-----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, McWnRYARoKfQtKiy3ywJkefSF5t6JZWRFkf3NP1abO54P+tJLXE/ZLEu1EPgVslX 2kBTbnBgv2dynZjr4XijXw== 0000820027-95-000488.txt : 19951004 0000820027-95-000488.hdr.sgml : 19951004 ACCESSION NUMBER: 0000820027-95-000488 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950731 FILED AS OF DATE: 19951002 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: 1940 Act SEC FILE NUMBER: 811-02591 FILM NUMBER: 95577965 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 CASH MANAGEMENT FUND PAGE 1 IDS Cash Management Fund 1995 annual report (prospectus enclosed) (Icon of) piggy bank The goal of Cash Management Fund, a part of IDS Money Market Series, Inc., 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.) Distributed by American Express Financial Advisors Inc. PAGE 2 A cache for cash (Icon of) piggy bank Keeping a portion of your investment portfolio in a cash reserve is a cornerstome of a sound financial strategy. And a money market mutual fund that stressese 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. For you, that translates into peace of mind, plus a competitive return on your money. PAGE 3 Contents (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. 1995 annual report From the president 4 From the portfolio manager 4 Making the most of your fund 6 Independent auditors' report 7 Financial statements 8 Notes to financial statements 11 Investments in securities 15 IDS mutual funds 20 Federal income tax information 23 1995 prospectus The fund in brief Goal 3p Types of fund investments 3p Manager and distributor 3p Portfolio manager 3p Alternative sales arrangements 3p Sales charge and fund expenses 4p Performance Financial highlights 6p Yield 7p Key terms 8p Investment policies and risks Facts about investments and their risks 9p Alternative investment option 10p Valuing assets 10p How to buy, exchange or sell shares Alternatie sales arrangements 11p How to buy shares 13p How to exchange shares 16p How to sell shares 16p Class B - contingent deferred sales charge alternative 21p Waivers of the sales charge for Class B shares 22p Special shareholder services Services 23p Quick telephone reference 23p PAGE 4 Distributions and taxes Dividend and capital gain distributions 24p Reinvestments 24p Taxes 24p How the fund is organized Shares 27p Voting rights 27p Shareholder meetings 27p Directors and officers 27p Investment manager and transfer agent 29p Distributor 30p About American Express Financial Corporation General information 31p PAGE 5 To our shareholders (Photo of) William R. Pearce President of the fund (Photo of) Terry Fettig Portfolio manager From the president As I indicated in the fund's previous reports, new agreements between the fund and American Express Financial Corporation were approved by shareholders in November 1994. The new agreements became effective when the fund began offering multiple classes of shares on March 20, 1995. The advantage of offering more than a single class of shares is that investors may choose how they wish to pay sales charges. A portion of these charges compensates your American Express financial advisor (formerly called your IDS planner), who is committed to providing you with outstanding services. Adding new classes of mutual find shares does make the presentation of financial information in this report more complex. However, we will continue our effort to make the reports easier to read and understand. Meanwhile, your American Express financial advisor is available to answer your questions. William R. Pearce From the portfolio manager Ongoing economic growth fostered increases in short-term interest rates during most of IDS Cash Management Fund's fiscal year (august 1994 through July 1995). Consistent with that trend, the fund's yield also increased. For the seven-day period ended July 31, 1995, the fund's compound annualized yield was 5.33% for Class A and Class Y and 4.55% for Class B, and the simple annualized yield was 5.19% for Class A and Class Y shares and 4.44% for Class B. In keeping with its objective, the fund maintained a stable $1 per share price throughout the 12-month period. A long run The rise in short-term interest rates actually began in February 1994, when the Federal Reserve Board started raising rates with the intention of slowing down the economy and, therefore, preventing an increase in the rate of inflation. (The Fed adjusts short-term 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 the economy. When the economy appears to be expanding rapidly, the Fed usually pushes up short-term interest rates to try to moderate economic growth and keep inflation in check.) The Fed's efforts led to higher rates on the securities in which the fund invests and, ultimately, to a higher fund yield. Trend reverses PAGE 6 The trend came to an end in January of this year, when the Fed implemented its last rate hike. At that point, short-term interest rates leveled off and subsequently marked time until July, when the Fed, given evidence of slower economic growth and unthreatening inflation news, reversed policy and pushed rates down slightly. Because this