Commentary & Insight

Update: RiverSource Money Market Funds

In light of recent events relating to money market mutual funds, the following is an update on RiverSource Cash Management Fund.

Maintaining the $1.00 NAV

All RiverSource money market funds, including RiverSource Cash Management Fund, continue to maintain a $1.00 Net Asset Value (NAV).

RiverSource Cash Management Fund holdings

On Sept. 15, 2008, Ameriprise Financial, the parent company of RiverSource Investments, LLC, committed to purchase Lehman Brothers Commercial Paper held in the RiverSource Cash Management Fund in order to maintain the Fund's $1.00 NAV. The Fund does not hold Commercial Paper from AIG or Washington Mutual.

How RiverSource Cash Management Fund is managed

RiverSource Cash Management Fund was established in 1975 and seeks to provide principal stability and a competitive yield. The fund had more than $4 billion in assets as of June 30, 2008, the most recent reporting period.

The Fund invests in money market instruments and maintains an average portfolio maturity of 90 days or less. Investments are made in marketable, short-term U.S. Government and corporate debt. Nearly all securities in the fund are rated in the highest short-term rating category. Current and future portfolio holdings are subject to risk.

Application to participate in U.S. Treasury's Temporary Guarantee Program

RiverSource Cash Management Fund, RiverSource VP Cash Management Fund and RiverSource Tax-Exempt Money Market Fund have applied to participate in the U.S. Treasury's Temporary Guarantee Program for Money Market Funds (Guarantee Program). The RiverSource Funds Board approved this application submission on Oct. 3, 2008, and the funds now await approval of their application by the U.S. Treasury.

The Guarantee Program is available to publicly offered money market funds registered with the Securities and Exchange Commission that had a stable net asset value or share price of $1.00 on Sept. 19, 2008 and are in compliance with Rule 2a-7 of the Investment Company Act of 1940. The Guarantee Program covers the shares of any shareholder of record as of the close of business on Sept. 19, 2008 (Covered Shareholders). If the number of shares an investor holds fluctuates over the period, the investor will be covered for either the number of shares held as of the close of business on Sept. 19, 2008 or the current amount, whichever is less. For example, a shareholder with $10,000 in a covered fund on Sept. 19, who invested another $5,000 on Sept. 20 would have coverage for the $10,000 portion, but not for the additional $5,000 investment. Similarly, new money that entered the account in the form of dividends or other earnings after Sept. 19 end-of-day would also not be covered by this program.

Unless extended by the U.S. Treasury Department, the Guarantee Program will expire on Dec. 18, 2008. Covered Shareholders will receive $1.00 per covered share upon the liquidation of a money market fund, dependent on the availability of funds in the Guarantee Program.

If you own shares in a money market mutual fund that is covered by the Guarantee Program, you could lose the benefit of the guarantee if you close or transfer your account to another firm. If you have questions about a potential loss of coverage under the Guarantee Program, you should contact your firm before closing or transferring an account.

For frequently asked questions about the Guarantee Program, please refer to http://www.ustreas.gov/press/releases/hp1163.htm.

Next steps

Meet with your financial advisor to ensure that your investment plan addresses the current volatility as well as your long-term goals. Staying focused on your long-term goals can help you weather these turbulent markets.

For more information

Special market update from RiverSource Chief Investment Officer Ted Truscott. Read more

Market commentary from David Joy, Chief Market Strategist Read more