-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SGaV9On4+9i9mS1IF6HxTGl/wYccYo20XS1Jkd5GJiOyXKaNAxqdbJkUBE83fgFv Sw1vtc+TkbU8nqrDa/4mUQ== 0000820027-98-000593.txt : 19981006 0000820027-98-000593.hdr.sgml : 19981006 ACCESSION NUMBER: 0000820027-98-000593 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980731 FILED AS OF DATE: 19981005 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDS NEW DIMENSIONS FUND INC CENTRAL INDEX KEY: 0000049717 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 410940846 STATE OF INCORPORATION: MN FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-01629 FILM NUMBER: 98720654 BUSINESS ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: T33/52 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 BUSINESS PHONE: 6123722772 N-30D 1 IDS NEW DIMENSIONS FUND, INC. 1998 ANNUAL REPORT IDS New Dimensions Fund (prospectus enclosed) (icon of) dimension The goal of IDS New Dimensions Fund, Inc. is long-term growth of capital. (This annual report includes a prospectus that describes in detail the Fund's objective, investment policies, risks, sales charges, fees and other matters of interest. Please read the prospectus carefully before you invest or send money.) AMERICAN EXPRESS Financial Advisors (logo) Distributed by American Express Financial Advisors Inc. (icon of) dimension Fast-track stocks What type of stock has been the driving force behind the dramatic increases posted by U.S. and foreign stock markets in recent years? The answer is growth stocks -- that is, stocks of companies that have a track record of increasing their business and profits at a rapid pace. These companies, some large and well-known, others smaller and newly discovered, form the foundation of IDS New Dimensions Fund. The Fund looks for companies from around the world that not only have a history of continuous growth, but are believed to be poised to continue growing over the long term due to their management, marketing innovation and/or technological advances. Contents 1998 annual report From the chairman 4 From the portfolio manager 4 The Portfolio's ten largest holdings 6 Making the most of the Fund 7 The Fund's long-term performance 8 Independent auditors' report (Fund) 9 Financial statements (Fund) 10 Notes to financial statements (Fund) 13 Independent auditors' report (Portfolio) 17 Financial statements (Portfolio) 18 Notes to financial statements (Portfolio) 21 Investments in securities 28 IDS mutual funds 33 Federal income tax information 37 1998 prospectus The Fund in brief 3p Goal 3p Investment policies and risks 3p Structure of the Fund 4p Manager and distributor 4p Portfolio manager 5p Alternative purchase arrangements 5p Sales charge and Fund expenses 6p Performance 8p Financial highlights 8p Total returns 10p Investment policies and risks 13p Facts about investments and their risks 13p Valuing Fund shares 16p How to purchase, exchange or redeem shares 17p Alternative purchase arrangements 17p How to purchase shares 20p How to exchange shares 23p How to redeem shares 23p Reductions and waivers of the sales charge 28p Special shareholder services 33p Services 33p Quick telephone reference 33p Distributions and taxes 34p Dividend and capital gain distributions 34p Reinvestments 35p Taxes 35p How to determine the correct TIN 37p How the Fund and Portfolio are organized 38p Shares 38p Voting rights 38p Shareholder meetings 38p Special considerations regarding master/feeder structure 39p Board members and officers 41p Investment manager 43p Administrator and transfer agent 43p Distributor 44p About American Express Financial Corporation 45p General information 45p Year 2000 46p Appendix 47p Descriptions of derivative instruments 47p The purpose of this annual report is to tell investors how the Fund performed. (icon of) One open book inside of another The prospectus, which is bound into the middle of this annual report, describes the Fund in detail. (This annual report is not part of the prospectus.) To our shareholders From the chairman If you're an experienced investor, you know that the past few years have been unusually strong in many financial markets. Perhaps just as important, you also know that history shows that bull markets don't last forever. Though they're often unpredictable, declines -- whether they're brief or long-lasting, moderate or substantial -- are always a possibility. We saw evidence of that last fall, when financial turmoil in Southeast Asia sparked a sharp decline in worldwide stock markets, including the U.S. The potential