fund's top priority is to provide a stable cash investment for shareholders, I maintained my conservative portfolio-management approach throughout the past fiscal year. This means an exclusive focus on high-grade securities and only subtle shifts in portfolio structure. As we enter a new fiscal year, I expect the economy will continue to expand at a modest pace in the months ahead while inflation remains largely in check. In such a scenario, I think it's probably that the Fed will either take a hands-off approach regarding short-term rates or nudge them down a bit more. Should that prove true, the fund's current yield would stay essentially the same or decline only slightly reflecting the marketplace. Terry Fettig Class A 12-month performance (All figures per share) Net asset value (NAV) July 31, 1995 $1.00 July 31, 1994 $1.00 Increase $ -- Distributions Aug. 1, 1994-July 31, 1995 From income $0.049 From capital gains $ -- Total distributions $0.049 Total return** +5.0%*** Class B March 20, 1995-July 31, 1995 (All figures per share) Net asset value (NAV) July 31, 1995 $1.00 March 20, 1995* $1.00 Increase $ -- Distributions March 20, 1995*-July 31, 1995 From income $0.020 From capital gains $ -- Total distributions $0.020 Total return** +2.0%*** PAGE 7 Class Y March 20, 1995-July 31, 1995 (All figures per share) Net asset value (NAV) July 31, 1995 $1.00 March 20, 1995* $1.00 Increase $ -- Distributions March 20, 1995*-July 31, 1995 From income $0.023 From capital gains $ -- Total distributions $0.023 Total return** +2.3%*** * Inception date. ** The prospectus discusses the effects of sales charges, if any, on the various classes. ***The total return is a hypothetical investment in the fund with all distributions reinvested. PAGE 8 Making the most of your fund Average annual total return (as of July 31, 1995) Class A 1 year 5 years 10 years +5.02% +4.09% +5.65% Total returns for Class A, Class B and Class Y for the period from March 20, 1995 to July 31, 1995 were 2.29%, 2.00% and 2.30%, respectively. March 20, 1995 was the inception date for Class B and Class Y. Total return for Class A is shown for comparative purposes. The performance of Class B 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. This was a period of widely fluctuating security prices. Past performance is no guarantee of future results. PAGE 9 Independent auditors' report The board of directors and shareholders IDS Money Market Series, Inc.: We have audited the accompanying statement of assets and liabilities, including the schedule of investments in securities, of IDS Cash Management Fund (a series of IDS Money Market Series, Inc.) as of July 31, 1995, and the related statement of operations for the year then ended and the statements of changes in net assets for each of the years in the two-year period ended July 31, 1995, and the financial highlights for each of the years in the ten-year period ended July 31, 1995. These financial statements and the financial highlights are the responsibility of fund management. Our responsibility is to express an opinion on these financial statements and the financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Investment securities held in custody are confirmed to us by the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of IDS Cash Management Fund at July 31, 1995, and the results of its operations for the year then ended and the changes in its net assets for each of the years in the two-year period ended July 31, 1995, and the financial highlights for the periods stated in the first paragraph above, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Minneapolis, Minnesota September 1, 1995 PAGE 10
Statement of assets and liabilities IDS Cash Management Fund July 31, 1995 ______________________________________________________________________________________________________________ Assets ______________________________________________________________________________________________________________ Investments in securities, at value (Note 1) (identified cost $1,878,400,128) $1,878,400,128 Cash in bank on demand deposit 12,633,483 Accrued interest receivable 1,713,651 _____________________________________________________________________________________________________________ Total assets 1,892,747,262 _____________________________________________________________________________________________________________ Liabilities ____________________________________________________________________________________________________________ Dividends payable to shareholders 1,298,290 Accrued investment management services fee 60,990 Accrued distribution fees 7,703 Accrued transfer agency fee 44,415 Accrued administrative services fee 5,765 Other accrued expenses 208,920 _____________________________________________________________________________________________________________ Total liabilities 1,626,083 _____________________________________________________________________________________________________________ Net assets applicable to outstanding capital stock $1,891,121,179 _____________________________________________________________________________________________________________ Represented by _____________________________________________________________________________________________________________ Capital stock -- authorized 10,000,000,000 shares of $.01 par value; $ 18,911,988 Additional paid-in capital 1,872,239,395 Undistributed net investment income 948 Accumulated net realized loss (30,152) _____________________________________________________________________________________________________________ Total -- representing net assets applicable to outstanding capital stock $1,891,121,179 _____________________________________________________________________________________________________________ Net assets applicable to outstanding shares: Class A $1,707,277,685 Class B $ 98,045,864 Class Y $ 85,797,630 Net asset value per share of outstanding capital stock: Class A shares 1,707,346,677 $ 1.00 Class B shares 98,048,196 $ 1.00 Class Y shares 85,803,933 $ 1.00 See accompanying notes to financial statements. PAGE 11 Financial statements Statement of operations IDS Cash Management Fund Year ended July 31, 1995 _____________________________________________________________________________________________________________ Investment income _____________________________________________________________________________________________________________ Income: Interest $84,566,077 _____________________________________________________________________________________________________________ Expenses (Note 2): Investment management services fee 4,733,219 Distribution fee Class A 735,343 Class B 138,187 Transfer agency fee 4,013,453 Incremental transfer agency fee - Class B 1,160 Administrative services fee 177,389 Compensation of directors 1,936 Compensation of officers 13,350 Custodian fees 95,284 Postage 441,455 Registration fees 211,631 Reports to shareholders 190,141 Audit fees 31,250 Administrative 10,841 Other 5,798 _____________________________________________________________________________________________________________ Total expenses 10,800,437 _____________________________________________________________________________________________________________ Investment income -- net 73,765,640 _____________________________________________________________________________________________________________ Realized gain -- net _____________________________________________________________________________________________________________ Net realized gain (Note 3) 755 _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations $73,766,395 _____________________________________________________________________________________________________________ See accompanying notes to financial statements. /TABLE PAGE 12
Financial statements Statements of changes in net assets IDS Cash Management Fund Year ended July 31, _____________________________________________________________________________________________________________ Operations and distributions 1995 1994 _____________________________________________________________________________________________________________ Investment income -- net $ 73,765,640 $ 27,818,919 Net realized gain 755 6,546 _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations 73,766,395 27,825,465 _____________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income Class A (71,448,349) (27,818,831) Class B (871,329) -- Class Y (1,445,224) -- _____________________________________________________________________________________________________________ Total distributions (73,764,902) (27,818,831) _____________________________________________________________________________________________________________ Capital share transactions at constant $1 net asset value _____________________________________________________________________________________________________________ Proceeds from sales Class A shares 5,083,998,091 3,450,597,013 Class B shares 145,099,672 -- Class Y shares 149,989,216 -- Fund merger (Note 4) Class A shares 12,051,967 -- Reinvestment of distributions at net asset value Class A shares 68,543,809 26,872,301 Class B shares 804,519 -- Class Y shares 1,211,841 -- Payments for redemptions Class A shares (4,610,927,088) (3,376,885,865) Class B shares (Note 2) (47,855,995) -- Class Y shares (65,397,125) -- _____________________________________________________________________________________________________________ Increase in net assets from capital share transactions 737,518,907 100,583,449 _____________________________________________________________________________________________________________ Total increase in net assets 737,520,400 100,590,083 Net assets at beginning of year 1,153,600,779 1,053,010,696 _____________________________________________________________________________________________________________ Net assets at end of year (including undistributed net investment income of $948 and $210) $1,891,121,179 $1,153,600,779 _____________________________________________________________________________________________________________ See accompanying notes to financial statements.
