IDS MANAGED FUTURES II L P - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended Commission File No.
December 31, 1995 0-17443

IDS MANAGED FUTURES II, L.P.
(Exact name of registrant as specified in its charter)

Delaware 06-1207252
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification #)

233 South Wacker Drive, Suite 2300, Chicago, IL 60606
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (312) 460-4000

Securities registered pursuant to Section 12 (b) of the Act: None

Securities registered pursuant to Section 12 (g) of the Act:
Units of Limited Partnership Interest

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days: Yes X No

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein
and will not be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K: [X]

There is no public market for the units of limited partnership
interest. Accordingly, information with respect to the aggregate
market value of units of limited partnership interest held by
non-affiliates has not been supplied.

Registrant has no voting stock.

Index to exhibits on page 24

Documents Incorporated by Reference

Incorporated by reference in Part I, Item 1 is the Partnership
Prospectus dated July 14, 1987 filed pursuant to Rule 424 under
the Securities Act of 1933 and its supplements dated May 4, 1988
and November 4, 1988.

Incorporated by reference in Part I, Item 1 and Part IV, Item 14
is Registration Statement No. 33-13938 of the Partnership on Form
S-1 under the Securities Act of 1933, declared effective on July
14, 1987.

Post Effective Amendment:

1. To the Registration Statement declared effective on April
27, 1988 incorporated by reference.

Post Effective Amendment:

2. To the Registration Statement declared effective on May 4,
1988 incorporated by reference.

Part I

Item 1. Business

IDS Managed Futures II, L.P. (the "Partnership") is a limited
partnership organized on April 21, 1987 under the Delaware
Revised Uniform Limited Partnership Act. The Partnership was
formed to speculatively trade commodity interests, including
futures contracts, forward contracts, physical commodities and
related options thereon pursuant to the trading instructions of
independent trading advisors. The General Partners of the
Partnership are CIS Investments, Inc. ("CISI") and IDS Futures
Corporation ("IDS Futures") (collectively, the "General
Partners"). The General Partners are registered commodity pool
operators under the Commodity Exchange Act, as amended (the "CE
Act"), and are responsible for administering the business and
affairs of the Partnership exclusive of trading decisions. CISI
is an affiliate of Cargill Investor Services, Inc. ("CIS"), the
clearing broker for the Partnership. IDS Futures is an affiliate
of American Express Financial Advisors Inc. ("AXP Advisors"),
formerly IDS Financial Services Inc., which acts as the
Partnership's introducing broker and selling agent. Effective
January 1, 1995, IDS Financial Corporation, the parent company of
IDS Financial Services Inc., changed its name to American Express
Financial Corporation and IDS Financial Services Inc. changed its
name to American Express Financial Advisors Inc. These were
solely name changes; the management and structure of each company
did not change.

CIS is a "Futures Commission Merchant," the General Partners are
"Commodity Pool Operators," IDS is an "Introducing Broker" and
the trading advisors to the Partnership are "Commodity Trading
Advisors" as those terms are used in the CE Act. As such, they
are registered with and subject to regulation by the Commodity
Futures Trading Commission ("CFTC") and the National Futures
Association ("NFA"). AXP Advisors and CIS are also registered as
broker-dealers with the National Association of Securities
Dealers, Inc. ("NASD") and the SEC.

Through March 3, 1989 trading decisions for the Partnership were
made by five independent commodity trading advisors, Commodity
Monitors, Inc., John W. Henry & Co., Inc., Mint Investment
Management Company, Neims-Stoken Partnership and Sabre Fund
Management Limited. Mint Investment Management Company no
longer traded assets of the Partnership after March 3, 1989 and
Neims-Stoken Partnership no longer traded assets of the
Partnership after October 13, 1989. In addition, Commodity
Monitors, Inc. ceased trading at the end of April 1991. Chang
Crowell Management Corporation began trading assets of the
Partnership in August 1991 and ceased trading on November 16,
1994. At December 31, 1995, John W. Henry & Co., Inc. and Sabre
Fund Management Limited made all trading decisions for the
Partnership.

Units of limited partnership interest ("Units") were offered by
AXP Advisors commencing July 14, 1987 through December 31, 1988.
The total amount of the offering was $40,000,000. There is no
definite number of Units authorized for the Partnership because
investors affiliated with the Selling Agent of the Partnership
were not required to pay selling commissions. As of December 31,
1988, 60,127.14 Units representing a total investment of
$14,983,249 had been sold and accepted into the Partnership
(excluding 627.95 Units purchased by the General Partners for
$150,110). A final group of investors purchasing Units worth
$423,750 between December 20, 1988 and December 31, 1988 were
admitted into the Partnership on January 31, 1989, at a Net Asset
Value of $255.27. The General Partners also purchased an
additional $3,960 of Units on January 31, 1989.

The offering was made pursuant to a Registration Statement on
Form S-1 and Prospectus declared effective with the Securities
and Exchange Commission ("SEC") on July 14, 1987 and supplements
thereto. The minimum subscription size was $5,000 for investors
not affiliated with AXP Advisors and $4,700 for affiliated
investors (affiliated investors did not have to pay selling
commissions of 6% of the investment amount). In the case of
Individual Retirement Accounts and Keogh Plans the minimum
subscription size was $1,000 in most jurisdictions and $940 for
affiliated investors. A selling commission of 6% was charged to
all non-affiliated investors. Through January 31, 1989 a total
of $897,126 was paid to AXP Advisors as selling commissions.
Upon completion of the offering period, the Partnership began to
reimburse the General Partners for organization and offering
costs advanced by them on behalf of the Partnership. The
organization and offering costs for the Partnership which were
originally estimated at $825,000 amounted to $642,710. During
1988 and 1989, $13,702 and $48,480, respectively, was reimbursed
to the General Partners by the Limited Partners redeeming prior
to the recovery of these expenses. In 1989 the Partnership had
additional organization and offering expenses of $18,619. The
balance of these expenses, which totaled $580,528, was reimbursed
from interest income earned on the net assets of the Partnership
on deposit with the clearing broker.

The General Partners each contributed $77,035 (a total of
$154,070) in cash to the capital of the Partnership, which was
approximately 1.05% of the total contributions to the Partnership
(less selling commissions) by all Partners. The General Partners
received in exchange for such contribution 644.4502 Units of
Partnership interest (322.2251 Units each).

Under the terms of the Limited Partnership Agreement, the General
Partners may not select Partnership transactions involving the
purchase or sale of any commodity interests, but must select one
or more trading advisors to direct the Partnership's trading with
respect thereto. Initially, the General Partners chose and
caused the Partnership to enter into an Advisory Contract with
each of Commodity Monitors, Inc., John W. Henry and Co., Inc.,
Mint Investment Management Company, Neims-Stoken Partnership and
Sabre Fund Management Limited (the "Advisors"). Commencing on
March 1, 1988, after the conclusion of the initial offering
period with respect to the Partnership's Limited Partnership
Units, the Advisors began to provide commodity trading
instructions to CIS on behalf of the Partnership. Mint
Investment Management Company gave notice to the Fund that they
were withdrawing as an Advisor due to a restructuring of their
business. After February 28, 1989 Mint Investment Management
Company no longer traded assets of the Partnership. Further,
Neims-Stoken Partnership was closed out on October 13, 1989 due
to poor trading performance. The assets remaining from both Mint
and Neims-Stoken were allocated among the remaining Advisors.
The assets formerly managed by John W. Henry & Co., Inc. ("JWH")
pursuant to its Original Trading Method were allocated to another
program operated by JWH, the KT Financial and Metals Portfolio as
of February 1989. Further, Commodity Monitors, Inc. ceased
trading assets of the Partnership due to poor trading performance
in April 1991 and Chang Crowell Management Corporation ("Chang
Crowell") began trading assets in August 1991. As of November
16, 1994 Chang Crowell was terminated as an Advisor to the
Partnership and on December 12, 1994 the assets formerly managed
by Chang Crowell were allocated to Sabre Fund Management Limited
("Sabre").

