EX-99.17(L) 17 c50349f.txt Semiannual Report (RIVERSOURCE INVESTMENTS LOGO) RIVERSOURCE LARGE CAP EQUITY FUND SEMIANNUAL REPORT FOR THE PERIOD ENDED JANUARY 31, 2009 RIVERSOURCE LARGE CAP EQUITY FUND SEEKS TO PROVIDE SHAREHOLDERS WITH LONG-TERM GROWTH OF CAPITAL. (SINGLE STRATEGY FUNDS ICON) LETTER TO SHAREHOLDERS --------------------------------------------------------- (PHOTO - BANNIGAN - LEWIS) Patrick T. Bannigan (left) Stephen R. Lewis, Jr. (right) Dear Fellow Shareholders, 2008 was an unprecedented year in many ways. Investors watched the precipitous decline in all the major U.S. and international equity indexes as concerns about the economy gave way to fear and selling of securities. In response to substantial losses in the markets and weakening economic indicators, the government stepped in swiftly and aggressively to encourage liquidity and credit availability in an attempt to make credit markets function. By the end of the calendar year, these actions still needed time to gain traction in the markets. During a severe economic environment like the one we are experiencing, it is essential that investors try not to let short-term losses in the market distract from a long-term investment plan. Such discipline may be easier said than done in the presence of negative news in the media. However, the financial choices you make today -- practicing patience or locking in losses -- will influence your portfolio's performance. GETTING BACK ON TRACK Whether you look at the glass as half empty or half full, every broad based market decline creates investment opportunities. The financial markets are expected to recover, although it is impossible to know when. In the meantime, make sure your portfolio is positioned to benefit from the next sources of growth. Market recoveries often occur before the reported end of a recession. If you wait for validation of economic recovery before reinvesting in the markets, you may well miss out on market returns associated with an economic rebound. -------------------------------------------------------------------------------- THIS PAGE IS NOT PART OF THE SEMIANNUAL REPORT --------------------------------------------------------------------------------
TIME ELAPSED BETWEEN BEAR MARKET AND BEAR MARKET RECESSION RETURNS RECESSION ENDED END DATES MISSED* ----------------------------------------------------------------- August 1929 - March 1933 June 1932 9 months 39.21% August 1957 - April 1958 December 1957 4 months 9.94% December 1969 - November 1970 June 1970 5 months 21.81% November 1973 - March 1975 September 1974 6 months 34.47% July 1981 - November 1982 July 1982 4 months 31.72% July 1990 - March 1991 October 1990 5 months 25.33% -----------------------------------------------------------------
* S&P 500(R) Index total returns for the number of months between the recession and bear market end dates. Be sure your portfolio is on track today. Talk with your financial professional about opportunities that have been created in the markets and take advantage of our solutions and strategies that can help position portfolios for the next market recovery cycle. OUR FAMILY OF FUNDS We also want to share some good news with our fellow shareholders. Last November, RiverSource Investments, a wholly- owned subsidiary of Ameriprise Financial, Inc., acquired J. & W. Seligman & Co. Incorporated. Seligman's long heritage of investing and exceptional wealth of experience is a valuable addition to RiverSource Investments. Along with RiverSource and Threadneedle, Seligman joins our comprehensive family of mutual funds we offer investors. For more information about any of our RiverSource Funds, go online to RiverSource.com or call (888) 791-3380. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 5 p.m. Central time. -------------------------------------------------------------------------------- THIS PAGE IS NOT PART OF THE SEMIANNUAL REPORT LETTER TO SHAREHOLDERS (continued) --------------------------------------------- In addition, we are excited to welcome John Maher and Leroy Richie to the RiverSource Funds' Boards of Directors. Mr. Maher and Mr. Richie join us from the Seligman Funds' Boards of Directors. The acquisition of Seligman creates several new opportunities for RiverSource Funds' shareholders, including access to talented portfolio managers and competitive mutual fund solutions to help you reach your investment goals. We hope you are as excited by these opportunities as we are. Thank you for investing with us. /s/ STEPHEN R. LEWIS, JR. /s/ PATRICK T. BANNIGAN Stephen R. Lewis, Jr. Patrick T. Bannigan Chairman of the Boards President, RiverSource Funds
YOU SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES OF A MUTUAL FUND CAREFULLY BEFORE INVESTING. FOR A FREE PROSPECTUS, WHICH CONTAINS THIS AND OTHER IMPORTANT INFORMATION ABOUT THE FUNDS, CALL (888) 791-3380. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. Asset allocation, diversification, and dollar cost averaging do not assure a profit or protect against loss and past performance is no guarantee of future results. Standard & Poor's 500 Index (S&P 500 Index) is an unmanaged list of common stocks and is frequently used as a general measure of U.S. market performance. -------------------------------------------------------------------------------- THIS PAGE IS NOT PART OF THE SEMIANNUAL REPORT TABLE OF CONTENTS -------------------------------------------------------------- Your Fund at a Glance.............. 2 Fund Expenses Example.............. 8 Portfolio of Investments........... 11 Statement of Assets and Liabilities...................... 25 Statement of Operations............ 27 Statements of Changes in Net Assets........................... 29 Financial Highlights............... 31 Notes to Financial Statements...... 39 Proxy Voting....................... 56
(DALBAR LOGO) The RiverSource mutual fund shareholder reports have been awarded the Communications Seal from Dalbar Inc., an independent financial services research firm. The Seal recognizes communications demonstrating a level of excellence in the industry. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 1 YOUR FUND AT A GLANCE ---------------------------------------------------------- (UNAUDITED) FUND SUMMARY -------------------------------------------------------------------------------- > RiverSource Large Cap Equity Fund (the Fund) Class A shares declined 39.47% (excluding sales charge) for the semiannual period ended Jan. 31, 2009. > The Fund underperformed its benchmarks, the Standard & Poor's 500 Index (S&P 500 Index), which declined 33.95% and the Russell 1000(R) Index (Russell Index), which declined 34.71% in the same six-month period. > The Fund's peer group, the Lipper Large-Cap Core Funds Index, fell 33.98% during the same time frame. ANNUALIZED TOTAL RETURNS (for period ended Jan. 31, 2009) --------------------------------------------------------------------------------
Since inception 6 months* 1 year 3 years 5 years 3/28/02 ------------------------------------------------------------------------- RiverSource Large Cap Equity Fund Class A (excluding sales charge) -39.47% -45.50% -15.96% -7.68% -5.47% ------------------------------------------------------------------------- Russell 1000 Index (unmanaged)(1) -34.71% -39.04% -12.03% -4.05% -2.56% ------------------------------------------------------------------------- S&P 500 Index (unmanaged)(2) -33.95% -38.63% -11.78% -4.24% -2.86% ------------------------------------------------------------------------- Lipper Large-Cap Core Funds Index(3) -33.98% -38.34% -11.95% -4.55% -3.40% -------------------------------------------------------------------------
* Not annualized. The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial institution or visiting riversource.com/funds. -------------------------------------------------------------------------------- 2 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- The 5.75% sales charge applicable to Class A shares of the Fund is not reflected in the table above. If reflected, returns would be lower than those shown. The performance of other classes may vary from that shown because of differences in expenses. See the Average Annual Total Returns table for performance of other share classes of the Fund. The indices do not reflect the effects of sales charges, expenses (excluding Lipper) and taxes. It is not possible to invest directly in an index. (1) The Russell 1000 Index, an unmanaged index, measures the performance of the 1,000 largest companies in the Russell 3000(R) Index, which represents approximately 90% of the total market capitalization of the Russell 3000 Index. The index reflects reinvestment of all distributions and changes in market prices. (2) The Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of common stocks, is frequently used as a general measure of market performance. The index reflects reinvestment of all distributions and changes in market prices. (3) The Lipper Large-Cap Core Funds Index includes the 30 largest large-cap core funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 3 YOUR FUND AT A GLANCE (continued) ---------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS --------------------------------------------------------------------------------
AT JAN. 31, 2009 SINCE Without sales charge 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS INCEPTION Class A (inception 3/28/02) -39.47% -45.50% -15.96% -7.68% -5.47% --------------------------------------------------------------------------- Class B (inception 3/28/02) -39.64% -45.89% -16.62% -8.37% -6.21% --------------------------------------------------------------------------- Class C (inception 3/28/02) -39.39% -45.79% -16.53% -8.32% -6.14% --------------------------------------------------------------------------- Class I (inception 3/4/04) -39.23% -45.24% -15.59% N/A -7.69% --------------------------------------------------------------------------- Class R2 (inception 12/11/06) -39.26% -45.49% N/A N/A -25.50% --------------------------------------------------------------------------- Class R3 (inception 12/11/06) -39.17% -45.29% N/A N/A -25.29% --------------------------------------------------------------------------- Class R4 (inception 3/28/02) -39.24% -45.43% -15.78% -7.47% -5.28% --------------------------------------------------------------------------- Class R5 (inception 12/11/06) -39.21% -45.27% N/A N/A -25.27% --------------------------------------------------------------------------- With sales charge Class A (inception 3/28/02) -43.00% -48.67% -17.60% -8.75% -6.30% --------------------------------------------------------------------------- Class B (inception 3/28/02) -42.57% -48.53% -17.56% -8.67% -6.21% --------------------------------------------------------------------------- Class C (inception 3/28/02) -39.98% -46.31% -16.53% -8.32% -6.14% ---------------------------------------------------------------------------
-------------------------------------------------------------------------------- 4 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT --------------------------------------------------------------------------------
AT DEC. 31, 2008 SINCE Without sales charge 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS INCEPTION Class A (inception 3/28/02) -32.82% -42.40% -12.07% -5.37% -3.92% --------------------------------------------------------------------------- Class B (inception 3/28/02) -32.94% -42.70% -12.71% -6.05% -4.65% --------------------------------------------------------------------------- Class C (inception 3/28/02) -33.05% -42.78% -12.72% -6.07% -4.63% --------------------------------------------------------------------------- Class I (inception 3/4/04) -32.57% -42.03% -11.64% N/A -5.60% --------------------------------------------------------------------------- Class R2 (inception 12/11/06) -32.81% -42.32% N/A N/A -22.21% --------------------------------------------------------------------------- Class R3 (inception 12/11/06) -32.57% -42.11% N/A N/A -21.97% --------------------------------------------------------------------------- Class R4 (inception 3/28/02) -32.81% -42.27% -11.93% -5.19% -3.74% --------------------------------------------------------------------------- Class R5 (inception 12/11/06) -32.66% -42.21% N/A N/A -21.99% --------------------------------------------------------------------------- With sales charge Class A (inception 3/28/02) -36.70% -45.76% -13.77% -6.49% -4.77% --------------------------------------------------------------------------- Class B (inception 3/28/02) -36.20% -45.49% -13.70% -6.36% -4.65% --------------------------------------------------------------------------- Class C (inception 3/28/02) -33.70% -43.33% -12.72% -6.07% -4.63% ---------------------------------------------------------------------------
Class A share performance reflects the maximum sales charge of 5.75%. Class B share performance reflects a contingent deferred sales charge (CDSC) applied as follows: first year 5%; second and third years 4%; fourth year 3%; fifth year 2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to a 1% CDSC if shares are sold within one year after purchase. Sales charges do not apply to Class I, Class R2, Class R3, Class R4 and Class R5 shares. Class I, Class R2, Class R3, Class R4 and Class R5 are available to institutional investors only. *Not annualized. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 5 YOUR FUND AT A GLANCE (continued) ---------------------------------------------- STYLE MATRIX -------------------------------------------------------------------------------- Style Matrix
STYLE VALUE BLEND GROWTH X LARGE MEDIUM SIZE SMALL
Shading within the style matrix indicates areas in which the Fund is designed to generally invest. The style matrix can be a valuable tool for constructing and monitoring your portfolio. It provides a frame of reference for distinguishing the types of stocks or bonds owned by a mutual fund, and may serve as a guideline for helping you build a portfolio. Investment products, including shares of mutual funds, are not federally or FDIC-insured, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value. ANNUAL OPERATING EXPENSE RATIO (as of the current prospectus) --------------------------------------------------------------------------------
Net fund and acquired Total fund Net fund fund fees expenses expenses(a) and expenses(b) -------------------------------------------------------- Class A 1.03% 0.96% 0.98% -------------------------------------------------------- Class B 1.79% 1.73% 1.75% -------------------------------------------------------- Class C 1.79% 1.72% 1.74% -------------------------------------------------------- Class I 0.57% 0.54% 0.56% -------------------------------------------------------- Class R2 1.39% 1.34% 1.36% -------------------------------------------------------- Class R3 1.14% 1.09% 1.11% -------------------------------------------------------- Class R4 0.87% 0.82% 0.84% -------------------------------------------------------- Class R5 0.67% 0.59% 0.61% --------------------------------------------------------
(a) The Investment Manager and its affiliates have contractually agreed to waive certain fees and to absorb certain expenses until July 31, 2009, unless sooner terminated at the discretion of the Fund's Board. Any amounts waived will not be reimbursed by the Fund. Under this agreement, net fund expenses (excluding fees and expenses of acquired funds), before giving effect to any performance incentive adjustment (that decreased the management fee by 0.08% for the year ended July 31, 2008), will not exceed 1.04% for Class A, 1.81% for Class B, 1.80% for Class C, 0.62% for Class I, 1.42% for Class R2, 1.17% for Class R3, 0.90% for Class R4 and 0.67% for Class R5. (b) In addition to the Fund's total annual operating expenses that the Fund bears directly, the Fund's shareholders indirectly bear the expenses of acquired funds in which the Fund invests. The Fund's "Acquired fund fees and expenses," based on its investment in the acquired funds, was 0.02% for the year ended July 31, 2008. -------------------------------------------------------------------------------- 6 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- SECTOR DIVERSIFICATION(1) (at Jan. 31, 2009; % of portfolio assets) ---------------------------------------------------------------------
Consumer Discretionary 11.4% ------------------------------------------------ Consumer Staples 11.7% ------------------------------------------------ Energy 14.2% ------------------------------------------------ Financials 11.5% ------------------------------------------------ Health Care 16.0% ------------------------------------------------ Industrials 8.8% ------------------------------------------------ Information Technology 10.2% ------------------------------------------------ Materials 2.4% ------------------------------------------------ Telecommunication Services 0.4% ------------------------------------------------ Utilities 1.8% ------------------------------------------------ Other(2) 11.6% ------------------------------------------------
