-----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, JwWoS9ynJwBg8jYc7Xl4Vnana9Uv2rM4E29XOTvBqpUDPff9YbtFp/xPrgUWlFpp YuLlNs2JcJ7AHHl2P+NHTw== 0000820027-06-000534.txt : 20060403 0000820027-06-000534.hdr.sgml : 20060403 20060403134459 ACCESSION NUMBER: 0000820027-06-000534 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060131 FILED AS OF DATE: 20060403 DATE AS OF CHANGE: 20060403 EFFECTIVENESS DATE: 20060403 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AXP DIMENSIONS SERIES INC CENTRAL INDEX KEY: 0000049717 IRS NUMBER: 410940846 STATE OF INCORPORATION: MN FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-01629 FILM NUMBER: 06732538 BUSINESS ADDRESS: STREET 1: 50606 AMERIPRISE FINANCIAL CENTER STREET 2: H27/5228 CITY: MINNEAPOLIS STATE: MN ZIP: 55474 BUSINESS PHONE: 6126714321 MAIL ADDRESS: STREET 1: 50606 AMERIPRISE FINANCIAL CENTER STREET 2: H27/5228 CITY: MINNEAPOLIS STATE: MN ZIP: 55474 FORMER COMPANY: FORMER CONFORMED NAME: AXP NEW DIMENSIONS FUND INC /MN/ DATE OF NAME CHANGE: 20000417 FORMER COMPANY: FORMER CONFORMED NAME: AXP NEW DIMENSIONS FUND INC/ DATE OF NAME CHANGE: 20000404 FORMER COMPANY: FORMER CONFORMED NAME: IDS NEW DIMENSIONS FUND INC DATE OF NAME CHANGE: 19920703 0000049717 S000003459 RiverSource Disciplined Small Cap Value Fund C000009585 RiverSource Disciplined Small Cap Value Fund Class A C000009586 RiverSource Disciplined Small Cap Value Fund Class B C000009587 RiverSource Disciplined Small Cap Value Fund Class C C000009588 RiverSource Disciplined Small Cap Value Fund Class I C000009589 RiverSource Disciplined Small Cap Value Fund Class Y 0000049717 S000003460 RiverSource New Dimensions Fund C000009590 RiverSource New Dimensions Fund Class A INNDX C000009591 RiverSource New Dimensions Fund Class B INDBX C000009592 RiverSource New Dimensions Fund Class C ANDCX C000009593 RiverSource New Dimensions Fund Class I ANDIX C000009594 RiverSource New Dimensions Fund Class Y IDNYX 0000049717 S000011670 RiverSource Disciplined Small and Mid Cap Equity Fund C000032029 RiverSource Disciplined Small and Mid Cap Equity Fund Class A C000032030 RiverSource Disciplined Small and Mid Cap Equity Fund Class B C000032031 RiverSource Disciplined Small and Mid Cap Equity Fund Class C C000032032 RiverSource Disciplined Small and Mid Cap Equity Fund Class I C000032033 RiverSource Disciplined Small and Mid Cap Equity Fund Class Y N-CSRS 1 dimensions-ncsrs.txt AXP DIMENSIONS SERIES, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-1629 ------------ AXP DIMENSIONS SERIES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Leslie L. Ogg - 901 S. Marquette Avenue, Suite 2810, Minneapolis, MN 55402-3268 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (612) 330-9283 ----------------- Date of fiscal year end: 7/31 -------------- Date of reporting period: 1/31 -------------- Semiannual Report [RIVERSOURCE(SM) INVESTMENTS Logo] RIVERSOURCE(SM) NEW DIMENSIONS FUND SEMIANNUAL REPORT FOR THE PERIOD ENDED JAN. 31, 2006 > RIVERSOURCE NEW DIMENSIONS FUND (FORMERLY AXP(R) NEW DIMENSIONS FUND) SEEKS TO PROVIDE SHAREHOLDERS WITH LONG-TERM GROWTH OF CAPITAL. TABLE OF CONTENTS Fund Snapshot....................................................3 Performance Summary..............................................4 Questions & Answers with Portfolio Management....................................6 Investments in Securities.......................................10 Financial Statements (Portfolio)................................17 Notes to Financial Statements (Portfolio).......................20 Financial Statements (Fund).....................................25 Notes to Financial Statements (Fund)............................28 Fund Expenses Example...........................................39 Approval of Investment Management Services Agreement...........................................41 Proxy Voting....................................................44 Results of Meeting of Shareholders..............................45 [Dalbar Logo] American Express(R) Funds'* reports to shareholders 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. * As of Oct. 1, 2005, the RiverSource brand replaced "American Express" as the name of the American Express Funds. - -------------------------------------------------------------------------------- 2 