-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mp5qtz6jdmcQBY80h/xN7F+04W1VHEnLubi62lxk3ZZ5codb9cjk84JIWh1K6v+i i4X1oNpnOwpsglwEKdlWWg== 0000820027-98-000594.txt : 19981006 0000820027-98-000594.hdr.sgml : 19981006 ACCESSION NUMBER: 0000820027-98-000594 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980731 FILED AS OF DATE: 19981005 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDS MONEY MARKET SERIES INC CENTRAL INDEX KEY: 0000049698 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 411254759 STATE OF INCORPORATION: MN FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-02591 FILM NUMBER: 98720655 BUSINESS ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: T33/52 CITY: MINNEAPLOS STATE: MN ZIP: 55440 BUSINESS PHONE: 6123722772 MAIL ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: T33/52 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 FORMER COMPANY: FORMER CONFORMED NAME: IDS CASH MANAGEMENT FUND INC DATE OF NAME CHANGE: 19920703 N-30D 1 IDS MONEY MARKET SERIES, INC. 1998 ANNUAL REPORT IDS Cash Management Fund (prospectus enclosed) (icon of) piggy bank The goal of IDS Cash Management Fund is to provide maximum current income consistent with liquidity and stability of principal. The Fund invests in money market securities. (This annual report includes a prospectus that describes in detail the Fund's objective, investment policies, risks, sales charges, fees and other matters of interest. Please read the prospectus carefully before you invest or send money.) AMERICAN EXPRESS Financial Advisors (logo) Distributed by American Express Financial Advisors Inc. (icon of) piggy bank A cache for cash Keeping a portion of your investment portfolio in a cash reserve is a cornerstone of a sound financial strategy. And a money market mutual fund that stresses stability of your investment principal and easy access when you need it is an excellent way to meet that need. That's what Cash Management Fund is all about. Contents 1998 annual report From the chairman 4 From the portfolio manager 4 Making the most of the Fund 6 Independent auditors' report 7 Financial statements 8 Notes to financial statements 11 Investments in securities 14 IDS mutual funds 18 Federal income tax information 22 1998 prospectus The Fund in brief 3p Goal 3p Investment policies and risks 3p Manager and distributor 3p Portfolio manager 3p Purchases 3p Sales charge and Fund expenses 4p Performance 6p Financial highlights 6p Yield 8p Investment policies and risks 9p Facts about investments and their risks 9p Alternative investment option 13p Valuing Fund shares 13p How to purchase, exchange or redeem shares 14p Purchases 14p How to purchase shares 16p How to exchange shares 19p How to redeem shares 21p Class B -- contingent deferred sales charge alternative 27p Waivers of the contingent deferred sales charge 28p Special shareholder services 29p Services 29p Quick telephone reference 29p Distributions and taxes 30p Dividend and capital gain distributions 30p Reinvestments 31p Taxes 32p How to determine the correct TIN 33p How the Fund is organized 34p Shares 34p Voting rights 34p Shareholder meetings 34p Board members and officers 34p Investment manager 36p Administrator and transfer agent 36p Distributor 37p About American Express Financial Corporation 38p General information 38p Year 2000 39p (icon of) One open book inside of another The purpose of this annual report is to tell investors how the Fund performed. The prospectus, which is bound into the middle of this annual report, describes the Fund in detail. (This annual report is not part of the prospectus.) To our shareholders From the chairman If you're an experienced investor, you know that the past few years have been unusually strong in many financial markets. Perhaps just as important, history shows that bull markets don't last forever. Though they're often unpredictable, declines -- whether they're brief or long-lasting, moderate or substantial -- are always a possibility. We saw evidence of that last October, when declines in Asian markets spawned a sharp drop in several financial markets worldwide, including the U.S. The potential for such volatility reinforces the need for investors to review periodically their long-term goals and examine whether their investment program remains on track to achieving them. Your quarterly investment statements are one part of that monitoring process. The other is a meeting with your American Express financial advisor. That becomes even more important if there's a major