(1) Sectors can be comprised of several industries. Please refer to the section entitled "Portfolio of Investments" for a complete listing. No single industry exceeds 25% of portfolio assets. (2) Cash & Cash Equivalents. Of the 11.6%, 8.7% is due to security lending activity and 2.9% is the Fund's cash equivalent position. The sectors identified above are based on the Global Industry Classification Standard (GICS), which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. TOP TEN HOLDINGS (at Jan. 31, 2009; % of portfolio assets) ---------------------------------------------------------------------
Wal-Mart Stores 4.6% ------------------------------------------------ Pfizer 4.4% ------------------------------------------------ Chevron 4.2% ------------------------------------------------ Johnson & Johnson 4.1% ------------------------------------------------ Home Depot 2.2% ------------------------------------------------ JPMorgan Chase & Co 2.2% ------------------------------------------------ Exxon Mobil 2.1% ------------------------------------------------ IBM 1.6% ------------------------------------------------ Microsoft 1.6% ------------------------------------------------ PepsiCo 1.4% ------------------------------------------------
For further detail about these holdings, please refer to the section entitled "Portfolio of Investments." Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 7 FUND EXPENSES EXAMPLE ---------------------------------------------------------- (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments; and (2) ongoing costs, which may include management fees; distribution and service (12b-1) fees; and other Fund fees and expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. In addition to the ongoing expenses which the Fund bears directly, the Fund's shareholders indirectly bear the expenses of the funds in which it invests (also referred to as "acquired funds"), including affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange traded funds). The Fund's indirect expense from investing in the acquired funds is based on the Fund's pro rata portion of the cumulative expenses charged by the acquired funds using the expense ratio of each of the acquired funds as of the acquired fund's most recent shareholder report. The example is based on an investment of $1,000 invested at the beginning of the period and held for the six months ended Jan. 31, 2009. ACTUAL EXPENSES The first line of the table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading titled "Expenses paid during the period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. -------------------------------------------------------------------------------- 8 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT --------------------------------------------------------------------------------
DIRECT AND DIRECT INDIRECT BEGINNING ENDING EXPENSES EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING PAID DURING AUG. 1, 2008 JAN. 31, 2009 THE PERIOD(A) THE PERIOD(B) ------------------------------------------------------------------------------------------ Class A ------------------------------------------------------------------------------------------ Actual(c) $1,000 $ 605.30 $3.46 $3.50 ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,020.76 $4.36 $4.41 ------------------------------------------------------------------------------------------ Class B ------------------------------------------------------------------------------------------ Actual(c) $1,000 $ 603.60 $6.55 $6.59 ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,016.90 $8.24 $8.29 ------------------------------------------------------------------------------------------ Class C ------------------------------------------------------------------------------------------ Actual(c) $1,000 $ 606.10 $6.52 $6.56 ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,016.95 $8.19 $8.24 ------------------------------------------------------------------------------------------ Class I ------------------------------------------------------------------------------------------ Actual(c) $1,000 $ 607.70 $1.77 $1.81 ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,022.86 $2.23 $2.28 ------------------------------------------------------------------------------------------ Class R2 ------------------------------------------------------------------------------------------ Actual(c) $1,000 $ 607.40 $5.00 $5.04 ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,018.85 $6.28 $6.33 ------------------------------------------------------------------------------------------ Class R3 ------------------------------------------------------------------------------------------ Actual(c) $1,000 $ 608.30 $3.99 $4.03 ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,020.10 $5.01 $5.06 ------------------------------------------------------------------------------------------ Class R4 ------------------------------------------------------------------------------------------ Actual(c) $1,000 $ 607.60 $2.90 $2.94 ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,021.46 $3.65 $3.70 ------------------------------------------------------------------------------------------ Class R5 ------------------------------------------------------------------------------------------ Actual(c) $1,000 $ 607.90 $1.81 $1.85 ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,022.81 $2.28 $2.33 ------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 9 FUND EXPENSES EXAMPLE (continued) ---------------------------------------------- ANNUALIZED EXPENSE RATIOS
FUND'S ACQUIRED FUND ANNUALIZED FEES AND NET FUND EXPENSE RATIO EXPENSES EXPENSES ---------------------------------------------------------------------- Class A .86% .01% .87% ---------------------------------------------------------------------- Class B 1.63% .01% 1.64% ---------------------------------------------------------------------- Class C 1.62% .01% 1.63% ---------------------------------------------------------------------- Class I .44% .01% .45% ---------------------------------------------------------------------- Class R2 1.24% .01% 1.25% ---------------------------------------------------------------------- Class R3 .99% .01% 1.00% ---------------------------------------------------------------------- Class R4 .72% .01% .73% ---------------------------------------------------------------------- Class R5 .45% .01% .46% ----------------------------------------------------------------------
(a) Expenses are equal to the Fund's annualized expense ratio for each class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). (b) Expenses are equal to the Fund's annualized expense ratio for each class plus the acquired fund fees and expenses, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). (c) Based on the actual return for the six months ended Jan. 31, 2009: -39.47% for Class A, -39.64% for Class B, -39.39% for Class C, -39.23% for Class I, -39.26% for Class R2, -39.17% for Class R3, -39.24% for Class R4 and -39.21% for Class R5. -------------------------------------------------------------------------------- 10 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT PORTFOLIO OF INVESTMENTS ------------------------------------------------------- JAN. 31, 2009 (UNAUDITED) (Percentages represent value of investments compared to net assets) INVESTMENTS IN SECURITIES
COMMON STOCKS (96.8%) ISSUER SHARES VALUE(a) AEROSPACE & DEFENSE (0.8%) AeroVironment 8,500(b,f) $315,010 American Science & Engineering 3,213 250,614 Ceradyne 25,331(b,f) 578,053 General Dynamics 172,255(f) 9,772,027 Rockwell Collins 33,368 1,257,306 United Technologies 99,020 4,751,970 --------------- Total 16,924,980 ------------------------------------------------------------------------------------- AIR FREIGHT & LOGISTICS (0.2%) CH Robinson Worldwide 95,986 4,413,437 Hub Group Cl A 16,373(b) 371,667 Pacer Intl 46,242(f) 397,681 --------------- Total 5,182,785 ------------------------------------------------------------------------------------- AIRLINES (0.4%) Alaska Air Group 31,558(b) 831,869 Allegiant Travel 8,541(b,f) 305,426 AMR 30,335(b) 180,190 Continental Airlines Cl B 14,891(b) 200,582 Delta Air Lines 59,755(b) 412,310 Hawaiian Holdings 65,225(b) 265,466 JetBlue Airways 37,430(b) 210,731 SkyWest 71,912 1,125,423 Southwest Airlines 502,569(f) 3,533,059 UAL 73,227(b) 691,263 US Airways Group 81,594(b) 462,638 --------------- Total 8,218,957 ------------------------------------------------------------------------------------- AUTO COMPONENTS (0.1%) Cooper Tire & Rubber 56,651(f) 264,560 Exide Technologies 62,946(b) 228,494 Fuel Systems Solutions 7,302(b,f) 190,874 Goodyear Tire & Rubber 194,518(b) 1,200,176 Johnson Controls 65,605 820,719 --------------- Total 2,704,823 ------------------------------------------------------------------------------------- AUTOMOBILES (0.1%) Ford Motor 249,800(b,f) 467,126 General Motors 62,539(f) 188,242 Harley-Davidson 164,139(f) 1,999,213 --------------- Total 2,654,581 ------------------------------------------------------------------------------------- BEVERAGES (2.9%) Brown-Forman Cl B 56,384 2,560,397 Coca-Cola 631,980 26,998,186 PepsiCo 653,531 32,826,862 --------------- Total 62,385,445 ------------------------------------------------------------------------------------- BIOTECHNOLOGY (2.6%) Amgen 405,762(b) 22,256,046 Cephalon 45,699(b,f) 3,527,049 CV Therapeutics 32,590(b) 510,034 Emergent BioSolutions 13,873(b,f) 304,235 Genentech 14,017(b) 1,138,741 Gilead Sciences 524,678(b) 26,637,901 Myriad Genetics 19,227(b) 1,433,757 NPS Pharmaceuticals 36,398(b) 227,124 Vertex Pharmaceuticals 8,688(b,f) 287,138 --------------- Total 56,322,025 ------------------------------------------------------------------------------------- BUILDING PRODUCTS (0.1%) American Woodmark 16,024(f) 241,161 Insteel Inds 27,417(f) 211,111 Masco 291,531 2,279,772 Owens Corning 7,565(b) 100,917 Trex 11,677(b,f) 172,703 --------------- Total 3,005,664 ------------------------------------------------------------------------------------- CAPITAL MARKETS (1.5%) Goldman Sachs Group 133,369 10,766,879 Knight Capital Group Cl A 24,027(b) 433,207 Morgan Stanley 1,011,014(f) 20,452,814 Stifel Financial 11,707(b,f) 410,213 SWS Group 45,991(f) 673,768 --------------- Total 32,736,881 -------------------------------------------------------------------------------------
See accompanying Notes to Portfolio of Investments. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 11 PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) CHEMICALS (1.5%) Ashland 21,801 $174,844 Balchem 10,066(f) 224,774 CF Inds Holdings 28,881 1,357,407 Dow Chemical 1,772,219 20,540,017 Ecolab 19,484 661,677 EI du Pont de Nemours & Co 108,801 2,498,071 Innophos Holdings 15,945 241,248 OM Group 16,873(b,f) 326,999 PPG Inds 77,165 2,899,861 Sigma-Aldrich 56,009 2,020,805 Solutia 48,200(b,f) 188,462 Stepan 6,925(f) 254,078 Westlake Chemical 14,332(f) 195,918 WR Grace & Co 100,680(b) 580,924 --------------- Total 32,165,085 ------------------------------------------------------------------------------------- COMMERCIAL BANKS (1.1%) BancFirst 6,108(f) 217,567 BB&T 292,392(f) 5,786,437 Comerica 125,875 2,097,078 Community Trust Bancorp 6,575 183,903 Fifth Third Bancorp 606,788 1,450,223 First BanCorp 15,522(c,f) 110,361 First Citizens BancShares Cl A 949 132,727 First Financial 7,250(f) 240,338 First Financial Bankshares 9,490(f) 421,261 Home BancShares 8,731(f) 179,771 Intl Bancshares 20,109(f) 366,386 KeyCorp 343,879 2,503,439 MainSource Financial Group 17,647(f) 172,411 Marshall & Ilsley 204,955(f) 1,170,293 Popular 18,530(c,f) 50,772 Republic Bancorp Cl A 11,372(f) 204,696 SunTrust Banks 146,867 1,800,589 TowneBank 11,883 247,642 Trico Bancshares 9,961(f) 200,615 Trustmark 13,543 274,923 UMB Financial 10,116 391,894 Wells Fargo & Co 268,910(f) 5,082,399 Wilshire Bancorp 33,656(f) 230,880 Zions Bancorporation 9,592(f) 143,113 --------------- Total 23,659,718 ------------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (0.9%) ABM Inds 9,515(f) 141,298 Avery Dennison 48,390(f) 1,172,490 Clean Harbors 5,723(b,f) 306,238 HNI 20,631(f) 272,536 Kimball Intl Cl B 44,536 306,853 Republic Services 248,682 6,430,916 RR Donnelley & Sons 80,980 790,365 Sykes Enterprises 13,650(b) 228,092 Tetra Tech 6,789(b) 157,708 United Stationers 7,598(b,f) 212,820 Waste Management 282,337 8,806,090 --------------- Total 18,825,406 ------------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT (1.4%) 3Com 129,413(b) 301,532 Airvana 49,195(b) 250,403 ARRIS Group 40,980(b) 291,778 Cisco Systems 489,238(b) 7,323,893 Corning 747,258(f) 7,554,778 InterDigital 28,749(b,f) 929,455 Motorola 133,924 593,283 NETGEAR 21,473(b,f) 238,780 QUALCOMM 328,496 11,349,536 Tekelec 18,199(b) 226,032 --------------- Total 29,059,470 ------------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (3.5%) Adaptec 83,576(b,f) 233,177 Apple 120,797(b) 10,887,434 Dell 831,979(b) 7,903,801 Electronics for Imaging 26,387(b,f) 234,580 Hewlett-Packard 338,952 11,778,582 IBM 414,283 37,969,036 Lexmark Intl Cl A 207,679(b) 4,917,839 NCR 18,658(b,f) 234,158 Western Digital 26,046(b) 382,355 --------------- Total 74,540,962 -------------------------------------------------------------------------------------
See accompanying Notes to Portfolio of Investments. -------------------------------------------------------------------------------- 12 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT --------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) CONSTRUCTION & ENGINEERING (0.3%) EMCOR Group 21,413(b,f) $440,894 Fluor 66,753 2,596,691 Foster Wheeler 2,749(b) 54,898 Granite Construction 36,466(f) 1,284,333 Michael Baker 3,799(b) 132,813 Perini 48,557(b,f) 1,012,413 --------------- Total 5,522,042 ------------------------------------------------------------------------------------- CONSTRUCTION MATERIALS (--%) Vulcan Materials 3,181(f) 157,332 ------------------------------------------------------------------------------------- CONSUMER FINANCE (0.2%) Advanta Cl B 88,512(f) 69,039 American Express 60,682 1,015,210 Discover Financial Services 80,265(f) 573,895 SLM 248,814(b,f) 2,848,920 --------------- Total 4,507,064 ------------------------------------------------------------------------------------- CONTAINERS & PACKAGING (--%) Rock-Tenn Cl A 25,329(f) 789,505 ------------------------------------------------------------------------------------- DISTRIBUTORS (0.2%) Genuine Parts 106,374 3,406,095 ------------------------------------------------------------------------------------- DIVERSIFIED CONSUMER SERVICES (0.5%) Apollo Group Cl A 20,567(b) 1,675,388 Career Education 4,579(b,f) 99,822 Corinthian Colleges 37,035(b,f) 691,814 H&R Block 372,711 7,726,298 Regis 22,824 256,770 Universal Technical Institute 12,637(b,f) 221,527 --------------- Total 10,671,619 ------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES (4.8%) Apollo Management LP 1,406,500(d,e) 2,109,750 Bank of America 3,728,404 24,532,898 Citigroup 6,585,055(f) 23,376,945 JPMorgan Chase & Co 1,969,323 50,237,430 KKR Financial Holdings LLC 563,202 799,747 Life Partners Holdings 6,727(f) 255,626 Moody's 6,357(f) 136,167 --------------- Total 101,448,563 ------------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES (0.3%) CenturyTel 45,084(f) 1,223,580 Embarq 106,239 3,794,856 Frontier Communications 134,518 1,090,941 Qwest Communications Intl 87,185 280,736 Shenandoah Telecommunications 8,904(f) 217,080 --------------- Total 6,607,193 ------------------------------------------------------------------------------------- ELECTRIC UTILITIES (1.1%) Entergy 43,933(f) 3,354,724 Exelon 142,513(f) 7,727,055 FirstEnergy 141,478(f) 7,072,485 Hawaiian Electric Inds 20,076 435,248 Pinnacle West Capital 1,445 48,364 Portland General Electric 20,589 400,456 Southern 149,523 5,001,544 --------------- Total 24,039,876 ------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT (0.3%) American Superconductor 10,335(b,f) 167,220 Emerson Electric 138,702(f) 4,535,556 Encore Wire 14,462 238,768 Energy Conversion Devices 10,231(b,f) 257,514 GrafTech Intl 25,000(b) 200,250 --------------- Total 5,399,308 ------------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (0.3%) Anixter Intl 14,075(b) 379,744 Arrow Electronics 34,712(b,f) 661,958 Avnet 35,573(b) 705,057 Benchmark Electronics 82,459(b) 968,069 Ingram Micro Cl A 49,358(b) 605,623 Insight Enterprises 47,127(b,f) 244,118 Jabil Circuit 365,781 2,128,844 L-1 Identity Solutions 16,308(b) 118,233 Methode Electronics 32,965(f) 152,298 SYNNEX 23,322(b,f) 357,993
