ended Aug.
31, 1995.  The portfolio turnover rate for Managed Fund was 79% in
fiscal year ended Aug. 31, 1994 and ____% in fiscal year ended Aug.
31, 1995.

BROKERAGE COMMISSIONS PAID TO BROKERS AFFILIATED WITH IDS LIFE

Affiliates of American Express Company (American Express) (of which
IDS Life is a wholly owned indirect subsidiary) may engage in
brokerage and other securities transactions on behalf of the funds
in accordance with procedures adopted by the Funds' boards of
directors and to the extent consistent with applicable provisions
of the federal securities laws.  IDS Life will use an American
Express affiliate only if (i) IDS Life determines that a 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.

AEFC may direct brokerage to compensate an affiliate.  AEFC will
receive research on South Africa from New Africa Advisors, a
wholly-owned subsidiary of Sloan Financial Group.  AEFC owns 100%
of IDS Capital Holdings Inc. which in turn owns 40% of Sloan
Financial Group.  New Africa Advisors will send research to AEFC
and in turn American Express Financial Corporation will direct
trades to a particular broker.  The broker will have an agreement 
to pay New Africa Advisors.  All transactions will be on a best
execution basis.  Compensation received will be reasonable for the
services rendered.
    
Information about brokerage commissions paid by Capital Resource
Fund for the last three fiscal years to brokers affiliated with IDS
Life is contained in the following table:
<PAGE>
PAGE 139
   
<TABLE>
<CAPTION>
                   For the Fiscal Year Ended Aug. 31,

                                                      1995                            1994            1993   
                                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>
  Lehman             (1)        $                    %               %             $ 71,398        $ 79,780
  Brothers,
  Inc.

  Robinson           (2)                                                              6,300           none
  Humphrey

  American           (3)                                                            412,316         245,330
  Enterprise
  Investment
  Services, Inc.
</TABLE>
(1) Until May 31, 1994, under common control with AEFC as a
subsidiary of American Express Company (American Express).  As of
May 31, 1994, is no longer a subsidiary of American Express.
(2) Under common control with AEFC as an indirect subsidiary of
American Express until July 30, 1993.
(3) Wholly owned subsidiary of AEFC.
    
Information about brokerage commissions paid by Managed Fund during
the last three fiscal years to brokers affiliated with IDS Life is
contained in the following table:
   
<TABLE>
<CAPTION>
                   For the Fiscal Year Ended Aug. 31,

                                                      1995                            1994            1993   
                                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>
  Lehman             (1)        $                    %               %             $ 86,076        $ 48,467
  Brothers,
  Inc.               

  The Robinson       (2)                                                             24,338           None
  Humphrey
  Company, Inc.

  American           (3)                                                            127,304         177,107
  Enterprise
  Investment
  Services, Inc.
</TABLE>
(1) Until May 31, 1994, under common control with AEFC as a
subsidiary of American Express Company (American Express).  As of
May 31, 1994, is no longer a subsidiary of American Express.
(2) Under common control with AEFC as an indirect subsidiary of
American Express until July 30, 1993.
(3) Wholly owned subsidiary of AEFC.
    
Information about brokerage commissions paid by Special Income Fund
during the last three fiscal years to brokers affiliated with IDS
Life is contained in the following table:<PAGE>
PAGE 140
   
<TABLE>
<CAPTION>
                   For the Fiscal Year Ended Aug. 31,

                                                      1995                            1994            1993   
                                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>
  American           (1)        $                    %               %             $666             None
  Enterprise
  Investment
  Services, Inc.
</TABLE>
(1) Wholly owned subsidiary of AEFC.
    
PERFORMANCE INFORMATION

Each Fund may quote various performance figures to illustrate past
performance.  Average annual total return and current yield
quotations used by a fund are based on standardized methods of 
computing performance as required by the SEC.  An explanation of
these and any other methods used by each Fund to compute
performance follows below.

Average annual total return

Each Fund may calculate average annual total return for certain
periods by finding the average annual compounded rates of return
over the period that would equate the initial amount 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

Each Fund may calculate aggregate total return for certain periods
representing the cumulative change in the value of an investment in
a 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)
<PAGE>
PAGE 141
Annualized yield and Distribution yield

Special Income Fund may calculate an annualized yield by dividing
the net investment income per share deemed earned during a 31-day
period by the public offering price per share (including the
maximum sales charge) on the last day of the period and annualizing
the results.

Yield is calculated according to the following formula:

                     Yield = 2[(a-b + 1)6 - 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 ____% for the 31-day period ended
Aug. 31, 1995.
    
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 contract owners.  Actual amounts paid to contract owners are
reflected in the distribution yield.

Distribution yield is calculated according to the following
formula:

                        D   x   F   =  DY
                       NAV      31   

where:    D  =  sum of dividends for 31 day period
        NAV  =  beginning of period net asset value
          F  =  annualizing factor
         DY  =  distribution yield
   
The Fund's distribution yield was ____% for the 31-day period ended
Aug. 31, 1995.  
    
REMEMBER THAT THESE YIELDS ARE THE RETURN TO THE SHAREHOLDER (THE
VARIABLE ACCOUNT), NOT TO A VARIABLE ANNUITY CONTRACT OWNER.  SEE
YOUR ANNUITY PROSPECTUS FOR A DISCUSSION OF THE DIFFERENCES.

In sales material and other communications, the Funds 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 
<PAGE>
PAGE 142
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 EACH FUND'S SHARES
   
On Aug. 31, 1995, the computation of the value of an individual
share looked like this:

Capital Resource Fund
                                                   Net asset value
     Net assets              Shares outstanding    of one share   
$                   divided by                   =   $
    

Special Income Fund
                                                   Net asset value
     Net assets              Shares outstanding    of one share     
$                   divided by                   =   $


Managed Fund
                                                   Net asset value
     Net assets              Shares outstanding    of one share   
$                   divided by                   =   $

Capital Resource, Special Income and Managed Funds' 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 exists, to the over-the-counter market.

'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.
<PAGE>
PAGE 143
'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.  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 New York Stock Exchange that will not be
reflected in the computation of a 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
funds' boards of directors.

'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
determined in good faith by the boards of directors.  The boards of
directors are responsible for selecting methods they believe
provide fair value.  When possible, bonds are valued by a pricing 
service independent from a 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, IDS Life and the funds 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.

INVESTING IN THE FUNDS

You cannot buy shares of the Funds directly.  The only way you can
invest in the Funds at the current time is by buying an annuity
contract from IDS Life or its affiliates and directing the 
allocation of part or all of your net purchase payment to the
Separate Accounts which will invest in shares of Capital Resource,
Special Income or Managed Funds.  Please read the Funds' prospectus
along with your annuity prospectus for further information.
<PAGE>
PAGE 144
Sales Charges and Surrender or Withdrawal Charges

The Funds do not assess sales charges, either when they sell or
when they redeem securities.  The surrender or withdrawal charges
that may be assessed under your annuity contract are described in
your annuity prospectus, as are the other charges that apply to
your annuity contract and to the variable accounts.

REDEEMING SHARES

The Funds will redeem any shares presented by a shareholder
(variable account) for redemption.  The Variable Accounts' policies
on when or whether to buy or redeem fund shares are described in
your annuity prospectus.

During an emergency, the boards of directors can suspend the
computation of net asset value, stop accepting payments for
purchase of shares or suspend the duty of the Funds to redeem
shares for more than 7 days.  Such emergency situations would occur
if:

'The New York Stock Exchange closes for reasons other than the
usual weekend and holiday closings or trading on the Exchange is
restricted,

'Disposal of a 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

'The Securities and Exchange Commission, under the provisions of
the Investment Company Act of 1940, as amended, declares a period
of emergency to exist.

Should a Fund stop selling shares, the directors 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 contract owners.
   
AGREEMENTS WITH IDS LIFE AND AMERICAN EXPRESS FINANCIAL CORPORATION

Investment Management Services Agreement

Each Fund has an Investment Management Services Agreement with IDS
Life.  The Funds have retained IDS Life to, among other things,
counsel and advise the Funds and their directors in connection with
the formulation of investment programs designed to accomplish the
Funds' investment objectives, and to determine, consistent with the
Funds' investment objectives and policies, which securities in IDS
Life's discretion shall be purchased, held or sold, subject always
to the direction and control of the boards of directors.  The Funds
do not maintain their own research departments or record-keeping
services.  These services are provided by IDS Life under the
Investment Management Services Agreement.  
    
<PAGE>
PAGE 145
The Agreement provides that, in addition to paying its own
management fee, brokerage costs and certain taxes, each Fund pays
IDS Life an amount equal to the cost of certain expenses incurred
and paid by IDS Life in connection with the Fund's operations.
   
For its services, IDS Life is paid a fee based on the following
schedules:

Capital Resource

  assets                 Annual rate at
(billions)              each asset level
First $1                     0.630%
Next  $1                     0.615
Next  $1                     0.600
Next  $3                     0.585
Over  $6                     0.570

Special Income

  assets                 Annual rate at
(billions)              each asset level
First $1                     0.610%
Next  $1                     0.595
Next  $1                     0.580
Next  $3                     0.565
Next  $3                     0.550
Over  $9                     0.535

Managed

  assets                 Annual rate at
(billions)              each asset level
First $0.5                   0.630%
Next  $0.5                   0.615
Next  $1                     0.600
Next  $1                     0.585
Next  $3                     0.570
Over  $6                     0.550

On Aug. 31, 1995, the daily rate applied to the Fund's assets on an
annual basis, was ____% for Capital Resource, ____% for Special
Income, and ____% for Managed.  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 the prior and current
agreements, the total amount paid for Capital Resource was
$___________ for the fiscal year ended August 31, 1995, $__________
for fiscal year 1994, and $____________ for fiscal year 1993.
<PAGE>
PAGE 146
Under the prior and current agreements, the total amount paid for
Special Income was $_____________ for the fiscal year ended August
31, 1995, $_____________ for fiscal year 1994, and $____________
for fiscal year 1993.

Under the prior and current agreements, the total amount paid for
Managed was $_____________ for the fiscal year ended August 31,
1995, $_____________ for fiscal year 1994, and $____________ for
fiscal year 1993.

Under the current Agreement, the expenses of IDS Life that each
Fund has agreed to reimburse are: taxes, brokerage commissions,
custodian fees and expenses, audit expenses, cost of items sent to
contract owners, postage, fees and expenses paid to directors who
are not officers or employees of IDS Life or AEFC fees and expenses
of attorneys, costs of fidelity and surety bonds, SEC registration
fees, expenses of preparing prospectuses and of printing and
distributing prospectuses to existing contract owners, losses due
to theft or other wrong doing or due to liabilities not covered by
bond or agreement, expenses incurred in connection with lending
portfolio securities of the funds and expenses properly payable by
the funds, approved by the boards of directors.  All other expenses
are borne by IDS Life.

Under a prior agreement:

Capital Resource paid nonadvisory expenses of $________ for the
fiscal year ended August 31, 1995, $__________ for fiscal year
1994, and $__________ for fiscal year 1993;

Special Income paid nonadvisory expenses of $____________ for the
fiscal year ended August 31, 1995, $____________ for fiscal year
1994, and $______________ for fiscal year 1993; and

Managed paid nonadvisory expenses of $____________ for the fiscal
year ended August 31, 1995, $____________ for fiscal year 1994, and
$______________ for fiscal year 1993.

Administrative Services Agreement

The Funds have an Administrative Services Agreement with AEFC. 
Under this agreement, the Funds pay AEFC for providing
administration and accounting services.  The fee is calculated as
follows:

Capital Resource

  Assets                 Annual rate at
(billions)              each asset level
First $1                     0.050%
Next  $1                     0.045
Next  $1                     0.040
Next  $3                     0.035
Over  $6                     0.030
<PAGE>
PAGE 147
Special Income

  Assets                 Annual rate at
(billions)              each asset level
First $1                     0.050%
Next  $1                     0.045
Next  $1                     0.040
Next  $3                     0.035
Next  $3                     0.030
Over  $9                     0.025

Managed

  Assets                 Annual rate at
(billions)              each asset level
First $0.5                   0.040%
Next  $0.5                   0.035
Next  $1                     0.030
Next  $1                     0.025
Next  $3                     0.020
Over  $6                     0.020

The aggregate net assets of all non-money market funds in the IDS
MUTUAL FUND GROUP were $________________ on Aug. 31, 1995, and the
daily rate applied to each Fund's assets was equal to approximately
____% on an annual basis.

Investment Advisory Agreements

IDS Life and AEFC have an Investment Advisory Agreement under which 
AEFC executes purchases and sales and negotiates brokerage as
directed by IDS Life.  For its services, IDS Life pays AEFC a fee
based on a percentage of each Fund's average daily net assets for
the year.  This fee is equal to 0.25% for each Fund.

