-----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, KZ+gUaF7d9sYHStI32+el4iSFqANCvJtuzCq6+bd0ES5QPswnNIotB2Tr1MwxAD1 Jbb8QQPofa2iRxLkL72XdA== 0000820027-97-000307.txt : 19970329 0000820027-97-000307.hdr.sgml : 19970329 ACCESSION NUMBER: 0000820027-97-000307 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970131 FILED AS OF DATE: 19970328 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: 97566162 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 1997 SEMIANNUAL REPORT IDS Cash Management Fund The goal of IDS 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. Distributed by American Express Financial Advisors Inc. 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 From the president 3 From the portfolio manager 3 Financial statements 5 Notes to financial statements 8 Investments in securities 14 Board members and officers 19 IDS mutual funds 20 From the president If you're an experienced investor, you know that the past two years have been unusually strong ones in many financial markets. Perhaps just as important, you also know that 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. That fact reinforces the need for investors to periodically review 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 From the portfolio manager IDS Cash Management Fund's yield was little changed during the first half of its fiscal year (August 1996 through January 1997), reflecting generally stable short-term interest rates over the period. For the seven-day period ended Jan. 31, 1997, the Fund's compound annualized yield was 4.97%, and the simple annualized yield was 4.85%. In keeping with its objective, the Fund maintained a $1 per share price throughout the six 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. Fed adopts 'hands-off' policy With inflation remaining subdued and the economy showing no signs of either overheating or falling into recession, the Federal Reserve Board (Fed) elected to leave short-term interest unchanged during the past six months. By way of background, 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 economic growth. When the economy is strong, the Fed usually raises rates to reign in economic growth and thereby keep inflation in check. Given that uneventful environment, I kept the average maturity of the securities in the portfolio in a neutral range, between 35 and 45 days. At the end of January, the maturity level was approximately 44 days. The longer the average maturity, the longer it takes the Fund's yield to respond to a change in interest rates. As always, the entire portfolio remained invested in commercial paper, bank letters of credit and certificates of deposit. Rates may head higher As for the rest of the fiscal year, I expect the moderate economic growth we've experienced in recent years to continue, accompanied by a modest increase in the inflation rate. Should that forecast prove to be accurate, I think the Fed probably will push short-term interest rates somewhat higher. In such a scenario, rates on the short-term securities the Fund invests in would rise as well and ultimately lead to a slightly higher yield. Terry Fettig William R. Pearce President of the Fund Terry Fettig Portfolio manager Class A 6-month performamce ================================================================================ (All figures per share) Net asset value (NAV) - -------------------------------------------------------------------------------- Jan. 31, 1997 $ 1.00 July 31, 1996 $ 1.00 Increase $ -- - -------------------------------------------------------------------------------- Distributions Aug. 1, 1996 - Jan. 31, 1997 - -------------------------------------------------------------------------------- From income $ 0.03 From capital gains $ -- Total distributions$ 0.03 - -------------------------------------------------------------------------------- Total return* +2.5% ** - -------------------------------------------------------------------------------- Class B 6-month performamce ================================================================================ (All figures per share) Net asset value (NAV) - -------------------------------------------------------------------------------- Jan. 31, 1997 $ 1.00 July 31, 1996 $ 1.00 Increase $ -- - -------------------------------------------------------------------------------- Distributions Aug. 1, 1996 - Jan. 31, 1997 - -------------------------------------------------------------------------------- From income $ 0.02 From capital gains $ -- Total distributions$ 0.02 - -------------------------------------------------------------------------------- Total return* +2.1% ** - -------------------------------------------------------------------------------- Class Y 6-month performamce ================================================================================ (All figures per share) Net asset value (NAV) - -------------------------------------------------------------------------------- Jan. 31, 1997 $ 1.00 July 31, 1996 $ 1.00 Increase $ -- - -------------------------------------------------------------------------------- Distributions Aug. 1, 1996 - Jan. 31, 1997 - -------------------------------------------------------------------------------- From income $ 0.03 From capital gains $ -- Total distributions$ 0.03 - -------------------------------------------------------------------------------- Total return* +2.5% ** - -------------------------------------------------------------------------------- * 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.
