-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, inK7rcIg/7RmkRYKfRHaDeoyfsCn9ejPgu+dw4x0q9qRriW1BjmYAlG5yi/l5v10 yax16uIvAis0V+tCr/DZ5w== 0000820027-95-000169.txt : 19950615 0000820027-95-000169.hdr.sgml : 19950615 ACCESSION NUMBER: 0000820027-95-000169 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950131 FILED AS OF DATE: 19950320 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDS GROWTH FUND INC CENTRAL INDEX KEY: 0000049702 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 410329910 STATE OF INCORPORATION: MN FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-02111 FILM NUMBER: 95521842 BUSINESS ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: T33/52 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 BUSINESS PHONE: 6126712772 N-30D 1 GROWTH FUND JAN. 1995 PAGE IDS Growth Fund 1995 semiannual report (Picture of icon: flower) The goal of IDS Growth Fund, Inc. is long-term growth of capital. The fund invests primarily in common stocks and securities convertible into common stocks. Distributed by American Express Financial Advisors Inc. PAGE Going for growth In the long run, a company's stock price usually reflects its business fortunes. Therefore, if a company thrives, its stock tends to follow suit. That's why many long-term investors, including Growth Fund, focus on growth stocks those of companies that enjoy rising sales and profits. While there will be interruptions along the way, patient investors look forward to sharing in that same prosperity. Contents From the president 3 From the portfolio manager 3 Ten largest holdings 5 Financial statements 6 Notes to financial statements 9 Investments in securities 17 Directors and officers 20 IDS mutual funds 21 PAGE To our shareholders (Picture of William R. Pearce) William R. Pearce President of the fund (Picture of Mitzi Malevich) Mitzi Malevich Portfolio manager From the president All of the funds in the IDS MUTUAL FUND GROUP held shareholder meetings on Nov. 9, 1994. The meetings, which were well-attended, approved all of the proposals advanced by management. Among the proposals were: - - The election of directors and the selection of KPMG Peat Marwick LLP as independent auditors for each of the funds in the group. - - A new investment management agreement that will become effective for each fund when it begins offering multiple classes of shares, now planned to occur in March, 1995. - - A change in investment policy that will permit the fund to adopt a master/feeder structure if and when the board of each fund determines that it is in the best interest of shareholders. - And, finally, a change with respect to the number of "fundamental investment polices" that allows the board to modify them should it deem appropriate. No other business was presented at the meeting, which was concluded by a report to shareholders from the American Express Financial Corporation Investment Department. Thanks to all of you for your effort in reviewing the proxy material and voting your proxies. William R. Pearce PAGE From the portfolio manager After losing considerable ground early in 1994, growth stocks mounted periodic comebacks in the second half of the year. The fund took full advantage of the improving environment, posting a return for the August 1994 through January 1995 period that was well above that of the average for growth mutual funds. During that time, the fund's advance also exceeded that of the broad stock market, as measured by the Standard & Poor's 500 Stock Index an unmanaged group of stocks commonly used to determine how stocks in general are performing. (As detailed in the accompanying table, much of the return for the past six months came in the form of a capital gain, which was declared last December and reduced the fund's net asset value by a like amount at that time.) Continuing their pattern of recent years, growth stocks were volatile during the past six months, as rising interest rates and the strength of corporate profits produced a tug-of-war effect on the market as a whole. However, for this fund at least, the upturns outnumbered the downturns. A perfect case in point was last summer, when a sharp decline in June was followed by a July/August surge that saw the fund gain more than 11%. It's that kind of rapid advance that points up the importance of taking a patient approach to investing and being willing to ride out the periodic dips in the road. Selectivity pays off The key to positive results during the past period was being invested in the right sectors within the growth stock group. Among the best-performing sectors were technology, telecommunications and health care, as well as large consumer-goods companies that derive a substantial portion of their business from foreign markets. To the fund's benefit, much of the portfolio was concentrated in those areas. Looking at specific stocks in the portfolio, Microsoft, Coca-Cola, Motorola and Home Depot were among those registering good gains. As for changes to the portfolio structure, we gradually reduced our holdings of foreign stocks from about 15% last summer to about 6% at period-end. Much of that reduction centered on Mexico, where we sold virtually all of our stocks once the peso was devalued and thereby avoided much of the subsequent downturn in that market. Aside from that, we essentially stayed with the same mix of holdings during the six months. A better year for growth stocks? As is usually the case, the trend of long-term interest rates in the U.S. probably will play a major role in how the stock market performs this year. When it becomes clear that rates have stopped their upward trend, we believe stocks should do well, or at least improve on their 1994 performance. Growth stocks, which have been lackluster the past couple of years, appear to be in an excellent position to advance, particularly if economic growth slows down. We think the portfolio remains well-positioned for such an environment and, barring major developments, plan to stay with the successful strategies of recent months. This is in keeping with the fund's buy-and-hold investment approach, which we believe creates the best opportunity to take advantage of stock market advances. Mitzi Malevich PAGE 6-month performance (All figures per share) Net asset value (NAV) Jan. 31, 1995 $ 16.60 July 31, 1994 $ 17.39 Decrease $ (0.79) Distributions Aug. 1, 1994 - Jan. 31, 1995 From income $ 0.04 From capital gains $ 1.51 Total distributions $ 1.55 Total return* +4.4% * If you purchased shares in the fund during this period, your return also would have been affected by the sales charge, as described in the prospectus. PAGE IDS Growth Fund, Inc.