change in your financial situation or in the financial markets. William R. Pearce (picture of) William R. Pearce William R. Pearce Chairman of the board From the portfolio manager IDS Cash Management Fund's yield was little changed during the past fiscal year -- August 1997 through July 1998 -- reflecting generally stable short-term interest rates. For the seven-day period ended July 31, 1998, the Fund's compound annualized yield was 5.10%, and the simple annualized yield was 4.98%. In keeping with its objective, the Fund maintained a $1 per share price throughout the 12 months. (Although the Fund seeks to maintain a stable $1 per share price, there is no assurance that it will be able to do so. An investment in the fund is neither insured nor guaranteed by the U.S. government.) With inflation remaining remarkably subdued and the economy showing no signs of either overheating or falling into recession, the Federal Reserve Board -- or, simply, the Fed -- decided to leave short-term interest rates unchanged during the 12 months. Concern about the possibility of higher inflation was further eased by the financial crisis in Asia, which many observers believed would (This annual report is not part of the prospectus.) ultimately restrain U.S. economic growth and, thus, temper a potential increase in consumer prices. (By way of background, the Fed adjusts short-term interest rates based on the condition of the economy and the inflation outlook. When the economy appears weak and inflation is low, the Fed usually lowers rates to stimulate economic growth. When the economy is strong, the Fed usually raises rates to reign in economic growth and thereby keep inflation in check.) Short maturity For the most part, I kept the average maturity of the Fund's investments somewhat shorter than normal. This strategy reflected my belief that interest rates were more likely to rise than fall, and a shorter maturity would make it easier to add new, higher-yielding securities. (The longer the Fund's average maturity, the longer it takes the Fund's yield to reflect a change in interest rates.) In addition, I found the yield advantage provided by longer-term issues too slight to warrant extending the portfolio's average maturity. As always, the entire portfolio remained invested in first-rated commercial paper, bank letters of credit and certificates of deposit. As we begin a new fiscal year, it appears that our economy is weathering the negative effects of the economic turmoil in Asia relatively well. In fact, I think it's possible that economic growth could pick up before the year is out, putting upward pressure on inflation. If so, the Federal Reserve may decide to nudge up short-term interest rates, which would probably result in a modestly higher yield for the Fund. Terry Fettig (picture of) Terry Fettig Terry Fettig Portfolio manager (This annual report is not part of the prospectus.) Class A 12-month performance (All figures per share) Net asset value (NAV) July 31, 1998 $1.00 July 31, 1997 $1.00 Increase $ -- Distributions Aug. 1, 1997 - July 31, 1998 From income $0.05 From capital gains $ -- Total distributions $0.05 Total return* +5.3%** Class B 12-month performance (All figures per share) Net asset value (NAV) July 31, 1998 $1.00 July 31, 1997 $1.00 Increase $ -- Distributions Aug. 1, 1997 - July 31, 1998 From income $0.04 From capital gains $ -- Total distributions $0.04 Total return* +4.5%** Class Y 12-month performance (All figures per share) Net asset value (NAV) July 31, 1998 $1.00 July 31, 1997 $1.00 Increase $ -- Distributions Aug. 1, 1997 - July 31, 1998 From income $0.05 From capital gains $ -- Total distributions $0.05 Total return* +5.3%** *The prospectus discusses the effect of sales charges, if any, on the various classes. **The total return is a hypothetical investment in the Fund with all distributions reinvested. (This annual report is not part of the prospectus.) Making the most of the Fund Average annual total return (as of July 31, 1998) 1 year Since 5 years 10 years inception* Class A +5.34% --% +4.62% +5.24% Class B +0.53% +3.71% --% --% Class Y +5.33% +5.31% --% --% * Inception date was March 20, 1995. The performance of Class B and Class Y will vary from the performance of Class A based on differences in sales charges and fees. Your investment and return values fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Figures for Class B reflect the impact of the applicable sales charge up to a maximum of 5%. This was a period of widely fluctuating security