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- FUND SNAPSHOT AT JAN. 31, 2006 - ------------------------------------------------------------------------------ PORTFOLIO MANAGERS < - ------------------------------------------------------------------------------ PORTFOLIO MANAGERS SINCE YEARS IN INDUSTRY Robert Ewing, CFA 10/05 16 Nick Thakore 10/05 11 - ------------------------------------------------------------------------------ FUND OBJECTIVE < - ------------------------------------------------------------------------------ For investors seeking long-term growth of capital. Inception dates by class A: 8/1/68 B: 3/20/95 C: 6/26/00 I: 3/4/04 Y: 3/20/95 Ticker symbols by class A: INNDX B: INDBX C: ANDCX I: ANDIX Y: IDNYX Total net assets $8.586 billion Number of holdings 372 - ------------------------------------------------------------------------------ STYLE MATRIX < - ------------------------------------------------------------------------------ [GRAPH] Shading within the style matrix indicates areas in which the Fund generally invests. - ------------------------------------------------------------------------------ SECTOR COMPOSITION* < - ------------------------------------------------------------------------------ Percentage of portfolio assets Financials 17.8% Information Technology 14.1% Health Care 13.6% Consumer Discretionary 11.3% Energy 10.0% [Pie Graph] Telecommunication Services 9.1% Consumer Staples 8.2% Industrials 7.9% Short-Term Securities** 3.2% Materials 2.5% Utilities 2.3% * Sectors can be comprised of several industries. Please refer to the section entitled "Investments in Securities" for a complete listing. No single industry exceeds 25% of portfolio assets. ** Of the 3.2%, 0.4% is due to security lending activity and 2.8% is the Portfolio's cash equivalent position. - ------------------------------------------------------------------------------ TOP TEN HOLDINGS < - ------------------------------------------------------------------------------ Percentage of portfolio assets Sprint Nextel (Diversified Telecommunication Services) 4.2% Exxon Mobil (Oil & Gas) 3.4 Pfizer (Pharmaceuticals) 2.9 NTL (Media) 2.4 Bank of America (Commercial Banks) 2.2 American Intl Group (Insurance) 2.1 General Electric (Industrial Conglomerates) 2.0 Cisco Systems (Communications Equipment) 1.9 Altria Group (Tobacco) 1.8 Citigroup (Diversified Financial Services) 1.6 For further detail about these holdings, please refer to the section entitled "Investments in Securities." The Global Industry Classification Standard (GICS) 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. Fund holdings are subject to change. - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 3 - -------------------------------------------------------------------------------- PERFORMANCE SUMMARY PERFORMANCE COMPARISON For the six-month period ended Jan. 31, 2006 [Bar Graph] +3.75% = RiverSource New Dimensions Fund Class A (excluding sales charge) +5.04% = Russell 1000 Growth Index(3) (unmanaged) +4.68% = S&P 500 Index(2) (unmanaged) +3.91% = Russell 1000 Growth Index(3) (unmanaged) +6.01% = Lipper Large-Cap Core Funds Index(4) +6.58% = Lipper Large-Cap Growth Funds Index(5) 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 calling (800) 862-7919 or visiting www.riversource.com/funds. (1) The Russell 1000 Index, an unmanaged index, measures the performance of the 1,000 largest companies in the Russell 3000(R) Index, and represents approximately 92% of the total market capitalization of the Russell 3000 Index. The index reflects reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. (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, but excludes brokerage commissions or other fees. (3) The Russell 1000 Growth Index, an unmanaged index, measures the performance of those stocks in the Russell 1000 Index with higher price-to-book ratios and higher forecasted growth values. The index reflects reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. (4) 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 (since Nov. 1, 2005) for purposes of determining the performance incentive adjustment. (5) The Lipper Large-Cap Growth Funds Index includes the 30 largest large-cap growth funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance was measured against this index (through Oct. 31, 2005) for