Your fund's ten largest holdings Pie Chart: The ten holdings listed here make up 26.97% of the fund's net assets _____________________________________________________________________________________ Percent of Value (fund's net assets) (as Jan. 31, 1995) _____________________________________________________________________________________ Coca-Cola 3.10% $31,500,000 The world's largest producer and distributor of soft drinks, concentrates and syrups. HEALTHSOUTH Rehab 2.99 30,400,000 A fast-growing chain of hospitals and outpatient centers. The company specializes in patient rehabilitation that enables patients to return to a normal lifestyle as soon as possible after accidents, surgery or illness. Tellabs 2.93 29,850,000 Tellabs designs, manufactures and markets a broad range of products and equipment for use by telephone companies, the Bell System, specialized common carriers and other providers of telecommunication services. Home Depot 2.75 28,050,000 Home Depot sells a broad range of building materials and home-improvement products via retail warehouse stores. The company focuses on the do-it-yourselfer and home remodeler. Royal Dutch Petroleum 2.75 27,968,750 Royal Dutch Petroleum Co., which includes Royal Dutch (the Dutch version) and Shell Transport (the English version) is a major oil company. Microsoft 2.63 26,718,750 Microsoft has a leading franchise in microcomputer operating systems, DOS, Windows and Windows NT. Oracle Systems 2.51 25,575,000 One of the largest independent vendors of database-management software. Oracle offers a wide variety of new products, enhancements and applications software, supported by excellent service. Walt Disney 2.50 25,437,500 Disney is one of the premier entertainment companies and has two core businesses: filmed entertainment and theme parks, and consumer products. First Financial Management 2.43 24,700,000 A leading provider of information services, including processing credit card transactions and health-care claims. United Healthcare 2.38 24,250,000 United Healthcare is a national leader in health-care cost management and is the largest publicly held operator of health maintenance organizations.
PAGE Financial statements Statement of assets and liabilities IDS Growth Fund, Inc. Jan. 31, 1995
_____________________________________________________________________________________________________________ Assets _____________________________________________________________________________________________________________ (Unaudited) Investments in securities, at value (Note 1) (identified cost $798,140,001) $1,044,210,492 Cash in bank on demand deposit 3,449,625 Receivable for investment securities sold 1,411,952 Dividends and accrued interest receivable 592,642 U.S. government securities held as collateral (Note 4) 3,773,711 _____________________________________________________________________________________________________________ Total assets 1,053,438,422 _____________________________________________________________________________________________________________ Liabilities _____________________________________________________________________________________________________________ Payable for investment securities purchased 16,239,052 Payable upon return of securities loaned (Note 4) 18,764,711 Accrued investment management and services fee 555,778 Accrued distribution fee 45,174 Accrued transfer agency fee 112,532 Other accrued expenses 100,048 _____________________________________________________________________________________________________________ Total liabilities 35,817,295 _____________________________________________________________________________________________________________ Net assets applicable to outstanding capital stock $1,017,621,127 _____________________________________________________________________________________________________________ Represented by _____________________________________________________________________________________________________________ Capital stock -- authorized 10,000,000,000 shares of $.01 par value; outstanding 61,296,645 shares $ 612,966 Additional paid-in capital 773,814,246 Excess of distributions over net investment income (146,152) Accumulated net realized loss (Note 1) (2,730,424) Unrealized appreciation 246,070,491 _____________________________________________________________________________________________________________ Total -- representing net assets applicable to outstanding capital stock $1,017,621,127 _____________________________________________________________________________________________________________ Net asset value per share of outstanding capital