For the fiscal year ended Aug. 31, 1993, Capital Resource Fund paid
IDS Life $13,224,140 and IDS Life paid AEFC $5,025,362 for its
services.  For fiscal year 1994, the amounts were $16,497,309 and
$6,382,698 and for fiscal year 1995, they were $_____________ and
$_____________.

For the fiscal year ended Aug. 31, 1993, Special Income Fund paid
IDS Life $8,479,379 and IDS Life paid AEFC $3,222,653 for its
services.  For fiscal year 1994, the amounts were $10,547,321 and
$4,080,208 and for fiscal year 1995, they were $_____________ and
$_____________.

For the fiscal year ended Aug. 31, 1993, Managed Fund paid IDS Life
$9,652,553 and IDS Life paid AEFC $3,669,394 for its services.  For
fiscal year 1994, the amounts were $14,142,061 and $5,471,820 and
for fiscal year 1995, they were $______________ and $_____________.

Information concerning other funds advised by IDS Life or AEFC is
contained in the prospectus.
    
<PAGE>
PAGE 148
DIRECTORS AND OFFICERS

The following is a list of the Fund's directors who also are
directors of all other funds in the IDS MUTUAL FUND GROUP.  All
shares have cumulative voting rights when voting on the election of
directors.
   
Lynne V. Cheney+'
Born in 1941
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-Martin and the Interpublic Group of Companies, Inc.
(advertising).
   
Robert F. Froehlke+
Born in 1922.
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. (architectual
engineering) and Public Oversight Board of the American Institute
of Certified Public Accountants.
   
David R. Hubers**
Born in 1943.
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+
Born in 1929.
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.
<PAGE>
PAGE 149
   
Anne P. Jones+
Born in 1935.
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'
Born in 1921.
PepsiCo, Inc.
Purchase, NY
    
Former chairman and chief executive officer, PepsiCo, Inc.
   
Melvin R. Laird+
Born in 1922.
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, 
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'
Born in 1921.
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).
   
James A. Mitchell**
Born in 1941.
2900 IDS Tower
Minneapolis, MN

Executive Vice President, AEFC.  Director, chairman of the board
and chief executive officer, IDS Life.

William R. Pearce+*
Born in 1927.
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).<PAGE>
PAGE 150
   
Edson W. Spencer
Born in 1926.
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**
Born in 1937.
2900 IDS Tower
Minneapolis, MN
    
Senior vice president and director of AEFC.
   
Wheelock Whitney+
Born in 1926.
1900 Foshay Tower
821 Marquette Ave.
Minneapolis, MN
    
Chairman, Whitney Management Company (manages family assets).
   
C. Angus Wurtele
Born in 1934.
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).
   
+ 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. 
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OFFICERS WHO ALSO ARE OFFICERS AND/OR EMPLOYEES OF AEFC

Peter J. Anderson
Born in 1942.
IDS Tower 10
Minneapolis, MN

Vice president-investments of all funds in the IDS MUTUAL FUND
GROUP.  Director and senior vice president-investments of AEFC.

Melinda S. Urion
Born in 1953.
IDS Tower 10
Minneapolis, MN

Treasurer of all funds in the IDS MUTUAL FUND GROUP.  Vice
president and corporate controller of AEFC.  Director and executive
vice president and controller of IDS Life Insurance Company.

Besides Mr. Pearce, who is president, the fund's other officer is:

Leslie L. Ogg
Born in 1938.
901 S. Marquette Ave.
Minneapolis, MN

Vice president, general counsel and secretary of all funds in the
IDS MUTUAL FUND GROUP.

On Aug. 31, 1995, the Fund's directors and officers as a group
owned less than 1% of the outstanding shares.  During the fiscal
year ended Aug. 31, 1995, no director or officer earned more than
$______________ from this Fund.  All directors and officers as a
group earned $____________, including $____________ of retirement
plan expense, from these Funds.

CUSTODIAN

The Funds' 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
with sub-custodians or in central depository systems as allowed by
federal law.

INDEPENDENT AUDITORS

The Funds' financial statements contained in their Annual Report,
as of and for, the year ended Aug. 31, 1995, are audited by
independent auditors, KPMG Peat Marwick LLP, 4200 Norwest Center,
90 S. Seventh St., Minneapolis, MN  55402-3900.  IDS Life has
agreed that it will send a copy of this report and the Semiannual
Report to every annuity contract owner having an interest in the
funds.  The independent auditors also provide other accounting and
tax-related services as requested by the Funds.
    
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FINANCIAL STATEMENTS
   
The Independent Auditors' Report and Financial Statements,
including Notes to the Financial Statements and the Schedule of
Investments in Securities, contained in the 1995 Annual Report to
the shareholders of Capital Resource, Special Income and Managed
Funds, pursuant to Section 30(d) of the Investment Company Act of
1940, as amended, are hereby incorporated in this Statement of
Additional Information by reference.  No other portion of the
Annual Report, however, is incorporated by reference.  

PROSPECTUS

The prospectus dated Oct. 30, 1995, is hereby incorporated in this
Statement of Additional Information by reference.
    
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APPENDIX A

DESCRIPTION OF CORPORATE BOND RATINGS AND ADDITIONAL INFORMATION ON
INVESTMENT POLICIES FOR INVESTMENTS OF CAPITAL RESOURCE AND SPECIAL
INCOME FUNDS

Bond 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.  Ratings by Moody's Investors Service, Inc. are Aaa, Aa,
A, Baa, Ba, B, Caa, Ca, C and D.  Ratings by Standard & Poor's
Corporation are AAA, AA, A, BBB, BB, B, CCC, CC, C and D.

Aaa/AAA - Judged to be of the best quality and carry the smallest
degree of investment risk.  Interest and principal are secure.

Aa/AA - 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.

A - Considered upper-medium grade.  Protection for interest and
principal is deemed adequate but may be susceptible to future
impairment.

Baa/BBB - Considered medium-grade obligations.  Protection for
interest and principal is adequate over the short-term; however,
these obligations may have certain speculative characteristics.

Ba/BB - Considered to have speculative elements.  The protection of
interest and principal payments may be very moderate.

B - Lack characteristics of the desirable investments.  There may
be small assurance over any long period of time of the payment of
interest and principal.

Caa/CCC - Are of poor standing.  Such issues may be in default or
there may be risk with respect to principal or interest.

Ca/CC - Represent obligations that are highly speculative.  Such
issues are often in default or have other marked shortcomings.

C - Are obligations with a higher degree of speculation.  These
securities have major risk exposures to default.

D - Are in payment default.  The D rating is used when interest
payments or principal payments are not made on the due date.

Non-rated securities will be considered for investment when they
possess a risk comparable to that of rated securities consistent
with the Fund's objectives and policies.  When assessing the risk
involved in each non-rated security, the Fund will consider the
financial condition of the issuer or the protection afforded by the
terms of the security.
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Definitions of Zero-Coupon and Pay-In-Kind Securities

A zero-coupon security is a security that is sold at a deep
discount from its face value and makes no periodic interest
payments.  The buyer of such a security receives a rate of return
by gradual appreciation of the security, which is redeemed at face
value on the maturity date.

A pay-in-kind security is a security in which the issuer has the
option to make interest payments in cash or in additional
securities.  The securities issued as interest usually have the
same terms, including maturity date, as the pay-in-kind securities.
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APPENDIX B
   
FOREIGN CURRENCY TRANSACTIONS
    
Since investments in foreign companies 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.
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PAGE 156
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 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 
<PAGE>
PAGE 157
time, and shareholders should be aware of currency conversion
costs.  Although foreign exchange dealers do not charge a fee for
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.
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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
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.
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PAGE 159
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 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 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.
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PAGE 160
APPENDIX C

OPTIONS AND STOCK INDEX FUTURES CONTRACTS FOR INVESTMENTS OF
CAPITAL RESOURCE AND MANAGED FUNDS

Capital Resource and Managed Funds 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 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.  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.  Managed Fund also may enter into interest rate futures
contracts - see Appendix E.

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 a
fund and its shareholders by improving the fund's liquidity and by
helping to stabilize the value of its net assets.
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PAGE 161
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 used for investment.  Options
are 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, a 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 a fund for investment
purposes.  Options permit a fund to experience the change in the
value of a security with a relatively small initial cash
investment.  The risk a fund assumes when it buys an option is the
loss of the premium.  To be beneficial to a 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.  Each 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 each fund's
goal.

'All options written by a fund will be covered.  For covered call
options, if a decision is made to sell the security, each fund will
attempt to terminate the option contract through a closing purchase
transaction.

'Each Fund will deal only in standard option contracts traded on
national securities exchanges or those that may be quoted on NASDAQ
(a system of price quotations developed by the National Association
of Securities Dealers, Inc.)

'Each 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 funds, each will conform to the requirements of those
states.  For example, California limits the writing of options to
50% of the assets of a fund.  Some regulations also affect the
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PAGE 162
Custodian.  When a covered option is written, the Custodian
segregates the underlying securities, and issues a receipt.  There
are certain rules regarding banks issuing such receipts that may 
restrict the amount of covered call options written.  Furthermore,
each fund is limited to pledging not more than 15% of the cost of
its total assets.

Net premiums on call options closed or premiums on expired call
options are treated as short-term capital gains.  Since each 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.

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 a
Fund writes listed options, it will follow the rules of the options
exchange.  The Custodian will segregate the underlying securities
and issue a receipt.  There are certain rules regarding issuing
such receipts that may restrict the amount of covered call options
written.  Further the Funds are limited to pledging not more than
15% of the cost of their total assets.  Options are valued at the
close of the New York Stock Exchange.  An option listed on a
national exchange 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 asked prices.

STOCK INDEX FUTURES CONTRACTS.  Stock index futures contracts are
commodity contracts listed on commodity exchanges.  They currently
include contracts on the Standard & Poor's 500 Stock Index (S&P 500
Index) and other broad stock market indexes such as the New York
Stock Exchange Composite Stock Index and the Value Line Composite
Stock Index, as well as narrower sub-indexes such as the S&P 100
Energy Stock Index and the New York Stock Exchange Utilities Stock
Index.  A stock index assigns relative values to common stocks
included in the index and the index fluctuates with the value of
the common stocks so included.

A futures contract is a legal agreement between a buyer or seller
and the clearinghouse of a futures exchange in which the parties
agree to make a cash settlement on a specified future date in an
amount determined by the stock index on the last trading day of the
contract.  The amount is a specified dollar amount (usually $100 or
$500) multiplied by the difference between the index value on the
last trading day and the value on the day the contract was struck.
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PAGE 163
For example, the S&P 500 Index consists of 500 selected common
stocks, most of which are listed on the New York Stock Exchange. 
The S&P 500 Index assigns relative weightings to the common stocks 
included in the Index, and the Index fluctuates with changes in the
market values of those stocks.  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 a 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.

Unlike the purchase or sale of an equity security, no price would
be paid or received by the Fund upon entering into stock index
futures contracts.  However, the Fund would be required to deposit
with its custodian, in a segregated account in the name of the
futures broker, an amount of cash or U.S. Treasury bills equal to
approximately 5% of the contract value.  This amount is known as
initial margin.  The nature of initial margin in futures
transactions is different from that of margin in security
transactions in that futures contract margin does not involve
borrowing funds by the Fund to finance the transactions.  Rather, 
the initial margin is in the nature of a performance bond or good-
faith deposit on the contract that is returned to the fund upon
termination of the contract, assuming all contractual obligations
have been satisfied.

Subsequent payments, called variation margin, to and from the
broker would be made on a daily basis as the price of the
underlying stock index fluctuates, making the long and short
positions in the contract more or less valuable, a process known as
marking to market.  For example, when a fund enters into a contract
in which it benefits from a rise in the value of an index and the
price of the underlying stock index has risen, the fund will
receive from the broker a variation margin payment equal to that
increase in value.  Conversely, if the price of the underlying
stock index declines, the fund would be required to make a
variation margin payment to the broker equal to the decline in
value.

How These Funds Would Use Stock Index Futures Contracts.  The Funds
intend to use stock index futures contracts and related options for
hedging and not for speculation.  Hedging permits a fund to gain
rapid exposure to or protect itself from changes in the market. 
For example, a fund may find itself with a high cash position at
the beginning of a market rally.  Conventional procedures of
purchasing a number of individual issues entail the lapse of time 
<PAGE>
PAGE 164
and the possibility of missing a significant market movement.  By
using futures contracts, the Fund can obtain immediate exposure to 
the market and benefit from the beginning stages of a rally.  The
buying program can then proceed and once it is completed (or as it
proceeds), the contracts can be closed.  Conversely, in the early
stages of a market decline, market exposure can be promptly offset 
by entering into stock index futures contracts to sell units of an
index and individual stocks can be sold over a longer period under
cover of the resulting short contract position.