prices. Past performance is no guarantee of future results. (This annual report is not part of the prospectus.) The financial statements contained in Post-Effective Amendment #48 to Registration Statement No. 2-54516 filed on or about September 28, 1998, are incorporated herein by reference. IDS mutual funds Global/International funds Funds in this group seek capital growth and/or income by investing primarily in foreign securities. Foreign investments may be subject to currency fluctuations and political and economic risks of the countries in which the investments are made. They are high risk mutual funds with a potential for high reward. IDS Emerging Markets Fund Invests in a Portfolio comprised primarily of stocks of companies in developing countries throughout the world that are believed to offer growth potential. Seeks to provide long-term growth of capital. (icon of) world with countries IDS Global Growth Fund Invests in a Portfolio comprised primarily of stocks of companies throughout the world that are positioned to meet market needs in a changing world economy. These companies offer above-average potential for long-term growth. (icon of) world IDS International Fund Invests primarily in common stocks of foreign companies that offer potential for superior growth. The Fund may invest up to 20% of its assets in the U.S. market. (icon of) three flags IDS Global Balanced Fund Invests in stocks and bonds in, for the most part, major markets throughout the world, including the U.S. Seeks to provide a balance of growth of capital and current income. (icon of) scale of globes IDS Global Bond Fund Invests in a Portfolio comprised primarily of debt securities of U.S. and foreign issuers to seek high total return through income and growth of capital. (icon of) globe Growth funds Funds in this group seek capital growth, primarily from common stocks. They are high risk mutual funds with a potential for high reward. IDS Precious Metals Fund Invests primarily in the securities of foreign or domestic companies that explore for, mine and process or distribute gold and other precious metals. A highly aggressive and speculative fund that seeks long-term growth of capital. (icon of) cart of precious gems IDS Discovery Fund Invests in small- and medium-size, growth-oriented companies emphasizing technological innovation and productivity enhancement. Buys and holds larger growth-oriented stocks. (icon of) ship IDS Small Company Index Fund Invests in all or a representative group of the equity securities comprising the S&P SmallCap 600 Index, as it strives to provide long-term capital appreciation. (icon of) building IDS Strategy Aggressive Fund Invests primarily in common stocks of companies that are selected for their potential for above-average growth. Above-average means that their growth potential is better, in the opinion of the portfolio's investment manager, than the S&P 500 Stock Index. (icon of) chess piece IDS Research Opportunities Fund Invests in a Portfolio comprised primarily of equity securities of companies included in the S&P 500 Stock Index that are believed to have strong growth potential. The Portfolio is managed using a research methodology by the Research Department of AEFC. Goal is long-term appreciation. (icon of) magnifying glass (This annual report is not part of the prospectus.) IDS Growth Fund Invests in a Portfolio comprised primarily of companies that have above-average potential for long-term growth as a result of new management, marketing opportunities or technological superiority. (icon of) trees IDS New Dimensions Fund Invests in a Portfolio comprised primarily of companies with significant growth potential due to superiority in technology, marketing or management. The Fund frequently changes its industry mix. (icon of) dimension IDS Progressive Fund Invests primarily in undervalued common stocks. The Fund holds stocks for the long term with the goal of capital growth. (icon of) shooting star Growth & income funds These funds focus on securities of medium to large, well-established companies that offer long-term growth of capital and reasonable income from dividends and interest. Foreign investments may be subject to currency fluctuations and political and economic risks of the countries in which the investments are made. IDS Equity Select Fund Invests primarily in a combination of moderate growth stocks that generaly pay dividends and bonds. Seeks growth of capital and income. (icon of) three pine trees IDS Blue Chip Advantage Fund Invests