for such volatility reinforces the need for an investor to review periodically their long-term goals and examine whether their investment program remains on track to achieving them. Your quarterly investment statements are one part of that monitoring process. The other is a meeting with your American Express financial advisor. That becomes even more important if there's major change in your financial situation or in the financial markets. William R. Pearce (picture of) William R. Pearce William R. Pearce Chairman of the board From the portfolio manager The past 12 months was a highly volatile period for stocks, especially the growth sector. In the end, though, IDS New Dimensions Fund generated positive results for the fiscal year -- August 1997 through July 1998. For the Fund's Class A shares, the total return was 16.2%. (A portion of the return came in the form of a capital gain, which was paid to shareholders last December and reduced the Fund's net asset by a like amount.) After a spectacular summer, the stock market was kept off balance for much of the past fall and winter. The initial problem was a rise in long-term interest rates, which caused stocks to stumble at the outset of the period. After a rebound in September, stocks then were confronted with the far-reaching effect of financial turmoil in Asia. This phenomenon immediately raised concerns that profits of American companies -- particularly those in technology-related businesses, for which Asia is an important market -- might soon erode. The result was a (This annual report is not part of the prospectus.) sharp decline for stocks last October, followed by a lingering case of the winter doldrums. But, thanks to support provided by ongoing low inflation, a decline in long-term interest rates and still-solid economic growth, stocks mounted a robust recovery from February through April, before petering out in the summer. Core investments little changed The Fund's performance pattern generally followed that of the broad market, although its fluctuations were somewhat more dramatic. That condition was largely an outgrowth of the Fund's substantial holdings among technology stocks, which were whipsawed by the Asian storm. The Fund's other major areas of exposure -- health care and financial/business services stocks -- provided relatively consistent performance, as their profit prospects appeared more stable. For the most part, I maintained an investment emphasis on large-capitalization growth stocks such as General Electric, Norwest Corporation and Pfizer. That worked to the Fund's advantage, as a relatively small group of large-cap issues accounted for the great majority of the total stock market's advance over the 12 months. In fact, to illustrate the narrowness of the market's success, just five stocks in the Standard & Poor's 500 stock index generated nearly 25% of the gain for the index as a whole. Fund performance also benefited from a reduction in cash reserves, which I implemented last winter, and virtually no exposure to smaller foreign markets, particularly those in Asia and Latin America. As we begin the new fiscal year, two of the three driving factors for the stock market -- inflation and long-term interest rates -- remain encouragingly low. The third -- corporate earnings -- is more in doubt, as the fallout from the `Asian flu' continues. Therefore, I plan to continue to concentrate investments in large-cap domestic stocks that appear best able to generate consistent earnings growth. Gordon Fines (picture of) Gordon Fines Gordon Fines Portfolio manager (This annual report is not part of the prospectus.) Class A 12-month performance (All figures per share) Net asset value (NAV) July 31, 1998 $27.59 July 31, 1997 $25.69 Increase $ 1.90 Distributions Aug. 1, 1997 - July 31, 1998 From income $ 0.17 From capital gains $ 1.73 Total distributions $ 1.90 Total return* +16.2%** Class B 12-month performance (All figures per share) Net asset value (NAV) July 31, 1998 $27.19 July 31, 1997 $25.38 Increase $ 1.81 Distributions Aug. 1, 1997 - July 31, 1998 From income $ 0.03 From capital gains $ 1.73 Total distributions $ 1.76 Total return* +15.3%** Class Y 12-month performance (All figures per share) Net asset value (NAV) July 31, 1998 $27.62 July 31, 1997 $25.72 Increase $ 1.90 Distributions Aug. 1, 1997 - July 31, 1998 From income $ 0.20 From capital gains $ 1.73 Total distributions $ 1.93 Total return* +16.3%** * The prospectus discusses the effect of sales charges, if any, on the various classes. **The total