The General Partners are responsible for the preparation of
monthly and annual reports to the Limited Partners; filing
reports required by the CFTC, the NFA, the SEC and any other
Federal or State agencies having jurisdiction over the
Partnership's operations; calculation of the Net Asset Value
(meaning the total assets less total liabilities of the
Partnership (for a more precise definition, see the Exhibit "the
Registration Statement on Form S-1" hereto)) and directing
payment of the management and incentive fees payable to the
Advisors under the Advisory Contracts. The General Partners
provide suitable facilities and procedures for handling
redemptions, transfers, distributions of profits (if any) and
orderly liquidation of the Partnership. Although CIS, an
affiliate of CISI (one of the General Partners) acts as the
Partnership's clearing broker, the General Partners are
responsible for selecting another clearing broker in the event
CIS is unable or unwilling to continue in that capacity. The
General Partners are further authorized, on behalf of the
Partnership (i) to enter into the brokerage clearing agreement
and related customer agreements with their affiliates, CIS and
AXP Advisors, pursuant to which those firms render clearing and
introducing brokerage services to the Partnership; (ii) to cause
the Partnership to pay brokerage commissions at the rates
provided for in the brokerage agreement ($58.75 per round turn
trade to CIS which in turn reallocates $37.25 per round turn
trade to AXP Advisors) and NFA, exchange, clearing, delivery,
insurance, storage, service and other fees and charges incidental
to the Partnership's trading. The Partnership shall not pay
brokerage commissions to CIS and AXP Advisors at rates higher
than those established in the Prospectus for a period of 60
months from the date the Partnership commences trading except for
trades placed at certain foreign exchanges for which the
Partnership is charged a surcharge equal to the increased
incremental cost to CIS; thereafter, such brokerage commissions
may be increased at rates equivalent to increases in the Consumer
Price Index or other comparable measure of inflation.

The original Advisory Contract between the Partnership and each
of the Advisors provides that the Advisors shall each have sole
discretion in and responsibility for the selection of the
Partnership's commodity transactions with respect to the portion
of the Partnership's assets allocated to it. The initial
Advisory Contracts terminated on March 31, 1989 and were extended
with each Advisor on the same terms for three additional one year
terms. An Amendment to the IDS Managed Futures II, L.P. Advisory
Contract was signed on March 31, 1992 for Sabre and JWH,
extending each of their terms for one year with the ability to
extend for three additional one year periods thereafter.

An additional Advisory Contract among the Partnership, the
General Partners and Chang Crowell became effective August 9,
1991. This contract was for one year with a provision to extend
the Advisory Contract for two additional one year terms. The
Advisory Contract with Chang Crowell was not renewed in August
1994 and Chang Crowell was terminated as an Advisor to the
Partnership on November 16, 1994.

The Advisory Contracts shall terminate automatically with respect
to each Advisor in the event that the Partnership is terminated
in accordance with the Limited Partnership Agreement. The
Advisory Contracts may be terminated by the Partnership with
respect to any Advisor individually upon written notice to the
Advisor in the event that (i) the Partnership assets allocated to
the Advisor has trading losses in excess of 30% of the assets
originally allocated to the Advisor; (ii) the Advisor is unable,
to any material extent, to use its agreed upon Trading Approach;
(iii) the Advisor's registration is revoked or not renewed; (iv)
there is unauthorized assignment of the Advisory Contract by the
Advisor; (v) the Advisor dissolves, merges, consolidates with
another entity, sells a substantial portion of its assets,
changes control, becomes bankrupt or insolvent or has a change in
executive officer; or (vi) the General Partners determine in good
faith that such termination is necessary for the protection of
the Partnership.

An Advisor may terminate the Advisory Contract at any time upon
written notice to the Partnership in the event that (i) its
continued trading on behalf of the Partnership would require the
Advisor to become registered as an investment advisor under the
Investment Advisors Act of 1940; (ii) assets in excess of 50% of
the initially allocated assets are reallocated from the Advisor;
(iii) the registration of either General Partner is revoked,
suspended, terminated or not renewed; (iv) the General Partners
elect to have the Advisor use a trading approach which is
different from that initially used; (v) the General Partners
override a trading instruction or impose additional trading
limitations; (vi) there is an unauthorized assignment of the
Advisory Contract by the General Partners; or (vii) other good
cause is shown to which the written consent of the General
Partners is also obtained. An Advisor may also terminate the
Advisory Contract on 60 days written notice to the General
Partners during any renewal term.

The Advisors will continue to advise other futures trading
accounts. The Advisors and their officers, directors and
employees also will be free to trade commodity interests for
their own accounts provided such trading is consistent with the
Advisors' obligations and responsibilities to the Partnership.
To the extent that the Advisors recommend similar or identical
trades to the Partnership and other accounts which they manage,
the Partnership may compete with those accounts for the execution
of the same or similar trades.

The Partnership paid JWH and Chang Crowell a monthly management
fee of 1/3 of 1% of the Partnership's Net Asset Value ("NAV")
under management as of the end of the month. Effective November
6, 1994 Chang Crowell ceased making trading decisions for the
Partnership. Initially the Partnership paid Sabre a monthly
management fee of 1/3 of 1% of the month-end net assets under
management. Effective December 1, 1991, the Advisory Contract
with Sabre was changed to reduce management fees paid to them to
1/6 of 1% of month-end net assets until such time as the assets
allocated to Sabre showed a profit of 25%. The Partnership
raised Sabre's management fee to 1/3 of 1% on September 1, 1993
because the 25% profit was achieved. Further effective January
1, 1996, Sabre's monthly management fee was again reduced from
1/3 of 1% to 1/6 of 1% of the Partnership's Net Asset Value
subject to Sabre's management at month end. This reduction in
management fees will continue until such time that the cumulative
trading performance of Sabre reaches a certain level specified by
the General Partners and agreed upon by Sabre. The Partnership
pays each Advisor a quarterly incentive fee of 15% of trading
profits achieved on the NAV of the Partnership allocated by the
General Partners to such Advisor's management. The calculation
and payment of such incentive fees shall not be affected by the
performance of any other Advisor. See pages 6-8 of Exhibit 10.1
hereto for a description of Net Asset Value and trading profits.

The incentive fee is paid to an Advisor only when the cumulative
trading profits for assets allocated to that Advisor at the end
of a quarter exceed the highest previous cumulative trading
profits at the end of a quarter for which an incentive fee was
paid to that Advisor.