stock $ 16.60 _____________________________________________________________________________________________________________ See accompanying notes to financial statements. PAGE Financial statements Statement of operations IDS Growth Fund, Inc. Six months ended Jan. 31, 1995 _____________________________________________________________________________________________________________ Investment income _____________________________________________________________________________________________________________ (Unaudited) Income: Dividends (net of foreign taxes withheld of $65,655) $ 4,186,915 Interest 1,244,935 _____________________________________________________________________________________________________________ Total income 5,431,850 _____________________________________________________________________________________________________________ Expenses (Note 2): Investment management and services fee 3,291,730 Distribution fee 255,168 Transfer agency fee 635,754 Compensation of directors 6,338 Compensation of officers 2,718 Custodian fees 48,065 Postage 80,898 Registration fees 27,219 Reports to shareholders 31,732 Audit fees 11,000 Administrative 6,261 Other 8,828 _____________________________________________________________________________________________________________ Total expenses 4,405,711 _____________________________________________________________________________________________________________ Investment income -- net 1,026,139 _____________________________________________________________________________________________________________ Realized and unrealized gain -- net _____________________________________________________________________________________________________________ Net realized gain on security and foreign currency transactions (Note 3) 6,867,484 Net change in unrealized appreciation or depreciation 33,418,617 _____________________________________________________________________________________________________________ Net gain on investments and foreign currency 40,286,101 _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations $41,312,240 _____________________________________________________________________________________________________________ See accompanying notes to financial statements. /TABLE PAGE Financial statements Statements of changes in net assets IDS Growth Fund, Inc.
_____________________________________________________________________________________________________________ Operations and distributions Jan. 31, 1995 July 31, 1994 Six months ended Year ended ___________________________________________________________________________________________________________________ (Unaudited) Investment income -- net $ 1,026,139 $ 1,053,685 Net realized gain on investments and foreign currency 6,867,484 132,940,828 Net change in unrealized appreciation or depreciation 33,418,617 (69,264,677) _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations 41,312,240 64,729,836 _____________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income (2,222,074) (34,025) Net realized gain (83,810,550) (94,040,848) _____________________________________________________________________________________________________________ Total distributions (86,032,624) (94,074,873) _____________________________________________________________________________________________________________ Capital share transactions _____________________________________________________________________________________________________________ Proceeds from sales of 5,379,234 and 5,591,678 shares (Note 2) 95,159,175 100,957,458 Net asset value of 5,080,714 and 5,261,628 shares issued in reinvestment of distributions 84,355,086 92,378,509 Payments for redemptions of 3,872,255 and 7,981,768 shares (68,796,343) (144,922,563) _____________________________________________________________________________________________________________ Increase in net assets from capital share transactions representing net addition of 6,587,693 and 2,871,538 shares 110,717,918 48,413,404 ____________________________________________________________________________________________________________ Total increase in net assets 65,997,534 19,068,367 Net assets at beginning of period 951,623,593 932,555,226 _____________________________________________________________________________________________________________ Net assets at end of period (including undistributed net investment income of $(149,152) and $1,049,783) $1,017,621,127 $951,623,593 _____________________________________________________________________________________________________________ See accompanying notes to financial statements.