return is a hypothetical investment in the Fund with all distributions reinvested. (This annual report is not part of the prospectus.) The Portfolio's ten largest holdings Percent Value (of Portfolio's net assets) (as of July 31, 1998) General Electric 3.79% $669,843,750 Cisco Systems 2.98 526,625,000 Pfizer 2.93 517,000,000 Wal-Mart Stores 2.75 486,062,500 Travelers Group 2.46 435,500,000 Microsoft 2.21 389,842,500 Norwest 2.03 359,375,000 Safeway 2.01 354,500,000 BellSouth 1.93 341,562,499 Waste Management 1.81 319,725,000 For further detail about these holdings, please refer to the section entitled "Investments in securities" herein. (icon of) pie chart The ten holdings listed here make up 24.90% of the Portfolio's net assets (This annual report is not part of the prospectus.) Making the most of the Fund Build your assets systematically One of the best ways to invest in the Fund is by dollar-cost averaging -- a time-tested strategy that can make market fluctuations work for you. To dollar-cost average, simply invest a fixed amount of money regularly. You'll automatically buy more shares when the Fund's share price is low, fewer shares when it is high. Using this strategy does not ensure a profit or avoid a loss if the market declines, and requires that you be able to keep on investing on a regular basis, even when the price of your shares falls or the market declines. Investing in this manner can be an effective way to accumulate shares to meet your long-term goals. How dollar-cost averaging works Month Amount Per-share Number of shares purchased invested market price Jan $100 $20 5.00 XXXXX Feb 100 18 5.56 XXXXXx March 100 17 5.88 XXXXXx April 100 15 6.67 XXXXXXx May 100 16 6.25 XXXXXXx June 100 18 5.56 XXXXXx July 100 17 5.88 XXXXXx Aug 100 19 5.26 XXXXXx Sept 100 21 4.76 XXXXx Oct 100 20 5.00 XXXXX (footnotes to table) By investing an equal number of dollars each month... (arrow in table pointing to April) you automatically buy more shares when the per share market price is low... (arrow in table pointing to September) and fewer shares when the per share market price is high. You have paid an average price of only $17.91 per share over the 10 months, while the average market price actually was $18.10. Three ways to benefit from a mutual fund: o your shares increase in value when the Fund's investments do well o you receive capital gains when the gains on investments sold by the Fund exceed losses o you receive income when the Fund's stock dividends, interest and short-term gains exceed its expenses. All three make up your total return. And you potentially can increase your investment if, like most investors, you reinvest your dividends and capital gain distributions to buy additional shares of the Fund or another fund. (This annual report is not part of the prospectus.) The Fund's long-term performance Assumes: oHolding period from 8/1/88 to 7/31/98. oReturns do not reflect taxes payable on distributions. oReinvestment of all income and capital gain distributions for the Fund, with a value of $25,233. Also see "Performance" in the Fund's current prospectus. Standard & Poor's 500 Stock Index (S&P 500), an unmanaged list of common stocks, is frequently used as a general measure of market performance. However, the S&P companies are generally larger than those in which the Portfolio invests. Lipper Growth Fund Index, published by Lipper Analytical Services, Inc., includes 30 funds that are generally similar to this Fund, although some funds in the index may have somewhat different investment policies or objectives. How your $10,000 has grown in IDS New Dimensions Fund $57,198 New Dimensions Fund Class A $50,000 $40,000 $30,000 Lipper Growth Fund Index $20,000 S&P 500 Stock Index $9,500 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 Average annual total return (as of July 31, 1998) 1 year Since 5 years 10 years inception* Class A +10.38% --% +19.37% +19.05% Class B +11.31% +26.18% --% --% Class Y +16.28% +27.82% --% --% *Inception date was March 20, 1995. On the graph above you can see how the Fund's total return compared to two widely cited performance indexes, the S&P 500 and the Lipper Growth Fund Index. In comparing New Dimensions Fund (Class A) to the two indexes, you should take into account the fact that the Fund's performance reflects the maximum sales charge of 5%, while such charges are not reflected in the performance of the indexes. Your investment and return values fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Average annual total return figures