A Fund may enter into contracts with respect to any stock index or
sub-index.  To hedge the Fund's portfolio successfully, however,
the fund must enter into contracts with respect to indexes or sub-
indexes whose movements will have a significant correlation with
movements in the prices of the Fund's individual portfolio
securities.

Special Risks of Transactions in Stock Index Futures Contracts.

1.  Liquidity.  Each Fund may elect to close some or all of its
contracts prior to expiration.  The purpose of making such a move
would be to reduce or eliminate the hedge position held by the
fund.  The Fund may close its positions by taking opposite
positions.  Final determinations of variation margin are then made,
additional cash as required is paid by or to the Fund, and the Fund
realizes a gain or a loss.

Positions in stock index futures contracts may be closed only on an
exchange or board of trade providing a secondary market for such
futures contracts.  For example, futures contracts transactions can
currently be entered into with respect to the S&P 500 Stock Index
on the Chicago Mercantile Exchange, the New York Stock Exchange
Composite Stock Index on the New York Futures Exchange and the
Value Line Composite Stock Index on the Kansas City Board of Trade.

Although the Funds intend 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 subject to the hedge.  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.

2.  Hedging Risks.  There are several risks in using stock index
futures contracts as a hedging device.  One risk arises because the
prices of futures contracts may not correlate perfectly with
movements in the underlying stock index due to certain market
distortions.  First, all participants in the futures market are
subject to initial margin and variation margin requirements. 
Rather than making additional variation margin payments, investors 
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may close the contracts through offsetting transactions which could
distort the normal relationship between the index and futures
markets.  Second, the margin requirements in the futures market are
lower than margin requirements in the securities market, and as a
result the futures market may attract more speculators than does
the securities market.  Increased participation by speculators in 
the futures market also may cause temporary price distortions. 
Because of price distortion in the futures market and because of
imperfect correlation between movements in stock indexes and
movements in prices of futures contracts, even a correct forecast
of general market trends may not result in a successful hedging
transaction over a short period.

Another risk arises because of imperfect correlation between
movements in the value of the stock index futures contracts and
movements in the value of securities subject to the hedge.  If this
occurred, a fund could lose money on the contracts and also
experience a decline in the value of its portfolio securities. 
While this could occur, IDS believes that over time the value of
the Fund's portfolio will tend to move in the same direction as the
market indexes and will attempt to reduce this risk, to the extent
possible, by entering into futures contracts on indexes whose
movements it believes will have a significant correlation with
movements in the value of the fund's portfolio securities sought to
be hedged.  It is also possible that if the Fund has hedged against
a decline in the value of the stocks held in its portfolio and
stock prices increase instead, the Fund will lose part or all of
the benefit of the increased value of its stock which it has hedged
because it will have offsetting losses in its futures positions. 
In addition, in such situations, if the Fund has insufficient cash,
it may have to sell securities to meet daily variation margin
requirements.  Such sales of securities may be, but will not
necessarily be, at increased prices which reflect the rising
market.  The Fund may have to sell securities at a time when it may
be disadvantageous to do so.

OPTIONS ON STOCK INDEX FUTURES CONTRACTS.  Options on stock index
futures contracts are similar to options on stock except that
options on futures contracts give the purchaser the right, in
return for the premium paid, to assume a position in a stock index 
futures contract (a long position if the option is a call and a
short position if the option is a put) at a specified exercise 
price at any time during the period of the option.  If the option
is closed instead of exercised, the holder of the option receives
an amount that represents the amount by which the market price of
the contract exceeds (in the case of a call) or is less than (in
the case of a put) the exercise price of the option on the futures
contract.  If the option does not appreciate in value prior to the
exercise date, the fund will suffer a loss of the premium paid.

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, 
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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.

SPECIAL RISKS OF TRANSACTIONS IN OPTIONS ON STOCK INDEX FUTURES
CONTRACTS AND OPTIONS ON STOCK INDEXES.  As with options on stocks,
the holder of an option on a stock index futures contract or on a
stock index may terminate a position by selling an option covering
the same contract or index and having the same exercise price and
expiration date.  The ability to establish and close out positions
on such options will be subject to the development and maintenance
of a liquid secondary market.  The funds will not purchase options
unless the market for such options has developed sufficiently, so
that the risks in connection with options are not greater than the
risks in connection with stock index futures contracts transactions
themselves.  Compared to using futures contracts, purchasing
options involves less risk to the funds because the maximum amount
at risk is the premium paid for the options (plus transaction
costs).  There may be circumstances, however, when using an option
would result in a greater loss to a fund than using a futures
contract, such as when there is no movement in the level of the
stock index.

TAX TREATMENT.  As permitted under federal income tax laws, each
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 stock indexes is currently
unclear, although the Funds' tax advisers currently believe marking
to market is not required.  Depending on developments, a fund may
seek Internal Revenue Service (IRS) rulings clarifying questions
concerning such treatment.  Certain provisions of the Internal
Revenue Code may also limit a 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, a 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.
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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.
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APPENDIX D

OPTIONS AND INTEREST RATE FUTURES CONTRACTS FOR INVESTMENTS OF
SPECIAL INCOME AND MANAGED FUNDS

The Funds 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 traded on any U.S. or foreign
exchange.  The Fund also may buy or write put and call options on
these futures.  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.  Managed Fund also may enter into
stock index futures contracts - see Appendix C.

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 stock
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
value 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 (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.

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 a
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 used for investment.  Options
are used as a trading technique to take advantage of any disparity
between the price of the underlying security in the securities 
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PAGE 169
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 a 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 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.  A 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, 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 a 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.
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If a covered call option is exercised, the security is sold by the
fund.  The fund will recognize a capital gain or loss based upon
the difference between the proceeds and the security's basis.  

Options on many securities are listed on options exchanges.  If a
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 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 asked prices.

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.  They have been established by boards of trade which have
been designated contract markets by the Commodity Futures Trading
Commission (CFTC).  Futures contracts trade on these markets in a
manner similar to the way a stock trades on a stock exchange, and
the boards of trade, through their clearing corporations, guarantee
performance of the contracts.  Currently, there are futures
contracts based on such debt securities as long-term U.S. Treasury
bonds, Treasury notes, GNMA modified pass-through mortgage-backed
securities, three-month U.S. Treasury bills and bank certificates
of deposit.  While futures contracts based on debt securities do
provide for the delivery and acceptance of securities, such
deliveries and acceptances are very seldom made.  Generally, the
futures contract is terminated by entering into an offsetting
transaction.  An offsetting transaction for a futures contract sale
is effected by the fund entering into a futures contract purchase
for the same aggregate amount of the specific type of financial
instrument and same delivery date.  If the price in the sale
exceeds the price in the offsetting purchase, the fund immediately
is paid the difference and realizes a gain.  If the offsetting
purchase price exceeds the sale price, the fund pays the difference
and realizes a loss.  Similarly, closing out a futures contract
purchase is effected by the fund entering into a futures contract
sale.  If the offsetting sale price exceeds the purchase price, the
fund realizes a gain, and if the offsetting sale price is less than
the purchase price, the fund realizes a loss.  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.  The initial margin deposit is approximately 1.5%
of a contract's face value.  Daily 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, in the case of a portfolio
holding long-term debt securities, is to gain the benefit of
changes in interest rates without actually buying or selling long-
term debt securities.  For example, if a fund owned long-term bonds
and interest rates were expected to increase, it might enter into 
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futures contracts to sell securities which would have much the same
effect as selling some of the long-term bonds it owned.  Futures
contracts are based on types of debt securities referred to above,
which have historically reacted to an increase or decline in
interest rates in a fashion similar to the debt securities the fund
owns.  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. 
Successful use of futures contracts depends on the investment
manager's ability to predict the future direction of interest
rates.  If the investment manager's prediction is incorrect, the
fund would have been better off had it not entered into futures
contracts.

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.  Furthermore, because the value of the option is fixed at
the point of sale, there are no 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.
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Risks.  There are risks in engaging in each of the management tools
described above.  The risk a fund assumes when it buys an option is
the loss of the premium paid for the option.  Purchasing options
also limits the use of monies that might otherwise be available for
long-term investments.

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.  Furthermore,
the fund might not be able to close the option because of
insufficient activity in the options market.  

A 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.

Another risk is that the fund's investment manager could be
incorrect in anticipating as to the direction or extent of various
interest rate 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.

TAX TREATMENT.  As permitted under federal income tax laws, each
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 currently unclear,
although the funds' tax advisers currently believe marking to
market is not required.  Depending on developments, a fund may seek
Internal Revenue Service (IRS) rulings clarifying questions
concerning such treatment.  Certain provisions of the Internal 
Revenue Code may also limit a fund's ability to engage in futures
contracts and related options transactions.  For example, at the 
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PAGE 173
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, a 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.
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APPENDIX E

MORTGAGE-BACKED SECURITIES AND ADDITIONAL INFORMATION ON INVESTMENT
POLICIES FOR ALL FUNDS

GNMA Certificates

The Government National Mortgage Association (GNMA) is a wholly
owned corporate instrumentality of the United States within the
Department of Housing and Urban Development.  GNMA certificates are
mortgage-backed securities of the modified pass-through type, which
means that both interest and principal payments (including
prepayments) are passed through monthly to the holder of the
certificate.  Each certificate evidences an interest in a specific
pool of mortgage loans insured by the Federal Housing
Administration or the Farmers Home Administration or guaranteed by
the Veterans Administration.  The National Housing Act provides
that the full faith and credit of the United States is pledged to
the timely payment of principal and interest by GNMA of amounts due
on these certificates.  GNMA is empowered to borrow without
limitation from the U.S. Treasury, if necessary, to make such
payments.

Underlying Mortgages of the Pool.  Pools consist of whole mortgage
loans or participations in loans.  The majority of these loans are
made to purchasers of 1-4 member family homes.  The terms and
characteristics of the mortgage instruments generally are uniform 
within a pool but may vary among pools.  For example, in addition
to fixed-rate fixed-term mortgages, the Fund may purchase pools of
variable rate mortgages, growing equity mortgages, graduated
payment mortgages and other types.

All servicers apply standards for qualification to local lending
institutions which originate mortgages for the pools.  Servicers
also establish credit standards and underwriting criteria for
individual mortgages included in the pools.  In addition, many
mortgages included in pools are insured through private mortgage
insurance companies.

Average Life of GNMA Certificates.  The average life of GNMA
certificates varies with the maturities of the underlying mortgage
instruments which have maximum maturities of 30 years.  The average
life is likely to be substantially less than the original maturity
of the mortgage pools underlying the securities as the result of
prepayments or refinancing of such mortgages.  Such prepayments are
passed through to the registered holder with the regular monthly
payments of principal and interest.

As prepayment rates vary widely, it is not possible to accurately
predict the average life of a particular pool.  It is customary in
the mortgage industry in quoting yields on a pool of 30-year
mortgages to  compute the yield as if the pool were a single loan
that is amortized according to a 30-year schedule and that is 
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prepaid in full at the end of the 12th year.  For this reason, it
is standard practice to treat GNMA certificates as 30-year
mortgage-backed securities which prepay fully in the 12th year.

Calculation of Yields.  Yields on pass-through securities are
typically quoted based on the maturity of the underlying
instruments and the associated average life assumption.

Actual pre-payment experience may cause the yield to differ from
the assumed average life yield.  When mortgage rates drop, pre-
payments will increase, thus reducing the yield.  Reinvestment of
pre-payments may occur at higher or lower interest rates than the
original investment, thus affecting the yield of a fund.  The
compounding effect from reinvestments of monthly payments received
by the fund will increase the yield to shareholders compared to
bonds that pay interest semi-annually.  The yield also may be
affected if the certificate was issued at a premium or discount,
rather than at par.  This also applies after issuance to
certificates trading in the secondary market at a premium or
discount.

"When-Issued" GNMA Certificates.  Some U.S. government securities
may be purchased on a "when-issued" basis, which means that it may
take as long as 45 days after the purchase before the securities
are delivered to the fund.  Payment and interest terms, however,
are fixed at the time the purchaser enters into the commitment. 
However, the yield on a comparable GNMA certificate when the 
transaction is consummated may vary from the yield on the GNMA
certificate at the time that the when-issued transaction was made. 
A fund does not pay for the securities or start earning interest on
them until the contractual settlement date.  When-issued securities
are subject to market fluctuations and they may affect the fund's
gross assets the same as owned securities.

Market for GNMA Certificates.  Since the inception of the GNMA
mortgage-backed securities program in 1970, the amount of GNMA
certificates outstanding has grown rapidly.  The size of the market
and the active participation in the secondary market by securities
dealers and many types of investors make the GNMA certificates a
highly liquid instrument.  Prices of GNMA certificates are readily
available from securities dealers and depend on, among other
things, the level of market interest rates, the certificate's
coupon rate and the prepayment experience of the pool of mortgages
underlying each certificate.