PAGE Notes to financial statements IDS Growth Fund, Inc. (Unaudited as to Jan. 31, 1995) ______________________________________________________________________________ 1. Summary of significant accounting policies The fund is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. Significant accounting policies followed by the fund are summarized below: Valuation of securities All securities are valued at the close of each business day. Securities traded on national securities exchanges or included in national market systems are valued at the last quoted sales price; securities for which market quotations are not readily available are valued at fair value according to methods selected in good faith by the board of directors. Determination of fair value involves, among other things, reference to market indexes, matrixes and data from independent brokers. Short-term securities maturing in more than 60 days from the valuation date are valued at the market price or approximate market value based on current interest rates; those maturing in 60 days or less are valued at amortized cost. Options transactions In order to produce incremental earnings, protect gains, and facilitate buying and selling of securities for investment purposes, the fund may buy or write options traded on any U.S. or foreign exchange or in the over-the-counter market where the completion of the obligation is dependent upon the credit standing of the other party. The fund also may buy and sell put and call options and write covered call options on portfolio securities and may write cash-secured put options. The risk in writing a call option is that the fund gives up the opportunity of profit if the market price of the security increases. The risk in writing a put option is that the fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the fund pays a premium whether or not the option is exercised. The fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Option contracts are valued daily at the closing prices on their primary exchanges and unrealized appreciation or depreciation is recorded. The fund will realize a gain or loss upon expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option or the cost of a security for a purchased put or call option is adjusted by the amount of premium received or paid. Futures transactions In order to gain exposure to or protect itself from changes in the market, the fund may buy and sell stock index futures contracts traded on any U.S. or foreign exchange. The fund also may buy or write put and call options on these contracts. Risks of entering into futures contracts and related options include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. Upon entering into a futures contract, the fund is required to deposit either cash or securities in an amount (initial margin) equal to a certain percentage of the contract value. Subsequent payments(variation margin) are made or received by the fundeach day. The variation margin payments are equal to the daily changes in the contract value and arerecorded as unrealized gains and losses. The fund recognizes a realized gain or loss when the contractis closed or expires. Foreign currency translations and foreign currency contracts Securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars at the closing rate of exchange. Foreign currency amounts related to the purchase or sale of securities and income and expenses are translated at the exchange rate on the transaction date. The effect of changes in foreign exchange rates on realized and unrealized security gains or losses is reflected as a component of such gains or losses. In the statement of operations, net realized gains or losses from foreign currency transactions may arise from sales of foreign currency, closed forward contracts, exchange gains or losses realized between the trade date and settlement dates on securities transactions, and other translation gains or losses on dividend, interest income and foreign withholding taxes. The fund may enter into forward foreign currency exchange contracts for operational purposes and to protect against adverse exchange rate fluctuation. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates from an independent pricing service. The fund is subject to the credit risk that the other party will not complete the obligations of the contract. 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 primarily because of the deferral of losses on certain futures contracts, the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes, and losses deferred due to "wash sale" transactions. 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 An annual dividend declared and paid at the end of the calendar year from net investment income is reinvested in additional shares of the fund at net asset value or payable in cash. Capital gains, when available, are distributed along with the income dividend. Other Security transactions are accounted for on the date securities are purchased or sold. Dividend income is recognized on the ex-dividend date and interest income, including level-yield amortization of premium and discount is accrued daily. ______________________________________________________________________________ 2. Expenses and sales charges Under terms of an agreement dated Nov. 14, 1991, the fund pays American Express Financial Corporation a fee for managing its investments, recordkeeping and other specified services. The fee is a percentage of the fund's average daily net assets consisting of a group asset charge in reducing percentages from 0.46% to 0.32% annually on the combined net assets of all non-money market funds in the