PAGE 13 Notes to Financial Statements IDS Cash Management Fund ___________________________________________________________________ 1. Summary of significant accounting policies The fund is a series of IDS Money Market Series, Inc. and is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. The fund offers Class A, Class B and Class Y shares. Class A shares have no sales charge. Class B shares, which the fund began offering on March 20, 1995, may be subject to a contingent deferred sales charge and such shares automatically convert to Class A after eight years. Class Y shares, which the fund also began offering on March 20, 1995, have no sales charge and are offered only to qualifying institutional investors. All classes of shares have identical voting, dividend, liquidation and other rights, and the same terms and conditions, except that the level of distribution fee and transfer agent fee (class specific expenses) differs among classes. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses on investments are allocated to each class of shares based upon its relative net assets. Significant accounting policies followed by the fund are summarized below: Valuation of securities Pursuant to Rule 2a-7 of the 1940 Act, all securities are valued daily at amortized cost, which approximates market value, in order to maintain a constant net asset value of $1 per share. Federal taxes Since the fund's policy is to comply with all sections of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders, no provision for income or excise taxes is required. Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the fund. On the statement of assets and liabilities, as a result of permanent book-to-tax differences, additional paid-in-capital and accumulated net realized loss have been increased by $978. Dividends to shareholders PAGE 14 Dividends from net investment income, declared daily and payable monthly, are reinvested in additional shares of the fund at net asset value or payable in cash. Other Security transactions are accounted for on the date securities are purchased or sold. Interest income, including amortization of premium and discount, is accrued daily. ___________________________________________________________________ 2. Expenses and sales charges Under terms of a prior agreement that ended March 19, 1995, the fund paid AEFC a fee for managing its investments, recordkeeping and other specified services. The fee was a percentage of the fund's average daily net assets consisting of a group asset charge in reducing percentages from 0.34% to 0.26% annually. Also under terms of a prior agreement, the fund paid AEFC a distribution fee at an annual rate of $6 per shareholder account and a transfer agency fee at an annual rate of $20 per shareholder account. The transfer agency fee was reduced by earnings on monies pending shareholder redemptions. Effective March 20, 1995, when the fund began offering multiple classes of shares, the fund entered into agreements with AEFC for managing it's portfolio, providing administrative services and serving as transfer agent as follows: Under its Investment Management Services Agreement, AEFC determines which securities will be purchased, held or sold. The management fee is a percentage of the fund's average daily net assets in reducing percentages from 0.31% to 0.24% annually. Under an Administrative Services Agreement, the fund pays AEFC for administration and accounting services at a percentage of the fund's average daily net assets in reducing percentages from 0.03% to 0.02% annually. Under a separate Transfer Agency Agreement, AEFC maintains shareholder accounts and records. The fund pays AEFC an annual fee per shareholder account for this service as follows: o Class A $20 o Class B $21 o Class Y $20 Also effective March 20, 1995, the fund entered into agreements with American Express Financial Advisors Inc. for distribution and shareholder servicing-related services as follows: Under a Plan and Agreement of Distribution, the fund pays a distribution fee at an annual rate of 0.75% of the fund's average daily net assets attributable to Class B shares for distribution-related services. AEFC will assume and pay any expenses (except taxes and brokerage commissions) that exceed the most restrictive applicable state expense limitation. Sales charges by American Express Financial Advisors Inc. for distributing Class B shares were $83,274 for the year ended July 31, 1995. PAGE 15 The fund has a retirement plan for its independent directors. Upon retirement, directors receive monthly payments equal to one-half of the retainer fee for as many months as they served as directors up to 120 months. There are no death benefits. The plan is not funded but the fund recognizes the cost of payments during the time the directors serve on the board. The retirement plan expense amounted to $4,593 for the year ended July 31, 1995. ___________________________________________________________________ 3. Securities transactions Cost of purchases and proceeds from sales of securities aggregated $11,090,712,483 and $10,366,394,110, respectively, for the year ended July 31, 1995. Realized gains and losses are determined on an identified cost basis. ___________________________________________________________________ 4.Effective with the close of business on Nov. 18, 1994, IDS Planned Investment Account was acquired by IDS Cash Management Fund. The merger was accomplished by a tax free exchange of 12,051,967 shares of the IDS Cash Management Fund with a net asset value of $1 per share for net assets of $12,051,967 from the IDS Planned Investment Account. 5. Financial highlights "Financial highlights" showing per share data and selected information is presented on page 6 of the prospectus. PAGE 16