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 
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PAGE 176
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.

Managed and Special Income Funds may invest in securities called
"inverse floaters".  Inverse floaters are created by underwriters
using the interest payments on securities.  A portion of the
interest received is paid to holders of instruments based on
current interest rates for short-term securities.  What is left
over, less a servicing fee, is paid to holders of the inverse
floaters.  As interest rates go down, the holders of the inverse
floaters receive more income and an increase in the price for the
inverse floaters.  As interest rates go up, the holders of the
inverse floaters receive less income and a decrease in the price
for the inverse floaters.

Managed and Special Income Funds may purchase some securities in
advance of when they are issued.  Price and rate of interest are
set on the date the commitments are given but no payment is made or
interest earned until the date the securities are issued, usually
within two months, but other terms may be negotiated.  The
commitment requires the portfolio to buy the security when it is
issued so the commitment is valued daily the same way as owning a
security would be valued.  The Portfolio's custodian will maintain,
in a segregated account, cash or liquid high-grade debt securities
that are marked to market daily and are at least equal in value to
the Portfolio's commitments to purchase the securities.  The
portfolio may sell the commitment just like it can sell a security. 
Frequently, the portfolio has the opportunity to sell the
commitment back to the institution that plans to issue the security
and at the same time enter into a new commitment to purchase a
when-issued security in the future.  For rolling its commitment
forward, the portfolio realizes a gain or loss on the sale of the
current commitment or receives a fee for entering into the new
commitment.

Managed and Special Income Funds may purchase mortgage-backed
security (MBS) put spread options and write covered MBS call spread
options.  MBS spread options are based upon the changes in the
price spread between a specified mortgage-backed security and a
like-duration Treasury security.  MBS spread options are traded in
the OTC market and are of short duration, typically one to two
months.  The portfolio would buy or sell covered MBS call spread
options in situations where mortgage-backed securities are expected
to under perform like-duration Treasury securities.
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APPENDIX F

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 unit value 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
units 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 units lower
than the average price of units 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
contract owners who can continue investing through changing market
conditions to acquire units to meet long term goals.

Dollar-cost averaging 
                                                                   
Regular         Market Value of an         Accumulation 
Investment      Accumulation Unit          Units Acquired          

 $100                 $ 6                      16.7
  100                   4                      25.0
  100                   4                      25.0
  100                   6                      16.7
  100                   5                      20.0
 $500                 $25                     103.4 

Average market price of an accumulation unit over 5 periods: $5
($25 divided by 5).
The average price you paid for each accumulation unit: $4.84 
($500 divided by 103.4).
<PAGE>
PAGE 178
PART C. OTHER INFORMATION

Item 24.  Financial Statements and Exhibits

(a)  Registrant's semi-annual report to shareholders filed
electronically pursuant to Section 270.30d-1 on or about April 26,
1995 is incorporated herein by reference.

(b)  Exhibits:

(1)  Articles of Incorporation as amended October 13, 1989, filed
electronically as Exhibit No. 1 to Registrant's Post-Effective
Amendment No. 25 to Registration Statement No. 2-73115, is
incorporated herein by reference.

(2)  By-Laws as amended January 12, 1989, filed electronically as
Exhibit No. 2 to Registrant's Post-Effective Amendment No. 25 to
Registration Statement No. 2-73115, is incorporated herein by
reference.

(3)  Not Applicable.

(4)  Form of stock certificate for common shares, is on file at the
Registrant's headquarters.

(5)(a)  Form of Investment Management Services Agreement between
Registrant and IDS Life Insurance Company, filed electronically
herewith.

(5)(b)  Investment Advisory Agreement between IDS Life and
IDS/American Express Inc. (IDS) dated July 11, 1984 filed and, copy
of Addendum to the Investment Advisory Agreement for IDS Life
International Equity Fund, dated Jan. 8, 1992, filed electronically
as Exhibit No. 5(d) to Registrant's Post-Effective Amendment No. 25
to Registration Statement No. 2-73115, is incorporated herein by
reference.

(5)(c)  Sub-Investment Advisory Agreement between IDS and IDS
International, Inc. for IDS Life International Equity Fund, dated
Jan. 13, 1992, filed electronically as Exhibit No. 5(e) to
Registrant's Post-Effective Amendment No. 25 to Registration
Statement No. 2-73115, is incorporated herein by reference.

(5)(d)  Administrative Services Agreement, dated March 20, 1995,
between IDS Life Investment Series, Inc. and American Express
Financial Corporation, filed electronically herewith.

(6)  Not Applicable.

(7)  All employees who have attained age 21 and completed one year
of service are eligible to participate in a thrift plan.  Entry
into the plan is Jan. 1 or July 1 following completion of the age
and service requirements.  The Fund contributes each year an amount
equal to l5 percent of their annual salaries, the maximum amount
permitted under Section 404 (a) of the Internal Revenue Code, or up
to a maximum of 0.08 of l percent of the Fund's net income before
income taxes and other adjustments.  Employees of the Registrant
become eligible to participate in a retirement plan on Jan. 1 or 
<PAGE>
PAGE 179
July 1 following completion of one year employment and attainment
of age 21.  Contributions to the retirement plan cease no later
than the time at which the participant reaches the normal
retirement of age 65.

(8)(a)  Custodian Agreement dated March 20, 1995, between IDS Life
Investment Series, Inc. and American Express Trust Company, filed
electronically herewith.

(8)(b)  Foreign Custody and Subcustodial Agreement, dated Jan. 9,
1992, for IDS Life Capital Resource Fund, filed electronically as
Exhibit No. 8(b) to Registrant's Post-Effective Amendment No. 25 to
Registration Statement No. 2-73115, is incorporated herein by
reference.

(8)(c)  Global Custody Agreement between The Chase Manhatten Bank
and IDS Bank & Trust, for IDS Life International Equity Fund and
IDS Life Aggressive Growth Fund, dated Feb. 19, 1992, filed
electronically as Exhibit No. 8(c) to Registrant's Post-Effective
Amendment No. 25 to Registration Statement No. 2-73115, is
incorporated herein by reference.

(9)(a)  Plan and Agreement of Merger between IDS Life Capital
Resource Minnesota, Inc. and IDS Life Capital Resource Fund, Inc.
dated April 10, 1986, filed electronically as Exhibit No. 9(a) to
Registrant's Post-Effective Amendment No. 25 to Registration
Statement No. 2-73115, is incorporated herein by reference.

(9)(b)  License Agreement between Registrant and IDS Financial
Corporation, dated January 25, 1988, filed electronically as
Exhibit No. 9(b) to Registrant's Post-Effective Amendment No. 25 to
Registration Statement No. 2-73115, is incorporated herein by
reference.

(10)  Opinion of Richard J. O'Brien dated October l3, l98l, filed
electronically as Exhibit No. 10 to Registrant's Post-Effective
Amendment No. 25 to Registration Statement No. 2-73115, is
incorporated herein by reference.

(11)  Independent Auditors' Consent, to be filed by amendment.

(12)  None. 

(13)  Investment Letter of IDS Life Insurance Company dated October
l3, l98l, filed electronically as Exhibit 13 to Registrant's Post-
Effective Amendment No. 25 to Registration Statement No. 2-73115,
is incorporated herein by reference.

(14)  Not Applicable.

(15)  Not Applicable.

(16)  Schedule for computation of each performance quotation
provided in the Registration Statement in response to Item 22 filed
as Exhibit 16 to Post-Effective Amendment No. 16 to Registration
Statement No. 2-73115 is incorporated herein by reference.  
<PAGE>
PAGE 180
Addendum to the schedule for computation of each performance
quotation filed as Exhibit 16 to Post-Effective Amendment No. 24 to
Registration Statement No. 2-73115 is incorporated herein by
reference.

(17)  Not Applicable.

(18)(a) Directors' Power of Attorney, dated November 10, 1994, to
sign Amendments to this Registration Statement, filed
electronically herewith.

(18)(b) Officers' Power of Attorney, dated June 1, 1993, to sign
Amendments to this Registration Statement, filed electronically as
Exhibit No. 17(b) to Registrant's Post-Effective Amendment No. 26
is incorporated herein by reference.

Item 25.  Persons Controlled by or under Common Control with        
          Registrant 

IDS Life and its subsidiaries are the record holders of all
outstanding shares of IDS Life Investment Series, Inc., IDS Life
Special Income Fund, Inc., IDS Life Moneyshare Fund, Inc. and IDS
Life Managed Fund, Inc.  All of such shares were purchased and are
held by IDS Life and its subsidiaries pursuant to instructions from
owners of variable annuity contracts issued by IDS Life and its
subsidiaries.  Accordingly, IDS Life disclaims beneficial ownership
of all shares of each fund.

Item 26.  Number of Holders of Securities

             (l)                            (2)
                                     Number of Record 
                                      Holders as of 
        Title of Class                August 11, 1995

        Capital Stock                       Four
         ($.0l par)

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.

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 
<PAGE>
PAGE 181
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 182
<TABLE>
<CAPTION>
Item 28b. Business and Other Connections of Investment Adviser (IDS Life Insurance Company)
(IDS Life).

Directors and officers of IDS Life who are directors and/or officers of one or more other
companies:
<S>                                     <C>                        <C>
Timothy V. Bechtold, Vice President--Risk Management Products                                 

American Express Financial Advisors     IDS Tower 10               Vice President-Risk
                                        Minneapolis, MN  55440       Management Products
American Express Financial Corporation                             Vice President-Risk
                                                                     Management Products

Alan R. Dakay, Vice President--Institutional Insurance Marketing                              

American Enterprise Life Insurance Co.  IDS Tower 10               Director and President
                                        Minneapolis, MN  55440
American Express Financial Advisors                                Vice President -
                                                                     Institutional Products
                                                                     Group
American Express Financial Corporation                             Vice President - 
                                                                     Institutional Products
                                                                     Group
American Partners Life Insurance Co.                               Director and President

Robert M. Elconin, Vice President                                                             

American Express Financial Advisors     IDS Tower 10               Vice President-
                                        Minneapolis, MN  55440       Government Relations
American Express Financial Corporation                             Vice President-
                                                                     Government Relations

Louis C. Fornetti, Director                                                                   

American Enterprise Investment          IDS Tower 10               Vice President
  Services Inc.                         Minneapolis, MN  55440
American Express Financial Advisors                                Senior Vice President and
                                                                     Chief Financial Officer
American Express Financial Corporation                             Director, Senior Vice
                                                                     President and Chief
                                                                     Financial Officer
American Express Trust Company                                     Director
IDS Cable Corporation                                              Director
IDS Cable II Corporation                                           Director
IDS Capital Holdings Inc.                                          Senior Vice President
IDS Certificate Company                                            Vice President
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
<PAGE>
PAGE 183
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)

IDS Insurance Agency of Ohio Inc.                                  Vice President
IDS Insurance Agency of Wyoming Inc.                               Vice President
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
Investors Syndicate Development Corp.                              Vice President

Morris Goodwin Jr., Vice President and 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 Financial Advisors                                Vice President and
                                                                     Corporate Treasurer
American Express Financial Corporation                             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                                              Director, Vice President
                                                                     and Treasurer
IDS Cable II Corporation                                           Director, 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 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
<PAGE>
PAGE 184
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)

IDS International, Inc.                                            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                                         Director, Vice President
                                                                     and Treasurer
IDS Partnership Services Corporation                               Director, 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                                             Director, 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

Lorraine R. Hart, Vice President--Investments                                                 

American Enterprise Life                IDS Tower 10               Vice President-Investments
  Insurance Company                     Minneapolis, MN  55440
American Express Financial Advisors                                Vice President-Insurance
                                                                     Investments
American Express Financial Corporation                             Vice President-Insurance
                                                                     Investments
American Partners Life Insurance Co.                               Director and Vice
                                                                     President-Investments
IDS Certificate Company                                            Vice President-Investments
IDS Life Series Fund, Inc.                                         Vice President-Investments
IDS Life Variable Annuity Funds A and B                            Vice President-Investments
Investors Syndicate Development Corp.                              Vice President-Investments

David R. Hubers, Director                                                                     

American Express Financial Advisors     IDS Tower 10               Chairman, Chief Executive
                                        Minneapolis, MN  55440       Officer and President
American Express Financial Corporation                             Director, President and
                                                                     Chief Executive Officer
American Express Service Corporation                               Director and President
IDS Aircraft Services Corporation                                  Director
IDS Certificate Company                                            Director
IDS Plan Services of California, Inc.                              Director and President
IDS Property Casualty Insurance Co.                                Director
<PAGE>
PAGE 185
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)