reflect the impact of the applicable sales charge up to a maximum of 5%. This was a period of widely fluctuating security prices. Past performance is no guarantee of future results. (This annual report is not part of the prospectus.) The financial statements contained in Post-Effective Amendment #58 to Registration Statement No. 2-28529 filed on or about September 25, 1998, are incorporated herein by reference. IDS mutual funds Global/International funds Funds in this group seek capital growth and/or income by investing primarily in foreign securities. Foreign investments may be subject to currency fluctuations and political and economic risks of the countries in which the investments are made. They are high risk mutual funds with a potential for high reward. IDS Emerging Markets Fund Invests in a Portfolio comprised primarily of stocks of companies in developing countries throughout the world that are believed to offer growth potential. Seeks to provide long-term growth of capital. (icon of) world with countries IDS Global Growth Fund Invests in a Portfolio comprised primarily of stocks of companies throughout the world that are positioned to meet market needs in a changing world economy. These companies offer above-average potential for long-term growth. (icon of) world IDS International Fund Invests primarily in common stocks of foreign companies that offer potential for superior growth. The Fund may invest up to 20% of its assets in the U.S. market. (icon of) three flags IDS Global Balanced Fund Invests in stocks and bonds in, for the most part, major markets throughout the world, including the U.S. Seeks to provide a balance of growth of capital and current income. (icon of) scale of globes IDS Global Bond Fund Invests in a Portfolio comprised primarily of debt securities of U.S. and foreign issuers to seek high total return through income and growth of capital. (icon of) globe Growth funds Funds in this group seek capital growth, primarily from common stocks. They are high risk mutual funds with a potential for high reward. IDS Precious Metals Fund Invests primarily in the securities of foreign or domestic companies that explore for, mine and process or distribute gold and other precious metals. A highly aggressive and speculative fund that seeks long-term growth of capital. (icon of) cart of precious gems IDS Discovery Fund Invests in small- and medium-size, growth-oriented companies emphasizing technological innovation and productivity enhancement. Buys and holds larger growth-oriented stocks. (icon of) ship IDS Small Company Index Fund Invests in all or a representative group of the equity securities comprising the S&P SmallCap 600 Index, as it strives to provide long-term capital appreciation. (icon of) building IDS Strategy Aggressive Fund Invests primarily in common stocks of companies that are selected for their potential for above-average growth. Above-average means that their growth potential is better, in the opinion of the portfolio's investment manager, than the S&P 500 Stock Index. (icon of) chess piece IDS Research Opportunities Fund Invests in a Portfolio comprised primarily of equity securities of companies included in the S&P 500 Stock Index that are believed to have strong growth potential. The Portfolio is managed using a research methodology by the Research Department of AEFC. Goal is long-term appreciation. (icon of) magnifying glass (This annual report is not part of the prospectus.) IDS mutual funds IDS Growth Fund Invests in a Portfolio comprised primarily of companies that have above-average potential for long-term growth as a result of new management, marketing opportunities or technological superiority. (icon of) trees IDS New Dimensions Fund Invests in a Portfolio comprised primarily of companies with significant growth potential due to superiority in technology, marketing or management. The Fund frequently changes its industry mix. (icon of) dimension IDS Progressive Fund Invests primarily in undervalued common stocks. The Fund holds stocks for the long term with the goal of capital growth. (icon of) shooting star Growth & income funds These funds focus on securities of medium to large, well-established companies that offer long-term growth of capital and reasonable income from dividends and interest. Foreign investments may be subject to currency fluctuations and political and economic risks of the countries in which the investments are made. IDS Equity Select Fund Invests primarily in a combination of moderate growth stocks that generaly