IDS MUTUAL FUND GROUP and an individual annual asset charge of 0.23% of average daily net assets. The fee is adjusted upward or downward by a performance incentive adjustment based on the fund's average daily net assets over a rolling 12-month period as measured against the change in the Lipper Growth Fund Index. The maximum adjustment is 0.12% of the fund's average daily net assets after deducting 1% from the performance difference. If the performance difference is less than 1%, the adjustment will be zero. The adjustment decreased the fee by $123,818 for the six months ended Jan. 31, 1995. The fund also pays American Express Financial Corporation a distribution fee at an annual rate of $6 per shareholder account and a transfer agency fee at an annual rate of $15 per shareholder account. The transfer agency fee is reduced by earnings on monies pending shareholder redemptions. American Express Financial Corporation will assume and pay any expenses (except taxes and brokerage commissions) that exceed the most restrictive applicable state expense limitation. Sales charges by American Express Financial Advisors Inc. for distributing fund shares were $1,518,597 for the six months ended Jan. 31, 1995. The fund also pays custodian fees to American Express Trust Company, an affiliate of American Express Financial Corporation. The fund has a retirement plan for its independent directors. Upon retirement, directors receive monthly payments equal to one-half of the retainer fee for as many months as they served as directors up to 120 months. There are no death benefits. The plan is not funded but the fund recognizes the cost of payments during the time the directors serve on the board. The retirement plan expense amounted to $4,403 for the six months ended Jan. 31, 1995. ______________________________________________________________________________ 3. Securities transactions Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated $224,401,682 and $211,726,993, respectively, for the six months ended Jan. 31, 1995. Realized gains and losses are determined on an identified cost basis. Brokerage commissions paid to brokers affiliated with American Express Financial Corporation were $88,086 for the six months ended Jan. 31, 1995. PAGE Notes to financial statements IDS Growth Fund, Inc. ______________________________________________________________________________ 4. Lending of portfolio securities At Jan. 31, 1995, securities valued at $18,296,500 were on loan to brokers. For collateral, the fund received $14,991,000 in cash and U.S. government securities valued at $3,773,711. Income from securities lending amounted to $195,287 for the six months ended Jan. 31, 1995. The risks to the fund of securities lending are that the borrower may not provide additional collateral when required or return the securities when due. PAGE
5. Financial highlights The table below shows certain important financial information for evaluating the fund's results. IDS Growth Fund, Inc. Fiscal period ended July 31, Per share income and capital changes* 1995** 1994 1993 1992 1991 1990 Net asset value, $17.39 $17.99 $18.57$17.62 $24.05 $23.24 beginning of period Income from investment operations: Net investment income .02 .02 -- .08 .19 .34 Net gains .74 1.24 2.40 2.66 .69 2.89 (both realized and unrealized) Total from investment .76 1.26 2.40 2.74 .88 3.23 operations Less distributions: Dividends from net (.04) -- -- (.18) (.33) (.27) investment income Distributions from (1.51) (1.86)(2.98) (1.61) (6.98) (2.15) realized gains Total distributions (1.55) (1.86)(2.98) (1.79) (7.31) (2.42) Net asset value, $16.60 $17.39 $17.99 $18.57 $17.62 $24.05 end of period Ratios/supplemental data 1995** 1994 1993 1992 1991 1990 Net assets, end of period (in millions) $1,018 $952 $933 $863 $780 $756 Ratio of expenses to .87%*** .83% .87% .88% .87% .73% average daily net assets Ratio of net income to .20%*** .11% --% .41% 1.36% 1.40% average daily net assets Portfolio turnover rate 22% 56% 44% 83% 75% 49% (excluding short-term securities) Total return 4.4%++ 7.0% 13.0% 15.1% 12.4% 15.3% *For a share outstanding throughout the period. Rounded to the nearest cent. **Six months ended Jan. 31, 1995 (Unaudited). ***Adjusted to an annual basis. +Total return does not reflect payment of a sales charge. ++For the fiscal period ended Jan. 31, 1995, the annualized total return is 8.8%.
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Investments in securities IDS Growth Fund, Inc. Jan. 31, 1995 (Uuaudited) (Percentages represents value of investments compared to net assets) ____________________________________________________________________________________________________________________________ Common stocks (96.1%) ____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Airlines (1.6%) KLM Royal Dutch Air 300,000 (b) $ 8,062,500 Northwest Airlines 440,000 (b) 8,085,000 ____________ Total 16,147,500 _____________________________________________________________________________________________________________________________ Automotive & related (0.4%) Gentex 200,000 (b) 4,450,000 _____________________________________________________________________________________________________________________________ Banks and savings & loans (1.8%) First Chicago 400,000 18,800,000 _____________________________________________________________________________________________________________________________ Beverages & tobacco (3.1%) Coca-Cola 600,000 31,500,000 _____________________________________________________________________________________________________________________________ Building materials (1.8%) Clayton Homes 750,000 11,062,500 