Statement of assets and liabilities IDS Cash Management Fund Jan. 31, 1997 ==================================================================================================================================== Assets ==================================================================================================================================== (Unaudited) Investments in securities, at value (Note 1) (identified cost $2,929,892,045) $2,929,892,045 Cash in bank on demand deposit 23,143,555 Accrued interest receivable 4,179,270 ------------- Total assets 2,957,214,870 ============= ==================================================================================================================================== Liabilities ==================================================================================================================================== Dividends payable to shareholders 767,086 Accrued investment management services fee 22,695 Accrued distribution fees 4,078 Accrued transfer agency fee 12,300 Accrued administrative services fee 2,076 Other accrued expenses 334,134 -------------- Total liabilities 1,142,369 -------------- Net assets applicable to outstanding capital stock $2,956,072,501 ============== ==================================================================================================================================== Represented by ==================================================================================================================================== Capital stock-- authorized 10,000,000,000 shares of $.01 par value $ 29,561,969 Additional paid-in capital 2,926,537,834 Undistributed net investment income 580 Accumulated net realized loss (Note 1) (27,882) -------------- Total-- representing net assets applicable to outstanding capital stock $2,956,072,501 ============== Net assets applicable to outstanding shares: Class A $2,683,921,074 Class B $ 195,348,647 Class Y $ 76,802,780 Net asset value per share of outstanding capital stock: Class A shares 2,683,979,596 $ 1.00 Class B shares 195,395,980 $ 1.00 Class Y shares 76,821,333 $ 1.00 See accompanying notes to financial statements. Statement of operations IDS Cash Management Fund Six months ended Jan. 31, 1997 ==================================================================================================================================== Investment Income ==================================================================================================================================== (Unaudited) Income: Interest $76,248,943 ----------- Expenses (Note 2): Investment management services fee 3,978,221 Distribution fee-- Class B 948,262 Transfer agency fee 2,837,430 Incremental transfer agency fee-- Class B 9,046 Administrative services fee and expenses 370,573 Compensation of board members 11,651 Compensation of officers 9,423 Custodian fees 73,464 Postage 333,000 Registration fees 397,987 Reports to shareholders 157,715 Audit fees 16,250 Administrative 7,977 Other 20,599 ----------- Total expenses 9,171,598 Earnings credits on cash balances (Note 2) (425,942) ----------- Total net expenses 8,745,656 Investment income-- net 67,503,287 ----------- ==================================================================================================================================== Realized loss -- net ==================================================================================================================================== Net realized loss (Note 3) (521) Net increase in net assets resulting from operations $67,502,766 =========== See accompanying notes to financial statements. Statements of changes in net assets IDS Cash Management Fund ==================================================================================================================================== Operations and distributions ==================================================================================================================================== Six months ended Year ended (Unaudited) Investment income-- net $ 67,503,287 $ 109,971,618 Net realized loss (521) (2,565) ----------- ------------ Net increase in net assets resulting from operations 67,502,766 109,969,053 Distributions to shareholders from: ----------- ------------ Net investment income Class A (60,651,613) (98,832,686) Class B (5,182,955) (7,718,760) Class Y (1,664,034) (3,425,225) ----------- ------------ Total distributions (67,498,602) (109,976,671) ==================================================================================================================================== Capital share transactions at constant $1 net asset value ==================================================================================================================================== Proceeds from sales Class A shares 4,283,896,137 6,873,710,335 Class B shares 155,871,787 546,797,564 Class Y shares 88,480,284 137,595,869 Reinvestment of distributions at net asset value Class A shares 60,166,135 96,280,970 Class B shares 5,225,917 7,549,183 Class Y shares 1,461,867 3,059,283 Payments for redemptions Class A shares (3,995,551,989) (6,341,900,642) Class B shares (Note 2) (238,888,542) (379,219,480) Class Y shares (69,806,625) (169,773,277) -------------- --------------- Increase in net assets from capital share transactions 290,854,971 774,099,805 -------------- --------------- Total increase in net assets 290,859,135 774,092,187 Net assets at beginning of period 2,665,213,366 1,891,121,179 -------------- --------------- Net assets at end of period (including undistributed net investment income of $580 and $(4,105)) $2,956,072,501 $2,665,213,366 ============== ============== See accompanying notes to financial statements.
IDS Cash Management Fund (Unaudited as to Jan. 31, 1997) 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 invests in money market securities. The Fund offers Class A, Class B and Class Y shares. Class A shares have no sales charge. Class B shares may be subject to a contingent deferred sales charge and such shares automatically convert to Class A after eight years. Class Y shares have no sales charge and are offered only to qualifying institutional investors. All classes of shares have identical voting, dividend, liquidation and other rights, and the same terms and conditions, except that the level of distribution fee 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: Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the period. Actual results could differ from those estimates. Valuation of securities 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. Dividends to shareholders 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 Effective March 20, 1995, when the Fund began offering multiple classes of shares, the Fund entered into agreements with American Express Financial Corporation (AEFC) for managing its portfolio, providing administrative services and serving as transfer agent. 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. Additional administrative services paid by the Fund are office expenses, consultant's fees and compensation of officers and employees. Under this agreement, the Fund also pays taxes, audit and certain legal fees, registration fees for shares, compensation of board members, corporate filing fees, organizational expenses, and any other expenses properly payable by the Fund approved by the board. 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: oClass A $20 oClass B $21 oClass 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. 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. Sales charges received by American Express Financial Advisors Inc. for distributing Class B shares were $288,485 for the six months ended Jan. 31, 1997. During the six months ended Jan. 31, 1997 the Fund's custodian and transfer agency fees were reduced by $425,942 as a result of earnings credits from overnight cash balances. 3. Securities transactions Cost of purchases and proceeds from sales of securities aggregated $9,088,242,347 and $8,802,599,657, respectively, for the six months ended Jan. 31, 1997. Realized gains and losses are determined on an identified cost basis. 4. Financial highlights The tables below show certain important financial information for evaluating the Fund's results.
Fiscal period ended July 31, Class A 1997** 1996 1995 1994 1993 1992 1991 1990 1989 1988 Net asset value, $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 beginning of period Income from investment operations: Net investment income .03 .05 .05 .03 .02 .04 .07 .08 .08 .06 Less distributions: Dividends from net (.03) (.05) (.05) (.03) (.02) (.04) (.07) (.08) (.08) (.06) investment income Net asset value, $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 end of period Class A 1997** 1996 1995 1994 1993 1992 1991 1990 1989 1988 Net assets, end of $2,684 $2,335 $1,707 $1,154 $1,053 $1,230 $1,655 $1,617 $1,392 $1,136 period (in millions) Ratio of expenses to .56% .63% .73% .94%## .94%## .91% .77% .74% .75% .69% average daily net assets# Ratio of net income to 4.88% 4.97% 4.99% 2.61% 2.36% 3.84% 6.55% 7.81% 8.42% 6.53% average daily net assets Total return 2.5% 5.1% 5.0% 2.6% 2.4% 3.8% 6.7% 7.9% 8.7% 6.7% * For a share outstanding throughout the period. Rounded to the nearest cent. ** Six months ended Jan. 31, 1997 (Unaudited). # Effective fiscal year 1996, expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. ## During the fiscal years ended July 31, 1993 and 1994, AEFC voluntarily reimbursed the Fund for a portion of its expenses. Had AEFC not done so, the ratio of expenses to average daily net assets would have been 0.97%. Adjusted to an annual basis.