See accompanying Notes to Portfolio of Investments. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 13 PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (CONT.) Tyco Electronics 65,715(c,f) $930,524 --------------- Total 7,252,461 ------------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (2.0%) Baker Hughes 96,051 3,200,419 BASiC Energy Services 52,684(b) 505,766 BJ Services 228,552 2,514,072 Complete Production Services 30,311(b) 194,294 ENSCO Intl 149,498 4,090,265 GulfMark Offshore 12,678(b) 303,511 Halliburton 554,230 9,560,469 Helmerich & Payne 14,600 327,916 Lufkin Inds 8,971 313,536 Nabors Inds 270,635(b,c,f) 2,963,453 Natl Oilwell Varco 200,633(b) 5,304,737 Newpark Resources 39,801(b) 167,562 Noble 139,883(f) 3,797,823 Oil States Intl 7,333(b) 134,267 Parker Drilling 149,991(b,f) 317,981 Patterson-UTI Energy 28,165 269,257 Pioneer Drilling 40,209(b,f) 199,839 Rowan Companies 84,835 1,074,011 Smith Intl 45,574 1,034,530 Tidewater 6,622 275,541 Unit 7,740(b,f) 193,036 Weatherford Intl 586,296(b) 6,466,845 --------------- Total 43,209,130 ------------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (5.7%) Casey's General Stores 12,446(f) 264,478 Costco Wholesale 34,790(f) 1,566,594 Ingles Markets Cl A 17,188(f) 245,101 Nash Finch 8,093 348,242 Pantry 11,709(b,f) 194,721 SUPERVALU 121,694 2,134,513 SYSCO 119,812 2,670,609 Walgreen 242,493(f) 6,646,733 Wal-Mart Stores 2,280,221 107,444,013 Winn-Dixie Stores 44,499(b,f) 611,416 --------------- Total 122,126,420 ------------------------------------------------------------------------------------- FOOD PRODUCTS (2.3%) Bunge 5,267(f) 226,165 Cal-Maine Foods 11,403(f) 308,793 Campbell Soup 93,880(f) 2,851,136 Darling Intl 42,476(b) 194,965 Dean Foods 78,795(b) 1,523,895 Diamond Foods 7,437(f) 190,982 Flowers Foods 33,535(f) 720,667 Fresh Del Monte Produce 16,371(b,c,f) 394,541 General Mills 405,435 23,981,480 Hershey 14,498(f) 540,485 J&J Snack Foods 7,348 256,519 JM Smucker 79,073(f) 3,570,146 Kellogg 100,341 4,383,898 Lance 11,712(f) 220,537 Ralcorp Holdings 17,045(b) 1,009,405 Sanderson Farms 8,480 306,806 Sara Lee 505,990 5,075,080 TreeHouse Foods 17,104(b,f) 451,375 Tyson Foods Cl A 189,641(f) 1,678,323 --------------- Total 47,885,198 ------------------------------------------------------------------------------------- GAS UTILITIES (0.3%) Atmos Energy 8,037 197,308 Laclede Group 9,965(f) 452,311 New Jersey Resources 25,623(f) 1,027,226 Nicor 32,666 1,117,504 Piedmont Natural Gas 25,754 667,286 Questar 73,004(f) 2,480,677 --------------- Total 5,942,312 ------------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (0.9%) Becton Dickinson & Co 94,068 6,835,922 Covidien 200,575(c,f) 7,690,045 CryoLife 19,446(b,f) 160,235 Cyberonics 11,792(b) 181,479 Greatbatch 9,720(b,f) 226,476 Immucor 7,503(b) 207,908 St. Jude Medical 32,370(b) 1,177,297 STERIS 35,623(f) 947,572 Thoratec 29,234(b,f) 846,909 Volcano 28,992(b) 378,925 --------------- Total 18,652,768 ------------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES (1.2%) Almost Family 4,966(b,f) 153,151
See accompanying Notes to Portfolio of Investments. -------------------------------------------------------------------------------- 14 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT --------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) HEALTH CARE PROVIDERS & SERVICES (CONT.) AMERIGROUP 31,195(b) $872,524 Cardinal Health 93,991(g) 3,538,761 CIGNA 460,711 7,997,943 Coventry Health Care 16,443(b) 248,783 DaVita 39,752(b) 1,868,344 Gentiva Health Services 12,919(b) 326,592 HealthSpring 60,412(b) 1,052,377 Humana 19,622(b) 744,262 Kindred Healthcare 60,238(b) 817,430 Landauer 5,797(f) 397,558 LHC Group 6,103(b) 162,401 Magellan Health Services 26,612(b) 963,887 Molina Healthcare 21,468(b) 376,549 Omnicare 9,838(f) 275,070 Quest Diagnostics 71,854 3,545,995 Tenet Healthcare 606,612(b) 649,075 UnitedHealth Group 48,487 1,373,637 Universal American Financial 25,232(b,f) 249,040 Universal Health Services Cl B 3,693 139,780 --------------- Total 25,753,159 ------------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (1.3%) Bob Evans Farms 6,334(f) 111,225 Darden Restaurants 28,115(f) 737,175 Intl Game Technology 86,368(f) 915,501 McDonald's 426,834 24,764,910 Panera Bread Cl A 2,788(b,f) 130,980 Starwood Hotels & Resorts Worldwide 23,901(f) 361,383 Wyndham Worldwide 168,588 1,033,444 --------------- Total 28,054,618 ------------------------------------------------------------------------------------- HOUSEHOLD DURABLES (0.6%) Black & Decker 39,371(f) 1,138,216 Centex 133,790 1,138,553 DR Horton 201,667 1,201,935 Garmin 15,642(c,f) 274,204 Harman Intl Inds 72,907(f) 1,173,074 KB Home 54,179(f) 578,090 Leggett & Platt 102,924(f) 1,285,521 Lennar Cl A 134,250 1,032,383 Natl Presto Inds 8,400 563,976 Newell Rubbermaid 40,565 327,765 NVR 401(b) 170,862 Pulte Homes 111,267 1,129,360 Ryland Group 16,765(f) 261,534 Snap-On 32,903 993,013 Stanley Works 8,721 272,618 Toll Brothers 6,345(b) 107,992 Whirlpool 51,835(f) 1,732,843 --------------- Total 13,381,939 ------------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS (1.8%) Clorox 32,837 1,646,776 Kimberly-Clark 85,492 4,400,273 Procter & Gamble 576,352 31,411,184 --------------- Total 37,458,233 ------------------------------------------------------------------------------------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.2%) Calpine 8,553(b) 63,378 Constellation Energy Group 104,964(f) 2,760,553 Dynegy Cl A 466,585(b) 984,494 --------------- Total 3,808,425 ------------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES (1.3%) 3M 217,362 11,691,902 Seaboard 471 473,355 Textron 93,093 840,630 Tredegar 16,209 267,449 Tyco Intl 654,427(c,g) 13,756,055 --------------- Total 27,029,391 ------------------------------------------------------------------------------------- INSURANCE (4.5%) AFLAC 147,289 3,418,578 Allied World Assurance Holdings 6,869(c) 258,961 Allstate 1,197,191(g) 25,943,129 American Financial Group 11,304 191,942 Aon 103,317 3,827,895 Arch Capital Group 6,237(b,c,f) 375,156 Aspen Insurance Holdings 66,891(c) 1,478,291 Assurant 56,546 1,492,814
See accompanying Notes to Portfolio of Investments. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 15 PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) INSURANCE (CONT.) Axis Capital Holdings 20,174(c) $489,421 Chubb 140,797(f) 5,995,136 Cincinnati Financial 12,519 274,542 Employers Holdings 36,927 499,992 Everest Re Group 5,516(c) 347,508 Hartford Financial Services Group 158,284(f) 2,083,017 HCC Insurance Holdings 14,014 328,068 IPC Holdings 33,187(c,f) 851,578 Marsh & McLennan Companies 440,703 8,518,789 Montpelier Re Holdings 71,187(c) 1,006,584 Odyssey Re Holdings 25,577(f) 1,203,398 PartnerRe 6,873(c) 450,388 Platinum Underwriters Holdings 45,109(c,f) 1,254,481 Progressive 1,242,638(b) 15,098,052 RenaissanceRe Holdings 8,305(c) 371,150 RLI 12,392 700,024 Travelers Companies 434,027 16,770,803 Validus Holdings 48,236(c,f) 1,100,746 WR Berkley 19,445 514,904 Zenith Natl Insurance 29,120 816,525 --------------- Total 95,661,872 ------------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL (--%) NutriSystem 41,148(f) 530,398 PetMed Express 10,222(b) 147,606 Ticketmaster Entertainment 26,034(b) 154,902 --------------- Total 832,906 ------------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES (0.1%) Ariba 38,540(b,f) 294,446 EarthLink 70,156(b,f) 528,274 ModusLink Global Solutions 71,828(b) 167,359 RealNetworks 67,312(b) 189,820 --------------- Total 1,179,899 ------------------------------------------------------------------------------------- IT SERVICES (1.4%) Affiliated Computer Services Cl A 103,970(b) 4,768,064 Automatic Data Processing 202,289(f) 7,349,159 Ciber 52,635(b,f) 229,489 Computer Sciences 17,530(b) 645,805 Convergys 13,435(b,f) 101,166 CSG Systems Intl 22,398(b) 324,771 Integral Systems 17,756(b) 194,073 ManTech Intl Cl A 21,514(b,f) 1,153,796 MasterCard Cl A 39,332 5,340,499 NCI Cl A 8,433(b) 252,990 Paychex 127,898 3,106,642 Perot Systems Cl A 28,231(b,f) 366,721 SAIC 36,100(b,f) 712,614 Total System Services 21,811 276,127 Western Union 345,685(f) 4,722,057 --------------- Total 29,543,973 ------------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS (0.4%) Brunswick 79,223(f) 220,240 Eastman Kodak 257,081(f) 1,164,577 Hasbro 117,369 2,832,114 JAKKS Pacific 40,483(b,f) 742,458 Mattel 253,773 3,601,039 --------------- Total 8,560,428 ------------------------------------------------------------------------------------- LIFE SCIENCES TOOLS & SERVICES (0.1%) Luminex 15,394(b) 313,576 PerkinElmer 125,550(f) 1,584,440 Sequenom 19,260(b,f) 426,802 --------------- Total 2,324,818 ------------------------------------------------------------------------------------- MACHINERY (1.2%) Cummins 100,950 2,420,781 Deere & Co 92,031 3,197,157 Dover 77,239(f) 2,184,319 Eaton 74,070 3,260,561 Flowserve 30,090 1,604,098 Force Protection 68,911(b) 414,155 FreightCar America 7,315 140,082 Gardner Denver 8,822(b) 192,055 Illinois Tool Works 154,278 5,038,720 Ingersoll-Rand Cl A 183,012(c) 2,966,625 Joy Global 9,129(f) 190,157 Manitowoc 146,341 804,876 Mueller Inds 51,804 1,042,296
See accompanying Notes to Portfolio of Investments. -------------------------------------------------------------------------------- 16 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT --------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) MACHINERY (CONT.) NACCO Inds Cl A 8,300(f) $265,517 Pall 49,291 1,285,016 Terex 16,330(b,f) 193,347 Wabtec 28,621(f) 856,627 --------------- Total 26,056,389 ------------------------------------------------------------------------------------- MEDIA (3.1%) CBS Cl B 608,287 3,479,402 Comcast Cl A 1,292,482(f) 18,934,862 DIRECTV Group 209,156(b) 4,580,516 DreamWorks Animation SKG Cl A 3,854(b) 84,595 Gannett 501,357 2,892,830 Marvel Entertainment 14,171(b) 389,844 Meredith 86,571(f) 1,382,539 New York Times Cl A 266,866(f) 1,326,324 News Corp Cl A 283,178(f) 1,809,507 Sirius XM Radio 15,046,171(b) 1,805,541 Time Warner Cable Cl A 59,461(b,f) 1,107,758 Virgin Media 5,987,186(e) 27,181,825 WorldSpace Cl A 263,942(b) 3,167 --------------- Total 64,978,710 ------------------------------------------------------------------------------------- METALS & MINING (1.0%) AK Steel Holding 137,071(f) 1,106,163 Alcoa 48,086 374,590 AM Castle & Co 26,449(f) 223,759 Cliffs Natural Resources 14,804(f) 343,009 Compass Minerals Intl 5,450 327,927 Freeport-McMoRan Copper & Gold 42,418(f) 1,066,389 Horsehead Holding 25,185(b) 99,733 Kaiser Aluminum 8,262(f) 205,228 Nucor 314,082(f) 12,811,404 Olympic Steel 15,484 245,731 Reliance Steel & Aluminum 15,731(f) 348,127 RTI Intl Metals 9,465(b) 125,979 Timminco 510,164(b,c,f) 1,441,189 United States Steel 112,157(f) 3,368,074 Worthington Inds 22,881 230,183 --------------- Total 22,317,485 ------------------------------------------------------------------------------------- MULTILINE RETAIL (0.7%) Big Lots 80,289(b,f) 1,079,887 Dillard's Cl A 53,223(f) 231,520 Dollar Tree 8,846(b) 377,813 Family Dollar Stores 175,923(f) 4,885,382 Fred's Cl A 33,104(f) 339,647 JC Penney 51,311(f) 859,459 Kohl's 113,484(b,f) 4,165,998 Macy's 83,729 749,375 Nordstrom 82,493(f) 1,046,836 Sears Holdings 8,132(b,f) 332,761 --------------- Total 14,068,678 ------------------------------------------------------------------------------------- MULTI-UTILITIES (0.4%) CH Energy Group 3,442 174,096 DTE Energy 2,526 87,147 MDU Resources Group 10,592 210,675 PG&E 80,109 3,097,815 TECO Energy 120,193 1,443,518 Vectren 7,668 197,758 Wisconsin Energy 51,986(f) 2,317,536 --------------- Total 7,528,545 ------------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (13.6%) Apache 176,609 13,245,675 Cabot Oil & Gas 55,530(f) 1,526,520 Chesapeake Energy 289,099 4,570,655 Chevron 1,385,499 97,705,390 Cimarex Energy 13,126(f) 326,050 Clayton Williams Energy 5,179(b) 206,124 Comstock Resources 20,170(b,f) 769,082 ConocoPhillips 584,206 27,767,311 CONSOL Energy 85,435 2,328,958 Contango Oil & Gas 5,181(b,f) 231,073 EOG Resources 112,266(f) 7,608,267 EXCO Resources 18,093(b) 183,463 Exxon Mobil 625,884 47,867,608 Frontier Oil 14,907(f) 212,872 Frontline 4,642(c,f) 132,343 Goodrich Petroleum 7,657(b) 221,287 Gran Tierra Energy 87,228(b,c) 246,855 Hess 127,604(f) 7,096,058 James River Coal 16,847(b) 228,445 Marathon Oil 412,818 11,241,034 Massey Energy 92,601 1,405,683
See accompanying Notes to Portfolio of Investments. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 17 PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) OIL, GAS & CONSUMABLE FUELS (CONT.) McMoRan Exploration 30,874(b) $206,547 Murphy Oil 111,186 4,912,197 Newfield Exploration 7,467(b) 143,292 Noble Energy 103,023 5,040,915 Occidental Petroleum 312,463(f) 17,044,857 Peabody Energy 136,760 3,419,000 Penn Virginia 11,931(f) 245,779 Petrohawk Energy 3,969(b,f) 78,229 PetroQuest Energy 24,474(b,f) 154,920 Pioneer Natural Resources 141,145 2,066,363 Plains Exploration & Production 7,946(b,f) 167,820 Range Resources 33,648 1,205,944 Rosetta Resources 43,026(b) 261,168 Southwestern Energy 218,764(b) 6,923,881 Spectra Energy 479,403 6,956,138 St. Mary Land & Exploration 10,285(f) 199,015 Stone Energy 22,251(b) 190,914 Sunoco 42,251(f) 1,957,066 Swift Energy 45,994(b,f) 704,628 Tesoro 77,808(f) 1,340,632 USEC 77,943(b) 396,730 VAALCO Energy 46,283(b,f) 347,585 Valero Energy 204,530 4,933,264 Western Refining 23,140 269,812 Williams Companies 202,174 2,860,762 World Fuel Services 7,441(f) 251,283 --------------- Total 287,399,494 ------------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS (--%) Wausau Paper 39,145(f) 372,269 ------------------------------------------------------------------------------------- PERSONAL PRODUCTS (0.1%) Estee Lauder Companies Cl A 87,587(f) 2,299,159 ------------------------------------------------------------------------------------- PHARMACEUTICALS (12.8%) Abbott Laboratories 122,292 6,779,868 Eli Lilly & Co 283,187 10,426,945 Forest Laboratories 430,301(b) 10,774,737 Johnson & Johnson 1,636,996 94,438,299 King Pharmaceuticals 793,580(b) 6,935,889 Merck & Co 508,625 14,521,244 Mylan 123,475(b,f) 1,398,972 Par Pharmaceutical Companies 19,731(b) 242,889 Pfizer 7,072,211 103,112,837 Schering-Plough 434,393 7,627,941 Valeant Pharmaceuticals Intl 36,414(b,f) 790,184 ViroPharma 92,903(b) 1,114,836 VIVUS 21,562(b) 105,869 Watson Pharmaceuticals 46,739(b,f) 1,275,040 Wyeth 266,933 11,470,111 --------------- Total 271,015,661 ------------------------------------------------------------------------------------- PROFESSIONAL SERVICES (0.1%) Administaff 15,452 325,883 Heidrick & Struggles Intl 15,205 231,116 Huron Consulting Group 4,487(b) 224,260 Kelly Services Cl A 32,477 294,242 Korn/Ferry Intl 21,781(b,f) 204,741 Manpower 8,767 249,509 TrueBlue 49,670(b,f) 422,195 --------------- Total 1,951,946 ------------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS (REITS) (0.2%) American Campus Communities 11,424(f) 244,131 BRE Properties Cl A 3,175(f) 80,613 Capstead Mtge 26,825 286,223 Digital Realty Trust 3,469(f) 110,661 Equity Residential 144,231 3,451,449 Health Care REIT 5,787(f) 218,806 Investors Real Estate Trust 22,612 224,989 Liberty Property Trust 7,850 157,000 UDR 9,138(f) 107,190 --------------- Total 4,881,062 ------------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT (--%) Avatar Holdings 8,745(b) 226,933 St. Joe 6,506(b,f) 156,469 --------------- Total 383,402 -------------------------------------------------------------------------------------
See accompanying Notes to Portfolio of Investments. -------------------------------------------------------------------------------- 18 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT --------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) ROAD & RAIL (3.8%) Arkansas Best 33,461 $782,653 Burlington Northern Santa Fe 314,011 20,803,229 Con-way 3,857 84,970 CSX 417,739(f) 12,097,721 Genesee & Wyoming Cl A 10,684(b,f) 290,284 Kansas City Southern 6,630(b,f) 120,401 Norfolk Southern 452,461 17,356,404 Old Dominion Freight Line 10,109(b,f) 253,534 Ryder System 84,319 2,848,296 Saia 26,543(b) 283,745 Union Pacific 566,518 24,807,822 Werner Enterprises 18,060 270,900 --------------- Total 79,999,959 ------------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (2.0%) Altera 281,189 4,324,687 Amkor Technology 141,788(b,f) 328,948 Atmel 32,711(b,f) 109,255 Infineon Technologies 806,777(b,c,f) 718,921 Infineon Technologies ADR 614,065(b,c) 528,096 Intel 1,283,714 16,559,910 Lam Research 26,944(b,f) 544,538 Linear Technology 203,498(f) 4,765,923 LSI 406,802(b,f) 1,293,630 MEMC Electronic Materials 152,983(b) 2,080,569 Microchip Technology 121,743 2,309,465 MKS Instruments 29,302(b,f) 411,693 Natl Semiconductor 114,937(f) 1,165,461 NVIDIA 21,718(b,f) 172,658 OmniVision Technologies 40,728(b) 272,470 Sigma Designs 26,295(b,f) 268,735 Silicon Image 79,753(b,f) 292,694 Spansion Cl A 1,738,038(b) 116,449 Teradyne 33,804(b) 162,597 Xilinx 290,253(f) 4,890,763 Zoran 33,505(b) 199,020 --------------- Total 41,516,482 ------------------------------------------------------------------------------------- SOFTWARE (2.5%) BMC Software 41,845(b,f) 1,059,934 Compuware 240,368(b) 1,562,392 Intuit 47,822(b) 1,083,168 Microsoft 2,175,020 37,192,842 Oracle 659,566(b,f) 11,100,496 Quality Systems 8,208(f) 305,994 Red Hat 6,267(b,f) 91,812 Salesforce.com 47,195(b,f) 1,255,859 Take-Two Interactive Software 20,438 143,475 TeleCommunication Systems Cl A 31,053(b) 222,339 --------------- Total 54,018,311 ------------------------------------------------------------------------------------- SPECIALTY RETAIL (4.8%) Aaron Rents 24,988(f) 546,238 Abercrombie & Fitch Cl A 121,228 2,163,920 Advance Auto Parts 4,756 155,664 Aeropostale 18,721(b,f) 395,200 American Eagle Outfitters 12,985 116,995 Asbury Automotive Group 38,005(f) 136,058 AutoNation 212,973(b,f) 1,976,389 AutoZone 23,871(b,f) 3,172,217 Barnes & Noble 14,133(f) 232,064 Bed Bath & Beyond 193,604(b,f) 4,497,421 Best Buy 125,015 3,502,920 Blockbuster Cl A 261,540(b,f) 333,464 Brown Shoe 35,184(f) 165,013 Cato Cl A 27,254(f) 360,570 Chico's FAS 96,855(b) 383,546 Children's Place Retail Stores 22,270(b,f) 418,899 Collective Brands 48,547(b) 517,996 Dress Barn 37,279(b,f) 321,345 Finish Line Cl A 51,549 244,858 Foot Locker 60,996(f) 448,931 Gap 290,846 3,280,743 Group 1 Automotive 34,272(f) 341,692 Home Depot 2,397,534 51,618,906 Hot Topic 49,620(b,f) 423,755 Jo-Ann Stores 18,977(b,f) 242,336