Effective March 17, 1995, Sabre Limited, the holding company of
Sabre, changed its share ownership and management structure. On
this date Henderson Administration Group plc and Phoenix
Securities Limited both ceased to be ordinary shareholders in
Sabre Limited. In addition, Mr. Michael J. Grimme purchased a
29.25% share ownership in Sabre Limited. Following these
transactions, the holders of ordinary voting shares in Sabre
Limited are as follows: Robin W. Edwards, 41.5%; Peter G. Swete,
29.25%; and Michael J. Grimme, 29.25%. Also on March 17, 1995,
Michael J. Grimme was appointed to the Board of Directors of
Sabre Limited and became the Managing Director of Sabre.
Effective November 30, 1995, Michael J. Grimme became a
Non-Executive Director of Sabre.

Effective July 7, 1995, Bruce I. Nemirow resigned from his
positions with JWH and effective October 27, 1995 Thomas C.
Bozarth is no longer a principal of JWH. In the year ending
December 31, 1995, the following persons have been added as
principals of JWH: David R. Bailin, Executive Vice President;
Barry S. Fox, Director of Research and Development; David M.
Kozak, Vice President; Christopher E. Deakins, Vice President;
and Nancy O. Fox, Vice President. In addition, Mary Beth Hardy
was promoted to Senior Vice President of JWH.

The Limited Partnership Agreement provides that (i) funds will be
invested only in futures contracts which are traded in sufficient
volume to permit, in the opinion of each Advisor, ease of taking
and liquidating positions; (ii) no Advisor will establish futures
positions in a commodity interest such that the margin required
for those positions, when added to that required for existing
positions for the same commodity interest, would exceed 15% of
the Partnership assets allocated to that Advisor; (iii) it is
expected that 20% to 60% of the Net Assets of the Partnership
will normally be committed to initial margin, however, no Advisor
may commit more that 66 2/3% of the assets under its management
to initial margins; (iv) the Partnership will not generally
enter into an open position for a particular commodity interest
during a delivery month; (v) the Partnership may not trade in
securities or options on securities, commodity futures contracts,
or physical commodities unless such options have been approved
for trading on a designated contract market by the CFTC; the
Partnership may trade in foreign options if permitted under the
CE Act and CFTC regulations; the Partnership may trade in
futures contracts, futures contracts on foreign currencies
through foreign and domestic commodity exchanges and forward
contracts on foreign currencies; (vi) the Partnership may not
engage in pyramiding, but may employ spreads or straddles; (vii)
the Partnership's assets will not be commingled with the assets
of any other person; (viii) no Advisor will be permitted to
engage in churning the assets of the Partnership; and (ix) no
rebates or no give-ups may be paid to or received by the General
Partners. The Partnership will not generally utilize borrowing
except for short-term borrowing when the Partnership takes
delivery of a physical commodity. Material changes in these
trading policies must be approved by a vote of a majority of the
outstanding Limited Partnership Units.

The Partnership's net assets were deposited in the Partnership's
account with CIS, the Partnership's clearing broker. CIS credits
the Partnership at month end with interest income on 100% of the
Partnership's average monthly cash balance at a rate equal to 80%
of the average 90-day Treasury Bill rate for Treasury Bills
issued during the month. The organization and offering expenses
for the Partnership were advanced by the General Partners. The
General Partners began being reimbursed for these expenses in
March 1989 with payments at the end of each month from interest
income credited to the Partnership by CIS.

The Partnership currently has no salaried employees and all
administrative services performed for the Partnership are
performed by the General Partners. The General Partners have no
employees other than their officers and directors, all of whom
are employees of the affiliated companies of the General
Partners.

The Partnership's business constitutes only one segment for
financial reporting purposes; it is a limited partnership whose
purpose is to trade, buy, sell, spread or otherwise acquire, hold
or dispose of commodity interests including futures contracts,
forward contracts, physical commodities and related options
thereon. The Partnership does not engage in the production or
sale of any goods or services. The objective of the Partnership
business is appreciation of its assets through speculative
trading in such commodity interests. Financial information about
the Partnership's business as of December 31, 1995 is set forth
under Items 6 and 7 herein.

For a description of commodity trading and its regulation, see
the Registration Statement on Form S-1 included in the exhibits
hereto.

Competition

Each Advisor and its principals, affiliates and employees are
free to trade for their own accounts and to manage other
commodity accounts during the term of the Advisory Contract and
to use the same information and trading strategy which the
Advisor obtains, produces or utilizes in the performance of
services for the Partnership. To the extent that the Advisor
recommends similar or identical trades to the Partnership and
other accounts which it manages, the Partnership may compete with
those accounts for the execution of the same or similar trades.

In addition, other trading advisors who are not affiliated with
the Partnership may utilize trading methods which are similar in
some respects to those methods used by the Partnership's
Advisors. These other advisors could also be competing with the
Partnership for the same or similar trades as requested by the
Partnership's Advisors.

Item 2. Properties

The Partnership does not utilize any physical properties in the
conduct of its business. The General Partners use the offices of
CIS and AXP Advisors, at no additional charge to the Partnership,
to perform their administration functions and the Partnership
uses the offices of CIS, at no additional charge to the
Partnership, as its principal administrative offices.

Item 3. Legal Proceedings

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Part II

Item 5. Market for the Registrant's Units and Related Security
Holder Matters

(a) There is no established public market for
the Units and none is expected to develop.

(b) As of December 31, 1995, there were
21,884.34 Units held by Limited Partners and
644.45 Units held by the General Partners. A
total of 2,099.07 Units had been redeemed by
Limited Partners during the period from
January 1, 1995 to December 31, 1995 and
37,808.01 prior to 1995. The Partnership's
Limited Partnership Agreement (Exhibit 3.1
hereto) contains a full description of
purchase, redemptions and distribution
procedures.

(c) To date no distributions have been made to
partners in the Partnership.

The Limited Partnership Agreement does not provide for regular or
periodic cash distributions, but gives the General Partners sole
discretion in determining what distributions, if any, the
Partnership will make to its partners. The General Partners have
not declared any such distributions to date and do not currently
intend to declare such distributions.

Item 6. Selected Financial Data
1991 1992 1993 1994 1995

1. Operating Revenues(000) $4,165 $ 80 $4,715 $(508) $3,731
2. Income (Loss) From
Continuing Operations(000) 2,761 (790) 3,312 (1,544) 2,690
3. Income (Loss) Per Unit 78.94 (19.55) 118.26 (61.10) 112.27
4. Total Assets(000) 12,598 9,464 11,883 9,434 11,190
5. Long Term Obligations 0 0 0 0 0
6. Cash Dividend Per Unit 0 0 0 0 0

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations

Liquidity and Capital Resources

Most United States commodity exchanges limit the amount of
fluctuation in commodity futures contract prices during a single
trading day by regulations. These regulations specify what are
referred to as "daily price fluctuation limits" or "daily
limits". The daily limits establish the maximum amount the price
of a futures contract may vary either up or down from the
previous day's settlement price at the end of a trading session.
Once the daily limit has been reached in a particular commodity,
no trades may be made at a price beyond the limit. Positions in
the commodity could then be taken or liquidated only if traders
are willing to effect trades at or within the limit during the
period for trading on such day. Because the "daily limit" rule
only governs price movement for a particular trading day, it does
not limit losses. In the past, futures prices have moved the
daily limit for numerous consecutive trading days and thereby
prevented prompt liquidation of futures positions on one side of
the market, subjecting commodity futures traders holding such
positions to substantial losses for those days.