purposes of determining the performance incentive adjustment. The 5.75% sales charge applicable to Class A shares of the Fund is not reflected in the bar chart. If reflected, returns would be lower than those shown. The performance of other classes may vary from that shown because of differences in expenses. The indices do not reflect the effects of sales charges, expenses (excluding Lipper) and taxes. - -------------------------------------------------------------------------------- 4 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- PERFORMANCE SUMMARY - --------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS < - ---------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS I CLASS Y (INCEPTION DATES) (8/1/68) (3/20/95) (6/26/00) (3/4/04) (3/20/95) AFTER AFTER NAV(1) POP(2) NAV(1) CDSC(3) NAV(1) CDSC(4) NAV(5) NAV(6) AT JAN. 31, 2006 6 months* +3.75% -2.22% +3.35% -0.79% +3.35% +2.52% +4.02% +3.86% 1 year +6.41% +0.29% +5.58% +1.35% +5.59% +4.75% +6.94% +6.60% 3 years +10.57% +8.41% +9.73% +8.61% +9.72% +9.72% N/A +10.78% 5 years -2.88% -4.02% -3.62% -3.93% -3.63% -3.63% N/A -2.71% 10 years +7.30% +6.67% +6.48% +6.48% N/A N/A N/A +7.46% Since inception +11.17% +10.99% +8.56% +8.56% -5.02% -5.02% +2.66% +9.56% AT DEC. 31, 2005 6 months* +4.81% -1.22% +4.37% +0.19% +4.38% +3.54% +5.02% +4.87% 1 year +0.94% -4.86% +0.17% -3.84% +0.18% -0.63% +1.41% +1.15% 3 years +8.96% +6.83% +8.10% +6.95% +8.09% +8.09% N/A +9.15% 5 years -3.02% -4.16% -3.77% -4.08% -3.78% -3.78% N/A -2.85% 10 years +7.43% +6.79% +6.61% +6.61% N/A N/A N/A +7.59% Since inception +11.13% +10.95% +8.42% +8.42% -5.45% -5.45% +1.53% +9.41%
(1) Excluding sales charge. (2) Returns at public offering price (POP) reflect a sales charge of 5.75%. (3) Returns at maximum contingent deferred sales charge (CDSC). CDSC applies as follows: first year 5%; second and third year 4%; fourth year 3%; fifth year 2%; sixth year 1%; no sales charge thereafter. (4) 1% CDSC applies to redemptions made within the first year of purchase. (5) Sales charge is not applicable to these shares. Shares available to eligible investors only, currently limited to affiliated funds-of-funds. (6) Sales charge is not applicable to these shares. Shares available to institutional investors only. * Not annualized. - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 5 - -------------------------------------------------------------------------------- QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT On Oct. 17, 2005, RiverSource Investments' Large Cap Equity Team, led by portfolio managers Bob Ewing and Nick Thakore, began managing the RiverSource New Dimensions Fund. On Feb. 15, 2006, shareholders approved the merger of the Fund into RiverSource Large Cap Equity Fund. This merger took place on March 10, 2006. Below, the portfolio managers discuss the Fund's results and positioning for the six-month period ended Jan. 31, 2006. RiverSource New Dimensions Fund's Class A shares advanced 3.75%, excluding sales charge, for the six months ended Jan. 31, 2006. The Fund's primary benchmark, the Russell 1000 Index, rose 5.04%. A secondary benchmark, the Standard & Poor's 500 Composite Index (S&P 500 Index), increased 4.68% during the period. Prior to Oct. 17, 2005, the secondary benchmark was the Russell 1000 Growth Index, which for the semiannual period, was up 3.91%. The Fund's peer group, the Lipper Large-Cap Core Funds Index, gained 6.01% during the same time frame. The Fund's previous peer group, the Lipper Large-Cap Growth Funds Index, gained 6.58% for the six-month period. Q: What factors most significantly affected Fund performance? A: The stock market advanced strongly during the period and RiverSource New Dimensions Fund participated in the rally, though it did not keep pace with the S&P 500 Index. The Fund's positioning in the health care and technology sectors was beneficial during the period. However, these contributions were more than offset by positioning in the consumer discretionary sector, which had the most significant negative impact on performance, as well as telecommunications services, financials and energy which were also areas of underperformance for the Fund. During the six-month period, the largest individual contributors to performance were Google, Apple and SanDisk Corp. Google has