Fiscal period ended July 31, Class B Class Y 1997** 1996 1995*** 1997** 1996 1995*** Net asset value, $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 beginning of period Income from investment operations: Net investment income .02 .04 .02 .03 .05 .02 Less distributions: Dividends from net (.02) (.04) (.02) (.03) (.05) (.02) investment income Net asset value, $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 end of period Class B Class Y 1997** 1996 1995*** 1997** 1996 1995*** Net assets, end of $195 $273 $98 $77 $57 $86 period (in millions) Ratio of expenses to 1.31% 1.38% 1.41% .56% .62% .65% average daily net assets# Ratio of net income to 4.08% 4.15% 4.73% 4.89% 4.97% 5.53% average daily net assets Total return 2.1% 4.3% 2.0% 2.5% 5.1% 2.3% *For a share outstanding throughout the period. Rounded to the nearest cent. **Six months ended Jan. 31, 1997 (Unaudited) ***Inception date was March 20, 1995 for Class B and Class Y. Adjusted to an annual basis #Effective fiscal year 1996, expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances.
IDS Cash Management Fund Jan. 31, 1997 (Unaudited) (Percentages represent value of investments compared to net assets) ================================================================================ Issuer Annualized Amount Value(a) yield on payable at date of maturity purchase ================================================================================ U.S. government agencies (1.1%) Federal Farm Credit Disc Nt 03-03-97 5.17% $15,000,000 $ 14,997,392 Federal Home Loan Bank 01-28-98 5.78 10,000,000 10,000,000 Federal Home Loan Mtge Corp Disc Nt 02-03-97 5.48 7,200,000 7,197,808 Total U.S. government agencies (Cost: $32,195,200) 32,195,200 ================================================================================ Banker's acceptance (0.3%) First Union Bank 02-04-97 5.36 9,000,000 8,995,995 Total banker's acceptance (Cost: $8,995,995) 8,995,995 ================================================================================ Certificates of deposit (5.2%) Domestic (0.4%) Harris Trust 02-10-97 5.33 11,900,000 11,900,000 Eurodollar (4.8%) ABN Amro Yankee 03-18-97 5.53 15,000,000 14,998,392 Canadian Imperial Bank Yankee 03-11-97 5.37 15,000,000 15,000,000 04-15-97 5.75 5,000,000 5,000,000 01-08-98 5.83 12,000,000 12,000,000 Deutsche Bank Yankee 04-11-97 5.73 5,000,000 4,999,865 Natl Westminster Bank 02-03-97 5.37 25,000,000 24,999,921 Societe Generale Yankee 02-24-97 5.35 13,000,000 13,000,000 03-04-97 5.44 10,000,000 10,000,000 06-03-97 5.90 10,000,000 10,000,000 12-16-97 5.73 12,000,000 12,000,000 12-24-97 5.49 20,000,000(c) 19,987,496 Total 141,985,674 Total certificates of deposit (Cost: $153,885,674) 153,885,674 ================================================================================ Commercial Paper (62.8%) Automotive & related (2.2%) Ford Motor Credit 03-05-97 5.33 31,300,000 31,152,542 03-10-97 5.35 4,000,000 3,978,129 03-11-97 5.33 16,600,000 16,507,132 04-14-97 5.40 12,000,000 11,871,840 Total 63,509,643 Banks and savings & loans (15.4%) ABN Amro North America Finance 02-07-97 5.30 22,000,000 21,980,567 ANZ (Delaware) 04-21-97 5.44 15,000,000 14,823,237 05-13-97 5.44 15,000,000 14,775,275 Barclays U.S. Funding 02-13-97 5.36 17,900,000 17,868,436 BBV Finance (Delaware) 02-26-97 5.31 17,000,000 16,937,549 04-17-97 5.41 12,600,000 12,459,825 Ciesco LP 03-04-97 5.36 12,000,000(b) 11,944,923 03-05-97 5.33 15,300,000 15,227,784 04-01-97 5.36 10,800,000 10,706,013 Commerzbank U.S. Finance 03-25-97 5.35 12,300,000 12,205,659 Deutsche Bank 12-04-97 5.80 15,000,000 15,000,000 First Bank Minneapolis 10-24-97 5.38 20,000,000(c) 19,991,578 First Chicago NBD 02-10-97 5.35 7,100,000 7,090,539 02-24-97 5.32 25,000,000 24,915,347 First Union 06-06-97 5.95 5,000,000 5,000,000 Fleet Funding 02-19-97 5.34 17,500,000(b) 17,453,538 02-20-97 5.35 20,000,000(b) 19,943,739 02-24-97 5.35 18,000,000(b) 17,938,820 02-26-97 5.34 3,860,000(b) 3,845,766 02-27-97 5.33 15,000,000(b) 14,942,583 03-03-97 5.34 10,000,000(b) 9,955,667 Kredietbank North American Finance 05-06-97 5.42 18,800,000 18,537,865 05-09-97 5.43 30,000,000 29,567,542 Natl Australia Funding (Delaware) 02-03-97 5.37 6,400,000 6,398,105 03-12-97 5.36 7,300,000 7,257,928 03-26-97 5.46 18,000,000 17,857,165 04-25-97 5.40 15,500,000 15,309,169 NationsBank 02-13-97 5.37 11,700,000 11,700,000 NBD Bank