It is also possible for an exchange or the CFTC to suspend
trading in a particular contract, order immediate settlement of a
particular contract, or direct that trading in a particular
contract be for liquidation only.

The Partnership's net assets are deposited in cash with CIS and
as long as CIS acts as the Partnership's clearing broker, the
Partnership will earn interest on 100% of the Partnership's
average monthly cash balance at a rate equal to 80% of the
average yield on the 90-day U.S. Treasury Bills issued during
that month. For the calendar year ended December 31, 1995 CIS
had paid or accrued to pay interest of $470,866 to the
Partnership. Similarly, for the calendar year ended December 31,
1994, CIS had paid or accrued to pay interest of $365,050 to the
Partnership.

The General Partners each contributed a total of $77,035 for
which they each received 322.2251 Units of Partnership interest.
The purchase of Units was set forth in the Prospectus to meet the
1% minimum investment by the General Partners. The total amount
subscribed was contributed to the capital of the Partnership.

The Limited Partners contributed a total of $15,406,999 for which
they received 61,791.42 Units of Partnership interest.

For the year ended December 31, 1995, investors redeemed a total
of 2,099.07 Units for $951,690. In 1994 investors redeemed a
total of 1,944.80 Units for $812,167.

On December 31, 1995, the Partnership had unrealized profits of
$565,658 and cash on deposit at CIS of $10,585,211. These
positions required margin deposits at CIS of $1,204,662. The
total balance of the Partnership's account was $11,150,869.
These figures compare to unrealized profits of $546,622, cash on
deposit of $8,850,144, margin requirement of $1,375,181 and total
balance of the Partnership's account of $9,396,766 as of December
31, 1994. On December 31, 1993, the Partnership had unrealized
profits of $535,120 and cash on deposit of $11,322,539. These
positions required margin requirements at CIS of $911,000. The
total balance of the Partnership's account was $11,857,659.

During the fiscal year ended December 31, 1995, the Partnership
had no credit exposure to a counterparty which is a foreign
commodities exchange which was material.

The Partnership currently only trades on recognized global
futures exchanges. In the event the Partnership begins trading
over the counter contracts, any credit exposure to a counterparty
which exceeds 10% of the Partnership's total assets will be
disclosed.

See Footnote 5 of the Financial Statements for procedures
established by the General Partners to monitor and minimize
market and credit risks for the Partnership. In addition to the
procedures set out in Footnote 5, the General Partners review on
a daily basis reports of the Partnership's performance, including
monitoring of the daily net asset value of the Partnership. The
General Partners also review the financial situation of the
Partnership's Clearing Broker on a monthly basis. The General
Partners rely on the policies of the Clearing Broker to monitor
specific market risks. The Clearing Broker does not engage in
proprietary trading and thus has no direct market exposure which
provides the General Partners assurance that the Partnership will
not suffer trading losses through the Clearing Broker.

Results of Operations

The Partnership posted positive returns for 1995 and 1993 but
suffered losses for its Limited Partners in 1994.

Trading for 1993 was very profitable. The net return for this
period was 37%. These results were achieved primarily through
trading of world financial markets, capitalizing on strong trends
in global bonds and stock indices. Long positions in European,
United States and Pacific Rim bond markets were generally very
profitable as global economic sluggishness continued to plague
many of the world industrialized nations. Currency markets for
the most part stayed within narrow trading ranges for this
period. The one exception to this was the major movement of the
Japanese Yen. Grains had a brief flurry of activity during the
summer as severe flooding hampered crop development in the
Midwest coupled with drought conditions in the Southeastern
United States. As a result of this trading the Partnership
realized a gain for the year of $3,311,949.

The year 1994 was a challenging year for the Partnership, which
posted a loss of 14%. Economic and political instability
worldwide created disruptions in the financial markets. The U.S.
Administration was under fire, there was major trade tension
between the U.S. and Japan, instability in Russia, an
assassination in Mexico and conflict in Korea, all resulting in a
sharp decline in global stock and bond prices. The Yen/U.S.
Dollar relationship fluctuated sharply due to the concerns of
trade barriers or a potential trade war with Japan. The U.S.
Dollar declined relative to the European currencies and even
reached the lowest post World War II levels versus the Japanese
Yen. Physical commodities offered a few opportunities. Coffee
had a major rally after a severe freeze devastated the growing
area in Brazil, sugar prices rose to a three year high in October
and there were modest gains in precious metals. The Partnership
ended the year with a loss of $1,544,029.

In 1995 the Advisors were well-positioned to capitalize on many
trading opportunities, especially in the financial sector, which
produced a net gain of 29.8% for the year. The first quarter of
the year was the most profitable for the Partnership. The
February collapse of Barings PLC created opportunities,
especially in the Far Eastern markets. The Barings demise had a
global effect, sending stock prices falling around the world and
driving investors toward the safety of German marks and U.S.
Treasury bonds. The German mark benefited substantially from the
uncertain state of many world economies and gained steadily
versus the U.S. and other European currencies. Long positions in
foreign exchange generated sizable gains, with positions in the
Japanese yen, yen bond and the Nikkei 225 being the most
favorable. The balance of the year was much quieter in terms of
market opportunities, trends and profits. The Partnership ended
the year with a profit of $2,690,340.

To enhance the foregoing comparison of results of operations from
year to year one can examine, line to line, the Statements of
Financial Condition and Operations. Due to trends in the
marketplace in 1995 that were not evident in 1994, the
Partnership's "Realized gain (loss) on closed positions" was
greater than 1994.

Interest rates were higher in 1995 than in 1994 and the profits
earned by the Partnership caused a larger cash balance, so
interest income and interest receivable at the end of 1995 were
significantly greater than in 1994.

Because of the significant gains recorded during 1995, incentive
fees were significantly greater than in 1994. Also, because of
the gains throughout 1995, incentive fees at the end of the year
were much less in 1994 than in 1995.

Because the U.S. dollar lost value versus the various other
currencies traded by the Partnership during the year, the
Partnership recorded a foreign currency gain in 1994, but since
the move was not as great in 1995 as 1994, the total gain
recorded was less in 1995.

Due to the profits enjoyed by the Partnership as mentioned above,
it was required to accrue for the Illinois Personal Property
Replacement Tax at the end of the year. This caused Operating
Expenses and Accrued Operating Expenses for 1995 to be greater
than 1994.

Inflation

Inflation does have an effect on commodity prices and the
volatility of commodity markets; however, continued inflation is
not expected to have an adverse effect on the Partnership's
operations or assets.

Item 8. Financial Statements and Supplementary Data

Reference is made to the financial statements and the notes
thereto appearing on Pages 24 through 34 of this report.

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure

None.