See accompanying Notes to Portfolio of Investments. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 19 PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) SPECIALTY RETAIL (CONT.) Jos A Bank Clothiers 19,777(b,f) $543,076 Limited Brands 133,601 1,058,120 Lowe's Companies 749,982(g) 13,702,170 Men's Wearhouse 37,223(f) 433,648 Monro Muffler Brake 6,976 169,308 Office Depot 499,362(b) 1,078,622 PetSmart 9,435(f) 177,095 RadioShack 165,444(f) 1,895,988 Rent-A-Center 43,584(b) 647,222 Ross Stores 9,891(f) 290,993 Sherwin-Williams 45,446 2,170,047 Stage Stores 34,037 243,365 Staples 100,397 1,600,328 Tiffany & Co 51,022(f) 1,058,707 Urban Outfitters 3,466(b,f) 54,000 Wet Seal Cl A 86,206(b,f) 224,998 --------------- Total 101,344,827 ------------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS (0.7%) Carter's 26,542(b,f) 450,949 Coach 320,745(b,f) 4,682,876 Jones Apparel Group 143,519 496,576 Liz Claiborne 253,530(f) 557,766 Nike Cl B 79,319 3,589,185 Polo Ralph Lauren 27,092(f) 1,111,585 Skechers USA Cl A 24,247(b,f) 241,500 Steven Madden 16,880(b) 293,374 VF 65,686(f) 3,679,730 --------------- Total 15,103,541 ------------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE (0.2%) Capitol Federal Financial 2,312 95,717 First Niagara Financial Group 42,786 558,785 Freddie Mac 112,515 66,946 Hudson City Bancorp 224,552 2,604,804 NewAlliance Bancshares 12,085(f) 132,814 Ocwen Financial 34,121(b) 303,677 People's United Financial 22,442 367,151 Trustco Bank NY 23,917 160,244 United Financial Bancorp 17,441 239,116 --------------- Total 4,529,254 ------------------------------------------------------------------------------------- TRADING COMPANIES & DISTRIBUTORS (0.3%) Beacon Roofing Supply 27,278(b) 347,249 Fastenal 74,300(f) 2,539,574 GATX 3,343(f) 80,566 Rush Enterprises Cl A 27,585(b,f) 251,024 Watsco 12,534 414,249 WESCO Intl 16,458(b) 303,156 WW Grainger 37,197(f) 2,713,521 --------------- Total 6,649,339 ------------------------------------------------------------------------------------- WATER UTILITIES (--%) Aqua America 5,838 121,080 California Water Service Group 4,243 184,571 --------------- Total 305,651 ------------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (0.2%) Sprint Nextel 1,283,585(b) 3,119,112 USA Mobility 37,213(b) 393,341 --------------- Total 3,512,453 ------------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $2,692,173,898) $2,059,825,946 ------------------------------------------------------------------------------------- MONEY MARKET FUND (3.1%) SHARES VALUE(a) RiverSource Short-Term Cash Fund, 0.47% 65,890,575(h) $65,890,575 ------------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $65,890,575) $65,890,575 -------------------------------------------------------------------------------------
See accompanying Notes to Portfolio of Investments. -------------------------------------------------------------------------------- 20 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT --------------------------------------------------------------------------------
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (9.6%) SHARES VALUE(a) CASH COLLATERAL REINVESTMENT FUND JPMorgan Prime Money Market Fund 203,391,339 $203,391,339 ----------------------------------------------------------------- TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (Cost: $203,391,339) $203,391,339 ----------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $2,961,455,812)(i) $2,329,107,860 =================================================================
INVESTMENTS IN DERIVATIVES FUTURES CONTRACTS OUTSTANDING AT JAN. 31, 2009
NUMBER OF UNREALIZED CONTRACTS NOTIONAL EXPIRATION APPRECIATION CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION) ------------------------------------------------------------------------------------ Russell 2000 Mini Index 234 $10,356,840 March 2009 $(124,593) S&P 500 Index 285 58,603,125 March 2009 (7,248,513) ------------------------------------------------------------------------------------ Total $(7,373,106) ------------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (a) Securities are valued by using procedures described in Note 1 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. At Jan. 31, 2009, the value of foreign securities represented 1.9% of net assets. (d) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security may be determined to be liquid under guidelines established by the Fund's Board of Directors. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At Jan. 31, 2009, the value of these securities amounted to $2,109,750 or 0.1% of net assets. (e) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). Information concerning such security holdings at Jan. 31, 2008, is as follows:
ACQUISITION SECURITY DATES COST ---------------------------------------------------------------------------- Apollo Management LP* 08-02-07 thru 09-30-08 $30,730,942 Virgin Media 07-26-07 thru 08-06-08 101,975,398
* Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 21 PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------- NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED) (f) At Jan. 31, 2009, security was partially or fully on loan. See Note 5 to the financial statements. (g) At Jan. 31, 2009, investments in securities included securities valued at $11,992,828 that were partially pledged as collateral to cover initial margin deposits on open stock index futures contracts. (h) Affiliated Money Market Fund -- See Note 7 to the financial statements. The rate shown is the seven-day current annualized yield at Jan. 31, 2009. (i) At Jan. 31, 2009, the cost of securities for federal income tax purposes was approximately $2,961,456,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $44,376,000 Unrealized depreciation (676,724,000) ------------------------------------------------------------ Net unrealized depreciation $(632,348,000) ------------------------------------------------------------
The industries identified above are based on the Global Industry Classification Standard (GICS), which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. -------------------------------------------------------------------------------- 22 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED) FAIR VALUE MEASUREMENTS Statement of Financial Accounting Standards No. 157 (SFAS 157) seeks to implement more uniform reporting relating to the fair valuation of securities for financial statement purposes. Mutual funds are required to implement the requirements of this standard for fiscal years beginning after Nov. 15, 2007. While uniformity of presentation is the objective of the standard, it is likely that there may be a range of practices utilized and it may be some period of time before industry practices become more uniform. For this reason care should be exercised in interpreting this information and/or using it for comparison with other mutual funds. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below: - Level 1 -- quoted prices in active markets for identical securities - Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.) - Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) Observable inputs are those based on market data obtained from sources independent of the fund, and unobservable inputs reflect the fund's own assumptions based on the best information available. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. The following table is a summary of the inputs used to value the Fund's investments as of Jan. 31, 2009:
FAIR VALUE AT JAN. 31, 2009 ----------------------------------------------------------- LEVEL 1 LEVEL 2 QUOTED PRICES OTHER LEVEL 3 IN ACTIVE SIGNIFICANT SIGNIFICANT MARKETS FOR OBSERVABLE UNOBSERVABLE DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL ------------------------------------------------------------------------------------ Investments in securities $2,329,107,860 $-- $-- $2,329,107,860 Other financial instruments* (7,373,106) -- -- (7,373,106) ------------------------------------------------------------------------------------ Total $2,321,734,754 $-- $-- $2,321,734,754 ------------------------------------------------------------------------------------
* Other financial instruments are derivative instruments, such as futures, which are valued at the unrealized appreciation/depreciation on the instrument. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 23 PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------- HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iv) The Fund's complete schedule of portfolio holdings, as disclosed in its annual and semiannual shareholder reports and in its filings on Form N-Q, can be found at riversource.com/funds. -------------------------------------------------------------------------------- 24 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT STATEMENT OF ASSETS AND LIABILITIES ------------------------------------------- JAN. 31, 2009 (UNAUDITED)
ASSETS Investments in securities, at value Unaffiliated issuers* (identified cost $2,692,173,898) $ 2,059,825,946 Affiliated money market fund (identified cost $65,890,575) 65,890,575 Investments of cash collateral received for securities on loan (identified cost $203,391,339) 203,391,339 ---------------------------------------------------------------------------------- Total investments in securities (identified cost $2,961,455,812) 2,329,107,860 Cash 22,382 Foreign currency holdings (identified cost $652) 637 Capital shares receivable 437,979 Dividends receivable 3,595,532 Receivable for investment securities sold 130,663,058 ---------------------------------------------------------------------------------- Total assets 2,463,827,448 ---------------------------------------------------------------------------------- LIABILITIES Capital shares payable 2,380,003 Payable for investment securities purchased 128,505,375 Payable upon return of securities loaned 203,391,339 Variation margin payable on futures contracts 1,729,515 Accrued investment management services fees 34,994 Accrued distribution fees 19,269 Accrued transfer agency fees 23,709 Accrued administrative services fees 3,200 Accrued plan administration services fees 495 Other accrued expenses 656,515 ---------------------------------------------------------------------------------- Total liabilities 336,744,414 ---------------------------------------------------------------------------------- Net assets applicable to outstanding capital stock $ 2,127,083,034 ---------------------------------------------------------------------------------- REPRESENTED BY Capital stock -- $.01 par value $ 8,112,130 Additional paid-in capital 4,419,558,829 Excess of distributions over net investment income (11,741,239) Accumulated net realized gain (loss) (1,649,118,429) Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (639,728,257) ---------------------------------------------------------------------------------- Total -- representing net assets applicable to outstanding capital stock $ 2,127,083,034 ---------------------------------------------------------------------------------- *Including securities on loan, at value $ 190,109,786 ----------------------------------------------------------------------------------
-------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 25 STATEMENT OF ASSETS AND LIABILITIES (continued) ------------------------------- JAN. 31, 2009 (UNAUDITED)
NET ASSET VALUE PER SHARE NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE Class A $1,767,428,770 673,576,511 $2.62(1) Class B $ 231,221,979 89,152,064 $2.59 Class C $ 11,202,974 4,332,812 $2.59 Class I $ 28,634,991 10,885,950 $2.63 Class R2 $ 2,177 822 $2.65 Class R3 $ 2,175 822 $2.65 Class R4 $ 70,551,113 26,500,389 $2.66 Class R5 $ 18,038,855 6,763,671 $2.67 -------------------------------------------------------------------------------------------
(1) The maximum offering price per share for Class A is $2.78. The offering price is calculated by dividing the net asset value by 1.0 minus the maximum sales charge of 5.75%. The accompanying Notes to Financial Statements are an integral part of this statement. -------------------------------------------------------------------------------- 26 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT STATEMENT OF OPERATIONS ------------------------------------------------------- JAN. 31, 2009 (UNAUDITED)
INVESTMENT INCOME Income: Dividends $ 38,823,381 Income distributions from affiliated money market fund 736,103 Fee income from securities lending 180,077 Less foreign taxes withheld (17,909) ---------------------------------------------------------------------------------- Total income 39,721,652 ---------------------------------------------------------------------------------- Expenses: Investment management services fees 5,880,940 Distribution fees Class A 3,118,876 Class B 1,601,985 Class C 77,364 Class R2 7 Class R3 4 Transfer agency fees Class A 3,943,510 Class B 546,009 Class C 25,521 Class R2 1 Class R3 1 Class R4 32,997 Class R5 737 Administrative services fees 771,189 Plan administration services fees Class R2 4 Class R3 4 Class R4 164,984 Compensation of board members 47,231 Custodian fees 199,560 Printing and postage 580,700 Registration fees 17,240 Professional fees 42,299 Other 30,173 ---------------------------------------------------------------------------------- Total expenses 17,081,336 Expenses waived/reimbursed by the Investment Manager and its affiliates (3,023,996) Earnings and bank fee credits on cash balances (27,696) ---------------------------------------------------------------------------------- Total net expenses 14,029,644 ---------------------------------------------------------------------------------- Investment income (loss) -- net 25,692,008 ----------------------------------------------------------------------------------
-------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 27 STATEMENT OF OPERATIONS (continued) ------------------------------------------- JAN. 31, 2009 (UNAUDITED)
REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions $(1,237,189,207) Foreign currency transactions 38,078,697 Futures contracts (24,847,973) Options contracts written (4,792,289) ---------------------------------------------------------------------------------- Net realized gain (loss) on investments (1,228,750,772) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (298,686,651) ---------------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies (1,527,437,423) ---------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $(1,501,745,415) ----------------------------------------------------------------------------------
The accompanying Notes to Financial Statements are an integral part of this statement. -------------------------------------------------------------------------------- 28 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT STATEMENTS OF CHANGES IN NET ASSETS -------------------------------------------
SIX MONTHS ENDED YEAR ENDED JAN. 31, 2009 JULY 31, 2008 OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 25,692,008 $ 65,487,946 Net realized gain (loss) on investments (1,228,750,772) (20,362,259) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (298,686,651) (865,038,637) ---------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (1,501,745,415) (819,912,950) ---------------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income Class A (73,410,953) (36,389,921) Class B (5,489,205) -- Class C (317,848) -- Class I (1,247,239) (866,696) Class R2 (88) (32) Class R3 (97) (44) Class R4 (4,396,983) (2,588,075) Class R5 (105) -- Net realized gain Class A (11,674,647) (503,800,045) Class B (1,552,503) (85,854,373) Class C (75,828) (3,230,993) Class I (166,927) (7,554,314) Class R2 (14) (539) Class R3 (14) (539) Class R4 (654,100) (31,125,821) Class R5 (14) (539) ---------------------------------------------------------------------------------------------------- Total distributions (98,986,565) (671,411,931) ----------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 29 STATEMENTS OF CHANGES IN NET ASSETS (continued) -------------------------------
SIX MONTHS ENDED YEAR ENDED JAN. 31, 2009 JULY 31, 2008 CAPITAL SHARE TRANSACTIONS Proceeds from sales Class A shares $ 38,712,056 $ 211,484,181 Class B shares 8,833,689 33,647,160 Class C shares 1,029,455 2,226,679 Class I shares 6,815,859 10,561,864 Class R4 shares 11,759,682 34,516,064 Class R5 shares 20,568,962 -- Reinvestment of distributions at net asset value Class A shares 82,326,997 523,659,899 Class B shares 6,986,555 85,230,086 Class C shares 385,379 3,174,765 Class I shares 1,413,924 8,419,823 Class R4 shares 5,050,991 33,713,417 Payments for redemptions Class A shares (407,989,877) (1,190,365,828) Class B shares (48,792,757) (315,875,480) Class C shares (2,783,016) (8,714,618) Class I shares (848,883) (30,081,251) Class R4 shares (55,775,946) (150,506,498) Class R5 shares (360,970) (26,533,250) ---------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions (332,667,900) (775,442,987) ---------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets (1,933,399,880) (2,266,767,868) Net assets at beginning of period 4,060,482,914 6,327,250,782 ---------------------------------------------------------------------------------------------------- Net assets at end of period $ 2,127,083,034 $ 4,060,482,914 ---------------------------------------------------------------------------------------------------- Undistributed (excess of distributions over) net investment income $ (11,741,239) $ 47,429,271 ----------------------------------------------------------------------------------------------------