in selected stocks from a major market index. Securities purchased are those recommended by our research analysts as the best from each industry represented on the index. Offers potential for long-term growth as well as dividend income. (icon of) ribbon IDS Managed Allocation Fund Invests in a Portfolio comprised primarily of U.S. equity securities, U.S. and foreign debt securities, foreign equity securities and money market instruments. The Fund provides diversification among these major investment categories and has a target mix that represents the way the Fund's investments will be allocated over the long term. Seeks maximum total return. (icon of) gyroscope IDS Stock Fund Invests in a Portfolio comprised primarily of common stock of companies representing many sectors of the economy. Seeks current income and growth of capital. (icon of) building with columns IDS Equity Value Fund Invests primarily in undervalued common stocks that offer potential for growth of capital and income. (icon of) three growing flowers IDS Utilities Income Fund Invests primarily in the stocks of public utility companies to seek high current income and growth of income and capital with reduced volatility. (icon of) light bulb IDS Diversified Equity Income Fund Invests in a Portfolio comprised primarily in high-yielding common stocks to seek high current income and, secondarily, to benefit from the growth potential offered by stock investments. (icon of) two puzzle pieces IDS Mutual Invests in a Portfolio that seeks to balance between common stocks and senior securities (preferred stocks and bonds). Seeks a balance of growth of capital and current income. (icon of) scale of justice (This annual report is not part of the prospectus.) IDS mutual funds Income funds The funds in this group invest their assets primarily in corporate bonds or government securities to seek interest income. Secondary objective is capital growth. Risk varies by bond quality. IDS Extra Income Fund Invests in a Portfolio comprised mainly of long-term, high-yielding corporate fixed-income securities in the lower rated, higher risk bond categories to seek high current income. Secondary objective is capital growth. (icon of) two coins IDS Bond Fund Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk bond categories, or the equivalent, and in government bonds. (icon of) Greek column IDS Selective Fund Invests in a Portfolio comprised primarily of high-quality corporate bonds and other highly rated debt instruments including government securities and short-term investments. Seeks current income and preservation of capital. (icon of) skyline IDS Federal Income Fund Invests in a Portfolio comprised primarily of securities issued or guaranteed as to the timely payment of principal and interest by the U.S. government, its agencies and instrumentalities. Seeks a high level of current income and safety of principal consistent with its type of investments. (icon of) shield with eagle head Tax-exempt income funds These funds provide tax-free income by investing in municipal bonds. The income is generally free from federal income tax, but a portion of the income may be subject to state and local taxes. Risk varies by bond quality. IDS Tax-Exempt Bond Fund Invests mainly in bonds and notes of state or local government units, with at least 75% in the four highest rated, lowest risk bond categories. (icon of) shield with Greek column IDS Insured Tax-Exempt Fund Invests primarily in municipal securities that are insured as to the timely payment of principal and interest. The insurance feature minimizes credit risk of the Fund but does not guarantee the market value of the Fund's shares. (icon of) shield with star IDS State Tax-Exempt Funds (CA, MA, MI, MN, NY, OH) Invests primarily in high- and medium-grade municipal securities to provide income to residents of each respective state that is exempt from federal, state and local income taxes. (New York is the only state that is exempt at the local level.) (icon of) shield with U.S. enclosed IDS High Yield Tax-Exempt Fund Invests in a Portfolio comprised primarily of medium- and lower-quality municipal bonds and notes. Lower-quality securities generally involve greater risk of principal and income. (icon of) shield with basket of apples enclosed IDS Intermediate Tax-Exempt Fund Invests in mainly investment-grade bonds and other debt securities with intermediate-term maturities issued by state and local government units. Goal is to seek a high level of current income exempt from