Tyco Intl 150,000 7,256,250 ____________ Total 18,318,750 _____________________________________________________________________________________________________________________________ Communications equipment (14.4%) AirTouch Communications 600,000 (b) 16,500,000 Andrew 400,000 (b) 21,200,000 Cisco Systems 400,000 (b) 13,350,000 Ericsson (LM) Tel Cl B ADR 400,000 (c) 21,550,000 Intl Family Entertainment Cl B 196,800 (b) 2,681,400 MFS Communications 150,000 (b) 5,700,000 Motorola 400,000 23,650,000 Scientific-Atlanta 600,000 12,075,000 Tellabs 600,000 (b) 29,850,000 ____________ Total 146,556,400 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Computers & office equipment (11.3%) Amer Power Conversion 300,000 (b) 4,687,500 Compaq Computer 600,000 (b) 21,450,000 Danka Business Systems ADR 942,000 (c) 22,254,750 Microsoft 450,000 (b) 26,718,750 Oracle Systems 600,000 (b) 25,575,000 Solectron 600,000 (b) 14,325,000 ____________ Total 115,011,000 ______________________________________________________________________________________________________________________________ Electronics (5.5%) Applied Materials 200,000 (b) 7,700,000 Harman Intl 300,000 10,950,000 Intel 100,000 6,937,500 Maxim Integrated Products 600,000 (b) 17,400,000 Vishay Intertechnology 251,565 (b) 12,515,359 ____________ Total 55,502,859 _____________________________________________________________________________________________________________________________ Energy (2.9%) Renaissance Energy 100,000 (b,c) 1,764,870 Royal Dutch Petroleum 250,000 27,968,750 ____________ Total 29,733,620 _____________________________________________________________________________________________________________________________ Energy equipment & services (2.7%) Fluor 250,000 11,562,500 Schlumberger 300,000 (c) 15,825,000 ____________ Total 27,387,500 _____________________________________________________________________________________________________________________________ Financial services (4.6%) First Financial Management 400,000 24,700,000 Merrill Lynch 600,000 21,975,000 ____________ Total 46,675,000 _____________________________________________________________________________________________________________________________ Health care (13.4%) Boston Scientific 990,500 (b,d) 18,324,250 HEALTHSOUTH Rehab 800,000 (b) 30,400,000 Johnson & Johnson 200,000 11,625,000 Medtronics 250,000 14,843,750 Pfizer 250,000 20,437,500 Stryker 400,000 16,100,000 United Healthcare 500,000 24,250,000 ____________ Total 135,980,500 _____________________________________________________________________________________________________________________________ Industrial equipment & services (4.4%) Caterpiller 300,000 15,450,000 Deere 250,000 17,812,500 WMX Technologies 400,000 (b) 11,350,000 ____________ Total 44,612,500 _____________________________________________________________________________________________________________________________ Insurance (2.3%) SunAmerica 300,000 11,850,000 Travelers 300,000 11,062,500 ____________ Total 22,912,500 _____________________________________________________________________________________________________________________________ Leisure time & entertainment (2.5%) Walt Disney 500,000 25,437,500 _____________________________________________________________________________________________________________________________ Media (2.6%) Comcast 600,000 8,775,000 Tele-Communications 500,000 (b) 10,625,000 Thomas Nelson 300,000 6,975,000 ____________ Total 26,375,000 _____________________________________________________________________________________________________________________________ Metals (3.7%) Birmingham Steel 599,100 12,356,437 Commercial Metals 100,000 2,487,500 Nucor 450,000 22,950,000 ____________ Total 37,793,937 _____________________________________________________________________________________________________________________________ Multi-industry conglomerates (3.7%) Alco Standard 300,000 19,275,000 Manpower 200,000 5,100,000 Olsten 400,000 13,250,000 ____________ Total 37,625,000 _____________________________________________________________________________________________________________________________ Restaurants & lodging (0.6%) Marriott Intl 200,000 6,050,000 _____________________________________________________________________________________________________________________________ Retail (11.3%) Best Buy 200,000 (b) 6,200,000 Duracell Intl 400,000 16,300,000 Gillette 300,000 23,062,500 Home Depot 600,000 28,050,000 Nordstrom 300,000 12,150,000 Office Depot 600,000 (b) 15,600,000 St. John Knits 200,000 (b) 6,325,000 Wal-Mart Stores 300,000 6,900,000 ____________ Total 114,587,500 _____________________________________________________________________________________________________________________________ Utilities - telephone (1.5%) Century Telephone 500,000 15,750,000 _____________________________________________________________________________________________________________________________ Total common stocks (Cost: $731,136,363) $977,207,066 _____________________________________________________________________________________________________________________________