delivered tremendous earnings growth since its initial public offering in 2004. We believe it is still a great growth story with a reasonable valuation, although we anticipated some weakness in its short-term earnings. We reduced the Fund's Google holdings in January before the company announced its fourth quarter 2005 earnings, which fell short of analyst expectations and precipitated a sharp decline in the stock's price. Apple has performed very well, surprising some investors with the - -------------------------------------------------------------------------------- 6 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- QUESTIONS & ANSWERS > WE ADDED TO THE FUND'S TELECOMMUNICATIONS HOLDINGS BECAUSE WE BELIEVE THERE IS STILL A GREAT DEAL OF OPPORTUNITY IN THAT AREA. strength of its iPod franchise as well as growth in other areas of the company. SanDisk has benefited from strong demand for its computer flash memory cards which are used in cameras, MP3 players, video games and other consumer electronics. Both Apple and SanDisk were significant holdings under the Fund's previous management. Although we believe these stocks are good growth stories, their high valuations make them somewhat less attractive and they have been eliminated from the portfolio. The most significant detractors were Pulte Homes, Advance Auto Parts (which has been sold) and Comcast Cable. Homebuilders such as Pulte Homes have not performed well amid a weaker outlook for the housing market and concerns about the strength of U.S. consumers. We substantially reduced exposure to this group when we began managing the Fund. Although homebuilding stocks look cheap, their earnings are well above average and we think there could be some disappointments in the first half of 2006. Comcast Cable suffered along with other cable stocks which have been poor performers due to concerns about competition from telephone companies. Q: What changes did you make to the Fund during the period? A: We took over management of the Fund on Oct. 17, 2005, and consequently made significant changes. Previously, the Fund's emphasis was on large company growth stocks, but over time, enough value stocks were added to cause a drift from the growth style to the core style. For some time, independent data providers, such as Morningstar, have classified the Fund as a core fund. With the approval of the RiverSource Funds Board of Directors, we repositioned RiverSource New Dimensions Fund as a core fund. This positioning will help make it very clear to investors how the Fund invests, and going forward it will no longer drift between growth and core styles. - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 7 - -------------------------------------------------------------------------------- QUESTIONS & ANSWERS > WITH THE U.S. FAIRLY FAR ALONG IN THE ECONOMIC CYCLE, IT APPEARS LIKELY THAT ECONOMIC AND EARNINGS GROWTH COULD DECELERATE IN 2006. To ensure that the Fund firmly remains in its "core" position, we have initiated a multi-strategy approach, where we manage one-third of RiverSource New Dimensions Fund using a value strategy and one-third using a growth strategy. The remaining third is team-managed and driven by individual stocks selected by our analysts in their specific areas of concentration. We (i.e., senior portfolio managers Bob Ewing and Nick Thakore) oversee the Fund's performance and take overall management responsibility. We believe this multi-strategy approach capitalizes on our strongest investment capabilities and our team's best ideas, and also positions the Fund to benefit in a variety of market environments. During the transition to the Fund's new investment strategy, we made substantial changes to the portfolio. Previously, the Fund's technology weighting was significantly larger than the S&P 500 Index. We moved the weighting much closer to the S&P 500 Index. We increased the Fund's exposure to financial stocks, which we thought was uncomfortably low from a risk management perspective. We added to the Fund's telecommunications holdings because we believe there is still a great deal of opportunity in that area. We also reduced the Fund's health care weighting, particularly a number of health care services stocks, which we thought had become too expensive. To summarize the positioning after these