Canada 02-10-97 5.40 18,000,000 17,975,948 02-24-97 5.32 15,000,000 14,949,208 Societe Generale North America 02-11-97 5.37 9,000,000 8,986,750 Total 453,546,525 Broker dealers (13.6%) Dean Witter Discover & Co. 02-28-97 5.38 12,376,000 12,326,620 03-10-97 5.37 13,900,000 13,823,855 03-19-97 5.34 6,600,000 6,555,303 Goldman Sachs Group 02-27-97 5.32 34,900,000 34,766,410 02-27-97 5.39 15,000,000 14,942,258 03-05-97 5.58 8,000,000 7,960,676 03-18-97 5.39 18,300,000 18,177,848 04-17-97 5.39 15,000,000 14,833,750 04-21-97 5.49 15,000,000 14,823,896 Merrill Lynch 03-03-97 5.34 6,500,000 6,471,238 03-04-97 5.39 19,400,000 19,310,625 03-07-97 5.34 20,000,000 19,899,700 03-17-97 5.40 10,000,000 9,934,611 03-19-97 5.37 20,000,000 19,863,789 04-03-97 5.41 5,700,000 5,648,811 04-07-97 5.44 8,000,000 7,922,289 04-16-97 5.41 18,000,000 17,802,050 10-16-97 5.44 14,500,000(c) 14,500,000 Morgan Stanley Group 02-12-97 5.32 20,000,000 19,967,611 02-21-97 5.32 20,000,000 19,941,111 02-28-97 5.32 18,000,000 17,928,450 04-18-97 5.41 20,000,000 19,774,533 04-22-97 5.41 20,000,000 19,762,667 04-23-97 5.41 21,100,000 20,846,483 04-25-97 5.41 25,000,000 24,692,208 Total 402,476,792 Consumer finance -- personal loans (2.2%) Household Finance 03-13-97 5.35 20,100,000 19,981,410 04-01-97 5.38 20,000,000 19,825,294 04-09-97 5.42 25,000,000 24,751,076 Total 64,557,780 Energy (2.3%) Chevron Transport 02-26-97 5.36 10,000,000(b) 9,962,986 03-19-97 5.39 10,000,000(b) 9,932,150 03-20-97 5.39 10,000,000(b) 9,930,544 Chevron UK 02-06-97 5.37 10,000,000 9,992,542 02-13-97 5.32 10,000,000 9,982,267 03-10-97 5.31 10,000,000 9,945,425 03-17-97 5.35 7,000,000 6,954,228 Total 66,700,142 Financial services (14.5%) A.I. Credit 04-08-97 12,000,000 11,882,080 American General Finance 02-27-97 5.33 15,000,000 14,942,691 03-12-97 5.40 6,800,000(b) 6,760,589 04-10-97 5.40 14,200,000(b) 14,057,038 04-18-97 5.41 11,200,000(b) 11,073,739 05-07-97 5.44 15,000,000(b) 14,788,229 Associates North America 02-21-97 5.38 17,300,000 17,248,581 02-21-97 5.40 15,100,000 15,055,036 02-26-97 5.37 10,000,000(b) 9,963,125 03-04-97 5.33 30,000,000 29,862,825 03-31-97 5.36 18,400,000 18,242,588 Beneficial 02-25-97 5.36 25,000,000 24,911,166 03-06-97 5.33 8,300,000 8,259,600 BHP Finance (USA) 02-06-97 5.35 25,000,000 24,981,458 02-25-97 5.33 12,500,000 12,455,833 03-06-97 5.39 10,658,000 10,605,731 CAFCO 03-03-97 5.35 15,000,000 14,933,375 03-14-97 5.36 18,000,000 17,890,940 04-17-97 5.39 7,400,000(b) 7,317,829 Commercial Credit 02-27-97 5.33 17,500,000 17,432,887 02-28-97 5.33 25,000,000 24,900,438 General Electric Capital 02-04-97 5.40 20,300,000 20,290,932 03-25-97 5.35 14,700,000 14,587,251 Novartis Finance 02-11-97 5.34 11,600,000 11,582,858 03-03-97 5.33 12,000,000(b) 11,947,000 Transamerica Financial 02-24-97 5.37 2,200,000 2,192,551 03-27-97 5.47 8,800,000 8,728,720 04-03-97 5.38 12,000,000 11,892,437 04-18-97 5.39 6,600,000 6,525,875 USAA Capital 02-13-97 5.41 10,000,000 9,982,100 02-28-97 5.38 3,900,000 3,884,439 Total 429,179,941 Food (3.8%) Cargill 03-05-97 5.36 10,600,000 10,550,062 Cargill Global 03-17-97 5.35 11,200,000(b) 11,127,312 04-15-97 5.39 12,000,000(b) 11,871,033 CPC Intl 02-21-97 5.36 30,000,000(b) 29,911,167 03-05-97 5.38 10,000,000(b) 9,952,889 04-07-97 5.41 13,100,000(b) 12,973,694 Kellogg 02-05-97 5.44 13,400,000(b) 13,391,960 Sysco 02-25-97 5.38 11,600,000(b) 11,558,859 Total 111,336,976 Health care (0.4%) Pfizer 03-05-97 5.36 12,100,000(b) 12,042,780 Industrial equipment & services (0.9%) Mobil Australia Finance (Delaware) 03-03-97 5.39 27,064,000(b) 26,943,791 Insurance (2.2%) Lincoln Natl 02-20-97 5.32 16,800,000(b) 16,753,007 Metlife 03-06-97 5.37 9,514,000 9,467,620 SAFECO Credit 02-11-97 5.39 8,000,000 7,988,133 02-18-97 5.44 12,200,000 12,168,890 04-29-97 5.41 20,000,000 19,741,900 Total 66,119,550 Media (1.5%) Gannett 02-12-97 5.31 10,200,000(b) 10,183,513 02-21-97 5.32 25,000,000(b) 24,926,389 Reed Elsevier 04-21-97 5.39 10,000,000(b) 9,883,256 Total 44,993,158 Utilities -- gas (2.3%) Consolidated Natl 02-04-97 5.63 10,500,000 10,495,100 Michigan Consolidated Gas 03-14-97 5.36 10,000,000 9,939,867 03-18-97 5.35 5,700,000 5,662,166 03-18-97 5.43 10,000,000 9,933,000 Southern California Gas 02-10-97 5.38 8,911,000(b) 8,899,171 03-04-97 5.37 14,173,000(b) 14,108,316 03-20-97 5.37 9,694,000(b) 9,626,417 Total 68,664,037 Utilities -- telephone (1.5%) BellSouth Capital Funding 02-07-97 5.36 15,000,000 14,986,775 03-13-97 5.41 9,100,000 9,045,906 Southwestern Bell Telephone 02-21-97 5.42 6,900,000 6,879,415 U S WEST Communications 02-26-97 5.45 7,250,000 7,222,813 03-07-97 5.37 7,000,000 6,964,961 Total 45,099,870 Total commercial paper (Cost: $1,855,170,985) 1,855,170,985 ================================================================================ Letters of credit (29.8%) ABN Amro- Formosa Plastics 02-14-97 5.31 10,000,000 9,980,825 02-18-97 5.30 11,700,000 