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Short-term securities (6.6%) _____________________________________________________________________________________________________________________________ Issuer Annualized Amount Value(a) yield on payable date of at purchase maturity _____________________________________________________________________________________________________________________________ U.S. government agency (0.5%) Federal Home Loan Mtge Corp Disc Note 02-09-95 5.65% $5,400,000 $ 5,393,256 _____________________________________________________________________________________________________________________________ Commercial paper (5.5%) Amer General 02-15-95 5.66 900,000 898,030 Aon 02-24-95 5.85 500,000 498,141 AT&T 02-09-95 6.11 6,000,000 5,991,933 AT&T Capital 02-23-95 5.88 3,900,000 3,886,058 Barclays US 02-14-95 5.76 5,000,000 4,989,654 Bayshore Fuel 02-16-95 5.68 2,771,000 2,764,477 Cargill 03-06-95 6.06 2,300,000 2,287,139 Consolidated Rail 02-21-95 5.68 3,700,000 (e) 3,688,386 Fleet Funding 02-07-95 5.73 5,000,000 (e) 4,995,250 Lincoln Natl 02-13-95 5.68 3,200,000 (e) 3,193,973 Penny (JC) Funding 02-10-95 5.66 6,500,000 6,490,851 Pitney Bowes 02-17-95 5.66 1,600,000 1,595,996 St. Paul Companies 02-15-95 5.68 5,100,000 (e) 5,088,794 Southern California Gas 02-08-95 5.78 2,000,000 (e) 1,997,764 USAA Capital 03-08-95 5.79 7,300,000 7,259,191 _____________ Total 55,625,637 _____________________________________________________________________________________________________________________________ Letter of credit (0.6%) Bank of America- AES Barbers Point 02-17-95 5.82 6,000,000 5,984,533 _____________________________________________________________________________________________________________________________ Total short-term securities (Cost: $67,003,638) $ 67,003,426 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $798,140,001)(f) $1,044,210,492 _____________________________________________________________________________________________________________________________ Notes to investments in securities _____________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Presently non-income producing. (c) Foreign security values are stated in U.S. dollars. Foreign securities represent 6.0% of the fund's net assets as of Jan. 31, 1995 (d) Security is partially or fully on loan. See Note 4 to the financial statements. (e) 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 the guidelines established by the board of directors. (f) At Jan. 31, 1995, the cost of securities for federal income tax purposes was approximately $798,140,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $267,326,000 Unrealized depreciation (21,256,000) ______________________________________________________________________________________________ Net unrealized appreciation $246,070,000 ______________________________________________________________________________________________
PAGE Directors and officers Directors and officers of the fund _____________________________________________________________________ President and interested director William R. Pearce President of all funds in the IDS MUTUAL FUND GROUP. _____________________________________________________________________ Independent directors 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. Donald M. Kendall Former chairman and chief executive officer, PepsiCo, Inc. Melvin R. Laird Senior counsellor for national and international affairs, The Reader's Digest Association, Inc. Lewis W. Lehr Former chairman and chief executive officer, Minnesota Mining and Manufacturing Company (3M). Edson W. Spencer Former chairman and chief executive officer, Honeywell, Inc. Wheelock Whitney Chairman, Whitney Management Company. C. Angus Wurtele Chairman of the board and chief executive officer, The Valspar Corporation. _____________________________________________________________________ Interested directors who are officers and/or employees of American Express Financial Corporation. William H. Dudley Exective vice president, American Express Financial Corporation. David R. Hubers President and chief executive officer, American Express Fianacial Corporation. John R. Thomas Senior vice president, American Express Financial Corporation. _____________________________________________________________________ Other officer Leslie L. Ogg Vice president of all funds in the IDS MUTUAL FUND GROUP and general counsel and treasurer of the publicly offered funds. PAGE IDS mutual funds Cash equivalent investments These money market funds have three main goals: conservation of capital, constant liquidity and the highest possible current income consistent with these objectives. Very limited risk. IDS Cash Management Fund Invests in such money market securities as high quality commercial paper, bankers' acceptances, certificates of 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 Income investments The funds in this group invest their assets primarily in corporate bonds or government securities to seek interest income. Secondary objective is capital growth. Risk varies by bond quality. IDS Global Bond Fund Invests primarily in debt securities of U.S. and foreign issuers to seek high total return through income and growth of capital. (icon of) globe IDS Extra Income Fund Invests mainly in long-term, high-yielding corporate fixed-income securities in the lower rated, higher risk bond categories to seek high current income. Secondary objective is capital growth. (icon of) cornucopia PAGE 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 high-quality corporate bonds and other highly rated debt instruments including government securities and short-term investments. Seeks current income and preservation of capital. (icon of) skyline IDS Federal Income Fund Invests primarily in securities issued or guaranteed as to the timely payment of principal and interest by the U.S. government, its agencies and instrumentalities. Seeks a high level of current income and safety of principal consistent with its type of investments. (icon of) federal building Tax-exempt income investments These funds provide tax-free income by