Investments in securities IDS Cash Management Fund (Percentages represent value of July 31, 1995 investments compared to net assets) _____________________________________________________________________________________________________________________________ Issuer Annualized Amount Value(a) yield on payable at date of maturity purchase _____________________________________________________________________________________________________________________________ Certificates of deposit (5.2%) Domestic (0.8%) NationsBank North Carolina 09-12-95 5.75% $ 7,000,000 $ 7,000,000 NBD Bank Domestic 09-29-95 5.70 8,200,000 8,200,000 _____________ Total 15,200,000 ____________________________________________________________________________________________________________________________ Eurodollar (4.4%) Banque Paribas Yankee 08-01-95 6.19 24,000,000 24,000,000 Canadian Imperial Bank Yankee 08-01-95 5.90 12,000,000 12,000,000 09-05-95 5.89 7,000,000 7,000,389 04-04-96 6.37 10,000,000 10,018,994 06-03-96 6.40 10,000,000 10,000,000 Societe Generale Yankee 06-13-96 6.30 10,000,000 10,000,000 07-22-96 6.05 10,000,000 10,000,000 _____________ Total 83,019,383 _____________________________________________________________________________________________________________________________ Total certificates of deposit (Cost: $98,219,383) 98,219,383 _____________________________________________________________________________________________________________________________ Commercial paper (69.2%) Banks and savings & loans (13.9%) ABN AMRO Canada 08-28-95 5.79 9,000,000 8,961,120 ABN AMRO North Amer Finance 10-13-95 5.71 15,000,000 14,828,754 10-13-95 5.73 27,000,000 26,690,662 Bank New York Delaware 06-03-96 6.32 5,000,000 5,000,000 Bank One Milwaukee 09-19-95 5.74 7,100,000 7,100,000 Banque Paribas Canada 08-08-95 5.97 16,000,000 15,981,520 Ciesco LP 08-25-95 5.74 5,400,000 5,379,480 09-08-95 5.76 10,980,000 10,913,705 09-14-95 5.76 10,400,000 10,327,292 09-14-95 5.92 10,900,000 10,822,331 09-21-95 5.92 12,000,000 11,900,890 Deutsche Bank Financial 09-11-95 5.74 15,000,000 14,902,967 Dresdner US Finance 09-06-95 5.84 12,000,000 11,931,000 See accompanying notes to investments in securities. PAGE 17 First Chicago 02-16-96 5.79 10,000,000 (c) 9,996,994 Fleet Funding 08-10-95 6.02 12,200,000 (b) 12,181,761 08-11-95 5.78 1,800,000 (b) 1,797,125 08-29-95 5.77 619,000 (b) 616,241 09-08-95 5.77 15,000,000 (b) 14,909,275 Kredietbank North Amer Finance 08-25-95 6.22 5,000,000 4,979,733 Natl Australia Funding Delaware 10-05-95 5.70 15,000,000 14,847,792 10-05-95 5.71 15,000,000 14,847,521 Societe Generale North Amer 08-25-95 5.93 5,500,000 5,478,477 08-25-95 5.94 8,100,000 8,068,248 Wachovia Bank 08-02-95 5.98 20,000,000 20,000,000 _____________ Total 262,462,888 _____________________________________________________________________________________________________________________________ Beverages & tobacco (0.6%) Coca-Cola 08-03-95 6.01 11,500,000 11,496,218 _____________________________________________________________________________________________________________________________ Broker dealers (7.4%) Goldman Sachs Group LP 08-01-95 6.63 10,000,000 10,000,000 09-12-95 5.99 15,000,000 14,896,750 09-15-95 5.97 22,000,000 21,838,575 10-18-95 5.76 25,000,000 24,692,333 Merrill Lynch 08-02-95 6.00 10,400,000 10,398,278 08-04-95 5.99 300,000 299,851 08-17-95 5.99 8,000,000 7,978,844 08-24-95 6.18 9,000,000 8,965,213 08-25-95 5.78 11,000,000 10,957,833 09-14-95 5.75 20,000,000 19,860,667 01-26-96 5.87 10,000,000 (c) 10,000,000 _____________ Total 139,888,344 ______________________________________________________________________________________________________________________________ Building materials (0.4%) Illinois Tool Works 08-29-95 5.76 7,600,000 7,566,129 _____________________________________________________________________________________________________________________________ Commercial finance (1.7%) PACCAR Financial 08-16-95 5.76 10,000,000 9,976,125 USL Capital 08-24-95 5.77 2,300,000 2,291,580 09-07-95 5.76 9,755,000 9,697,651 09-08-95 5.79 10,000,000 9,939,306 _____________ Total 31,904,662 _____________________________________________________________________________________________________________________________ Consumer finance - personal loans (3.8%) Avco Financial 08-07-95 5.99 10,607,000 10,596,499 08-28-95 5.77 17,000,000 16,926,815 Household Finance 08-01-95 5.99 10,000,000 10,000,000 08-07-95 5.99 15,000,000 14,985,125 08-30-95 5.76 10,200,000 10,153,001 09-08-95 5.77 10,000,000 9,939,517 _____________ Total 72,600,957 ______________________________________________________________________________________________________________________________ Electronics (0.7%) Siemens 08-24-95 5.77 5,800,000 5,778,730 09-13-95 5.77 6,600,000 6,554,829 _____________ Total 12,333,559 PAGE 18 _____________________________________________________________________________________________________________________________ Energy (1.7%) Alabama Power 08-25-95 5.76 7,000,000 6,973,260 Chevron Transport 09-06-95 5.79 15,000,000 (b) 14,913,900 09-07-95 5.78 9,600,000 (b) 9,543,365 _____________ Total 31,430,525 _____________________________________________________________________________________________________________________________ Financial services (13.3%) A.I. Credit 08-28-95 5.76 16,600,000 16,528,786 Amer General 08-17-95 5.96 11,000,000 10,971,058 09-12-95 5.77 12,800,000 (b) 12,714,432 Associates North Amer 08-15-95 5.99 9,600,000 9,577,787 08-23-95 5.76 13,200,000 13,153,859 Beneficial 09-05-95 5.78 10,000,000 9,944,194 01-23-96 5.84 10,000,000 (c) 10,000,000 CIT Group Holdings 08-11-95 5.99 17,800,000 17,770,581 08-15-95 5.98 8,000,000 7,981,520 09-06-95 5.79 12,600,000 12,527,550 Commercial Credit 08-03-95 5.95 19,500,000 19,493,554 Corporate Asset Funding 08-04-95 5.96 4,800,000 (b) 4,797,612 08-11-95 5.98 15,000,000 (b) 14,975,291 09-22-95 5.76 7,000,000 (b) 6,942,367 10-10-95 5.73 10,000,000 9,890,139 General Electric Capital 10-10-95 5.70 15,000,000 14,836,083 10-16-95 5.73 6,000,000 5,928,560 05-06-96 6.39 10,000,000 10,000,000 General Electric Capital Services 08-22-95 5.78 5,200,000 5,182,558 Toyota Motor Credit 08-02-95 5.98 8,000,000 7,998,680 Transamerica Financial 08-18-95 5.76 13,100,000 13,064,554 08-25-95 5.76 5,500,000 5,478,990 USAA Capital 09-22-95 5.73 6,200,000 6,149,222 09-28-95 5.73 6,600,000 6,539,709 _____________ Total 252,447,086 _____________________________________________________________________________________________________________________________ Food (2.6%) Cargill Financial Markets 08-16-95 5.76 14,500,000 (b) 14,465,381 Cargill Global Funding 08-29-95 5.93 5,800,000 (b) 5,773,520 CPC Intl 08-30-95 5.76 4,725,000 4,703,190 09-25-95 5.96 20,000,000 (b) 19,820,639 PepsiCo 08-18-95 5.97 4,400,000 4,387,741 ______________ Total 49,150,471 _____________________________________________________________________________________________________________________________ Health care (2.1%) Amgen 10-20-95 6.23 8,400,000 8,287,067 10-20-95 6.24 10,000,000 9,865,556 08-18-95 5.78 11,000,000 10,969,093 Sandoz 10-05-95 5.74 11,500,000 11,382,061 ______________ Total 40,503,777 PAGE 19 _____________________________________________________________________________________________________________________________ Industrial equipment & services (0.6%) Mobil Australia Finance Delaware 08-22-95 5.75 11,732,000 (b) 11,692,854 _____________________________________________________________________________________________________________________________ Industrial transportation (3.3%) Consolidated Rail 08-04-95 5.98 15,000,000 (b) 14,992,600 08-31-95 5.83 10,000,000 (b) 9,952,083 09-22-95 5.89 10,000,000 (b) 9,916,367 09-22-95 5.97 7,400,000 (b) 7,337,256 Norfolk Southern 08-30-95 5.95 11,000,000 (b) 10,947,897 09-18-95 5.97 10,300,000 (b) 10,219,385 ______________ Total 63,365,588 _____________________________________________________________________________________________________________________________ Insurance (6.8%) Aon 08-22-95 6.04 10,000,000 9,965,292 11-06-95 5.95 2,700,000 2,657,805 Lincoln Natl 08-09-95 5.77 20,000,000 (b) 19,974,489 09-05-95 5.78 5,300,000 (b) 5,270,629 09-15-95 5.76 13,000,000 (b) 12,907,212 Pacific Mutual Life 08-03-95 5.91 900,000 899,708 08-16-95 5.89 14,100,000 14,065,808 09-07-95 5.76 12,000,000 11,929,700 SAFECO Credit 09-12-95 5.74 4,000,000 3,973,493 09-22-95 5.80 13,000,000 12,892,216 St. Paul Companies 08-18-95 5.76 10,000,000 (b) 9,972,989 08-23-95 5.77 3,500,000 (b) 3,487,723 09-06-95 5.77 20,000,000 (b) 19,885,400 ______________ Total 127,882,464 _____________________________________________________________________________________________________________________________ Media (0.3%) Dun & Bradstreet 10-31-95 5.75 5,300,000 5,224,306 _____________________________________________________________________________________________________________________________ Retail (3.8%) Colgate Palmolive 08-07-95 5.99 6,000,000 (b) 5,994,050 08-21-95 5.94 7,500,000 (b) 7,475,500 09-20-95 5.77 10,000,000 (b) 9,920,694 10-20-95 5.76 15,000,000 (b) 14,811,000 Penney (JC) Funding 08-03-95 5.98 10,000,000 9,996,706 08-29-95 5.77 7,900,000 7,864,731 09-08-95 5.76 15,000,000 14,909,433 _____________ Total 70,972,114 _____________________________________________________________________________________________________________________________ Utilities - gas (1.2%) Ameritech 12-11-95 5.94 6,000,000 5,873,060 Southern California Gas 08-09-95 6.51 9,299,000 (b) 9,285,981 08-14-95 6.45 7,000,000 (b) 6,984,201 ______________ Total 22,143,242 PAGE 20 _____________________________________________________________________________________________________________________________ Utilities - telephone (4.4%) AT&T Capital 08-23-95 5.78 13,000,000 