11,670,718 02-19-97 5.32 20,000,000 19,946,800 02-24-97 5.30 12,700,000 12,656,996 ABN Amro- U.S. Prime Properties 03-17-97 5.40 14,000,000 13,907,600 05-19-97 5.35 5,000,000 4,920,493 Bank of America- AES Barbers Point 02-14-97 5.31 10,000,000 9,980,644 Bank of America- Formosa Plastics 03-18-97 5.42 7,400,000 7,350,512 04-02-97 5.41 20,000,000 19,822,333 04-09-97 5.39 10,000,000 9,900,989 Bank of New York- River Fuel 02-12-97 5.37 19,300,000 19,268,450 03-12-97 5.37 9,129,000(b) 9,076,189 Barclays Bank- Banc de Columbia 02-03-97 5.35 30,000,000 29,991,083 Barclays Bank- Banca Serfin 02-05-97 5.31 20,000,000 19,988,200 Barclays Bank- Banco Bredesco 02-12-97 5.31 10,000,000 9,983,775 Barclays Bank- Banco de Columbia 03-19-97 5.32 5,000,000 4,966,011 04-16-97 5.40 15,000,000 14,833,500 Canadian Imperial Bank- Commed Fuel 04-14-97 5.34 7,218,000 7,140,912 04-17-97 5.36 15,188,000 15,018,401 Chase Manhattan Bank- Sommerset Railroad 02-11-97 5.37 22,300,000 22,266,860 Credit Agricole- Louis Dreyfus 02-07-97 5.35 15,000,000 14,986,625 02-24-97 5.36 16,000,000 15,945,516 02-28-97 5.33 10,000,000 9,960,025 Credit Suisse- Cemex 03-11-97 5.32 5,000,000 4,971,922 Credit Suisse- COFCO Capital 02-14-97 5.39 15,000,000 14,970,804 02-19-97 5.42 10,000,000 9,972,900 Credit Suisse- Commed Fuel 04-18-97 5.38 9,121,000 9,017,406 Credit Suisse- KOC Funding 05-19-97 5.32 10,000,000(b) 9,841,878 Credit Suisse- Natl Bank of Pakistan 04-04-97 5.32 15,000,000 14,862,567 Credit Suisse- Sinochem 02-14-97 5.45 15,000,000 14,970,479 03-14-97 5.40 25,000,000 24,846,250 03-17-97 5.47 6,800,000 6,754,538 Credit Suisse- Sunkyong America 02-20-97 5.35 7,000,000 6,980,235 02-24-97 5.32 17,000,000 16,942,219 04-25-97 5.34 12,000,000 11,852,260 Dresdner Bank- Banco Inbursa 02-03-97 5.37 14,500,000 14,495,674 Dresdner Bank- Galicia Buenos Aires Funding 02-18-97 5.35 35,000,000(b) 34,911,576 First Chicago- Commed Fuel 02-18-97 5.40 18,442,000 18,395,408 02-25-97 5.37 10,300,000 10,263,607 03-07-97 5.38 14,118,000 14,047,332 04-08-97 5.42 16,053,000 15,895,547 04-10-97 5.40 7,214,000 7,141,235 04-14-97 5.42 9,984,000 9,876,572 Natl Westminster Bank- Nebraska Higher Education 02-19-97 5.34 16,132,000 16,088,928 02-20-97 5.35 12,365,000 12,330,086 02-26-97 5.33 7,000,000 6,974,090 Societe Generale- China Intl Marine Containers 03-10-97 5.34 14,500,000 14,420,419 Societe Generale- Nacional Financiera 02-25-97 5.32 12,000,000 11,957,440 03-07-97 5.34 12,000,000 11,939,480 Toronto Dominion Bank- Franciscan Service 02-14-97 5.32 24,600,000 24,552,741 Union Bank Switzerland- River Fuel Trust 02-19-97 5.32 20,000,000(b) 19,946,800 02-20-97 5.30 17,218,000(b) 17,169,837 03-12-97 5.34 20,267,000(b) 20,149,756 Westdeutsche Landesbank- Beal Argentina 02-06-97 5.35 10,000,000 9,992,569 02-20-97 5.39 20,000,000(b) 19,943,844 03-06-97 5.32 10,000,000 9,951,233 03-06-97 5.35 17,000,000 16,916,629 Westdeutsche Landesbank- Comision Federale de Electricidad 02-04-97 5.35 20,000,000 19,991,083 02-20-97 5.39 13,214,000 13,176,410 03-10-97 5.35 15,000,000 14,917,521 04-11-97 5.42 10,000,000 9,897,459 04-16-97 5.40 15,000,000 14,833,500 Westdeutsche Landesbank- Hillsborough 03-26-97 5.40 10,000,000 9,920,500 Total letters of credit (Cost: $879,644,191) 879,644,191 ================================================================================ Total investments in securities (Cost: $2,929,892,045)(d) $2,929,892,045 ============== ================================================================================ (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. (c) Interest rate varies to reflect current market conditions; rate shown is the effective rate on Jan. 31, 1997. (d) Also represents the cost of securities for federal income tax purposes at Jan. 31, 1997. President and interested board member William R. Pearce President and director, Board Services Corporation (provides administrative services to boards including the boards of the IDS and IDSLife funds and Master Trust portfolios). Independent board members H. Brewster Atwater Jr. Former chairman and chief executive officer, General Mills, Inc. Lynne V. Cheney Distinguished fellow, American Enterprise Institute for Public Policy Research. Robert F. Froehlke Former president of all funds in the IDS MUTUAL FUND GROUP. Heinz F. Hutter Former president and chief operating officer, Cargill, Inc. Anne P. Jones Attorney and telecommunications consultant. Melvin R. Laird Senior counsellor for national and international affairs, The Reader's Digest Association, Inc. Alan K. Simpson Former United States senator for Wyoming. Edson W. Spencer Former chairman and chief executive officer, Honeywell, Inc. Wheelock Whitney Chairman, Whitney Management Company. C. Angus Wurtele Chairman of the board, The Valspar Corporation. Interested board members who are officers and/or employees of AEFC William H. Dudley Executive vice president, AEFC. David R. Hubers President and chief executive officer, AEFC. John R. Thomas Senior vice president, AEFC. Officers who also are officers and/or employees of AEFC Peter J. Anderson Senior vice president, AEFC. Vice president - Investments for the Fund. Melinda S. Urion Senior vice president and chief financial officer, AEFC. Treasurer for the Fund. Other officer Leslie L. Ogg Vice president, treasurer and corporate secretary of Board Services Corporation. Vice president, general counsel and secretary for the Fund. Refer to the SAI for the board members' and officers' biographies. 