Richard W. Kling, Director and President                                                      

American Enterprise Life Insurance Co.  IDS Tower 10               Director and Chairman of
                                        Minneapolis, MN  55440       the Board
American Express Financial Advisors                                Senior Vice President-
                                                                     Risk Management Products
American Express Financial Corporation                             Director and Senior Vice
                                                                     President-Risk Management
                                                                     Products
American Partners Life Insurance Co.                               Director and Chairman of
                                                                     the Board
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 Series Fund, Inc.                                         Director and President
IDS Life Variable Annuity Funds A&B                                Chairman of the Board of
                                                                     Managers 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

Paul F. Kolkman, Director and Executive Vice President                                        

American Express Financial Advisors     IDS Tower 10               Vice President-
                                        Minneapolis, MN  55440       Actuarial Finance
American Express Financial Corporation                             Vice President-
                                                                     Actuarial Finance
IDS Life Series Fund, Inc.                                         Vice President and Chief
                                                                     Actuary

Ryan R. Larson, Vice President--Annuity Product Development                                   

American Express Financial Advisors     IDS Tower 10               Vice President-
                                        Minneapolis, MN  55440       IPG Product Development
American Express Financial Corporation                             Vice President-
                                                                     IPG Product Development

Peter A. Lefferts, Director and Executive Vice President--Marketing                           

American Express Financial Advisors     IDS Tower 10               Senior Vice President-
                                        Minneapolis, MN  55440       Corporate Strategy and
                                                                     Development
American Express Financial Corporation                             Director and Senior Vice
                                                                     President-Corporate
                                                                     Strategy and Development
American Express Service Corporation                               Director
American Express Trust Company                                     Director
IDS Plan Services of California, Inc.                              Director
Investors Syndicate Development Corp.                              Director
<PAGE>
PAGE 186
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)

Janis E. Miller, Director and Executive Vice President--Variable Assets                       

American Express Financial Advisors     IDS Tower 10               Vice President-
                                        Minneapolis, MN  55440       Variable Assets
American Express Financial Corporation                             Vice President-
                                                                     Variable Assets
IDS Cable Corporation                                              Director and President
IDS Cable II Corporation                                           Director and President
IDS Futures Corporation                                            Director and President
IDS Futures III Corporation                                        Director and President
IDS Life Series Fund, Inc.                                         Director
IDS Life Variable Annuity Funds A&B                                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, Chairman of the Board and Chief Executive Officer                

American Enterprise Investment          IDS Tower 10               Director
  Services Inc.                         Minneapolis, MN  55440
American Express Financial Advisors                                Executive Vice President-
                                                                     Marketing and Products
American Express Financial Corporation                             Director and Executive
                                                                     Vice President-Marketing
                                                                     and Products
American Express Tax and Business                                  Director
  Services Inc.
IDS Certificate Company                                            Director and Chairman of
                                                                     the Board
IDS Plan Services of California, Inc.                              Director
IDS Property Casualty Insurance Co.                                Director

Barry J. Murphy, Director and Executive Vice President--Client Service                        

American Express Financial Advisors     IDS Tower 10               Senior Vice President-
                                        Minneapolis, MN  55440       Client Service
American Express Financial Corporation                             Director and Senior Vice
                                                                     President-Client Service

James R. Palmer, Vice President--Taxes                                                        

American Express Financial Advisors     IDS Tower 10               Vice President-
                                        Minneapolis, MN  55440       Insurance Operations
American Express Financial Corporation                             Vice President-
                                                                     Insurance Operations

Stuart A. Sedlacek, Director and Executive Vice President--Assured Assets                     

American Enterprise Life Insurance Co.  IDS Tower 10               Director and Executive
                                        Minneapolis, MN  55440       Vice President, Assured
                                                                     Assets
American Express Financial Advisors                                Vice President-
                                                                     Assured Assets
<PAGE>
PAGE 187
Item 28a. Business and Other Connections of Investment Adviser (IDS
Financial Corporation)(cont'd)

American Express Financial Corporation                             Vice President-
                                                                     Assured Assets
IDS Certificate Company                                            Director and President
Investors Syndicate Development Corp.                              Chairman of the Board
                                                                     and President

F. Dale Simmons, Vice President--Real Estate Loan Management                                  

American Enterprise Life Insurance Co.  IDS Tower 10               Vice President-Real
                                        Minneapolis, MN  55440       Estate Loan Management
American Express Financial Advisors                                Vice President-Senior
                                                                     Portfolio Manager,
                                                                     Insurance Investments
American Express Financial Corporation                             Vice President-Senior
                                                                     Portfolio Manager,
                                                                     Insurance Investments
American Partners Life Insurance Co.                               Vice President-Real
                                                                     Estate Loan Management
IDS Certificate 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

William A. Stoltzmann, Vice President, General Counsel and Secretary                          

American Enterprise Life Insurance Co.  IDS Tower 10               Director, Vice President, 
                                        Minneapolis, MN  55440       General Counsel
American Express Financial Advisors                                Vice President and
                                                                     Assistant General Counsel
                                                                     and Secretary
American Express Financial Corporation                             Vice President and
                                                                     Assistant General Counsel
American Partners Life Insurance Co.                               Director, Vice President,
                                                                     General Counsel and
                                                                     Secretary

Melinda S. Urion, Director, Executive Vice President and Controller                           

American Enterprise Life Insurance Co.  IDS Tower 10               Vice President and
                                        Minneapolis, MN  55440       Controller
American Express Financial Advisors                                Vice President and
                                                                     Corporate Controller
American Express Financial Corporation                             Vice President and
                                                                     Corporate Controller
American Partners Life Insurance Co.                               Director, Vice President,
                                                                     Controller and Treasurer
IDS Life Series Fund, Inc.                                         Vice President and
                                                                     Controller
</TABLE>

Item 29.     The Fund has no principal underwriter.

<PAGE>
PAGE 188
Item 30.     Location of Accounts and Records

             American Express Financial Corporation
             IDS Tower 10
             Minneapolis, MN  55440-0010

Item 31.     Management Services

             Not Applicable.

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 189
                            SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, IDS Life Investment
Series, Inc. certifies that it meets all of the requirements for
effectiveness of this Amendment to its Registration Statement
pursuant to Rule 485(a)(i) under the Securities Act of 1933 and 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 15th day
of August, 1995.


IDS LIFE INVESTMENT SERIES, 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 15th day
of August, 1995.

Signature                                 Capacity

/s/ William R. Pearce**                   President, Principal
    William R. Pearce                     Executive Officer and     
                                          Director 

/s/ Robert O. Schneider**                 Controller and Principal 
    Robert O. Schneider                   Accounting Officer

/s/ Leslie L. Ogg**                       Vice President and
    Leslie L. Ogg                         Secretary

/s/ Melinda S. Urion**                    Treasurer
    Melinda S. Urion

/s/ William N. Westhoff**                 Vice President -
    William N. Westhoff                   Investments

/s/ Lynne V. Cheney*                      Director
    Lynne V. Cheney

/s/ Robert F. Froehlke*                   Director 
    Robert F. Froehlke 

/s/ David R. Hubers*                      Director
    David R. Hubers

/s/ Heinz F. Hutter*                      Director
    Heinz F. Hutter

/s/ Anne P. Jones*                        Director 
    Anne P. Jones
<PAGE>
PAGE 190
Signature                                 Capacity

/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/ James A. Mitchell*                    Director 
    James A. Mitchell

/s/ William R. Pearce*                    Director
    William R. Pearce

/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 electronically herewith:


____________________________
Leslie L. Ogg

**Signed pursuant to Officers' Power of Attorney dated June 1,
1993, filed electronically as Exhibit 17(b) to Registrant's Post-
Effective Amendment No. 26 by:


____________________________ 
Leslie L. Ogg
<PAGE>
PAGE 191
CONTENTS OF THIS POST-EFFECTIVE AMENDMENT NO. 28
TO REGISTRATION STATEMENT NO. 2-73115

This post-effective amendment contains the following papers and
documents:

The facing sheet.

Cross reference sheet.

Part A.

     The prospectuses.

Part B.

     Statements of Additional Information.

Part C.

     Other information.

The signatures.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<DESCRIPTION>EXHIBIT INDEX
<TEXT>

<PAGE>
PAGE 1
IDS LIFE INVESTMENT SERIES, INC.
Registration Number 2-73115/811-3218

                           EXHIBIT INDEX

Exhibit 5(a):   Form of Investment Management Services Agreement.

Exhibit 5(d):   Administrative Services Agreement dated March 20,
                1995.

Exhibit 8(a):   Custodian Agreement dated March 20, 1995.

Exhibit 18(a):  Directors' Power of Attorney, dated November 10,
                1994.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.5A-IMS-AGMT
<SEQUENCE>3
<DESCRIPTION>5(A) INVESTMENT MANAGEMENT SERVICES AGREEMENT
<TEXT>

<PAGE>
PAGE 1
             INVESTMENT MANAGEMENT SERVICES AGREEMENT

      AGREEMENT made the ____ day of ____________, 199_, by and
between IDS Life Investment Series, Inc. (the "Corporation") on
behalf of its underlying series funds: IDS Life Aggressive Growth
Fund, IDS Life Capital Resource Fund and IDS Life International
Equity Fund (individually a "Fund" and collectively the "Funds"), a
Minnesota corporation, and IDS Life Insurance Company ("IDS Life")
a Minnesota corporation.

Part One: INVESTMENT MANAGEMENT AND OTHER SERVICES

      (1)   The Corporation hereby retains IDS Life, and IDS Life
hereby agrees, for the period of this Agreement and under the terms
and conditions hereinafter set forth, to furnish the Corporation
continuously with suggested investment planning; to determine,
consistent with the Funds' investment objectives and policies,
which securities in IDS Life's discretion shall be purchased, held
or sold and to execute or cause the execution of purchase or sell
orders; to prepare and make available to the Funds all necessary
research and statistical data in connection therewith; to furnish
all services of whatever nature required in connection with the
management of the Funds including transfer agent and dividend-
disbursing agent services; to furnish or pay for all supplies,
printed material, office equipment, furniture and office space as
the Funds may require; and to pay or reimburse such expenses of the
Funds as may be provided for in Part Three; subject always to the
direction and control of the Board of Directors (the "Board"), the
Executive Committee and the authorized officers of the corporation
and its underlying funds.  IDS Life agrees to maintain (directly or
through the contract described in paragraph (7) of this Part One)
an adequate organization of competent persons to provide the
services and to perform the functions herein mentioned.  IDS Life
agrees to meet with any persons at such times as the Board deems
appropriate for the purpose of reviewing IDS Life's performance
under this Agreement.

      (2)   IDS Life agrees that the investment planning and
investment decisions will be in accordance with general investment
policies of the Funds as disclosed to IDS Life from time to time by
the Funds and as set forth in its prospectuses and registration
statements filed with the United States Securities and Exchange
Commission (the "SEC").

      (3)   IDS Life agrees that it will maintain all required
records, memoranda, instructions or authorizations relating to the
acquisition or disposition of securities for the Funds.

      (4)   Each Fund agrees that it will furnish to IDS Life any
information that the latter may reasonably request with respect to
the services performed or to be performed by IDS Life under this
Agreement.

      (5)   IDS Life is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities
for the Funds and is directed to use its best efforts to obtain the
best available price and most favorable execution, except as 
<PAGE>
PAGE 2
prescribed herein.  Subject to prior authorization by the Board of
appropriate policies and procedures, and subject to termination at
any time by the Board, IDS Life may also be authorized to effect
individual securities transactions at commission rates in excess of
the minimum commission rates available, to the extent authorized by
law, if IDS Life determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or American Express
Financial Corporation's ("AEFC") or IDS Life's overall
responsibilities with respect to the Funds and other funds for
which they act as investment adviser.

      (6)   It is understood and agreed that in furnishing the
Funds with the services as herein provided, neither IDS Life, nor
any officer, director or agent thereof shall be held liable to a
Fund or its creditors or shareholders for errors of judgment or for
anything except willful misfeasance, bad faith, or gross negligence
in the performance of its duties, or reckless disregard of its
obligations and duties under the terms of this Agreement.  It is
further understood and agreed that IDS Life may rely upon
information furnished to it reasonably believed to be accurate and
reliable.

      (7)   The existence of an investment advisory agreement
between IDS Life and AEFC is specifically ackknowledged and
approved.

Part Two: COMPENSATION TO INVESTMENT MANAGER

      (1)   The Corporation agrees to pay to IDS Life, and IDS Life
covenants and agrees to accept from the Corporation in full payment
for the services furnished, a fee for each calendar day of each
year equal to the total of 1/365th (1/366th in each leap year) of
each of the respective percentages set forth below of the net
assets of the Funds; to be computed for each day on the basis of
net assets as of the close of business of the full business day two
(2) business days prior to the day for which the computation is
being made.  In the case of the suspension of the computation of
net asset value, the asset charge for each day during such
suspension shall be computed as of the close of business on the
last full business day on which the net assets were computed.  Net
assets as of the close of a full business day shall include all
transactions in shares of the Funds recorded on the books of the
Funds for that day.