federal taxes. (icon of) shield with tree enclosed (This annual report is not part of the prospectus.) Money market funds These money market funds have three main goals: conservation of capital, constant liquidity and the highest possible current income consistent with these objectives. An investment in these funds is neither insured nor guaranteed by the U.S. government, and there can be no assurance that these funds will be able to maintain a stable net asset value of $1.00 per share. Very limited risk. IDS Cash Management Fund Invests in such money market securities as high quality commercial paper, bankers' acceptances, certificates of deposit (CDs) and other bank securities. (icon of) piggy bank IDS Tax-Free Money Fund Invests primarily in short-term bonds and notes issued by state and local governments to seek high current income exempt from federal income taxes. (icon of) shield with piggy bank enclosed For more complete information about any of these funds, including charges and expenses, you can obtain a prospectus by contacting your financial advisor or writing to American Express Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534. Read it carefully before you invest or send money. (This annual report is not part of the prospectus.) Federal income tax information IDS Cash Management Fund The Fund is required by the Internal Revenue Code of 1986 to tell its shareholders about the tax treatment of the dividends it pays during its fiscal year. Some of the dividends listed below were reported to you on a Form 1099-DIV, Dividends and Distributions, last January. Dividends paid to you since the end of last year will be reported to you on a tax statement sent next January. Shareholders should consult a tax advisor on how to report distributions for state and local purposes. IDS Cash Management Fund Fiscal year ended July 31, 1998 Class A Income distributions taxable as dividend income, none qualifying for deduction by corporations. Payable date Per share Aug. 28, 1997 $0.00465 Sept. 26, 1997 0.00411 Oct. 29, 1997 0.00468 Nov. 26, 1997 0.00404 Dec. 26, 1997 0.00425 Jan. 29, 1998 0.00511 Feb. 27, 1998 0.00405 March 27, 1998 0.00389 April 29, 1998 0.00469 May 28, 1998 0.00404 June 26, 1998 0.00403 July 29, 1998 0.00458 Total distributions $0.05212 (This annual report is not part of the prospectus.) Class B Income distributions taxable as dividend income, none qualifying for deduction by corporations. Payable date Per share Aug. 28, 1997 $0.00396 Sept. 26, 1997 0.00350 Oct. 29, 1997 0.00399 Nov. 26, 1997 0.00346 Dec. 26, 1997 0.00364 Jan. 29, 1998 0.00438 Feb. 27, 1998 0.00345 March 27, 1998 0.00330 April 29, 1998 0.00400 May 28, 1998 0.00343 June 26, 1998 0.00342 July 29, 1998 0.00389 Total distributions $0.04442 Class Y Income distributions taxable as dividend income, none qualifying for deduction by corporations. Payable date Per share Aug. 28, 1997 $0.00464 Sept. 26, 1997 0.00411 Oct. 29, 1997 0.00467 Nov. 26, 1997 0.00404 Dec. 26, 1997 0.00425 Jan. 29, 1998 0.00511 Feb. 27, 1998 0.00405 March 27, 1998 0.00388 April 29, 1998 0.00469 May 28, 1998 0.00404 June 26, 1998 0.00402 July 29, 1998 0.00458 Total distributions $0.05208 (This annual report is not part of the prospectus.) Quick telephone reference* American Express Redemptions and exchanges, National/Minnesota Financial Advisors dividend payments or 800-437-3133 Telephone Transaction reinvestments and automatic Service payment arrangements Mpls./St. Paul area: 671-3800 TTY Service For the hearing impaired 800-846-4852 American Express Automated account information 800-862-7919 Financial Advisors (TouchTone(R) phones only), Easy Access Line including current fund prices and performance, account values and recent account transactions *You may experience delays when call volumes are high. AMERICAN EXPRESS Financial Advisors (logo) IDS Cash Management Fund IDS Tower 10 Minneapolis, MN 55440-0010 STATEMENT OF DIFFERENCES Difference Description 1) The layout is different 1) Some of the layout in the throughout the annual report. annual report to shareholders is in two columns. 2) Headings. 2) The headings in the annual report are placed in a blue strip at the top of the page. 3) There are pictures, icons 3) Each picture, icon and and graphs throughout the graph is described in annual report. parentheses. 4) Footnotes for charts and 4) The footnotes for each graphs are described at chart or graph are typed the left margin. below the description of the chart or graph. -----END PRIVACY-ENHANCED MESSAGE-----