pay dividends and bonds. Seeks growth of capital and income. (icon of) three pine trees IDS Blue Chip Advantage Fund Invests in selected stocks from a major market index. Securities purchased are those recommended by our research analysts as the best from each industry represented on the index. Offers potential for long-term growth as well as dividend income. (icon of) ribbon IDS Managed Allocation Fund Invests in a Portfolio comprised primarily of U.S. equity securities, U.S. and foreign debt securities, foreign equity securities and money market instruments. The Fund provides diversification among these major investment categories and has a target mix that represents the way the Fund's investments will be allocated over the long term. Seeks maximum total return. (icon of) gyroscope IDS Stock Fund Invests in a Portfolio comprised primarily of common stock of companies representing many sectors of the economy. Seeks current income and growth of capital. (icon of) building with columns IDS Equity Value Fund Invests primarily in undervalued common stocks that offer potential for growth of capital and income. (icon of) three growing flowers IDS Utilities Income Fund Invests primarily in the stocks of public utility companies to seek high current income and growth of income and capital with reduced volatility. (icon of) light bulb IDS Diversified Equity Income Fund Invests in a Portfolio comprised primarily in high-yielding common stocks to seek high current income and, secondarily, to benefit from the growth potential offered by stock investments. (icon of) two puzzle pieces IDS Mutual Invests in a Portfolio that seeks to balance between common stocks and senior securities (preferred stocks and bonds). Seeks a balance of growth of capital and current income. (icon of) scale of justice (This annual report is not part of the prospectus.) Income funds The funds in this group invest their assets primarily in corporate bonds or government securities to seek interest income. Secondary objective is capital growth. Risk varies by bond quality. IDS Extra Income Fund Invests in a Portfolio comprised mainly of long-term, high-yielding corporate fixed-income securities in the lower rated, higher risk bond categories to seek high current income. Secondary objective is capital growth. (icon of) two coins IDS Bond Fund Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk bond categories, or the equivalent, and in government bonds. (icon of) Greek column IDS Selective Fund Invests in a Portfolio comprised primarily of high-quality corporate bonds and other highly rated debt instruments including government securities and short-term investments. Seeks current income and preservation of capital. (icon of) skyline IDS Federal Income Fund Invests in a Portfolio comprised primarily of securities issued or guaranteed as to the timely payment of principal and interest by the U.S. government, its agencies and instrumentalities. Seeks a high level of current income and safety of principal consistent with its type of investments. (icon of) shield with eagle head Tax-exempt income funds These funds provide tax-free income by investing in municipal bonds. The income is generally free from federal income tax, but a portion of the income may be subject to state and local taxes. Risk varies by bond quality. IDS Tax-Exempt Bond Fund Invests mainly in bonds and notes of state or local government units, with at least 75% in the four highest rated, lowest risk bond categories. (icon of) shield with Greek column IDS Insured Tax-Exempt Fund Invests primarily in municipal securities that are insured as to the timely payment of principal and interest. The insurance feature minimizes credit risk of the Fund but does not guarantee the market value of the Fund's shares. (icon of) shield with star IDS State Tax-Exempt Funds (CA, MA, MI, MN, NY, OH) Invests primarily in high- and medium-grade municipal securities to provide income to residents of each respective state that is exempt from federal, state and local income taxes. (New York is the only state that is exempt at the local level.) (icon of) shield with U.S. enclosed IDS High Yield Tax-Exempt Fund Invests in a Portfolio comprised primarily of medium- and lower-quality municipal bonds and notes. Lower-quality securities generally involve greater risk of principal and income. (icon of) shield with basket of apples enclosed IDS Intermediate Tax-Exempt Fund Invests in mainly investment-grade bonds and other debt securities with intermediate-term maturities