12,954,319 10-16-95 5.72 9,800,000 9,683,315 BellSouth Capital Funding 08-02-95 6.07 10,000,000 9,998,339 Southwestern Bell Capital 08-04-95 5.96 6,500,000 (b) 6,496,788 08-08-95 6.62 10,000,000 (b) 9,987,556 08-21-95 5.94 4,100,000 (b) 4,086,607 09-01-95 5.91 10,000,000 (b) 9,949,625 09-12-95 5.75 5,000,000 (b) 4,966,167 US WEST Communications 09-08-95 5.92 7,100,000 7,056,158 09-20-95 5.97 8,900,000 8,827,440 ______________ Total 84,006,314 _____________________________________________________________________________________________________________________________ Miscellaneous (0.6%) United Parcel Service 09-08-95 5.96 11,500,000 11,428,745 _____________________________________________________________________________________________________________________________ Total commercial paper (Cost: $1,308,500,243) $1,308,500,243 PAGE 21 _____________________________________________________________________________________________________________________________ Letters of credit (24.9%) ABN Amro- Sci Systems 08-10-95 5.78 6,200,000 6,191,088 Bank of Amer- AES Barbers Point 08-17-95 5.77 25,000,000 24,936,222 09-22-95 5.76 2,000,000 1,983,533 09-22-95 5.77 10,000,000 9,917,378 Bank of Amer- Hyundai Motor Finance 08-29-95 5.80 5,000,000 4,977,561 Banque Paribas- Cogentrix of Richmond 08-15-95 5.78 22,000,000 21,950,806 08-18-95 5.78 11,000,000 10,970,132 Banque Paribas- Southeast Paper Manufacturing 09-06-95 5.82 6,000,000 5,965,320 09-07-95 6.05 7,000,000 6,957,337 Barclays Bank- Banco Nacional De Mexico 09-28-95 5.81 10,000,000 9,907,361 Barclays Bank- Banco Real Estate 10-25-95 5.80 17,000,000 16,770,405 10-25-95 6.29 23,000,000 22,668,736 Barclays Bank- Corporacion Andina De Forento 08-15-95 6.06 8,000,000 7,981,427 Canadian Imperial Bank- Commed Fuel 09-25-95 5.81 8,605,000 8,529,407 Credit Agricole- Louis Dreyfus Series B 08-11-95 5.99 10,000,000 9,983,500 08-18-95 5.80 10,000,000 9,972,800 08-21-95 5.80 20,000,000 19,936,000 09-08-95 5.81 11,200,000 11,131,786 Credit Suisse- Cemex 08-17-95 6.11 8,900,000 8,876,227 Credit Suisse- Cosco 09-11-95 5.93 20,000,000 19,866,522 Credit Suisse- Cosco Cayman 08-23-95 6.00 10,000,000 9,963,700 Credit Suisse- Pemex Capital 08-02-95 5.88 12,000,000 11,998,057 08-02-95 6.01 8,000,000 7,998,671 09-05-95 5.99 12,500,000 12,428,177 09-20-95 5.93 15,000,000 14,878,333 09-27-95 5.94 8,500,000 8,421,269 10-05-95 5.71 10,000,000 9,898,438 10-17-95 5.75 5,000,000 4,939,363 10-17-95 5.76 10,000,000 9,878,511 Credit Suisse- Sinochem Amer 09-25-95 5.84 6,000,000 5,947,017 10-10-95 5.77 10,000,000 9,889,361 First Natl Bank Chicago- Commed Fuel 08-09-95 6.02 7,658,000 7,647,908 08-16-95 5.98 13,783,000 13,748,887 08-29-95 5.77 16,902,000 16,826,673 09-18-95 5.74 6,500,000 6,450,773 Societe Generale- JMG Funding 08-22-95 5.78 27,000,000 26,909,437 Societe Generale- Michelin Tire 09-07-95 5.91 15,000,000 14,909,813 PAGE 22 Swiss Bank- Enterprise Capital Funding 08-11-95 5.77 9,500,000 (b) 9,484,853 Toronto Dominion Bank- Franciscan Services 08-14-95 5.77 30,050,000 29,987,713 _____________________________________________________________________________________________________________________________ Total letters of credit (Cost: $471,680,502) $ 471,680,502 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $1,878,400,128)(d) $1,878,400,128 _____________________________________________________________________________________________________________________________ PAGE 23 _____________________________________________________________________________________________________________________________ Notes to investments in securities _____________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Commercial paper sold within terms of a private placement memorandum, exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors." This security has been determined to be liquid under guidelines established by the board of directors. (c) Interest rate varies to reflect current market conditions; rate shown is the effective rate on July 31, 1995. (d) Also represents the cost of securities for federal income tax purposes at July 31, 1995.
PAGE 24 IDS mutual funds Cash equivalent investments These money market funds have three main goals: conservation of capital, constant liquidity and the highest possible current income consistent with these objectives. Very limited risk. IDS Cash Management Fund Invests in such money market securities as high quality commercial paper, bankers' acceptances, certificates of deposits (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 Income investments 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 Global Bond Fund Invests primarily in debt securities of U.S. and foreign issuers to seek high total return through income and growth of capital. (icon of) globe IDS Extra Income Fund Invests mainly in 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) cornucopia 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 PAGE 25 IDS Selective Fund Invests in 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 primarily in 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) federal building Tax-exempt income investments These funds provide tax-free income by investing in municipal bonds. The income is generally free from federal income tax. Risk varies by bond quality. IDS High Yield Tax-Exempt Fund Invests primarily in 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 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 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 eagle head PAGE 26 Growth and income investments 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. Moderate risk. 