Part III

Item 10. Directors and Executive Officers of the Registrant

The Partnership is managed by its General Partners, IDS Futures
Corporation and CIS Investments, Inc. The officers and directors
of the General Partners as of December 31, 1995 were as follows:

IDS Futures Corporation

Janis E. Miller (born in June 1951), President and Director. Ms.
Miller has served as President and Director of IDS Futures since
May 25, 1994. She has served as Vice President of Variable
Assets for American Express Financial Corporation since December
1993, where she is responsible for equity, fixed income and cash
mutual funds, the Flexible Annuity, Wealth Management, limited
partnerships and non-proprietary variable products. Ms. Miller
served as Vice President of Mutual Fund and Limited Partnership
Products Development and Marketing from June 1990 to November
1993; she served as Director of Mutual Fund Products Development
and Marketing since May 1987 and has been employed by American
Express Financial Corporation since 1981. She is a graduate of
Indiana University and holds an M.B.A. from the University of
Minnesota.

Lori J. Larson (born in August 1958), Vice President and
Director. Ms. Larson has been employed by American Express
Financial Corporation since 1981 and currently holds the title of
Vice President. Since August 1988 she has been responsible for
day-to-day management of vendor relationships, due diligence
review and operational aspects for the limited partnerships
distributed by AXP Advisors. In addition, she has
responsibility for the product development of publicly offered
mutual funds in the IDS Mutual Fund Group. Ms. Larson has held a
variety of management positions with American Express Financial
Corporation throughout her career. She is a graduate of and has
an M.B.A. from the University of Minnesota.

William H. Dudley (born in September 1932), Director. Mr. Dudley
has served as Executive Vice President-Investment and Brokerage
Operations for American Express Financial Corporation since March
1987 and as a Director of American Express Financial Corporation
since 1984. From 1974 until March 1987 he was the Senior Vice
President-Investment Operations for American Express Financial
Corporation. He is charged with overall responsibility for
American Express Financial Corporation's investment management
functions with respect to its mutual fund, private pension and
endowment accounts, face amount certificate and insurance and
annuity operations. Mr. Dudley is a graduate of the University
of Minnesota.

Michael L. Weiner (born in July 1946), Vice President, Secretary
and Treasurer. Mr. Weiner is the Vice President-Corporate Tax
Operations of American Express Financial Corporation. He has
been employed by American Express Financial Corporation since
1975. His responsibilities include research, planning and
compliance for the American Express Financial Corporation
corporate tax group. Mr. Weiner is also an officer of AXP
Advisors. Mr. Weiner graduated from the University of Minnesota
Law School in 1974 and completed the Masters of Business
Administration program at St. Thomas College of Minnesota in
1979.

John M. Knight (born in February 1952), Vice President. Mr.
Knight has been employed by American Express Financial
Corporation since July 1975. He is currently Controller-Variable
Assets, thus charged with overall finance responsibilities for
Mutual Funds, Limited Partnerships, Variable Annuities and Wealth
Management Services. From 1981 to March 1994 he held a number of
positions in the IDS Certificate Company, including Controller of
that organization. Mr. Knight is a graduate of the University of
Wisconsin-Eau Claire and a FLMI.

Morris Goodwin, Jr. (born in August 1951), Director. Mr. Goodwin
has served as Vice President and Corporate Treasurer of American
Express Financial Corporation since July 1989. He is responsible
for corporate cash management, treasury operations, short term
portfolio investment, capital allocation, liquidity management
and financing and corporate wide asset acquisition and
management. Mr. Goodwin served as Chief Financial Officer of IDS
Bank & Trust from 1988 to 1990. From 1980 until 1987, Mr.
Goodwin held various positions with Morgan Stanley & Co., Inc.
He is a graduate of Williams College and holds an M.B.A. from
Stanford Graduate School of Business.

CIS Investments, Inc.

Hal T. Hansen (born in November 1936), President and Director.
Mr. Hansen has been President of Cargill Investor Services, Inc.
since November 1978. He serves on the Executive Committees of
the Board of Directors of the NFA and the Futures Industry
Association ("FIA") and is Chairman of the NFA. Mr. Hansen
graduated from the University of Kansas in 1958. He started work
at Cargill, Incorporated in 1958 and was employed by Cargill
S.A.C.I. in Argentina from 1965 to 1969. Mr. Hansen has been
employed by Cargill Investor Services, Inc. since 1974.

L. Carlton Anderson (born in August 1937), Vice President and
Director. Mr. Anderson is a graduate of Northwestern University,
Evanston, Illinois. He started working at Cargill, Incorporated
in 1959 in the Commodity Marketing Division. He served as
President of Stevens Industries Inc., Cargill's peanut shelling
subsidiary, from 1979 to 1981. He has been employed by Cargill
Investor Services, Inc. since 1981, and is currently a Vice
President of CIS and the Director in charge of the Portfolio
Diversification Group. Mr. Anderson serves on the Board of
Directors of the Managed Futures Association.

Richard A. Driver (born in September 1947), Vice President and
Director. Mr. Driver became a Vice President and Director of
CISI on June 29, 1993. Mr. Driver graduated from the University
of North Carolina in 1969 and he received a Masters Degree from
American Graduate School of International Management in 1973.
Mr. Driver began working for Cargill, Incorporated in 1973 and
joined Cargill Investor Services, Inc. in 1977 as Vice President
of Operations.

Christopher Malo (born in August 1956), Vice President. Mr. Malo
graduated from Indiana University in 1976. He started working at
Cargill, Incorporated in June 1978 as an internal auditor. He
transferred to Cargill Investor Services, Inc. in August 1979 and
served as Secretary/Treasurer from November 1983 until July 1991.
He was elected as a Vice President in July 1991. He is a member
of the FIA Operations Division.

Barbara A. Pfendler (born in May 1953), Vice President. Ms.
Pfendler graduated from the University of Colorado in 1975. She
has held various merchandising and management positions within
Cargill's Oilseed Processing Division before transferring to CIS
in 1986. Currently, she is responsible for the CTA selection,
due diligence review and all marketing activities of the
Portfolio Diversification Group of CIS. Ms. Pfendler was
elected Assistant Vice President of CIS on May 1, 1995.

Donald J. Zyck (born in October 1961), Secretary and Treasurer.
Mr. Zyck graduated from Northern Illinois University, DeKalb,
Illinois in 1983. He began working at Cargill Investor Services,
Inc. in April 1985 as a Staff Accountant. From January 1988 to
October 1994 he was Manager of Treasury Operations at CIS. He
was elected Controller, Secretary and Treasurer of CIS in October
1994.

Bruce H. Barnett (born in June 1947), Assistant Secretary. Mr.
Barnett graduated in 1968 from Southern Connecticut State
College. New York University Law School awarded Mr. Barnett a
J.D. in 1971 and an LL.M. in 1973. He started working at
Cargill, Incorporated in 1990 as Vice President, Taxes. From
1987 to 1990, Mr. Barnett was employed in various positions at
Unilever, a European based multinational corporation.

Each officer and director holds such office until the election
and qualification of his or her successor or until his or her
earlier death, resignation or removal.

Item 11. Executive Compensation

The Partnership has no officers or directors. The General
Partners, IDS Futures and CISI administer the business and
affairs of the Partnership (exclusive of Partnership trading
decisions which are made by independent commodity trading
advisors). The officers and directors of the General Partners
receive no compensation from the Partnership for acting in their
respective capacities with the General Partners.