issued by state and local government units. Goal is to seek a high level of current income exempt from federal taxes. (icon of) shield with tree enclosed (This annual report is not part of the prospectus.) IDS mutual funds Money market funds These money market funds have three main goals: conservation of capital, constant liquidity and the highest possible current income consistent with these objectives. An investment in these funds is neither insured nor guaranteed by the U.S. government, and there can be no assurance that these funds will be able to maintain a stable net asset value of $1.00 per share. Very limited risk. IDS Cash Management Fund Invests in such money market securities as high quality commercial paper, bankers' acceptances, certificates of deposit (CDs) and other bank securities. (icon of) piggy bank IDS Tax-Free Money Fund Invests primarily in short-term bonds and notes issued by state and local governments to seek high current income exempt from federal income taxes. (icon of) shield with piggy bank enclosed For more complete information about any of these funds, including charges and expenses, you can obtain a prospectus by contacting your financial advisor or writing to American Express Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534. Read it carefully before you invest or send money. (This annual report is not part of the prospectus.) Federal income tax information IDS New Dimensions Fund, Inc. The Fund is required by the Internal Revenue Code of 1986 to tell its shareholders about the tax treatment of the dividends it pays during its fiscal year. The dividends listed below were reported to you on Form 1099-DIV, Dividends and Distributions, last January. Shareholders should consult a tax advisor on how to report distributions for state and local purposes. IDS New Dimensions Fund, Inc. Fiscal year ended July 31, 1998 Class A Income distribution taxable as dividend income, 100% qualifying for deduction by corporations. Payable date Per share Dec. 29, 199 $0.16921 Capital gain distribution taxable as long-term capital gain. Payable date Per share Dec. 29, 1997 $1.73514 Total distributions $1.90435 The long-term capital gains distribution is divided into two rate categories: 28% - $0.60192 and 20% - $1.13322. (This annual report is not part of the prospectus.) Federal income tax information Class B Income distribution taxable as dividend income, 100% qualifying for deduction by corporations. Payable date Per share Dec. 29, 1997 $0.02740 Capital gain distribution taxable as long-term capital gain. Payable date Per share Dec. 29, 1997 $1.73514 Total distributions $1.76254 The long-term capital gains distribution is divided into two rate categories: 28% - $0.60192 and 20% - $1.13322. (This annual report is not part of the prospectus.) Class Y Income distribution taxable as dividend income, 100% qualifying for deduction by corporations. Payable date Per share Dec. 29, 1997 $0.19314 Capital gain distribution taxable as long-term capital gain. Payable date Per share Dec. 29, 1997 $1.73514 Total distributions $1.92828 The long-term capital gains distribution is divided into two rate categories: 28% - $0.60192 and 20% - $1.13322. (This annual report is not part of the prospectus.) Quick telephone reference* American Express Redemptions and exchanges, National/Minnesota Financial Advisors dividend payments or 800-437-3133 Telephone Transaction reinvestments and automatic Service payment arrangements Mpls./St. Paul area: 671-3800 TTY Service For the hearing impaired 800-846-4852 American Express Automated account information 800-862-7919 Financial Advisors (TouchTone(R) phones only), Easy Access Line including current fund prices and performance, account values and recent account transactions *You may experience delays when call volumes are high. AMERICAN EXPRESS Financial Advisors (logo) IDS New Dimensions Fund IDS Tower 10 Minneapolis, MN 55440-0010 STATEMENT OF DIFFERENCES Difference Description 1) The layout is different 1) Some of the layout in the throughout the annual report. annual report to shareholders is in two columns. 2) Headings. 2) The headings in the annual report are placed in a blue strip at the top of the page. 3) There are pictures, icons 3) Each picture, icon and and graphs throughout the graph is described in annual report. parentheses. 4) Footnotes for charts and 4) The footnotes for each graphs are described at chart or graph are typed the left margin. below the description of the chart or graph. -----END PRIVACY-ENHANCED MESSAGE-----