The accompanying Notes to Financial Statements are an integral part of this statement. -------------------------------------------------------------------------------- 30 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT FINANCIAL HIGHLIGHTS ----------------------------------------------------------- CLASS A
PER SHARE INCOME AND CAPITAL CHANGES(a) Fiscal period ended July 31, 2009(j) 2008 2007 2006 2005 Net asset value, beginning of period $4.52 $6.05 $5.40 $5.26 $4.64 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .03(b) .07(b) .06(b) .06 .04 Net gains (losses) (both realized and unrealized) (1.80) (.90) .79 .12 .61 -------------------------------------------------------------------------------------------------------------- Total from investment operations (1.77) (.83) .85 .18 .65 -------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.11) (.05) (.06) (.04) (.02) Distributions from realized gains (.02) (.65) (.14) -- (.01) -------------------------------------------------------------------------------------------------------------- Total distributions (.13) (.70) (.20) (.04) (.03) -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $2.62 $4.52 $6.05 $5.40 $5.26 -------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $1,767 $3,389 $5,039 $5,461 $1,030 -------------------------------------------------------------------------------------------------------------- Gross expenses prior to expense waiver/reimbursement(c),(d) 1.07%(e) 1.03% 1.09% 1.06% 1.16% -------------------------------------------------------------------------------------------------------------- Net expenses after expense waiver/reimbursement(d),(f),(g) .86%(e) .97% 1.09% 1.06% 1.11% -------------------------------------------------------------------------------------------------------------- Net investment income (loss) 1.78%(e) 1.31% .99% 1.08% .79% -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 80% 68% 66% 116% 128% -------------------------------------------------------------------------------------------------------------- Total return(h) (39.47%)(i) (15.40%) 15.79% 3.51% 13.99% --------------------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Per share amounts have been calculated using the average shares outstanding method. (c) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) The Investment Manager and its affiliates have agreed to waive/reimburse certain fees and expenses (excluding fees and expenses of acquired funds), before giving effect to any performance incentive adjustment. (g) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. Earnings and bank fee credits for the six months ended Jan. 31, 2009 were less than 0.01% of average net assets. The ratio of net expenses after expense waiver/reimbursement and after reduction for earnings and bank fee credits was 0.96% for the year ended July 31, 2008. (h) Total return does not reflect payment of a sales charge. (i) Not annualized. (j) Six months ended Jan. 31, 2009 (Unaudited). The accompanying Notes to Financial Statements are an integral part of this statement. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 31 FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------- CLASS B
PER SHARE INCOME AND CAPITAL CHANGES(a) Fiscal period ended July 31, 2009(j) 2008 2007 2006 2005 Net asset value, beginning of period $4.41 $5.91 $5.29 $5.15 $4.56 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .02(b) .03(b) .01(b) .02 -- Net gains (losses) (both realized and unrealized) (1.76) (.88) .76 .12 .60 -------------------------------------------------------------------------------------------------------------- Total from investment operations (1.74) (.85) .77 .14 .60 -------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.06) -- (.01) -- -- Distributions from realized gains (.02) (.65) (.14) -- (.01) -------------------------------------------------------------------------------------------------------------- Total distributions (.08) (.65) (.15) -- (.01) -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $2.59 $4.41 $5.91 $5.29 $5.15 -------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $231 $433 $833 $1,169 $472 -------------------------------------------------------------------------------------------------------------- Gross expenses prior to expense waiver/reimbursement(c),(d) 1.84%(e) 1.79% 1.86% 1.84% 1.93% -------------------------------------------------------------------------------------------------------------- Net expenses after expense waiver/reimbursement(d),(f),(g) 1.63%(e) 1.73% 1.86% 1.84% 1.88% -------------------------------------------------------------------------------------------------------------- Net investment income (loss) 1.01%(e) .56% .23% .28% .02% -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 80% 68% 66% 116% 128% -------------------------------------------------------------------------------------------------------------- Total return(h) (39.64%)(i) (15.97%) 14.71% 2.72% 13.09% --------------------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Per share amounts have been calculated using the average shares outstanding method. (c) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) The Investment Manager and its affiliates have agreed to waive/reimburse certain fees and expenses (excluding fees and expenses of acquired funds), before giving effect to any performance incentive adjustment. (g) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. Earnings and bank fee credits for the six months ended Jan. 31, 2009 were less than 0.01% of average net assets. The ratio of net expenses after expense waiver/reimbursement and after reduction for earnings and bank fee credits was 1.72% for the year ended July 31, 2008. (h) Total return does not reflect payment of a sales charge. (i) Not annualized. (j) Six months ended Jan. 31, 2009 (Unaudited). The accompanying Notes to Financial Statements are an integral part of this statement. -------------------------------------------------------------------------------- 32 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- CLASS C
PER SHARE INCOME AND CAPITAL CHANGES(a) Fiscal period ended July 31, 2009(j) 2008 2007 2006 2005 Net asset value, beginning of period $4.41 $5.92 $5.30 $5.16 $4.57 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .02(b) .03(b) .01(b) .02 -- Net gains (losses) (both realized and unrealized) (1.75) (.89) .77 .12 .60 -------------------------------------------------------------------------------------------------------------- Total from investment operations (1.73) (.86) .78 .14 .60 -------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.07) -- (.02) -- -- Distributions from realized gains (.02) (.65) (.14) -- (.01) -------------------------------------------------------------------------------------------------------------- Total distributions (.09) (.65) (.16) -- (.01) -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $2.59 $4.41 $5.92 $5.30 $5.16 -------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $11 $21 $32 $35 $9 -------------------------------------------------------------------------------------------------------------- Gross expenses prior to expense waiver/reimbursement(c),(d) 1.83%(e) 1.79% 1.86% 1.84% 1.93% -------------------------------------------------------------------------------------------------------------- Net expenses after expense waiver/reimbursement(d),(f),(g) 1.62%(e) 1.73% 1.86% 1.84% 1.88% -------------------------------------------------------------------------------------------------------------- Net investment income (loss) 1.03%(e) .55% .23% .28% .02% -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 80% 68% 66% 116% 128% -------------------------------------------------------------------------------------------------------------- Total return(h) (39.39%)(i) (16.11%) 14.80% 2.71% 13.06% --------------------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Per share amounts have been calculated using the average shares outstanding method. (c) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) The Investment Manager and its affiliates have agreed to waive/reimburse certain fees and expenses (excluding fees and expenses of acquired funds), before giving effect to any performance incentive adjustment. (g) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. Earnings and bank fee credits for the six months ended Jan. 31, 2009 were less than 0.01% of average net assets. The ratio of net expenses after expense waiver/reimbursement and after reduction for earnings and bank fee credits was 1.72% for the year ended July 31, 2008. (h) Total return does not reflect payment of a sales charge. (i) Not annualized. (j) Six months ended Jan. 31, 2009 (Unaudited). The accompanying Notes to Financial Statements are an integral part of this statement. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 33 FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------- CLASS I
PER SHARE INCOME AND CAPITAL CHANGES(a) Fiscal period ended July 31, 2009(i) 2008 2007 2006 2005 Net asset value, beginning of period $4.55 $6.09 $5.44 $5.31 $4.67 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .04(b) .09(b) .09(b) .10 .05 Net gains (losses) (both realized and unrealized) (1.81) (.90) .78 .12 .63 -------------------------------------------------------------------------------------------------------------- Total from investment operations (1.77) (.81) .87 .22 .68 -------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.13) (.08) (.08) (.09) (.03) Distributions from realized gains (.02) (.65) (.14) -- (.01) -------------------------------------------------------------------------------------------------------------- Total distributions (.15) (.73) (.22) (.09) (.04) -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $2.63 $4.55 $6.09 $5.44 $5.31 -------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $29 $39 $68 $105 $43 -------------------------------------------------------------------------------------------------------------- Gross expenses prior to expense waiver/reimbursement(c),(d) .51%(e) .57% .63% .59% .70% -------------------------------------------------------------------------------------------------------------- Net expenses after expense waiver/reimbursement(d),(f),(g) .44%(e) .57% .63% .59% .65% -------------------------------------------------------------------------------------------------------------- Net investment income (loss) 2.21%(e) 1.74% 1.44% 1.53% 1.24% -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 80% 68% 66% 116% 128% -------------------------------------------------------------------------------------------------------------- Total return (39.23%)(h) (15.02%) 16.13% 4.06% 14.64% --------------------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Per share amounts have been calculated using the average shares outstanding method. (c) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) The Investment Manager and its affiliates have agreed to waive/reimburse certain fees and expenses (excluding fees and expenses of acquired funds), before giving effect to any performance incentive adjustment. (g) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. Earnings and bank fee credits for the six months ended Jan. 31, 2009 were less than 0.01% of average net assets. The ratio of net expenses after expense waiver/reimbursement and after reduction for earnings and bank fee credits was 0.56% for the year ended July 31, 2008. (h) Not annualized. (i) Six months ended Jan. 31, 2009 (Unaudited). The accompanying Notes to Financial Statements are an integral part of this statement. -------------------------------------------------------------------------------- 34 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- CLASS R2
PER SHARE INCOME AND CAPITAL CHANGES(a) Fiscal period ended July 31, 2009(j) 2008 2007(b) Net asset value, beginning of period $4.55 $6.08 $6.08 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(c) .03 .06 .03 Net gains (losses) (both realized and unrealized) (1.81) (.90) .19 -------------------------------------------------------------------------------------------------------------- Total from investment operations (1.78) (.84) .22 -------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.10) (.04) (.08) Distributions from realized gains (.02) (.65) (.14) -------------------------------------------------------------------------------------------------------------- Total distributions (.12) (.69) (.22) -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $2.65 $4.55 $6.08 -------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $-- $-- $-- -------------------------------------------------------------------------------------------------------------- Gross expenses prior to expense waiver/reimbursement(d),(e) 1.28%(f) 1.39% 1.44%(f) -------------------------------------------------------------------------------------------------------------- Net expenses after expense waiver/reimbursement(e),(g),(h) .98%(f) 1.14% 1.44%(f) -------------------------------------------------------------------------------------------------------------- Net investment income (loss) 1.70%(f) 1.15% .67%(f) -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 80% 68% 66% -------------------------------------------------------------------------------------------------------------- Total return (39.26%)(i) (15.45%) 3.71%(i) --------------------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007. (c) Per share amounts have been calculated using the average shares outstanding method. (d) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. (e) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (f) Adjusted to an annual basis. (g) The Investment Manager and its affiliates have agreed to waive/reimburse certain fees and expenses (excluding fees and expenses of acquired funds), before giving effect to any performance incentive adjustment. (h) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. The ratio of net expenses after expense waiver/reimbursement and after reduction for earnings and bank fee credits was 0.96% for the six months ended Jan. 31, 2009. Earnings and bank fee credits for the year ended July 31, 2008 were less than 0.01% of average net assets. (i) Not annualized. (j) Six months ended Jan. 31, 2009 (Unaudited). The accompanying Notes to Financial Statements are an integral part of this statement. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 35 FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------- CLASS R3
PER SHARE INCOME AND CAPITAL CHANGES(a) Fiscal period ended July 31, 2009(j) 2008 2007(b) Net asset value, beginning of period $4.56 $6.09 $6.08 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(c) .03 .08 .04 Net gains (losses) (both realized and unrealized) (1.80) (.90) .19 -------------------------------------------------------------------------------------------------------------- Total from investment operations (1.77) (.82) .23 -------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.12) (.06) (.08) Distributions from realized gains (.02) (.65) (.14) -------------------------------------------------------------------------------------------------------------- Total distributions (.14) (.71) (.22) -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $2.65 $4.56 $6.09 -------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $-- $-- $-- -------------------------------------------------------------------------------------------------------------- Gross expenses prior to expense waiver/reimbursement(d),(e) 1.05%(f) 1.14% 1.19%(f) -------------------------------------------------------------------------------------------------------------- Net expenses after expense waiver/reimbursement(e),(g),(h) .73%(f) .89% 1.19%(f) -------------------------------------------------------------------------------------------------------------- Net investment income (loss) 1.94%(f) 1.40% .92%(f) -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 80% 68% 66% -------------------------------------------------------------------------------------------------------------- Total return (39.17%)(i) (15.19%) 3.88%(i) --------------------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007. (c) Per share amounts have been calculated using the average shares outstanding method. (d) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. (e) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (f) Adjusted to an annual basis. (g) The Investment Manager and its affiliates have agreed to waive/reimburse certain fees and expenses (excluding fees and expenses of acquired funds), before giving effect to any performance incentive adjustment. (h) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. The ratio of net expenses after expense waiver/reimbursement and after reduction for earnings and bank fee credits was 0.71% for the six months ended Jan. 31, 2009. Earnings and bank fee credits for the year ended July 31, 2008 were less than 0.01% of average net assets. (i) Not annualized. (j) Six months ended Jan. 31, 2009 (Unaudited). The accompanying Notes to Financial Statements are an integral part of this statement. -------------------------------------------------------------------------------- 36 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- CLASS R4