All operating and administrative expenses attributable to the
Partnership are paid by the General Partners except for brokerage
commissions, NFA, clearing and exchange fees, advisory fees,
legal, accounting, auditing, printing, recording and filing fees
and postage charges which are paid directly by the Partnership.
All expenses other than brokerage commissions incurred by the
Partnership will be paid to persons not affiliated with the
Partnership.

CIS, an affiliate of CISI, is the Partnership's clearing broker.
During the year ended December 31, 1995, the Partnership accrued
and paid $340,999 in brokerage commissions and exchange fees to
CIS. Of these commissions, $37.25 per round-turn trade is paid
to AXP Advisors as the Partnership's Introducing Broker and
$21.50 is retained by CIS as Clearing Broker for trades placed by
JWH and Sabre.

Item 12. Security Ownership of Certain Beneficial Owners and
Management

(a) As of December 31, 1995, no person was known to
the Partnership to own beneficially more than 5%
of the outstanding Units.

(b) As of December 31, 1995, the General Partners
beneficially owned 644.45 Units or approximately
2.86% of the Units outstanding as of that date.
In addition, Michael L. Weiner, Vice President,
Secretary and Treasurer of IDS Futures,
beneficially owned 1 of the outstanding Units.

(c) As of December 31, 1995, no arrangements were
known to the registrant, including no pledge by
any person of Units of the Partnership or shares
of its General Partners or the parents of the
General Partners, such that a change in control of
the Partnership may occur at a subsequent date.

Item 13. Certain Relationships and Related Transactions

(a) None other than the compensation arrangements
described herein.

(b) None.

(c) None.

(d) The Registrant filed a Registration Statement
on Form S-1, therefore this is information is not
required to be included.

Part IV

Item 14. Exhibits, Financial Statements Schedules and Reports on
Form 8-K

(a) The following documents are included herein:

(1) Financial Statements:

a. Report of Independent Public
Accountants

b. Statements of Financial Condition
as of December 31, 1995 and 1994

c. For the years ended December 31,
1995, 1994 and 1993:

Statements of Operations
Statements of Changes in Partners'
Capital
Statements of Cash Flows

d. Notes to Financial Statements

(2) All financial statement schedules have been
omitted either because the information required by the schedules
is not applicable or because the information required is
contained in the financial statements included herein or the
notes thereto.

(3) Exhibits:

See the Index to Exhibits annexed hereto.

(b) Reports on Form 8-K

(1) A Report of Form 8-K was filed with the
Securities and Exchange Commission on January 30, 1995 to report
the termination of Chang Crowell Management Corporation as a
commodity trading advisor.

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Date: March ___, 1996 IDS Managed Futures II, L.P.
(Registrant)

BY: IDS Futures Corporation BY: CIS Investments, Inc.
(General Partner) (General Partner)

BY /s/ Janis E. Miller BY /s/ Hal T. Hansen
Janis E. Miller Hal T. Hansen
President President

BY /s/ Michael L. Weiner BY /s/ Donald J. Zyck
Michael L. Weiner Donald J. Zyck
V.P., Secretary and Treasurer Secretary and
Treasurer

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the date
indicated.

Date: March ___, 1996

/s/ Janis E. Miller /s/ Hal T. Hansen
Janis E. Miller Hal T. Hansen
Director and President Director and
President

/s/ William H. Dudley /s/ L. Carlton Anderson
William H. Dudley L. Carlton Anderson
Director Director and Vice
President

/s/ Michael L. Weiner /s/ Donald J. Zyck
Michael L. Weiner Donald J. Zyck
V.P., Secretary and Secretary and
Treasurer Treasurer

Supplemental Information to be Furnished with Reports Filed
Pursuant to Section 15 (d) of the Act by Registrants Which Have
Not Registered Securities Pursuant to Section 12 of the Act.

Annual reports or proxy materials have been sent to unit holders
of the Partnership for the year ended December 31, 1995. Four
copies of the annual report which is to be sent to all partners
pursuant to regulations of the CFTC are attached.

Index to Financial Statements
IDS Managed Futures II, L.P.

Report of Independent Public Accountants 24

Statements of Financial Condition as of
December 31, 1995 and 1994 25

Statements of Operations for the years ended
December 31, 1995, 1994 and 1993 26

Statements of Changes in Partners' Capital for the
years ended December 31, 1995, 1994 and 1993 27

Statements of Cash Flows for the
years ended December 31, 1995, 1994 and 1993 28

Notes to Financial Statements 29

Acknowledgment 34

Index to Exhibits

Number Exhibit

3.1 Limited Partnership Agreement dated July
14, 1987.

10.1 Advisory Agreements dated as of July 14,
1987 between IDS Managed Futures II,
L.P. and each of Commodity Monitors,
Inc., John W. Henry & Co., Inc., Mint
Investment Management Company,
Neims-Stoken Partnership and Sabre Fund
Management Limited. Advisory Agreement
dated as of August 9,1991 between IDS
Managed Futures II, L.P. and Chang
Crowell Management Corporation. Amended
Advisory Contracts dated March 31, 1992
between IDS Managed Futures II, L.P. and
each of John W. Henry & Co., Inc. and
Sabre Fund Management Limited.

Exhibits 3.1, 10.1 and the Prospectus filed under Form S-1,
including its supplements dated May 4, 1988 and November 11,
1988, are herein incorporated by reference to Registration
Statement No. 33-13938 declared effective on July 14, 1987,
Post-Effective Amendment No. 1 declared effective on April 27,
1988 and Post-Effective Amendment No. 2 declared effective on May
4, 1988.

The exhibits referenced above bear exhibit numbers corresponding
to those indicated in the Partnership's Registration Statement.

Number of
Attached Exhibits

None.

Independent Auditors' Report

The Partners
IDS Managed Futures II, L.P.:

We have audited the accompanying statements of financial condition of
IDS Managed Futures II, L.P. (the Partnership) as of December 31, 1995
and 1994, and the related statements of operations, partners' capital,
and cash flows for each of the years in the three-year period ended
December 31, 1995. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an
opinion on these financial statements 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
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. 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 Managed
Futures II, L.P. as of December 31, 1995 and 1994, and the results of
its operations and its cash flows for each of the years in the three-
year period ended December 31, 1995 in conformity with generally
accepted accounting principles.

January 25, 1996

IDS MANAGED FUTURES II, L.P.

Statements of Financial Condition

December 31, 1995 and 1994

1995 1994

Assets

Equity in commodity futures trading accounts:
Cash on deposit with Clearing Broker $10,585,211 8,850,144
Unrealized gain on open futures contracts 565,658 546,622

11,150,869 9,396,766

Interest receivable 39,588 37,615

$11,190,457 9,434,381

Liabilities and Partners' Capital

Liabilities:
Accrued commissions on open futures contracts
due to AXP Advisors and CIS 36,318 51,287
Accrued exchange, clearing, and NFA fees 535 1,035
Accrued management fees 36,944 30,011
Accrued incentive fees 10,682 0
Accrued operating expenses 70,279 27,869
Redemptions payable 19,908 47,038

Total liabilities 174,666 157,240

Partners' capital:
Limited partners (21,884.34 and 23,983.41 units outstanding
at December 31, 1995 and 1994, respectively) 10,700,674 9,034,378
General partners (644.45 units outstanding at December 31,
1995 and 1994) 315,117 242,763

Total partners' capital 11,015,791 9,277,141

$11,190,457 9,434,381

See accompanying notes to financial statements.