                           Asset Charge
<TABLE>
<CAPTION>
              Aggressive Growth    International Equity                   Capital Resource
  Assets        Annual Rate at        Annual Rate at         Assets        Annual Rate at
(Billions)     Each Asset Level      Each Asset Level      (Billions)     Each Asset Level
<S>                <C>                   <C>               <C>                <C>
First $0.25        0.650%                0.870%            First $1           0.630%
Next  $0.25        0.635                 0.855             Next  $1           0.615
Next  $0.25        0.620                 0.840             Next  $1           0.600
Next  $0.25        0.605                 0.825             Next  $3           0.585
Next  $1           0.590                 0.810             Over  $6           0.570
Over  $2           0.575                 0.795
</TABLE>
<PAGE>
PAGE 3
      (2)   The fee shall be paid on a monthly basis and, in the
event of the termination of this Agreement, the fee accrued shall
be prorated on the basis of the number of days that this Agreement
is in effect during the month with respect to which such payment is
made.

      (3)   The fee provided for hereunder shall be paid in cash by
the Corporation to IDS Life within five business days after the
last day of each month.

Part Three: ALLOCATION OF EXPENSES

      (1)   The Corporation agrees to pay: 

            (a)   Fees payable to IDS Life for the latter's
services under the terms of this Agreement.

            (b)   All fees, costs, expenses and allowances payable
to any person, firm or corporation for services under any agreement
entered into by the Funds covering the offering for sale, sale and
distribution of the Funds' shares.

            (c)   All taxes of any kind payable by the Funds other
than federal original issuance taxes on shares issued by the Funds.

            (d)   All brokerage commissions and charges in the
purchase and sale of assets.

      (2)   The Corporation agrees to reimburse IDS Life or its
affiliates for the aggregate cost of the services listed below
incurred by IDS Life in its operation of the Funds.

            (a)   All custodian or trustee fees, costs and
expenses.

            (b)   Costs and expenses in connection with the
auditing and certification of the records and accounts of the Funds
by independent certified public accountants.

            (c)   Costs of obtaining and printing of dividend
checks, reports to shareholders, notices, proxies, proxy statements
and tax notices to shareholders, and also the cost of envelopes in
which such are to be mailed.

            (d)   Postage on all communications, notices and
statements to brokers, dealers, and the Funds' shareholders.

            (e)   All fees and expenses paid to directors of the
Funds; however, IDS Life will pay fees to directors who are
officers or employees of IDS Life or its affiliated companies.

            (f)   Costs of fidelity and surety bonds covering
officers, directors and employees of the Funds.

            (g)   All fees and expenses of attorneys who are not
officers or employees of IDS Life or any of its affiliates.
<PAGE>
PAGE 4
            (h)   All fees paid for the qualification and
registration for public sales of the securities of the Funds under
the laws of the United States and of the several states of the
United States in which the securities of the Funds shall be offered
for sale.

            (i)   Cost of printing prospectuses, statements of
additional information and application forms for existing
shareholders, and any supplements thereto.

            (j)   Any losses due to theft and defalcation of the
assets of the Funds, or due to judgments or adjustments not covered
by surety or fidelity bonds, and not covered by agreement or
obligation.

            (k)   Expenses incurred in connection with lending
portfolio securities of the Funds.

            (l)   Expenses properly payable by the Funds, approved
by the Board.

Part Four: MISCELLANEOUS

      (1)   IDS Life shall be deemed to be an independent
contractor and, except as expressly provided or authorized in this
Agreement, shall have no authority to act for or represent the
Funds.

      (2)   A "full business day" shall be as defined in the
By-laws.

      (3)   The Fund recognizes that AEFC and IDS Life now render
and may continue to render investment advice and other services to
other investment companies and persons which may or may not have
investment policies and investments similar to those of the Funds
and that AEFC and IDS Life manage their own investments and/or
those of their subsidiaries.  AEFC and IDS Life shall be free to
render such investment advice and other services and the Funds
hereby consent thereto.

      (4)   Neither this Agreement nor any transaction had pursuant
hereto shall be invalidated or in any way affected by the fact that
directors, officers, agents and/or shareholders of the Funds are or
may be interested in AEFC or IDS Life or any successor or assignee
thereof, as directors, officers, stockholders or otherwise; that
directors, officers, stockholders or agents of AEFC or IDS Life are
or may be interested in the Funds as directors, officers,
shareholders, or otherwise; or that AEFC or IDS Life or any
successor or assignee, is or may be interested in the Funds as
shareholder or otherwise, provided, however, that neither IDS or
IDS Life, nor any officer, director or employee thereof or of the
Funds, shall sell to or buy from the Funds any property or security
other than shares issued by the Funds, except in accordance with
applicable regulations or orders of the SEC.
<PAGE>
PAGE 5
      (5)   Any notice under this Agreement shall be given in
writing, addressed, and delivered, or mailed postpaid, to the party
to this Agreement entitled to receive such, at such party's
principal place of business in Minneapolis, Minnesota, or to such
other address as either party may designate in writing mailed to
the other.

      (6)   IDS Life agrees that no officer, director or employee
of IDS Life will deal for or on behalf of the Funds with himself as
principal or agent, or with any corporation or partnership in which
he may have a financial interest, except that this shall not
prohibit: 

            (a)   Officers, directors or employees of IDS Life from
having a financial interest in the Funds or in IDS Life.

            (b)   The purchase of securities for the Funds, or the
sale of securities owned by the Funds, through a security broker or
dealer, one or more of whose partners, officers, directors or
employees is an officer, director or employee of IDS Life, provided
such transactions are handled in the capacity of broker only and
provided commissions charged do not exceed customary brokerage
charges for such services.

            (c)   Transactions with the Funds by a broker-dealer
affiliate of IDS Life as may be allowed by rule or order of the
SEC, and if made pursuant to procedures adopted by the Funds'
Board.

      (7)   IDS Life agrees that, except as herein otherwise
expressly provided or as may be permitted consistent with the use
of a broker-dealer affiliate of IDS Life under applicable
provisions of the federal securities laws, neither it nor any of
its officers, directors or employees shall at any time during the
period of this Agreement, make, accept or receive, directly or
indirectly, any fees, profits or emoluments of any character in
connection with the purchase or sale of securities (except shares
issued by the Funds) or other assets by or for the Funds.

Part Five: RENEWAL AND TERMINATION

      (1)   This Agreement shall continue in effect
until _________, 199_, or until a new agreement is approved by a
vote of the majority of the outstanding shares of the Funds and by
vote of the Board, including the vote required by (b) of this
paragraph, and if no new agreement is so approved, this Agreement
shall continue from year to year thereafter unless and until
terminated by either party as hereinafter provided, except that
such continuance shall be specifically approved at least annually
(a) by the Board or by a vote of the majority of the outstanding
shares of the Funds and (b) by the vote of a majority of the
directors who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval.  As used in this paragraph,
the term "interested person" shall have the same meaning as set
forth in the Investment Company Act of 1940, as amended (the "1940
Act").
<PAGE>
PAGE 6
      (2)   This Agreement may be terminated by either a Fund or
IDS Life at any time by giving the other party 60 days' written
notice of such intention to terminate, provided that any
termination shall be made without the payment of any penalty, and
provided further that termination may be effected either by the
Board or by a vote of the majority of the outstanding voting shares
of the Fund.  The vote of the majority of the outstanding voting
shares of a Fund for the purpose of this Part Five shall be the
vote at a shareholders' regular meeting, or a special meeting duly
called for the purpose, of 67% or more of the Fund's shares present
at such meeting if the holders of more than 50% of the outstanding
voting shares are present or represented by proxy, or more than 50%
of the outstanding voting shares of the Fund, whichever is less.

      (3)   This Agreement shall terminate in the event of its
assignment, the term "assignment" for this purpose having the same
meaning as set forth in the 1940 Act.

      IN WITNESS THEREOF, the parties hereto have executed the
foregoing Agreement as of the day and year first above written.


                              IDS LIFE INVESTMENT SERIES, INC.
                                IDS Life Aggressive Growth Fund
                                IDS Life Capital Resource Fund
                                IDS Life International Equity Fund


                              By                                   
                                    
                                          Vice President


                              IDS LIFE INSURANCE COMPANY


                              By                                   
                                          Vice President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.5D-AS-AGMT
<SEQUENCE>4
<DESCRIPTION>5(D) ADMINISTRATIVE SERVICES AGREEMENT
<TEXT>

<PAGE>
PAGE 1
ADMINISTRATIVE SERVICES AGREEMENT

AGREEMENT made the 20th day of March, 1995, by and between IDS Life
Investment Series Inc. (the "Corporation"),  a Minnesota
corporation, on behalf of its underlying series funds, and American
Express Financial Corporation, a Delaware corporation.

Part One:  SERVICES

(1) The Corporation hereby retains American Express Financial
Corporation, and American Express Financial Corporation hereby
agrees, for the period of this Agreement and under the terms and
conditions hereinafter set forth, to furnish the Corporation
continuously with all administrative, accounting, clerical,
statistical, correspondence, corporate and all other services of
whatever nature required in connection with the administration of
the Corporation as provided under this Agreement; and to pay such
expenses as may be provided for in Part Three hereof; subject
always to the direction and control of the Board of Directors, the
Executive Committee and the authorized officers of the Corporation. 
American Express Financial Corporation agrees to maintain an
adequate organization of competent persons to provide the services
and to perform the functions herein mentioned.  American Express
Financial Corporation agrees to meet with any persons at such times
as the Board of Directors deems appropriate for the purpose of
reviewing American Express Financial Corporation's performance
under this Agreement.

(2) The Corporation agrees that it will furnish to American Express
Financial Corporation any information that the latter may
reasonably request with respect to the services performed or to be
performed by American Express Financial Corporation under this
Agreement.

(3) It is understood and agreed that in furnishing the Corporation
with the services as herein provided, neither American Express
Financial Corporation, nor any officer, director or agent thereof
shall be held liable to the Corporation or its creditors or
shareholders for errors of judgment or for anything except willful
misfeasance, bad faith, or gross negligence in the performance of
its duties, or reckless disregard of its obligations and duties
under the terms of this Agreement.  It is further understood and
agreed that American Express Financial Corporation may rely upon
information furnished to it reasonably believed to be accurate and
reliable.

Part Two:  COMPENSATION FOR SERVICES

(1) The Corporation agrees to pay to American Express Financial
Corporation, and American Express Financial Corporation covenants
and agrees to accept from the Corporation in full payment for the
services furnished, based on the net assets of the Corporation as
set forth in the following table:
<PAGE>
PAGE 2
<TABLE><CAPTION>

  Assets     Annual Rate At      Assets      Annual Rate At      Assets      Annual Rate At
(Billions)  Each Asset Level   (Billions)   Each Asset Level   (Billions)   Each Asset Level
    Aggressive Growth                 Capital Resource             International Equity
<S>             <C>            <C>               <C>           <C>                <C>
First $0.25     0.060%         First $1          0.050%        First $0.25        0.060%
Next  $0.25     0.055          Next  $1          0.045         Next  $0.25        0.055
Next  $0.25     0.050          Next  $1          0.040         Next  $0.25        0.050
Next  $0.25     0.045          Next  $3          0.035         Next  $0.25        0.045
Next  $1        0.040          Next  $6          0.030         Next  $1           0.040
Over  $2        0.035                                          Over  $2           0.035
</TABLE>
The administrative fee for each calendar day of each year shall be
equal to 1/365th (1/366th in each leap year) of the total amount
computed. The computation shall be made for each such day on the
basis of net assets as of the close of business of the full
business day two (2) business days prior to the day for which the
computation is being made.  In the case of the suspension of the
computation of net asset value, the administrative fee for each day
during such suspension shall be computed as of the close of
business on the last full business day on which the net assets were
computed.  As used herein, "net assets" as of the close of a full
business day shall include all transactions in shares of the
Corporation recorded on the books of the Corporation for that day.

(2) The administrative fee shall be paid on a monthly basis and, in
the event of the termination of this Agreement, the administrative
fee accrued shall be prorated on the basis of the number of days
that this Agreement is in effect during the month with respect to
which such payment is made.

(3) The administrative fee provided for hereunder shall be paid in
cash by the Corporation to American Express Financial Corporation
within five (5) business days after the last day of each month.

Part Three:  ALLOCATION OF EXPENSES

(1) The Corporation agrees to pay:

(a) Administrative fees payable to American Express Financial
Corporation for its services under the terms of this Agreement.

(b) Taxes.

(c) Fees and charges of its independent certified public
accountants for services the Corporation requests.