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 Managed Retirement Fund Invests in a combination of common stocks, fixed-income investments and money market securities to seek a maximum total return through a combination of growth of capital and current income. (icon of) bird in a nest IDS Equity Select Fund Invests primarily in a combination of moderate growth stocks, higher-yielding equities and bonds. Seeks growth of capital and income. (icon of) three apple 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 Stock Fund Invests in 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 PAGE 27 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) electrical cord IDS Diversified Equity Income Fund Invests 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) four puzzle pieces IDS Mutual Invests in a balance between common stocks and senior securities (preferred stocks and bonds). Seeks a balance of growth of capital and current income. (icon of) scale Growth investments Funds in this group seek capital growth, primarily from common stocks. They are high risk mutual funds with a potential for high reward. 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 Strategy Aggressive Fund Invests primarily in common stocks of companies that are selected for their potential for above-average growth. Above-average means that their growth potential is better, in the opinion of the portfolio's investment manager, than the Standard & Poor's Corporation (S&P) 500 Stock Index. (icon of) chess piece IDS Growth Fund Invests primarily in companies that have above-average potential for long-term growth as a result of new management, marketing opportunities or technological superiority. (icon of) flower PAGE 28 IDS Global Growth Fund Invests in 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 New Dimensions Fund Invests primarily in companies with significant growth potential due to superiority in technology, marketing or management. The fund frequently changes its industry mix. (icon of) prism 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 Specialty growth investment This fund aggressively seeks capital growth as a hedge against inflation. 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. This is the most aggressive and most speculative IDS mutual fund. (icon of) cart of precious gems For more complete information about any of these funds, including charges and expenses, you can obtain a prospectus by contacting your financial advisor or writing to American Express Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534. Read it carefully before you invest or send money. PAGE 29 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 in 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, 1995 Class A Income distributions -- taxable as dividend income, none qualifying for deduction by corporations. Payable date Per share Aug. 29, 1994 $0.00310 Sept. 28, 1994 0.00343 Oct. 27, 1994 0.00328 Nov. 29, 1994 0.00398 Dec. 29, 1994 0.00413 Jan. 26, 1995 0.00402 Feb. 24, 1995 0.00427 March 29, 1995 0.00494 April 27, 1995 0.00437 May 26, 1995 0.00437 June 27, 1995 0.00479 July 27, 1995 0.00444 Total distributions $0.04912 Class B Income distributions -- taxable as dividend income, none qualifying for deduction by corporations. Payable date Per share March 29, 1995 $0.00483 April 27, 1995 0.00378 May 26, 1995 0.00378 June 27, 1995 0.00414 July 27, 1995 0.00382 Total distributions $0.02035 PAGE 30 Class Y Income distributions -- taxable as dividend income, none qualifying for deduction by corporations. Payable date Per share March 29, 1995 $0.00494 April 27, 1995 0.00437 May 26, 1995 0.00437 June 27, 1995 0.00479 July 27, 1995 0.00444 Total distributions $0.02291 PAGE 31 Quick telephone reference American Express Telephone Transaction Service Redemptions and exchanges, dividend payments or reinvestments and automatic payment arrangements National/Minnesota: 800-437-3133 Mpls./St. Paul area: 671-3800 American Express Shareholder Service Fund performance, objectives and account inquiries 612-671-3733 TTY Service For the hearing impaired 800-846-4852 American Express Infoline Automated account information (TouchToneR phones only), including current fund prices and performance, account values and recent account transactions National/Minnesota: 800-272-4445 Mpls./St. Paul area: 671-1630 AMERICAN EXPRESS FINANCIAL ADVISORS IDS CASH MANAGEMENT FUND IDS Tower 10 Minneapolis, MN 55440-0010 PAGE 32 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 and prospectus are placed in 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 and prospectus. 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-----