IDS MANAGED FUTURES II, L.P.

Statements of Operations

Years ended December 31, 1995, 1994, and 1993

1995 1994 1993

Revenues:
Gain (loss) on trading of commodity futures contracts:
Realized gain (loss) on closed positions $ 3,155,319 (1,020,859) 4,333,137
Increase in unrealized gain on open
futures contracts 19,036 11,502 101,390
Interest income 470,866 356,050 260,676
Foreign currency transaction gain 86,209 145,531 19,615

Total revenues 3,731,430 (507,776) 4,714,818

Expenses:
Commission paid to AXP Advisors and CIS 340,999 465,039 548,739
Exchange, clearing, and NFA fees 6,116 11,678 14,979
Management fees 430,581 422,292 419,946
Incentive fees 185,847 133,131 323,884
Operating expenses 77,547 4,113 95,321

Total expenses 1,041,090 1,036,253 1,402,869

Net profit (loss) $ 2,690,340 (1,544,029) 3,311,949

Profit (loss) per unit of limited partnership interest $ 112.27 (61.10) 118.26
Profit (loss) per unit of general partnership interest 112.27 (61.10) 118.26

See accompanying notes to financial statements.

IDS MANAGED FUTURES II, L.P.

Statements of Partners' Capital

Years ended December 31, 1995, 1994, and 1993

Total
Limited General patners'
Units* partners partners capital

Balance at December 31, 1992 28,383.03 $ 9,069,361 205,927 9,275,288

Net profit 0.00 3,235,737 76,212 3,311,949
Redemptions (2,454.82) (953,900) 0 (953,900)

Balance at December 31, 1993 25,928.21 11,351,198 282,139 11,633,337

Net loss 0.00 (1,504,653) (39,376)(1,544,029)
Redemptions (1,944.80) (812,167) 0 (812,167)

Balance at December 31, 1994 23,983.41 9,034,378 242,763 9,277,141

Net profit 0.00 2,617,986 72,354 2,690,340
Redemptions (2,099.07) (951,690) 0 (951,690)

Balance at December 31, 1995 21,884.34 $10,700,674 315,117 11,015,791

Net asset value per unit at December 31, 1995 $ 488.96 488.96

Net asset value per unit at December 31, 1994 $ 376.69 376.69

Net asset value per unit at December 31, 1993 $ 437.79 437.79

*Units of limited partnership interest

See accompanying notes to financial statements.

IDS MANAGED FUTURES II, L.P.

Statements of Cash Flows

Years ended December 31, 1995, 1994, and 1993

1995 1994 1993

Cash flows from operating activities:
Net profit (loss) $ 2,690,340 (1,544,029) 3,311,949
Adjustments to reconcile net profit (loss) to net
cash provided by operating activities
change in assets and liabilities:
Increase in unrealized gain on open
futures contracts (19,036) (11,502) (101,390)
Increase in interest receivable (1,973) (11,970) (3,503)
Increase (decrease) in accrued liabilities 44,556 (69,544) 61,353

Net cash (used in) provided by operating activities 2,713,887 (1,637,045) 3,268,409

Cash flows used in financing activities
limited partner redemptions (978,820) (835,350) (953,900)

Net increase (decrease) in cash 1,735,067 (2,472,395) 2,314,509

Cash at beginning of year 8,850,144 11,322,539 9,008,030

Cash at end of year $10,585,211 8,850,144 11,322,539

See accompanying notes to financial statements.

IDS Managed Futures II, L.P.
Notes to Financial Statements

(1) General Information and Summary

IDS Managed Futures II, L.P. (the Partnership), a limited partnership
organized in April 1987 under the Delaware Revised Uniform Limited
Partnership Act, was formed to engage in the speculative trading of
commodity interests including futures contracts, forward contracts,
physical commodities, and related options thereon pursuant to the
trading instructions of independent trading advisors. The General
Partners are IDS Futures Corporation and CIS Investments, Inc. The
clearing broker is Cargill Investor Services, Inc. (Clearing Broker or
CIS), the parent company of CIS Investments, Inc.

Units of limited partnership interest were offered by IDS Financial
Services Inc. (IDS) (an affiliate of IDSFC) commencing July 14, 1987
through December 31, 1988. The total amount of the offering was
$40,000,000. There is no definite number of units authorized of the
Partnership because investors affiliated with the Selling Agent of the
Partnership were not required to pay selling commissions. As of
December 31, 1988, 60,127.14 units of partnership interest,
representing a total investment of $14,983,249, had been sold and
accepted into the Partnership (excluding 627.95 units purchased by the
General Partners for $150,110) and prior to redemptions. A final
group of investors purchasing units worth $423,750 between
December 20, 1988 and December 31, 1988 were admitted into the
Partnership on January 31, 1989 at a net asset value of $255.27. The
General Partners also purchased an additional $3,960 of units on
January 31, 1989.

No redemptions are permitted by a subscriber during the first six
months after he or she has been admitted to the Partnership.
Thereafter, a Limited Partner may cause any or all of his or her units
to be redeemed by the Partnership effective as of the last trading day
of any month of the Partnership based on the Net Asset Value per unit
on ten days written notice to the General Partners. Payment will be
made within ten business days of the effective date of the redemption.
The Partnership s Limited Partnership Agreement contains a full
description of redemption and distribution procedures.

The Partnership shall be terminated on December 31, 2007 if none of
the following occur prior to that date: (1) investors holding more
than 50% of the outstanding units notify the General Partners to
dissolve the Partnership as of a specific date; (2) disassociation of
the General Partners with the Partnership; (3) bankruptcy of the
Partnership; (4) decrease in the net asset value to less than
$1,500,000; (5) the Partnership is declared unlawful, or (6) the net
asset value per unit declines to less than $125 per unit and the
partners elect to terminate the Partnership.

(2) Summary of Significant Accounting Policies

The accounting and reporting policies of the Partnership conform to
generally accepted accounting principles and to general practices
within the commodities industry. The following is a description of
the more significant of those policies which the Partnership follows
in preparing its financial statements.

Financial Accounting Standards Board Interpretation No. 39 Reporting

Reporting in accordance with Financial Accounting Standards Board
Interpretation No. 39 ( FIN 39 ) is not applicable to the Partnership
and the provisions of FIN 39 do not have any effect on the
Partnership s financial statements.

Revenue Recognition

Commodity futures contracts, forward contracts, physical commodities,
and related options are recorded on the trade date. All such
transactions are reported on an identified cost basis. Realized gains
and losses are determined by comparing the purchase price to the sales
price when the trades are offset. Unrealized gains and losses
reflected in the statements of financial condition represent the
difference between original contract amount and market value (as
determined by exchange settlement prices for futures contracts and
related options and cash dealer prices at a predetermined time for
forward contracts, physical commodities, and their related options) as
of the last business day of the year or as of the last date of the
financial statements.

The Partnership earns interest on 100% of the Partnership's average
monthly cash balance on deposit with the Clearing Broker at a rate
equal to 80% of the average 90-day treasury bill rate for U.S.
Treasury bills issued during that month.