(d) Fees and expenses of attorneys (i) it employs in matters not
involving the assertion of a claim by a third party against the
Corporation, its directors and officers, (ii) it employs in
conjunction with a claim asserted by the Board of Directors against
American Express Financial Corporation, except that American
Express Financial Corporation shall reimburse the Corporation for
such fees and expenses if it is ultimately determined by a court of
competent jurisdiction, or American Express Financial Corporation
agrees, that it is liable in whole or in part to the Corporation,
and (iii) it employs to assert a claim against a third party.<PAGE>
PAGE 3
(e) Fees paid for the qualification and registration for public
sale of the securities of the Corporation under the laws of the
United States and of the several states in which such securities
shall be offered for sale.

(f) Office expenses which shall include a charge for occupancy,
insurance on the premises, furniture and equipment, telephone,
telegraph, electronic information services, books, periodicals,
published services, and office supplies used by the Corporation,
equal to the cost of such incurred by American Express Financial
Corporation.

(g) Fees of consultants employed by the Corporation.

(h) Directors, officers and employees expenses which shall include
fees, salaries, memberships, dues, travel, seminars, pension,
profit sharing, and all other benefits paid to or provided for
directors, officers and employees, directors and officers liability
insurance, errors and omissions liability insurance, worker's
compensation insurance and other expenses applicable to the
directors, officers and employees, except the Corporation will not
pay any fees or expenses of any person who is an officer or
employee of American Express Financial Corporation or its
affiliates.

(i) Filing fees and charges incurred by the Corporation in
connection with filing any amendment to its articles of
incorporation, or incurred in filing any other document with the
State of Minnesota or its political subdivisions.

(j) Organizational expenses of the Corporation.

(k) One-half of the Investment Company Institute membership dues
charged jointly to the IDS MUTUAL FUND GROUP and American Express
Financial Corporation.

(l) Expenses properly payable by the Corporation, approved by the
Board of Directors.

(2) American Express Financial Corporation agrees to pay all
expenses associated with the services it provides under the terms
of this Agreement. Further, American Express Financial Corporation
agrees that if, at the end of any month, the expenses of the
Corporation under this Agreement and any other agreement between
the Corporation and American Express Financial Corporation, but
excluding those expenses set forth in (1)(b) of this Part Three,
exceed the most restrictive applicable state expenses limitation,
the Corporation shall not pay those expenses set forth in (1)(a)
and (c) through (m) of this Part Three to the extent necessary to
keep the Corporation's expenses from exceeding the limitation, it
being understood that American Express Financial Corporation will
assume all unpaid expenses and bill the Corporation for them in
subsequent months but in no event can the accumulation of unpaid
expenses or billing be carried past the end of the Corporation's
fiscal year.
<PAGE>
PAGE 4
Part Four:  MISCELLANEOUS

(1) American Express Financial Corporation shall be deemed to be an
independent contractor and, except as expressly provided or
authorized in this Agreement, shall have no authority to act for or
represent the Corporation.

(2) A "full business day" shall be as defined in the By-laws.

(3) The Corporation recognizes that American Express Financial
Corporation now renders and may continue to render investment
advice and other services to other investment companies and persons
which may or may not have investment policies and investments
similar to those of the Corporation and that American Express
Financial Corporation manages its own investments and/or those of
its subsidiaries.  American Express  Financial Corporation shall be
free to render such investment advice and other services and the
Corporation hereby consents thereto.

(4) Neither this Agreement nor any transaction had pursuant hereto
shall be invalidated or in anyway affected by the fact that
directors, officers, agents and/or shareholders of the Corporation
are or may be interested in American Express Financial Corporation
or any successor or assignee thereof, as directors, officers,
stockholders or otherwise; that directors, officers, stockholders
or agents of American Express Financial Corporation are or may be
interested in the Corporation as directors, officers, shareholders,
or otherwise; or that American Express Financial Corporation or any
successor or assignee, is or may be interested in the Corporation
as shareholder or otherwise, provided, however, that neither
American Express Financial Corporation, nor any officer, director
or employee thereof or of the Corporation, shall sell to or buy
from the Corporation any property or security other than shares
issued by the Corporation, except in accordance with applicable
regulations or orders of the United States Securities and Exchange
Commission.

(5) Any notice under this Agreement shall be given in writing,
addressed, and delivered, or mailed postpaid, to the party to this
Agreement entitled to receive such, at such party's principal place
of business in Minneapolis, Minnesota, or to such other address as
either party may designate in writing mailed to the other.

(6) American Express Financial Corporation agrees that no officer,
director or employee of American Express Financial Corporation will
deal for or on behalf of the Corporation with himself as principal
or agent, or with any corporation or partnership in which he may
have a financial interest, except that this shall not prohibit
officers, directors or employees of American Express Financial
Corporation from having a financial interest in the Corporation or
in American Express Financial Corporation.

(7)  The Corporation agrees that American Express Financial
Corporation may subcontract for certain of the services described
under this Agreement with the understanding that there shall be no
diminution in the quality or level of the services and that
American Express Financial Corporation remains fully responsible
for the services.
<PAGE>
PAGE 5
(8)  This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable
without the written consent of the other party.  This Agreement
shall be governed by the laws of the State of Minnesota.

Part Five:  RENEWAL AND TERMINATION

(1)  This Agreement shall become effective on the date first set
forth above (the "Effective Date") and shall continue in effect
from year to year thereafter as the parties may mutually agree;
provided that either party may terminate this Agreement by giving
the other party notice in writing specifying the date of such
termination, which shall be not less than 60 days after the date of
receipt of such notice.

(2) This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties. 
 
IN WITNESS THEREOF, the parties hereto have executed the foregoing
Agreement as of the day and year first above written.


IDS LIFE INVESTMENT SERIES, INC.
  IDS Life Aggressive Growth Fund
  IDS Life Capital Resources Fund
  IDS Life International Fund


By: /s/ Leslie L. Ogg                 
        Leslie L. Ogg 
        Vice President


AMERICAN EXPRESS FINANCIAL CORPORATION


By: /s/ Janis E. Miller               
        Vice President

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.8A-CUST-AGMT
<SEQUENCE>5
<DESCRIPTION>8(A) CUSTODIAN AGREEMENT
<TEXT>

<PAGE>
PAGE 1
                        CUSTODIAN AGREEMENT


THIS CUSTODIAN AGREEMENT dated March 20, 1995, between IDS Life
Investment Series, Inc., a Minnesota Corporation, (the
"Corporation"), on behalf of its underlying series funds, and
American Express Trust Company, a corporation organized under the
laws of the State of Minnesota with its principal place of business
at Minneapolis, Minnesota (the "Custodian").

WHEREAS, the Corporation desires that its securities and cash be
hereafter held and administered by Custodian pursuant to the terms
of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements herein
made, the Corporation and the Custodian agree as follows:

Section 1.  Definitions

The word "securities" as used herein shall be construed to include,
without being limited to, shares, stocks, treasury stocks,
including any stocks of this Corporation, notes, bonds, debentures,
evidences of indebtedness, options to buy or sell stocks or stock
indexes, certificates of interest or participation in any profit-
sharing agreements, collateral trust certificates, preorganization
certificates or subscriptions, transferable shares, investment
contracts, voting trust certificates, certificates of deposit for a
security, fractional or undivided interests in oil, gas or other
mineral rights, or any certificates of interest or participation
in, temporary or interim certificates for, receipts for, guarantees
of, or warrants or rights to subscribe to or purchase any of the
foregoing, acceptances and other obligations and any evidence of
any right or interest in or to any cash, property or assets and any
interest or instrument commonly known as a security.  In addition,
for the purpose of this Custodian Agreement, the word "securities"
also shall include other instruments in which the Corporation may
invest including currency forward contracts and commodities such as
interest rate or index futures contracts, margin deposits on such
contracts or options on such contracts.

The words "custodian order" shall mean a request or direction,
including a computer printout, directed to the Custodian and signed
in the name of the Corporation by any two individuals designated in
the current certified list referred to in Section 2.

The word "facsimile" shall mean an exact copy or likeness which is
electronically transmitted for instant reproduction.

Section 2.  Names, Titles and Signatures of Authorized Persons

The Corporation will certify to the Custodian the names and
signatures of its present officers and other designated persons
authorized on behalf of the Corporation to direct the Custodian by
custodian order as herein before defined.  The Corporation agrees
that whenever any change occurs in this list it will file with the
Custodian a copy of a resolution certified by the Secretary or an 
<PAGE>
PAGE 2
Assistant Secretary of the Corporation as having been duly adopted 
by the Board of Directors or the Executive Committee of the Board
of Directors of the Corporation designating those persons currently
authorized on behalf of the Corporation to direct the Custodian by
custodian order, as herein before defined, and upon such filing (to
be accompanied by the filing of specimen signatures of the
designated persons) the persons so designated in said resolution
shall constitute the current certified list.  The Custodian is
authorized to rely and act upon the names and signatures of the
individuals as they appear in the most recent certified list from
the Corporation which has been delivered to the Custodian as herein
above provided.

Section 3.  Use of Subcustodians

The Custodian may make arrangements, where appropriate, with other
banks having not less than two million dollars aggregate capital,
surplus and undivided profits for the custody of securities.  Any
such bank selected by the Custodian to act as subcustodian shall be
deemed to be the agent of the Custodian.

The Custodian also may enter into arrangements for the custody of
securities entrusted to its care through foreign branches of United
States banks; through foreign banks, banking institutions or trust
companies; through foreign subsidiaries of United States banks or
bank holding companies, or through foreign securities depositories
or clearing agencies (hereinafter also called, collectively, the
"Foreign Subcustodian" or indirectly through an agent, established
under the first paragraph of this section, if and to the extent
permitted by Section 17(f) of the Investment Company Act of 1940
and the rules promulgated by the Securities and Exchange Commission
thereunder, any order issued by the Securities and Exchange
Commission, or any "no-action" letter received from the staff of
the Securities and Exchange Commission.  To the extent the existing
provisions of the Custodian Agreement are consistent with the
requirements of such Section, rules, order or no-action letter,
they shall apply to all such foreign custodianships.  To the extent
such provisions are inconsistent with or additional requirements
are established by such Section, rules, order or no-action letter,
the requirements of such Section, rules, order or no-action letter
will prevail and the parties will adhere to such requirements;
provided, however, in the absence of notification from the
Corporation of any changes or additions to such requirements, the
Custodian shall have no duty or responsibility to inquire as to any
such changes or additions.

Section 4.  Receipt and Disbursement of Money
 
(1) The Custodian shall open and maintain a separate account or
accounts in the name of the Corporation or cause its agent to open
and maintain such account or accounts subject only to checks,
drafts or directives by the Custodian pursuant to the terms of this
Agreement.  The Custodian or its agent shall hold in such account
or accounts, subject to the provisions hereof, all cash received by
it from or for the account of the Corporation.  The Custodian or
its agent shall make payments of cash to or for the account of the
Corporation from such cash only:
<PAGE>
PAGE 3
      (a)   for the purchase of securities for the portfolio of the
            Corporation upon the receipt of such securities by the
            Custodian or its agent unless otherwise instructed on
            behalf of the Corporation;

      (b)   for the purchase or redemption of shares of capital
            stock of the Corporation;

      (c)   for the payment of interest, dividends, taxes,
            management fees, or operating expenses (including,
            without limitation thereto, fees for legal, accounting
            and auditing services);

      (d)   for payment of distribution fees, commissions, or
            redemption fees, if any;

      (e)   for payments in connection with the conversion,
            exchange or surrender of securities owned or subscribed
            to by the Corporation held by or to be delivered to the
            Custodian;

      (f)   for payments in connection with the return of
            securities loaned by the Corporation upon receipt of
            such securities or the reduction of collateral upon
            receipt of proper notice;

      (g)   for payments for other proper corporate purposes;

      (h)   or upon the termination of this Agreement.

Before making any such payment for the purposes permitted under the
terms of items (a), (b), (c), (d), (e), (f) or (g) of paragraph (1)
of this section, the Custodian shall receive and may rely upon a
custodian order directing such payment and stating that the payment
is for such a purpose permitted under these items (a), (b), (c),
(d), (e), (f) or (g) and that in respect to item (g), a copy of a
resolution of the Board of Directors or of the Executive Committee
of the Board of Directors of the Corporation signed by an officer
of the Corporation and certified by its Secretary or an Assistant
Secretary, specifying the amount of such payment, setting forth the
purpose to be a proper corporate purpose, and naming the person or
persons to whom such payment is made.  Notwithstanding the above,
for the purposes permitted under items (a) or (f) of paragraph (1)
of this section, the Custodian may rely upon a facsimile order.

(2) The Custodian is hereby appointed the attorney-in-fact of the
Corporation to endorse and collect all checks, drafts or other
orders for the payment of money received by the Custodian for the
account of the Corporation and drawn on or to the order of the
Corporation and to deposit same to the account of the Corporation
pursuant to this Agreement.