investing in municipal bonds. The income is generally free from federal income tax. Risk varies by bond quality. IDS High Yield Tax-Exempt Fund Invests primarily in medium- and lower-quality municipal bonds and notes. Lower-quality securities generally involve greater risk of principal and income. (icon of) shield with basket of apples enclosed PAGE IDS State Tax-Exempt Funds (CA, MA, MI, MN, NY, OH) Invests primarily in high- and medium-grade municipal securities to provide income to residents of each respective state that is exempt from federal, state and local income taxes. (New York is the only state that is exempt at the local level.) (icon of) shield with U.S. enclosed IDS Tax-Exempt Bond Fund Invests mainly in bonds and notes of state or local government units, with at least 75% in the four highest rated, lowest risk bond categories. (icon of) shield with Greek column IDS Insured Tax-Exempt Fund Invests primarily in municipal securities that are insured as to the timely payment of principal and interest. The insurance feature minimizes credit risk of the fund but does not guarantee the market value of the fund's shares. (icon of) shield with eagle head Growth and income investments These funds focus on securities of medium to large, well-established companies that offer long-term growth of capital and reasonable income from dividends and interest. Moderate risk. IDS International Fund Invests primarily in common stocks of foreign companies that offer potential for superior growth. The fund may invest up to 20% of its assets in the U.S. market. (icon of) three flags IDS Managed Retirement Fund Invests in a combination of common stocks, fixed-income investments and money market securities to seek a maximum total return through a combination of growth of capital and current income. (icon of) bird in a nest PAGE IDS Equity Select Fund Invests primarily in a combination of moderate growth stocks, higher-yielding equities and bonds. Seeks growth of capital and income. (icon of) three apple trees IDS Blue Chip Advantage Fund Invests in selected stocks from a major market index. Securities purchased are those recommended by our research analysts as the best from each industry represented on the index. Offers potential for long-term growth as well as dividend income. (icon of) ribbon IDS Stock Fund Invests in common 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) electrical cord IDS Diversified Equity Income Fund Invests primarily in high-yielding common stocks to seek high current income and, secondarily, to benefit from the growth potential offered by stock investments. (icon of) four puzzle pieces IDS Mutual Invests in a balance between common stocks and senior securities (preferred stocks and bonds). Seeks a balance of growth of capital and current income. (icon of) scale of justice PAGE Growth investments Funds in this group seek capital growth, primarily from common stocks. They are high risk mutual funds with a potential for high reward. IDS Discovery Fund Invests in small- and medium-size, growth-oriented companies emphasizing technological innovation and productivity enhancement. Buys and holds larger growth-oriented stocks. (icon of) ship IDS Strategy Aggressive Fund Invests primarily in common stocks of companies that are selected for their potential for above-average growth. Above-average means that their growth potential is better, in the opinion of the portfolio's investment manager, than the Standard & Poor's Corporation (S&P) 500 Stock Index. (icon of) chess piece IDS Growth Fund Invests primarily in companies that have above-average potential for long-term growth as a result of new management, marketing opportunities or technological superiority. (icon of) flower IDS Global Growth Fund Invests in stocks of companies throughout the world that are positioned to meet market needs in a changing world economy. These companies offer above-average potential for long-term growth. (icon of) world IDS New Dimensions Fund Invests primarily in companies with significant growth potential due to superiority in technology, marketing or management. The fund frequently changes its industry mix. (icon of) 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 PAGE Specialty growth investment This fund aggressively seeks capital growth as a hedge against inflation. IDS Precious Metals Fund Invests primarily in the securities of foreign or domestic companies that explore for, mine and process or distribute gold and other precious metals. This is the most aggressive and most speculative IDS mutual fund. (icon of) cart of precious gems For more complete information about any of these funds, including charges and expenses, you can obtain a prospectus by contacting your financial planner or writing to American Express Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534. Read it carefully before you invest or send money. PAGE Quick telephone reference American Express Telephone Transaction Service Redemptions and exchanges, dividend payments or reinvestments and automatic payment arrangements National/Minnesota: 800-437-3133 Mpls./St. Paul area: 671-3800 American Express Shareholder Service Fund performance, objectives and account inquiries 612-671-3733 TTY Service For the hearing impaired 800-846-4852 American Express Infoline Automated account information (TouchTone phones only), including current fund prices and performance, account values and recent account transactions National/Minnesota: 800-272-4445 Mpls./St. Paul area: 671-1630 AMERICAN EXPRESS FINANCIAL ADVISORS IDS Growth Fund IDS Tower 10 Minneapolis, MN 55440-0010 -----END PRIVACY-ENHANCED MESSAGE-----