Commissions

Brokerage commissions and National Futures Association (NFA) clearing
and exchange fees are accrued on a round-turn basis on open commodity
futures contracts. The Partnership pays CIS commissions on trades
executed on its behalf at a rate of $58.75 per round-turn contract.
The Partnership pays this commission directly to CIS and CIS then
reallocates the appropriate portion to American Express Financial
Advisors Inc. (AXP Advisors) (effective January 1, 1995 IDS Financial
Services Inc. changed its name to American Express Financial Advisors
Inc.). Effective August 8, 1991 the commission rate for Chang-Crowell
Management Corporation was reduced to $35.00 per round-turn contract.

Foreign Currency Transactions

Trading accounts in foreign currency denominations are susceptible to
both movements in underlying contract markets as well as fluctuations
in currency rates. Translation of foreign currencies into U.S.
dollars for closed positions are translated at an average exchange
rate for the year while year-end balances are translated at the year-
end currency rates. The impact of the translation is reflected in the
statements of operations.

Statements of Cash Flows

For purposes of the statements of cash flows, cash represents cash and
cash on deposit with the Clearing Broker in commodity futures trading
accounts.

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.

(3) Fees

Management fees are accrued and paid monthly and incentive fees are
accrued monthly and paid quarterly. Trading decisions for the periods
of these financial statements were made by the following Commodity
Trading Advisors (CTAs): Chang-Crowell Management Corporation, John W.
Henry & Company, Inc., and Sabre Fund Management Limited. Effective
November 6, 1994, Chang-Crowell Management Corporation ceased making
trading decisions for the Partnership. Under agreements signed with
the CTAs, the CTAs will receive a monthly management fee of 1/3 of 1%
of the month-end net asset value of the Partnership under their
management and 15% of the Partnership's new trading profits
attributable to each manager's trading, if any, in each quarter.
Effective December 1, 1991 to September 1, 1993 the agreement with
Sabre was changed to reduce management fees paid to them to 1/6th of
1% of the month-end net assets.

(4) Income Taxes

No provision for Federal income taxes has been made in the
accompanying financial statements as each partner is responsible for
reporting income (loss) based on the pro rata share of the profits or
losses of the Partnership. The Partnership is responsible for the
Illinois State Partnership Information and Replacement Tax based on
the operating results of the Partnership. Such tax amounted to
$57,567 and $40,779 for the years ended December 31, 1993 and 1995,
respectively, and is included in operating expenses in the statements
of operations. No such tax was incurred for the year ended
December 31, 1994 as the Partnership sustained net losses.

(5) Financial Instruments with Off-balance Sheet Risk

The Partnership was formed to speculatively trade commodity interests.
The Partnership's commodity interest transactions and related cash
balances are on deposit with the Clearing Broker at all times. In the
event that volatility of trading of other customers of the Clearing
Broker impaired the ability of the Clearing Broker to satisfy its
obligations to the Partnership, the Partnership would be exposed to
off-balance sheet risk. Such risk is defined in Statement of
Financial Accounting Standards No. 105 (SFAS 105) as a credit risk.
To mitigate this risk, the Clearing Broker, pursuant to the mandates
of the Commodity Exchange Act, is required to maintain funds deposited
by customers, relating to futures contracts in regulated commodities,
in separate bank accounts which are designated as segregated
customers' accounts. In addition, the Clearing Broker has set aside
funds deposited by customers relating to foreign futures and options
in separate bank accounts which are designated as customer secured
accounts. Lastly, the Clearing Broker is subject to the Securities
and Exchange Commission's Uniform Net Capital Rule which requires the
maintenance of minimum net capital at least equal to 4% of the funds
required to be segregated pursuant to the Commodity Exchange Act. The
Clearing Broker has controls in place to make certain that all
customers maintain adequate margin deposits for the positions which
they maintain at the Clearing Broker. Such procedures should protect
the Partnership from the off-balance sheet risk as mentioned earlier.
The Clearing Broker does not engage in proprietary trading and thus
has no direct market exposure.

The contractual amounts of commitments to purchase and sell exchange
traded futures contracts was $116,572,731 and $53,157,421
respectively, on December 31, 1995, and $148,431,621 and $155,154,290,
respectively, on December 31, 1994. The contractual amounts of these
instruments reflect the extent of the Partnership's involvement in the
related futures contracts and do not reflect the risk of loss due to
counterparty nonperformance. Such risk is defined by SFAS 105 as
credit risk. The counterparty of the Partnership for futures
contracts traded in the United States and most non-U.S. exchanges on
which the fund trades is the Clearing House associated with the
exchange. In general, Clearing Houses are backed by the membership
and will act in the event of nonperformance by one of its members or
one of the members' customers and as such should significantly reduce
this credit risk. In the cases where the Partnership trades on
exchanges on which the Clearing House is not backed by the membership,
the sole recourse of the Partnership for nonperformance will be the
Clearing House.

The average fair value of commodity interests was $521,023 and
$570,000 during 1995 and 1994, respectively. Fair value as of
December 31, 1995 and 1994 was $565,658 and 546,622. The net gains or
losses arising from the trading of commodity interests are presented
in the statement of operations.

The Partnership holds futures and futures options positions on the
various exchanges throughout the world. The Partnership does not
trade over the counter contracts. As defined by SFAS 105, futures
positions are classified as financial instruments. SFAS 105 requires
that the Partnership disclose the market risk of loss from all of its
financial instruments. Market risk is defined as the possibility that
future changes in market prices may make a financial instrument less
valuable or more onerous. If the markets should move against all of
the futures positions held by the Partnership at the same time, and if
the markets moved such that the CTAs were unable to offset the futures
positions of the Partnership, the Partnership could lose all of its
assets and the partners would realize a 100% loss. The Partnership
has contracts with two CTAs who make the trading decisions. One of
the CTAs trade programs which are diversified among all commodity
groups, while the other is diversified among the various futures
contracts in the financial and metals group. Both traders trade on
U.S. and non-U.S. exchanges. Such diversification should greatly
reduce this market risk.

At December 31, 1995, the cash requirement of the commodity interests
of the Partnership was $1,204,662. This cash requirement is met by
$9,838,858 held in segregated funds and $1,312,011 held in secured
funds. At December 31, 1994, the cash requirement of the commodity
interests of the Partnership of $1,375,181 was met by $8,050,759 being
held in segregated funds and $1,346,007 being held in secured funds.
At December 31, 1995 and 1994, cash was on deposit with the Clearing
Broker which exceeded the cash requirement amount.

The following chart discloses the dollar amount of the unrealized gain
or loss on open contracts related to exchange traded contracts for the
Partnership at December 31, 1995 and 1994:

Commodity Group 1995 1994

Agricultural $47,367 $101,842
Currency 29,475 (104,550)
Stock Indices 76,702 -
Energies 79,46 46,506
Metals (2,296) 103,423
Interest 334,946 439,401

Total $565,658 $546,622

The range of maturity dates of these exchange traded open contracts is
January 1996 to December 1996.

Acknowledgment

To the best of my knowledge and belief, the information contained
herein is accurate and complete.

/s/ Donald J. Zyck
Donald J. Zyck
Treasurer, CIS Investments, Inc.,
one of the General Partners and Commodity Pool Operators of
IDS Managed Futures II, L.P.