Section 5.  Receipt of Securities

Except as permitted by the second paragraph of this section, the
Custodian or its agent shall hold in a separate account or
accounts, and physically segregated at all times from those of any 
<PAGE>
PAGE 4
other persons, firms or corporations, pursuant to the provisions
hereof, all securities received by it for the account of the
Corporation.  The Custodian shall record and maintain a record of 
all certificate numbers.  Securities so received shall be held in
the name of the Corporation, in the name of an exclusive nominee
duly appointed by the Custodian or in bearer form, as appropriate.

Subject to such rules, regulations or guidelines as the Securities
and Exchange Commission may adopt, the Custodian may deposit all or
any part of the securities owned by the Corporation in a securities
depository which includes any system for the central handling of
securities established by a national securities exchange or a
national securities association registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, or
such other person as may be permitted by the Commission, pursuant
to which system all securities of any particular class or series of
any issuer deposited within the system are treated as fungible and
may be transferred or pledged by bookkeeping entry without physical
delivery of such securities.

All securities are to be held or disposed of by the Custodian for,
and subject at all times to the instructions of, the Corporation
pursuant to the terms of this Agreement.  The Custodian shall have
no power or authority to assign, hypothecate, pledge or otherwise
dispose of any such securities, except pursuant to the directive of
the Corporation and only for the account of the Corporation as set
forth in Section 6 of this Agreement.

Section 6.  Transfer Exchange, Delivery, etc. of Securities

The Custodian shall have sole power to release or deliver any
securities of the Corporation held by it pursuant to this
Agreement.  The Custodian agrees to transfer, exchange or deliver
securities held by it or its agent hereunder only:

(a)   for sales of such securities for the account of the
      Corporation, upon receipt of payment therefor;

(b)   when such securities are called, redeemed, retired or
      otherwise become payable;

(c)   for examination upon the sale of any such securities in
      accordance with "street delivery" custom which would include
      delivery against interim receipts or other proper delivery
      receipts;

(d)   in exchange for or upon conversion into other securities
      alone or other securities and cash whether pursuant to any
      plan of

(e)   merger, consolidation, reorganization, recapitalization or
      readjustment, or otherwise;

(f)   for the purpose of exchanging interim receipts or temporary
      certificates for permanent certificates;
<PAGE>
PAGE 5
(g)   upon conversion of such securities pursuant to their terms
      into other securities;

(h)   upon exercise of subscription, purchase or other similar
      rights represented by such securities; for loans of such
      securities by the Corporation upon receipt of collateral; or

(i)   for other proper corporate purposes.

As to any deliveries made by the Custodian pursuant to items (a),
(b), (c), (d), (e), (f), (g) and (h), securities or cash received
in exchange therefore shall be delivered to the Custodian, its
agent, or to a securities depository.  Before making any such
transfer, exchange or delivery, the Custodian shall receive a
custodian order or a facsimile from the Corporation requesting such
transfer, exchange or delivery and stating that it is for a purpose
permitted under Section 6 (whenever a facsimile is utilized, the
Corporation will also deliver an original signed custodian order)
and, in respect to item (i), a copy of a resolution of the Board of
Directors or of the Executive Committee of the Board of Directors
of the Corporation signed by an officer of the Corporation and
certified by its Secretary or an Assistant Secretary, specifying
the securities, setting forth the purpose for which such payment,
transfer, exchange or delivery is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person or
persons to whom such transfer, exchange or delivery of such
securities shall be made.

Section 7.  Custodian's Acts Without Instructions

Unless and until the Custodian receives a contrary custodian order
from the Corporation, the Custodian shall or shall cause its agent
to:

(a)   present for payment all coupons and other income items held
      by the Custodian or its agent for the account of the
      Corporation which call for payment upon presentation and hold
      all cash received by it upon such payment for the account of
      the Corporation;
 
(b)   present for payment all securities held by it or its agent
      which mature or when called, redeemed, retired or otherwise
      become payable;

(c)   ascertain all stock dividends, rights and similar securities
      to be issued with respect to any securities held by the
      Custodian or its agent hereunder, and to collect and hold for
      the account of the Corporation all such securities; and

(d)   ascertain all interest and cash dividends to be paid to
      security holders with respect to any securities held by the
      Custodian or its agent, and to collect and hold such interest
      and cash dividends for the account of the Corporation.
<PAGE>
PAGE 6
Section 8.  Voting and Other Action

Neither the Custodian nor any nominee of the Custodian shall vote
any of the securities held hereunder by or for the account of the
Corporation.  The Custodian shall promptly deliver to the
Corporation all notices, proxies and proxy soliciting materials
with relation to such securities, such proxies to be executed by 
the registered holder of such securities (if registered otherwise
than in the name of the Corporation), but without indicating the
manner in which such proxies are to be voted.

Custodian shall transmit promptly to the Corporation all written
information (including, without limitation, pendency of calls and
maturities of securities and expirations of rights in connection
therewith) received by the Custodian from issuers of the securities
being held for the Corporation.  With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Corporation
all written information received by the Custodian from issuers of
the securities whose tender or exchange is sought and from the
party (or his agents) making the tender or exchange offer.

Section 9.  Transfer Taxes

The Corporation shall pay or reimburse the Custodian for any
transfer taxes payable upon transfers of securities made hereunder,
including transfers resulting from the termination of this
Agreement.  The Custodian shall execute such certificates in
connection with securities delivered to it under this Agreement as
may be required, under any applicable law or regulation, to exempt
from taxation any transfers and/or deliveries of any such
securities which may be entitled to such exemption.

Section 10.  Custodian's Reports

The Custodian shall furnish the Corporation as of the close of
business each day a statement showing all transactions and entries
for the account of the Corporation.  The books and records of the
Custodian pertaining to its actions as Custodian under this
Agreement and securities held hereunder by the Custodian shall be
open to inspection and audit by officers of the Corporation,
internal auditors employed by the Corporation's investment adviser,
and independent auditors employed by the Corporation.  The
Custodian shall furnish the Corporation in such form as may
reasonably be requested by the Corporation a report, including a
list of the securities held by it in custody for the account of the
Corporation, identification of any subcustodian, and identification
of such securities held by such subcustodian, as of the close of
business of the last business day of each month, which shall be
certified by a duly authorized officer of the Custodian.  It is
further understood that additional reports may from time to time be
requested by the Corporation.  Should any report ever be filed with
any governmental authority pertaining to lost or stolen securities,
the Custodian will concurrently provide the Corporation with a copy
of that report.
<PAGE>
PAGE 7
The Custodian also shall furnish such reports on its systems of
internal accounting control as the Corporation may reasonably
request from time to time.

Section 11.  Concerning Custodian

For its services hereunder the Custodian shall be paid such
compensation at such times as may from time to time be agreed on in
writing by the parties hereto in a Custodian Fee Agreement.

The Custodian shall not be liable for any action taken in good
faith upon any custodian order or facsimile herein described or
certified copy of any resolution of the Board of Directors or of
the Executive Committee of the Board of Directors of the
Corporation, and may rely on the genuineness of any such document
which it may in good faith believe to have been validly executed.

The Corporation agrees to indemnify and hold harmless Custodian and
its nominee from all taxes, charges, expenses, assessments, claims
and liabilities (including counsel fees) incurred or assessed
against it or its nominee in connection with the performance of
this Agreement, except such as may arise from the Custodian's or
its nominee's own negligent action, negligent failure to act or
willful misconduct.  Custodian is authorized to charge any account
of the Corporation for such items.  In the event of any advance of
cash for any purpose made by Custodian resulting from orders or
instructions of the Corporation, or in the event that Custodian or
its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the
performance of this Agreement, except such as may arise from its or
its nominee's own negligent action, negligent failure to act or
willful misconduct, any property at any time held for the account
of the Corporation shall be security therefor.

The Custodian shall maintain a standard of care equivalent to that
which would be required of a bailee for hire and shall not be
liable for any loss or damage to the Corporation resulting from
participation in a securities depository unless such loss or damage
arises by reason of any negligence, misfeasance, or willful
misconduct of officers or employees of the Custodian, or from its
failure to enforce effectively such rights as it may have against
any securities depository or from use of an agent, unless such loss
or damage arises by reason of any negligence, misfeasance, or
willful misconduct of officers or employees of the Custodian, or
from its failure to enforce effectively such rights as it may have
against any agent.

Section 12.  Termination and Amendment of Agreement

The Corporation and the Custodian mutually may agree from time to
time in writing to amend, to add to, or to delete from any
provision of this Agreement.

The Custodian may terminate this Agreement by giving the
Corporation ninety days' written notice of such termination by
registered mail addressed to the Corporation at its principal place
of business.
<PAGE>
PAGE 8
The Corporation may terminate this Agreement at any time by written
notice thereof delivered, together with a copy of the resolution of
the Board of Directors authorizing such termination and certified
by the Secretary of the Corporation, by registered mail to the
Custodian.

Upon such termination of this Agreement, assets of the Corporation
held by the Custodian shall be delivered by the Custodian to a
successor custodian, if one has been appointed by the Corporation, 
upon receipt by the Custodian of a copy of the resolution of the
Board of Directors of the Corporation certified by the Secretary,
showing appointment of the successor custodian, and provided that
such successor custodian is a bank or trust company, organized
under the laws of the United States or of any State of the United
States, having not less than two million dollars aggregate capital,
surplus and undivided profits.  Upon the termination of this
Agreement as a part of the transfer of assets, either to a
successor custodian or otherwise, the Custodian will deliver
securities held by it hereunder, when so authorized and directed by
resolution of the Board of Directors of the Corporation, to a duly
appointed agent of the successor custodian or to the appropriate
transfer agents for transfer of registration and delivery as
directed.  Delivery of assets on termination of this Agreement
shall be effected in a reasonable, expeditious and orderly manner;
and in order to accomplish an orderly transition from the Custodian
to the successor custodian, the Custodian shall continue to act as
such under this Agreement as to assets in its possession or
control.  Termination as to each security shall become effective
upon delivery to the successor custodian, its agent, or to a
transfer agent for a specific security for the account of the
successor custodian, and such delivery shall constitute effective
delivery by the Custodian to the successor under this Agreement.

In addition to the means of termination herein before authorized,
this Agreement may be terminated at any time by the vote of a
majority of the outstanding shares of the Corporation and after
written notice of such action to the Custodian.

Section 13.  General

Nothing expressed or mentioned in or to be implied from any
provision of this Agreement is intended to, or shall be construed
to give any person or corporation other than the parties hereto,
any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any covenant, condition or provision herein
contained, this Agreement and all of the covenants, conditions and
provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective
successors and assigns.

This Agreement shall be governed by the laws of the State of
Minnesota.
<PAGE>
PAGE 9
This Agreement supersedes all prior agreements between the parties.


IDS LIFE INVESTMENT SERIES, INC.
  IDS Life Aggressive Growth Fund
  IDS Life Capital Resource Fund
  IDS Life International Fund


By: /s/ Leslie L. Ogg                 
        Leslie L. Ogg
        Vice President


AMERICAN EXPRESS TRUST COMPANY


By: /s/ Chan Patel                    
        Vice President

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.18A-DIR-POA
<SEQUENCE>6
<DESCRIPTION>18(A) DIRECTORS' POWER OF ATTORNEY
<TEXT>

<PAGE>
PAGE 1
                   DIRECTORS' POWER OF ATTORNEY


City of Minneapolis

State of Minnesota

     Each of the undersigned, as directors 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 Life Investment Series, Inc.       2-73115      811-3218
     IDS Life Managed Fund, Inc.            2-96367      811-4252
     IDS Life Moneyshare Fund, Inc.         2-72584      811-3190
     IDS Life Special Income Fund, Inc.     2-73113      811-3219

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.


/s/ Lynne V. Cheney                      /s/ Lewis W. Lehr        
    Lynne V. Cheney                          Lewis W. Lehr

/s/ Robert F. Froehlke                   /s/ James A. Mitchell    
    Robert F. Froehlke                       James A. Mitchell

/s/ David R. Hubers                      /s/ William R. Pearce    
    David R. Hubers                          William R. Pearce

/s/ Heinz F. Hutter                      /s/ Edson W. Spencer     
    Heinz F. Hutter                          Edson W. Spencer

/s/ Anne P. Jones                        /s/ John R. Thomas       
    Anne P. Jones                            John R. Thomas

/s/ Donald M. Kendall                    /s/ Wheelock Whitney     
    Donald M. Kendall                        Wheelock Whitney

/s/ Melvin R. Laird                      /s/ C. Angus Wurtele     
    Melvin R. Laird                          C. Angus Wurtele

</TEXT>
</DOCUMENT>
</IMS-DOCUMENT>