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 globe IDS Global Growth Fund Invests in a Portfolio comprised primarily of stocks of companies throughout the world that are positioned to meet market needs in a changing world economy. These companies offer above-average potential for long-term growth. (icon of) world IDS International Fund Invests primarily in common stocks of foreign companies that offer potential for superior growth. The Fund may invest up to 20% of its assets in the U.S. market. (icon of) three flags IDS Global Balanced Fund Invests in stocks-and bonds in, for the most part, major markets throughout the world, including the U.S. Seeks to provide a balance of growth of capital and current income. (icon of) scale of globes IDS Global Bond Fund Invests in a Portfolio comprised primarily of debt securities of U.S. and foreign issuers to seek high total return through income and growth of capital. (icon of) globe Growth funds Funds in this group seek capital growth, primarily from common stocks. They are high risk mutual funds with a potential for high reward. IDS Precious Metals Fund Invests primarily in the securities of foreign or domestic companies that explore for, mine and process or distribute gold and other precious metals. A highly aggressive and speculative fund that seeks long-term growth of capital. (icon of) cart of precious gems IDS Discovery Fund Invests in small- and medium-size, growth-oriented companies emphasizing technological innovation and productivity enhancement. Buys and holds larger growth-oriented stocks. (icon of) ship IDS Small Company Index Fund Invests in all or a representative group of the equity securities comprising the S&P SmallCap 600 Index, as it strives to provide long-term capital appreciation. (icon of) building IDS Strategy Aggressive Fund Invests primarily in common stocks of companies that are selected for their potential for above-average growth. Above-average means that their growth potential is better, in the opinion of the portfolio's investment manager, than the Standard & Poor's Corporation (S&P) 500 Stock Index. (icon of) chess piece IDS Research Opportunities Fund Invests in a Portfolio comprised primarily of equity securities of companies included in the S&P 500 Index that are believed to have strong growth potential. The Portfolio is managed using a research methodology by the Research Department of AEFC. Goal is long-term appreciation. (icon of) magnifying glass IDS Growth Fund Invests in a Portfolio comprised primarily of companies that have above-average potential for long-term growth as a result of new management, marketing opportunities or technological superiority. (icon of) flower 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 and 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. IDS Equity Select Fund Invests primarily in a combination of moderate growth stocks, higher-yielding equities and bonds. Seeks growth of capital and income. (icon of) three pine trees IDS Blue Chip Advantage Fund Invests in selected stocks from a major market index. Securities purchased are those recommended by our research analysts as the best from each industry represented on the index. Offers potential for long-term growth as well as dividend income. (icon of) ribbon IDS Managed Allocation Fund Invests in a Portfolio comprised primarily of U.S. equity securities, U.S. and foreign debt securities, foreign equity securities and money market instruments. The Fund provides diversification among these major investment categories and has a target mix that represents the way the Fund's investments will be allocated over the long term. Seeks maximum total return. (icon of) spinning toy IDS Stock Fund Invests in a Portfolio comprised primarily of common stocks of companies representing many sectors of the economy. Seeks current income and growth of capital. (icon of) building with columns IDS Equity Value Fund Invests primarily in undervalued common stocks that offer potential for growth of capital and income. (icon of) three growing flowers IDS Utilities Income Fund Invests primarily in the stocks of public utility companies to seek high current income and growth of income and capital with reduced volatility. (icon of) light bulb IDS Diversified Equity Income Fund Invests in a Portfolio