PER SHARE INCOME AND CAPITAL CHANGES(a) Fiscal period ended July 31, 2009(i) 2008 2007 2006 2005 Net asset value, beginning of period $4.58 $6.13 $5.47 $5.28 $4.66 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .04(b) .08(b) .07(b) .09 .04 Net gains (losses) (both realized and unrealized) (1.82) (.92) .79 .12 .61 -------------------------------------------------------------------------------------------------------------- Total from investment operations (1.78) (.84) .86 .21 .65 -------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.12) (.06) (.06) (.02) (.02) Distributions from realized gains (.02) (.65) (.14) -- (.01) -------------------------------------------------------------------------------------------------------------- Total distributions (.14) (.71) (.20) (.02) (.03) -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $2.66 $4.58 $6.13 $5.47 $5.28 -------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $71 $179 $330 $1,069 $-- -------------------------------------------------------------------------------------------------------------- Gross expenses prior to expense waiver/reimbursement(c),(d) .80%(e) .87% .90% .81% .95% -------------------------------------------------------------------------------------------------------------- Net expenses after expense waiver/reimbursement(d),(f),(g) .72%(e) .82% .89% .81% .90% -------------------------------------------------------------------------------------------------------------- Net investment income (loss) 1.97%(e) 1.46% 1.14% 1.41% 1.08% -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 80% 68% 66% 116% 128% -------------------------------------------------------------------------------------------------------------- Total return (39.24%)(h) (15.40%) 15.80% 4.03% 14.06% --------------------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Per share amounts have been calculated using the average shares outstanding method. (c) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. (d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (e) Adjusted to an annual basis. (f) The Investment Manager and its affiliates have agreed to waive/reimburse certain fees and expenses (excluding fees and expenses of acquired funds), before giving effect to any performance incentive adjustment. (g) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. Earnings and bank fee credits for the six months ended Jan. 31, 2009 were less than 0.01% of average net assets. The ratio of net expenses after expense waiver/reimbursement and after reduction for earnings and bank fee credits was 0.81% for the year ended July 31, 2008. (h) Not annualized. (i) Six months ended Jan. 31, 2009 (Unaudited). The accompanying Notes to Financial Statements are an integral part of this statement. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 37 FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------- CLASS R5
PER SHARE INCOME AND CAPITAL CHANGES(a) Fiscal period ended July 31, 2009(j) 2008 2007(b) Net asset value, beginning of period $4.61 $6.11 $6.08 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(c) .01 .08 .06 Net gains (losses) (both realized and unrealized) (1.80) (.93) .19 -------------------------------------------------------------------------------------------------------------- Total from investment operations (1.79) (.85) .25 -------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.13) -- (.08) Distributions from realized gains (.02) (.65) (.14) -------------------------------------------------------------------------------------------------------------- Total distributions (.15) (.65) (.22) -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $2.67 $4.61 $6.11 -------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $18 $-- $25 -------------------------------------------------------------------------------------------------------------- Gross expenses prior to expense waiver/reimbursement(d),(e) .58%(f) .67% .70%(f) -------------------------------------------------------------------------------------------------------------- Net expenses after expense waiver/reimbursement(e),(g),(h) .45%(f) .67% .70%(f) -------------------------------------------------------------------------------------------------------------- Net investment income (loss) 1.09%(f) 1.21% 1.44%(f) -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 80% 68% 66% -------------------------------------------------------------------------------------------------------------- Total return (39.21%)(i) (15.38%) 4.24%(i) --------------------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007. (c) Per share amounts have been calculated using the average shares outstanding method. (d) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. (e) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. (f) Adjusted to an annual basis. (g) The Investment Manager and its affiliates have agreed to waive/reimburse certain fees and expenses (excluding fees and expenses of acquired funds), before giving effect to any performance incentive adjustment. (h) Includes the impact of a performance incentive adjustment, if any. Expense ratio is before reduction for earnings and bank fee credits on cash balances. Earnings and bank fee credits for the six months ended Jan. 31, 2009 were less than 0.01% of average net assets. The ratio of net expenses after expense waiver/reimbursement and after reduction for earnings and bank fee credits was 0.66% for the year ended July 31, 2008. (i) Not annualized. (j) Six months ended Jan. 31, 2009 (Unaudited). The accompanying Notes to Financial Statements are an integral part of this statement. -------------------------------------------------------------------------------- 38 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT NOTES TO FINANCIAL STATEMENTS -------------------------------------------------- (UNAUDITED AS TO JAN. 31, 2009) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RiverSource Large Cap Equity Fund (the Fund) is a series of RiverSource Large Cap Series, Inc. and is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. RiverSource Large Cap Series, Inc. has 10 billion authorized shares of capital stock that can be allocated among the separate series as designated by the Board of Directors (the Board). The Fund invests primarily in equity securities of companies with a market capitalization greater than $5 billion at the time of purchase. The Fund offers Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4 and Class R5 shares. - Class A shares are sold with a front-end sales charge. - Class B shares may be subject to a contingent deferred sales charge (CDSC) and automatically convert to Class A shares during the ninth year of ownership. - Class C shares may be subject to a CDSC. - Class I, Class R2, Class R3, Class R4 and Class R5 shares are sold without a front-end sales charge or CDSC and are offered to qualifying institutional investors. At Jan. 31, 2009, RiverSource Investments, LLC (RiverSource Investments or the Investment Manager) and the RiverSource affiliated funds-of-funds, owned 100% of Class I shares and the Investment Manager owned 100% of Class R2 and Class R3 shares. All classes of shares have identical voting, dividend and liquidation rights. Class specific expenses (e.g., distribution and service fees, transfer agency fees, plan administration services fees) differ among classes. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses on investments are allocated to each class of shares based upon its relative net assets. The Fund's significant accounting policies are summarized below: USE OF ESTIMATES Preparing financial statements that conform to U.S. generally accepted accounting principles requires management to make estimates (e.g., on assets, liabilities and contingent assets and liabilities) that could differ from actual results. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 39 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- VALUATION OF SECURITIES Effective Aug. 1, 2008, the Fund adopted Statement of Financial Accounting Standards No. 157 "Fair Value Measurements" (SFAS 157). SFAS 157 establishes an authoritative definition of fair value, sets out a hierarchy for measuring fair value, and requires additional disclosures about the inputs used to develop the measurements of fair value and the effect of certain measurements reported in the Statement of Operations for a fiscal period. There was no impact to the Fund's net assets or results of operations upon adoption. The fair valuation measurements disclosure can be found following the Notes to Portfolio of Investments. 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. Debt securities are generally traded in the over-the-counter market and are valued at a price that reflects fair value as quoted by dealers in these securities or by an independent pricing service. When market quotes are not readily available, the pricing service, in determining fair values of debt securities, takes into consideration such factors as current quotations by broker/dealers, coupon, maturity, quality, type of issue, trading characteristics, and other yield and risk factors it deems relevant in determining valuations. Foreign securities are valued based on quotations from the principal market in which such securities are normally traded. The procedures adopted by the Board generally contemplate the use of fair valuation in the event that price quotations or valuations are not readily available, price quotations or valuations from other sources are not reflective of market value and thus deemed unreliable, or a significant event has occurred in relation to a security or class of securities (such as foreign securities) that is not reflected in price quotations or valuations from other sources. A fair value price is a good faith estimate of the value of a security at a given point in time. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange, including significant movements in the U.S. market after foreign exchanges have closed. Accordingly, in those situations, Ameriprise Financial, Inc. (Ameriprise Financial), parent company of the Investment Manager, as administrator to the Fund, will fair value foreign securities pursuant to procedures adopted by the Board, including utilizing a third party pricing service to determine these fair values. These procedures take into account multiple factors, including movements in the U.S. securities markets, to determine a good faith estimate that reasonably reflects the current market conditions as of the close of the New York Stock -------------------------------------------------------------------------------- 40 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- Exchange. Swap transactions are valued through an authorized pricing service, broker, or an internal model. 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, which approximates fair value. ILLIQUID SECURITIES At Jan. 31, 2009, investments in securities included issues that are illiquid which the Fund currently limits to 15% of net assets, at market value, at the time of purchase. The aggregate value of such securities at Jan. 31, 2009 was $29,291,575 representing 1.38% of net assets. Certain illiquid securities may be valued by management at fair value according to procedures approved, in good faith, by the Board. According to Board guidelines, certain unregistered securities are determined to be liquid and are not included within the 15% limitation specified above. Assets are liquid if they can be sold or disposed of in the ordinary course of business within seven days at approximately the value at which the asset is valued by the Fund. OPTION TRANSACTIONS To produce incremental earnings, protect gains, and facilitate buying and selling of securities for investments, the Fund may buy and write options traded on any U.S. or foreign exchange or in the over-the-counter market where completing the obligation depends upon the credit standing of the other party. Cash collateral may be collected by the Fund to secure certain over-the-counter options (OTC options) trades. Cash collateral held by the Fund for such option trades must be returned to the counterparty upon closure, exercise or expiration of the contract. The Fund also may buy and sell put and call options and write covered call options on portfolio securities as well as write cash-secured put options. The risk in writing a call option is that the Fund gives up the opportunity for 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 being unable 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. Option contracts, including OTC option contracts, with no readily available market value are valued using quotations obtained from independent brokers as of the close of the New York Stock Exchange. The Fund will realize a gain or loss when the option -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 41 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- transaction expires or closes. 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. At Jan. 31, 2009, the Fund had no outstanding option contracts. FUTURES TRANSACTIONS To gain exposure to or protect itself from market changes, the Fund may buy and sell financial futures contracts traded on any U.S. or foreign exchange. The Fund also may buy and write put and call options on these futures contracts. Risks of entering into futures contracts and related options include the possibility of 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. Futures and options on futures are valued daily based upon the last sale price at the close of the market on the principal exchange on which they are traded. 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 Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS Securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars. 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, if any, may arise from sales of foreign currency, closed forward contracts, exchange gains or losses realized between the trade date and settlement date on securities transactions, and other translation gains or losses on dividends, interest income and foreign withholding taxes. At Jan. 31, 2009, foreign currency holdings were entirely comprised of European monetary units. The Fund may enter into forward foreign currency contracts for operational purposes. 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 -------------------------------------------------------------------------------- 42 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- counterparty will not complete its contract obligations. At Jan. 31, 2009, the Fund had no outstanding forward foreign currency contracts. TOTAL RETURN EQUITY SWAP TRANSACTIONS The Fund may enter into swap agreements to gain exposure to the total return on a specified security, basket of securities or security indexes during the specified period, in return for periodic payments based on a fixed or variable interest rate. Total return swap agreements may be used to obtain exposure to a security or market without owning or taking physical custody of such security or market. Under the terms of a total return equity swap agreement, payments made by the Fund or the counterparty are based on the total return of a particular reference asset or assets (such as an equity security, a combination of such securities, or an index). That is, one party agrees to pay another party the return on a stock, basket of stocks, or stock index in return for a specified interest rate. The notional amounts of swap contracts are not recorded in the financial statements. Swap contracts are valued daily, and the change in value is recorded as unrealized appreciation (depreciation) until the termination of the swap, at which time realized gain (loss) is recorded. Payments received or made are recorded as realized gains (losses). Swap agreements may be subject to liquidity risk, which exists when a particular swap is difficult to purchase or sell. It may not be possible for the Fund to initiate a transaction or liquidate a position at an advantageous time or price, which may result in significant losses. Total return swaps are subject to the risk associated with the investment in the underlying securities and also the risk of the counterparty not fulfilling its obligations under the agreement. At Jan. 31, 2009, the Fund had no outstanding total return equity swap contracts. GUARANTEES AND INDEMNIFICATIONS Under the Fund's organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, certain of the Fund's contracts with its service providers contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined and the Fund has no historical basis for predicting the likelihood of any such claims. FEDERAL TAXES The Fund's policy is to comply with Subchapter M of the Internal Revenue Code that applies to regulated investment companies and to distribute substantially all of its taxable income to shareholders. No provision for income or excise taxes is thus required. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 43 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- Financial Accounting Standards Board (FASB) Interpretation 48 (FIN 48), "Accounting for Uncertainty in Income Taxes," clarifies the accounting for uncertainty in income taxes recognized in accordance with FASB Statement 109, "Accounting for Income Taxes." FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. Management of the Fund has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Generally, the tax authorities can examine all the tax returns filed for the last three years. Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of futures and options contracts, foreign currency transactions, recognition of unrealized appreciation (depreciation) for certain derivative investments, re-characterization of REIT distributions, investments in partnerships, post-October losses and losses deferred due to wash sales. 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. RECENT ACCOUNTING PRONOUNCEMENTS The Fund has adopted FASB Staff Position No. 133-1 and FIN No. 45-4 (FSP FAS 133-1 and FIN 45-4), "Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45". The amendments to FSP FAS 133-1 and FIN 45-4 require enhanced disclosures about a fund's derivatives and guarantees. Funds are required to provide enhanced disclosures about (a) how and why a fund uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS 133 and its related interpretations, (c) how derivative instruments and related hedged items affect a fund's financial position, financial performance, and cash flows and (d) the current status of the payment/performance risk of the credit derivative. The amendments to FSP FAS 133-1 and FIN 45-4 also require additional disclosures about the current status of the payment/performance risk of a guarantee. At Jan. 31, 2009, the Fund did not own nor was it a party to any credit derivative contracts within the scope of these amendments. In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161 (SFAS 161), "Disclosures about Derivative Instruments and Hedging Activities -- an amendment of FASB Statement No. 133," which requires enhanced disclosures about a fund's derivative and hedging activities. SFAS 161 -------------------------------------------------------------------------------- 44 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- is effective for financial statements issued for fiscal years and interim periods beginning after Nov. 15, 2008. As of Jan. 31, 2009, management does not believe the adoption of SFAS 161 will impact the financial statement amounts; however, additional footnote disclosures may be required about the use of derivative instruments and hedging items. DIVIDENDS TO SHAREHOLDERS An annual dividend from net investment income, declared and paid at the end of the calendar year, when available, 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 amortization of premium, market discount and original issue discount using the effective interest method, is accrued daily. SECURITY LITIGATION SETTLEMENTS Litigation proceeds from Enron Corp. related to portfolio securities no longer included in the portfolio are recorded as realized gains. Proceeds received during the six months ended Jan. 31, 2009 were $589,084. 2. EXPENSES AND SALES CHARGES INVESTMENT MANAGEMENT SERVICES FEES Under an Investment Management Services Agreement, the Investment Manager determines which securities will be purchased, held or sold. The management fee is a percentage of the Fund's average daily net assets that declines from 0.60% to 0.375% annually as the Fund's assets increase. The fee may be adjusted upward or downward by a performance incentive adjustment determined monthly by measuring the percentage difference over a rolling 12-month period between the annualized performance of one Class A share of the Fund and the annualized performance of the Lipper Large-Cap Core Funds Index. In certain circumstances, the Board may approve a change in the index. The maximum adjustment is 0.12% per year. If the performance difference is less than 0.50%, the adjustment will be zero. The adjustment decreased the management fee by $2,700,703 for the six months ended Jan. 31, 2009. The management fee for the six months ended Jan. 31, 2009 was 0.39% of the Fund's average daily net assets, including the adjustment under the terms of the performance incentive arrangement. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 45 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- ADMINISTRATIVE SERVICES FEES Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a fee for administration and accounting services at a percentage of the Fund's average daily net assets that declines from 0.06% to 0.03% annually as the Fund's assets increase. The fee for the six months ended Jan. 31, 2009 was 0.05% of the Fund's average daily net assets. OTHER FEES Other expenses are for, among other things, certain expenses of the Fund or the Board including: Fund boardroom and office expense, employee compensation, employee health and retirement benefits, and certain other expenses. Payment of these Fund and Board expenses is facilitated by a company providing limited administrative services to the Fund and the Board. For the six months ended Jan. 31, 2009, other expenses paid to this company were $14,607. COMPENSATION OF BOARD MEMBERS Under a Deferred Compensation Plan (the Plan), non-interested board members may defer receipt of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the Fund or other RiverSource funds. The Fund's liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Plan. TRANSFER AGENCY FEES Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer Agent) maintains shareholder accounts and records. The Fund pays the Transfer Agent an annual account-based fee at a rate equal to $19.50 for Class A, $20.50 for Class B and $20.00 for Class C for this service. The Fund also pays the Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's average daily net assets attributable to Class R2, Class R3, Class R4 and Class R5 shares. The Transfer Agent charges an annual fee of $5 per inactive account, charged on a pro rata basis for 12 months from the date the account becomes inactive. These fees are included in the transfer agency fees on the Statement of Operations. PLAN ADMINISTRATION SERVICES FEES Under a Plan Administration Services Agreement with the Transfer Agent, the Fund pays an annual fee at a rate of 0.25% of the Fund's average daily net assets attributable to Class R2, Class R3 and Class R4 shares for the provision of various administrative, recordkeeping, communication and educational services. -------------------------------------------------------------------------------- 46 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- DISTRIBUTION FEES The Fund has an agreement with RiverSource Distributors, Inc. and RiverSource Fund Distributors, Inc. (collectively, the Distributor) for distribution and shareholder services. Under a Plan and Agreement of Distribution pursuant to Rule 12b-1, the Fund pays a fee at an annual rate of up to 0.25% of the Fund's average daily net assets attributable to Class A and Class R3 shares, a fee at an annual rate of up to 0.50% of the Fund's average daily net assets attributable to Class R2 shares and a fee at an annual rate of up to 1.00% of the Fund's average daily net assets attributable to Class B and Class C shares. For Class B and Class C shares, up to 0.75% of the fee is reimbursed for distribution expenses. The amount of distribution expenses incurred by the Distributor and not yet reimbursed ("unreimbursed expense") was approximately $11,663,000 and $169,000 for Class B and Class C shares, respectively. These amounts are based on the most recent information available as of Jan. 31, 2009, and may be recovered from future payments under the distribution plan or CDSC. To the extent the unreimbursed expense has been fully recovered, the distribution fee is reduced. SALES CHARGES Sales charges received by the Distributor for distributing Fund shares were $970,964 for Class A, $188,560 for Class B and $799 for Class C for the six months ended Jan. 31, 2009. EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES For the six months ended Jan. 31, 2009, the Investment Manager and its affiliates waived/reimbursed certain fees and expenses such that net expenses (excluding fees and expenses of acquired funds*), including the adjustment under the terms of a performance incentive arrangement, were as follows: Class A............................................. 0.86% Class B............................................. 1.63 Class C............................................. 1.62 Class I............................................. 0.44 Class R2............................................ 0.98 Class R3............................................ 0.73 Class R4............................................ 0.72 Class R5............................................ 0.45
-------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 47 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- The waived/reimbursed fees and expenses for the transfer agency fees at the class level were as follows: Class A......................................... $1,810,132 Class B......................................... 237,081 Class C......................................... 11,378 Class R4........................................ 12,742
The waived/reimbursed fees and expenses for the plan administration services fees at the class level were as follows: Class R2........................................... $ 4 Class R3........................................... 4 Class R4........................................... 917
The management fees waived/reimbursed at the Fund level were $951,738. The Investment Manager and its affiliates have contractually agreed to waive certain fees and expenses until July 31, 2009, unless sooner terminated at the discretion of the Board, such that net expenses (excluding fees and expenses of acquired funds*), before giving effect to any performance incentive adjustment, will not exceed the following percentage of the Fund's average daily net assets: Class A............................................. 1.04% Class B............................................. 1.81 Class C............................................. 1.80 Class I............................................. 0.62 Class R2............................................ 1.42 Class R3............................................ 1.17 Class R4............................................ 0.90 Class R5............................................ 0.67
* In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the funds in which it invests (also referred to as "acquired funds"), including affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange traded funds). Because the acquired funds have varied expense and fee levels and the Fund may own different proportions of acquired funds at different times, the amount of fees and expenses incurred indirectly by the Fund will vary. BANK FEE CREDITS During the six months ended Jan. 31, 2009, the Fund's transfer agency fees were reduced by $27,696 as a result of bank fee credits from overnight cash balances. CUSTODIAN FEES Effective Dec. 15, 2008, the fund pays custodian fees to JPMorgan Chase Bank, N.A. Prior to Dec. 15, 2008, the Fund paid custodian fees amounting to $160,746 to Ameriprise Trust Company, a subsidiary of Ameriprise Financial. -------------------------------------------------------------------------------- 48 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- 3. SECURITIES TRANSACTIONS Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated $2,374,454,240 and $2,722,612,153, respectively, for the six months ended Jan. 31, 2009. Realized gains and losses are determined on an identified cost basis. 4. CAPITAL SHARE TRANSACTIONS Transactions in shares of capital stock for the periods indicated are as follows:
SIX MONTHS ENDED JAN. 31, 2009 ISSUED FOR REINVESTED NET SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE) ---------------------------------------------------------------------------------- Class A 11,615,736 28,486,839 (117,055,540) (76,952,965) Class B 2,675,934 2,442,851 (14,086,006) (8,967,221) Class C 304,494 135,221 (808,411) (368,696) Class I 2,085,809 489,247 (252,037) 2,323,019 Class R4 3,446,396 1,723,888 (17,774,327) (12,604,043) Class R5 6,886,248 -- (123,399) 6,762,849 ---------------------------------------------------------------------------------- YEAR ENDED JULY 31, 2008 ISSUED FOR REINVESTED NET SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE) ---------------------------------------------------------------------------------- Class A 43,972,212 98,990,509 (225,955,886) (82,993,165) Class B 6,351,542 16,421,985 (65,543,343) (42,769,816) Class C 430,927 611,708 (1,682,294) (639,659) Class I 2,016,152 1,585,654 (6,198,548) (2,596,742) Class R4 6,389,837 6,289,817 (27,462,232) (14,782,578) Class R5 -- -- (4,152,231) (4,152,231) ----------------------------------------------------------------------------------
5. LENDING OF PORTFOLIO SECURITIES Effective Dec. 1, 2008, the Fund has entered into a Master Securities Lending Agreement ("the Agreement") with JPMorgan Chase Bank, National Association ("JPMorgan"). The Agreement authorizes JPMorgan as lending agent to lend securities to authorized borrowers on behalf of the Fund. Pursuant to the Agreement, all loaned securities are initially collateralized in an amount equivalent to 102% (for securities denominated in U.S. dollars) or 105% (for all other securities) of the value of the loaned securities, including accrued interest in the case of fixed income securities. Collateral is maintained over the life of the loan thereafter in an amount not less than 100% of the market value of loaned -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 49 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- securities, as determined at the close of each business day, except to the extent that a collateral shortfall is due to a diminution in the market value of authorized investments in which cash collateral is invested. Any additional collateral required to maintain those levels due to market fluctuations of the loaned securities is delivered the following business day. Collateral is either in the form of cash or U.S. government securities. Cash collateral received is invested by the lending agent on behalf of the Fund into authorized investments pursuant to the Agreement. The investments made with the cash collateral are listed on the Portfolio of Investments and the value of cash collateral received at period end is disclosed on the Statement of Assets and Liabilities along with the related obligation to return the collateral upon return of the securities loaned. At Jan. 31, 2009, securities valued at $190,109,786 were on loan secured by cash collateral of $203,391,339 invested in short-term securities or cash equivalents. Pursuant to the Agreement, the Fund receives income for lending its securities either in the form of fees or by earning interest on invested cash collateral, net of negotiated rebates paid to borrowers and fees paid to the lending agent for services provided and any other securities lending expenses. Income of $98,787 earned from securities lending from Dec. 1, 2008 through Jan. 31, 2009 is included in the Statement of Operations. The Fund also continues to earn interest and dividends on the securities loaned. Risks of delay in recovery of securities or even loss of rights in the securities may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the securities loaned increases above the value of the collateral received. JPMorgan will indemnify the Fund from losses resulting from a borrower's failure to return a loaned security when due. Such indemnification does not extend to losses associated with declines in the value of cash collateral investments. Loans are subject to termination by the Funds or the borrower at any time, and are, therefore, not considered to be illiquid investments. Prior to Dec. 1, 2008, RiverSource Investments, LLC served as securities lending agent for the Fund under the Securities Lending Agency Agreement pursuant to which the Fund agreed to reimburse RiverSource Investments, LLC for expenses incurred by it in connection with the lending program. Expenses paid to RiverSource Investments, LLC as securities lending agent were $8,577 through Nov. 30, 2008 and are included in other expenses on the Statement of Operations. Cash collateral received on loaned securities had been invested in an affiliated money market fund. Income of $81,290 earned from securities lending from Aug. 1, 2008 through Nov. 30, 2008 is included in the Statement of Operations. -------------------------------------------------------------------------------- 50 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- 6. OPTIONS CONTRACTS WRITTEN Contracts and premiums associated with options contracts written during the six months ended Jan. 31, 2009, are as follows:
PUTS CALLS CONTRACTS PREMIUMS CONTRACTS PREMIUMS --------------------------------------------------------------------------- Balance July 31, 2008 3,427 $ 2,454,994 16,411 $ 1,328,757 Opened 21,362 4,207,566 75,902 6,191,236 Closed (24,789) (6,662,560) (44,412) (5,545,057) Expired -- -- (47,901) (1,974,936) --------------------------------------------------------------------------- Balance Jan. 31, 2009 -- $ -- -- $ -- ---------------------------------------------------------------------------
7. AFFILIATED MONEY MARKET FUND The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund, a money market fund established for the exclusive use of the RiverSource funds and other institutional clients of RiverSource Investments. The cost of the Fund's purchases and proceeds from sales of shares of the RiverSource Short-Term Cash fund aggregated $869,988,866 and $928,435,784, respectively, for the six months ended Jan. 31, 2009. The income distributions received with respect to the Fund's investment in RiverSource Short-Term Cash Fund can be found in the Statement of Operations and the Fund's invested balance in RiverSource Short- Term Cash Fund at Jan. 31, 2009, can be found in the Portfolio of Investments. 8. BANK BORROWINGS The Fund has entered into a revolving credit facility with a syndicate of banks led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility became effective on Oct. 16, 2008, replacing a prior credit facility. The credit facility agreement, which is a collective agreement between the Fund and certain other RiverSource funds, severally and not jointly, permits collective borrowings up to $475 million. The borrowers shall have the right, upon written notice to the Administrative Agent to request an increase of up to $175 million in the aggregate amount of the credit facility from new or existing lenders, provided that the aggregate amount of the credit facility shall at no time exceed $650 million. Participation in such increase by any existing lender shall be at such lender's sole discretion. Interest is charged to each Fund based on its borrowings at a rate equal to the federal funds rate plus 0.75%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 51 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.06% per annum, in addition to an upfront fee equal to its pro rata share of 0.02% of the amount of the credit facility. The Fund had no borrowings during the six months ended Jan. 31, 2009. Under the prior credit facility which was effective until Oct. 15, 2008, the Fund had entered into a revolving credit facility with a syndicate of banks headed by JPMorgan Chase Bank, N.A., whereby the Fund was permitted to borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility agreement, which was a collective agreement between the Fund and certain other RiverSource funds, severally and not jointly, permitted collective borrowings up to $500 million. Interest was charged to each Fund based on its borrowings at a rate equal to the federal funds rate plus 0.30%. Each borrowing under the credit facility matured no later than 60 days after the date of borrowing. The Fund also paid a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.06% per annum. 9. CAPITAL LOSS CARRY-OVER AND POST-OCTOBER LOSS For federal income tax purposes, the Fund had a capital loss carry-over of $91,172,850 at July 31, 2008, that if not offset by capital gains will expire as follows:
2009 2010 2011 $60,717,128 $20,982,455 $9,473,267
Because the measurement periods for a regulated investment company's income are different for excise tax purposes versus income tax purposes, special rules are in place to protect the amount of earnings and profits needed to support excise tax distributions. As a result, the Fund is permitted to treat net capital losses realized between Nov. 1, 2007 and its fiscal year end ("post-October loss") as occurring on the first day of the following tax year. At July 31, 2008, the Fund had a post-October loss of $143,836,621 that is treated for income tax purposes as occurring on Aug. 1, 2008. It is unlikely the Board will authorize a distribution of any net realized capital gains until the available capital loss carry-over has been offset or expires. -------------------------------------------------------------------------------- 52 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- 10. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS In June 2004, an action captioned John E. Gallus et al. v. American Express Financial Corp. and American Express Financial Advisors Inc., was filed in the United States District Court for the District of Arizona. The plaintiffs allege that they are investors in several American Express Company mutual funds and they purport to bring the action derivatively on behalf of those funds under the Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid to the defendants by the funds for investment advisory and administrative services are excessive. The plaintiffs seek remedies including restitution and rescission of investment advisory and distribution agreements. The plaintiffs voluntarily agreed to transfer this case to the United States District Court for the District of Minnesota. In response to defendants' motion to dismiss the complaint, the Court dismissed one of plaintiffs' four claims and granted plaintiffs limited discovery. Defendants moved for summary judgment in April 2007. Summary judgment was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a notice of appeal with the Eighth Circuit Court of Appeals on August 8, 2007. In December 2005, without admitting or denying the allegations, American Express Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc. (Ameriprise Financial)), entered into settlement agreements with the Securities and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC) related to market timing activities. As a result, AEFC was censured and ordered to cease and desist from committing or causing any violations of certain provisions of the Investment Advisers Act of 1940, the Investment Company Act of 1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million and civil money penalties of $7 million. AEFC also agreed to retain an independent distribution consultant to assist in developing a plan for distribution of all disgorgement and civil penalties ordered by the SEC in accordance with various undertakings detailed at http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its affiliates have cooperated with the SEC and the MDOC in these legal proceedings, and have made regular reports to the RiverSource Funds' Boards of Directors/Trustees. On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise Financial, Inc., acquired J. & W. Seligman & Co., Inc. (Seligman). In late 2003, Seligman conducted an extensive internal review concerning mutual fund trading practices. Seligman's review, which covered the period 2001-2003, noted one arrangement that permitted frequent trading in certain open-end registered investment companies managed by Seligman (the Seligman Funds); -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 53 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- this arrangement was in the process of being closed down by Seligman before September 2003. Seligman identified three other arrangements that permitted frequent trading, all of which had been terminated by September 2002. In January 2004, Seligman, on a voluntary basis, publicly disclosed these four arrangements to its clients and to shareholders of the Seligman Funds. Seligman also provided information concerning mutual fund trading practices to the SEC and the Office of the Attorney General of the State of New York (NYAG). In September 2005, the New York staff of the SEC indicated that it was considering recommending to the Commissioners of the SEC the instituting of a formal action against Seligman and the distributor of the Seligman Funds, Seligman Advisors, Inc. (which is now know as RiverSource Fund Distributors, Inc.), relating to frequent trading in the Seligman Funds. Seligman responded to the staff in October 2005 that it believed that any action would be both inappropriate and unnecessary, especially in light of the fact that Seligman had previously resolved the underlying issue with the Independent Directors of the Seligman Funds and made recompense to the affected Seligman Funds. In September 2006, the NYAG commenced a civil action in New York State Supreme Court against Seligman, Seligman Advisors, Inc., Seligman Data Corp. and Brian T. Zino (collectively, the Seligman Parties), alleging, in substance, that the Seligman Parties permitted various persons to engage in frequent trading and, as a result, the prospectus disclosure used by the registered investment companies then managed by Seligman is and has been misleading. The NYAG included other related claims and also claimed that the fees charged by Seligman to the Seligman Funds were excessive. On March 13, 2009, without admitting or denying any violations of law or wrongdoing, the Seligman Parties entered into a stipulation of settlement with the NYAG and settled the claims made by the NYAG. Under the terms of the settlement, Seligman will pay $11.3 million to four Seligman Funds. This settlement resolved all outstanding matters between the Seligman Parties and the NYAG. In addition to the foregoing matter, the New York staff of the SEC indicated in September 2005 that it was considering recommending to the Commissioners of the SEC the instituting of a formal action against Seligman and Seligman Advisors, Inc. relating to frequent trading in the Seligman Funds. Seligman responded to the staff in October 2005 that it believed that any action would be both inappropriate and unnecessary, especially in light of the fact that Seligman had previously resolved the underlying issue with the Independent Directors of the Seligman Funds and made recompense to the affected Seligman Funds. There have been no further developments with the SEC on this matter. Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine -------------------------------------------------------------------------------- 54 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT -------------------------------------------------------------------------------- litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Funds are not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds. Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the Securities and Exchange Commission on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov. There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the Funds. Further, although we believe proceedings are not likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds, these proceedings are subject to uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial. -------------------------------------------------------------------------------- RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 55 PROXY VOTING ------------------------------------------------------------------- The policy of the Board is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling RiverSource Funds at (888) 791-3380; contacting your financial institution; visiting riversource.com/funds; or searching the website of the Securities and Exchange Commission (SEC) at http://www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31 for the most recent 12-month period ending June 30 of that year, and is available without charge by visiting riversource.com/funds; or searching the website of the SEC at www.sec.gov. -------------------------------------------------------------------------------- 56 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT NOTES -------------------------------------------------------------------------- -------------------------------------------------------------------------------- THIS PAGE IS NOT PART OF THE SEMIANNUAL REPORT THROUGH THE RIVERSOURCE INVESTMENTS FAMILY OF FUNDS, YOU CAN BUILD A DIVERSIFIED PORTFOLIO THAT IS DESIGNED TO HELP YOU REACH YOUR GOALS. ADVANCED ALPHA(SM) STRATEGIES RiverSource 120/20 Contrarian Equity Fund RiverSource Absolute Return Currency and Income Fund Threadneedle Global Extended Alpha Fund ADVICE-BUILT(SM) SOLUTIONS RIVERSOURCE INCOME BUILDER SERIES RiverSource Income Builder Basic Income Fund RiverSource Income Builder Enhanced Income Fund RiverSource Income Builder Moderate Income Fund RIVERSOURCE PORTFOLIO BUILDER SERIES RiverSource Portfolio Builder Aggressive Fund RiverSource Portfolio Builder Conservative Fund RiverSource Portfolio Builder Moderate Fund RiverSource Portfolio Builder Moderate Aggressive Fund RiverSource Portfolio Builder Moderate Conservative Fund RiverSource Portfolio Builder Total Equity Fund RIVERSOURCE RETIREMENT PLUS(R) SERIES RiverSource Retirement Plus 2010 Fund RiverSource Retirement Plus 2015 Fund RiverSource Retirement Plus 2020 Fund RiverSource Retirement Plus 2025 Fund RiverSource Retirement Plus 2030 Fund RiverSource Retirement Plus 2035 Fund RiverSource Retirement Plus 2040 Fund RiverSource Retirement Plus 2045 Fund RIVERSOURCE STRATEGIC ALLOCATION FUND RIVERSOURCE BALANCED FUND SINGLE-STRATEGY FUNDS GROWTH FUNDS RiverSource Partners Aggressive Growth Fund RiverSource Disciplined Large Cap Growth Fund RiverSource Global Technology Fund RiverSource Growth Fund RiverSource Mid Cap Growth Fund RiverSource Partners Small Cap Growth Fund BLEND FUNDS RiverSource Disciplined Equity Fund RiverSource Disciplined Small and Mid Cap Equity Fund RiverSource Large Cap Equity Fund RiverSource Precious Metals and Mining Fund RiverSource Recovery and Infrastructure Fund RiverSource S&P 500 Index Fund* RiverSource Small Cap Advantage Fund RiverSource Partners Small Cap Equity Fund RiverSource Small Company Index Fund VALUE FUNDS RiverSource Disciplined Large Cap Value Fund RiverSource Disciplined Small Cap Value Fund RiverSource Diversified Equity Income Fund RiverSource Dividend Opportunity Fund RiverSource Equity Value Fund RiverSource Partners Fundamental Value Fund RiverSource Large Cap Value Fund RiverSource Mid Cap Value Fund RiverSource Real Estate Fund RiverSource Partners Select Value Fund RiverSource Partners Small Cap Value Fund GLOBAL/INTERNATIONAL FUNDS RiverSource Disciplined International Equity Fund Threadneedle Emerging Markets Fund Threadneedle European Equity Fund Threadneedle Global Equity Fund Threadneedle Global Equity Income Fund RiverSource Partners International Select Growth Fund Threadneedle International Opportunity Fund RiverSource Partners International Select Value Fund RiverSource Partners International Small Cap Fund
-------------------------------------------------------------------------------- THIS PAGE IS NOT PART OF THE SEMIANNUAL REPORT TAXABLE INCOME FUNDS RiverSource Cash Management Fund** RiverSource Diversified Bond Fund RiverSource Emerging Markets Bond Fund RiverSource Floating Rate Fund RiverSource Global Bond Fund RiverSource High Yield Bond Fund RiverSource Income Opportunities Fund RiverSource Inflation Protected Securities Fund RiverSource Limited Duration Bond Fund RiverSource Short Duration U.S. Government Fund RiverSource Strategic Income Allocation Fund RiverSource U.S. Government Mortgage Fund TAX-EXEMPT FUNDS RiverSource California Tax-Exempt Fund RiverSource Intermediate Tax-Exempt Fund RiverSource Minnesota Tax-Exempt Fund RiverSource New York Tax-Exempt Fund RiverSource Tax-Exempt Bond Fund RiverSource Tax-Exempt High Income Fund RiverSource Tax-Exempt Money Market Fund**
You should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus of any of the funds listed above, which contains this and other important information about the funds, contact your financial institution or visit riversource.com/funds. Read the prospectus carefully before investing. Investment products, including shares of mutual funds, involve risks including possible loss of principal and fluctuation in value. Investing in certain funds involves special risks, such as those related to investments in foreign securities, small- and mid-capitalization stocks, fixed income securities (especially high-yield securities), and funds which focus their investments in a particular sector, such as real estate, technology and precious metals. See each fund's prospectus for specific risks associated with the fund. * "Standard & Poors(R)," "S&P," "S&P 500(R)," and "Standard & Poor's 500(R)" are trademarks of the McGraw-Hill Companies, Inc. These trademarks have been licensed for use by Ameriprise Financial, Inc. The fund is not sponsored, endorsed, sold or promoted by Standard & Poor's or any of their subsidiaries or affiliates (the "Licensors") and the Licensors make no representation regarding the advisability of investing in the fund. ** AN INVESTMENT IN MONEY MARKET FUNDS IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS TO MAINTAIN THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND. -------------------------------------------------------------------------------- THIS PAGE IS NOT PART OF THE SEMIANNUAL REPORT RIVERSOURCE LARGE CAP EQUITY FUND 734 Ameriprise Financial Center Minneapolis, MN 55474 RIVERSOURCE.COM/FUNDS This report must be accompanied or preceded by the Fund's current prospectus. RiverSource(R) mutual funds are distributed by RiverSource Distributors, Inc., and RiverSource Fund Distributors, Inc., Members FINRA, and managed by RiverSource Investments, LLC. RiverSource is part of Ameriprise Financial, Inc. (RIVERSOURCE INVESTMENTS LOGO) (C) 2009 RiverSource Investments, LLC. S-6255 H (4/09)