comprised primarily in high-yielding common stocks to seek high current income and, secondarily, to benefit from the growth potential offered by stock investments. (icon of) two puzzle pieces IDS Mutual Invests in a Portfolio which seeks to balance between common stocks and senior securities (preferred stocks and bonds). Seeks a balance of growth of capital and current income. (icon of) scale of justice Income funds The funds in this group invest their assets primarily in corporate bonds or government securities to seek interest income. Secondary objective is capital growth. Risk varies by bond quality. IDS Extra Income Fund Invests in a Portfolio comprised mainly 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) two coins IDS Bond Fund Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk bond categories, or the equivalent, and in government bonds. (icon of) Greek column IDS Selective Fund Invests in a Portfolio comprised primarily of high-quality corporate bonds and other highly rated debt instruments including government securities and short-term investments. Seeks current income and preservation of capital. (icon of) skyline IDS Federal Income Fund Invests in a Portfolio comprised primarily of securities issued or guaranteed as to the timely payment of principal and interest by the U.S. government, its agencies and instrumentalities. Seeks a high level of current income and safety of principal consistent with its type of investments. (icon of) shield with eagle head Tax-exempt income funds These funds provide tax-free income by investing in municipal bonds. The income is generally free from federal income tax, but a portion of the income may be subject to state and local taxes. Risk varies by bond quality. IDS Tax-Exempt Bond Fund Invests mainly in bonds and notes of state or local government units, with at least 75% in the four highest rated, lowest risk bond categories. (icon of) shield with Greek column IDS Insured Tax-Exempt Fund Invests primarily in municipal securities that are insured as to the timely payment of principal and interest. The insurance feature minimizes credit risk of the Fund but does not guarantee the market value of the Fund's shares. (icon of) shield with star IDS State Tax-Exempt Funds (CA, MA, MI, MN, NY, OH) Invests primarily in high- and medium-grade municipal securities to provide income to residents of each respective state that is exempt from federal, state and local income taxes. (New York is the only state that is exempt at the local level.) (icon of) shield with U.S. enclosed IDS High Yield Tax-Exempt Fund Invests in a Portfolio comprised primarily of medium- and lower-quality municipal bonds and notes. Lower-quality securities generally involve greater risk of principal and income. (icon of) shield with basket of apples enclosed IDS Intermediate Tax-Exempt Fund Invests in mainly investment-grade bonds and other debt securities with intermediate-term maturities issued by state and local government units. Goal is to seek a high level of current income exempt from federal taxes. (icon of) shield with tree enclosed Money market funds These money market funds have three main goals: conservation of capital, constant liquidity and the highest possible current income consistent with these objectives. An investment in these funds is neither insured nor guaranteed by the U.S. government, and there can be no assurance that these funds will be able to maintain a stable net asset value of $1.00 per share. Very limited risk. IDS Cash Management Fund Invests in such money market securities as high quality commercial paper, bankers' acceptances, certificates of deposit (CDs) and other bank securities. (icon of) piggy bank IDS Tax-Free Money Fund Invests primarily in short-term bonds and notes issued by state and local governments to seek high current income exempt from federal income taxes. (icon of) shield with piggy bank enclosed Quick telephone reference - -------------------------------------------------------------------------------- American Express Redemptions and exchanges, National/Minnesota: Telephone Transaction dividend payments or 800-437-3133 Service reinvestments and automatic payment arrangements Mpls./St. Paul area: 671-3800 American Express Fund performance, objectives 612-671-3733 Shareholder Service and account inquiries - -------------------------------------------------------------------------------- TTY Service For the hearing impaired 800-846-4852 - -------------------------------------------------------------------------------- American Express Automated account information National/Minnesota: Infoline (TouchTone(R) phones only), 800-272-4445 including current fund prices and performance, account values Mpls./St. Paul area: and recent account transactions 671-1630 IDS Cash Management Fund IDS Tower 10 Minneapolis, MN 55440-0010 -----END PRIVACY-ENHANCED MESSAGE-----