changes, the Fund had larger-than-S&P 500 Index positions in telecommunications services and health care, with smaller-than-S&P 500 Index positions in financials, industrials, technology and utilities. All other sectors were positioned relatively close to the S&P 500 Index. This repositioning of the Fund caused an increase in the portfolio turnover rate to 114%. This activity also resulted in a $4.60 per share capital gain distribution in December. - -------------------------------------------------------------------------------- 8 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- QUESTIONS & ANSWERS In terms of individual stocks, we made significant purchases of telecommunications firm Sprint Nextel, U.K. cable company NTL, insurance company AIG, pharmaceutical firm Pfizer, large regional bank Wells Fargo and oil companies Exxon Mobil and Chevron. We also reduced holdings of discount retailer Target, aerospace firm Boeing and home builder Pulte Homes. Q: How are you positioning the Fund for the current environment? A: We have focused on a number of key themes within the portfolio. First we are looking for companies that are less dependent on the economy. With the U.S. fairly far along in the economic cycle, it appears likely that economic and earnings growth could decelerate in 2006. In such an environment, we think it makes sense to be more cautious and to focus on stocks that control their own destiny no matter the state of the economy. Secondly, it seems to us that there are more opportunities in large-cap stocks than there have been in a long time. Compared to small- and mid-cap stocks, large stocks appear inexpensive in terms of the normal relationships between these groups. Finally, at this time there is very little valuation difference between traditional value and growth stocks, so we don't have to pay too much to expose the portfolio to growth. For that reason, the portfolio has a bit more emphasis on growth than it typically would, but still remains firmly in the core style box. - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 9 - -------------------------------------------------------------------------------- INVESTMENTS IN SECURITIES Growth Trends Portfolio JAN. 31, 2006 (UNAUDITED) (Percentages represent value of investments compared to net assets) - ------------------------------------------------------------------------------ COMMON STOCKS (96.1%) - ------------------------------------------------------------------------------ ISSUER SHARES VALUE(a) AEROSPACE & DEFENSE (3.1%) Boeing 684,355 $46,748,290 Empresa Brasileira de Aeronautica ADR 181,557(c,f) 7,380,292 General Dynamics 148,887 17,324,491 Goodrich 630,418 24,819,557 Honeywell Intl 1,401,483 53,844,977 Lockheed Martin 737,197 49,871,377 Northrop Grumman 430,757 26,762,932 United Technologies 628,772 36,701,422 --------------- Total 263,453,338 - ------------------------------------------------------------------------------ AIR FREIGHT & LOGISTICS (0.1%) United Parcel Service Cl B 115,660 8,664,091 - ------------------------------------------------------------------------------ AUTO COMPONENTS (0.1%) Cooper Tire & Rubber 17,203 257,873 Dana 8,202 186,044 Delphi 132,982 42,887 Goodyear Tire & Rubber 42,517(b,f) 664,966 Johnson Controls 47,157 3,265,150 Visteon 31,464(b) 165,186 --------------- Total 4,582,106 - ------------------------------------------------------------------------------ AUTOMOBILES (0.2%) Ford Motor 454,361 3,898,417 General Motors 307,273(f) 7,392,988 Harley-Davidson 70,520 3,774,936 --------------- Total 15,066,341 - ------------------------------------------------------------------------------ BEVERAGES (1.4%) Coca-Cola 636,241 26,327,653 PepsiCo 1,647,566 94,207,823 --------------- Total 120,535,476 - ------------------------------------------------------------------------------ BIOTECHNOLOGY (1.7%) Amgen 1,003,485(b) 73,144,022 Biogen Idec 707,943(b) 31,680,449 Genentech 300,695(b) 25,835,714 Gilead Sciences 210,849(b) 12,834,379 --------------- Total 143,494,564 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) - ------------------------------------------------------------------------------ ISSUER SHARES VALUE(a) BUILDING PRODUCTS (0.2%) American Standard Companies 146,426 $5,271,336 Masco 384,328 11,395,325 --------------- Total 16,666,661 - ------------------------------------------------------------------------------ CAPITAL MARKETS (2.4%) Bank of New York 935,697 29,764,522 Charles Schwab 405,797 6,001,738 Franklin Resources 208,147 20,502,480 Investors Financial Services 139,900 6,566,906 Legg Mason 14,069 1,824,749 Lehman Brothers Holdings 325,478 45,713,384 Merrill Lynch & Co 300,523 22,560,262 Morgan Stanley 939,119 57,708,862 State Street 249,583 15,089,788 --------------- Total 205,732,691 - ------------------------------------------------------------------------------ CHEMICALS (1.1%) Air Products & Chemicals 55,142 3,401,710 Bayer 192,383(c) 8,034,484 Dow Chemical 816,091 34,520,648 Eastman Chemical 129,610 6,248,498 Ecolab 53,832 1,927,724 EI du Pont de Nemours & Co 237,512 9,298,594 Engelhard 29,286 1,180,226 Hercules 28,046(b) 328,419 Intl Flavors & Fragrances 22,425 739,128 Lyondell Chemical 277,770 6,669,258 Monsanto 64,543 5,460,983 PPG Inds 41,915 2,493,943 Praxair 75,217 3,962,432 Rohm & Haas 46,373 2,360,386 RPM Intl 162,994 3,080,587 Sigma-Aldrich 17,126 1,111,135 --------------- Total 90,818,155 - ------------------------------------------------------------------------------ COMMERCIAL BANKS (4.7%) Bank of America 4,200,808 185,801,737 Commerce Bancorp 398,905(f) 13,339,383 ICICI Bank ADR 127,849(c) 4,017,016 PNC Financial Services Group 551,178 35,749,405 US Bancorp 855,722 25,594,645 See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 10 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) - ------------------------------------------------------------------------------ ISSUER SHARES VALUE(a) COMMERCIAL BANKS (CONT.) Wachovia 885,485 $48,551,143 Wells Fargo & Co 1,431,510 89,268,964 --------------- Total 402,322,293 - ------------------------------------------------------------------------------ COMMERCIAL SERVICES & SUPPLIES (0.6%) Allied Waste Inds 64,480(b) 586,123 Apollo Group Cl A 39,415(b) 2,194,233 Avery Dennison 100,309 5,992,460 Cendant 1,744,199 29,197,892 Cintas 36,207 1,542,418 Monster Worldwide 27,834(b) 1,187,398 Pitney Bowes 58,383 2,495,289 Robert Half Intl 39,615 1,447,136 RR Donnelley & Sons 52,200 1,701,720 Waste Management 145,857 4,606,164 --------------- Total 50,950,833 - ------------------------------------------------------------------------------ COMMUNICATIONS EQUIPMENT (3.1%) CBS Cl B 452,926 11,834,956 Cisco Systems 8,848,466(b) 164,316,014 Corning 401,450(b) 9,775,308 Nokia ADR 3,661,161(c) 67,292,139 Scientific-Atlanta 263,292 11,258,366 --------------- Total 264,476,783 - ------------------------------------------------------------------------------ COMPUTERS & PERIPHERALS (2.8%) Dell 2,508,110(b) 73,512,704 EMC 2,566,419(b) 34,390,015 Hewlett-Packard 2,215,123 69,067,535 Intl Business Machines 830,497 67,519,406 --------------- Total 244,489,660 - ------------------------------------------------------------------------------ CONSTRUCTION & ENGINEERING (--%) Fluor 20,381 1,792,509 - ------------------------------------------------------------------------------ CONSTRUCTION MATERIALS (--%) Vulcan Materials 24,117 1,733,530 - ------------------------------------------------------------------------------ CONSUMER FINANCE (1.2%) American Express 820,662 43,043,722 Capital One Financial 544,361 45,345,271 SLM 288,483 16,143,509 --------------- Total 104,532,502 - ------------------------------------------------------------------------------ CONTAINERS & PACKAGING (0.2%) Ball 26,910 1,089,855 Bemis 26,989 823,704 Pactiv 36,377(b) 809,024 Sealed Air 19,762(b) 1,092,246 Temple-Inland 373,092 17,498,015 --------------- Total 21,312,844 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) - ------------------------------------------------------------------------------ ISSUER SHARES VALUE(a) DISTRIBUTORS (--%) Genuine Parts 42,085 $1,789,875 - ------------------------------------------------------------------------------ DIVERSIFIED FINANCIAL SERVICES (2.6%) Citigroup 2,960,783 137,913,272 Consumer Discretionary Select Sector SPDR Fund 44,934 1,493,157 Industrial Select Sector SPDR Fund 136,154(f) 4,295,659 JPMorgan Chase & Co 1,826,435 72,600,791 Materials Select Sector SPDR Trust 135,811(f) 4,310,641 --------------- Total 220,613,520 - ------------------------------------------------------------------------------ DIVERSIFIED TELECOMMUNICATION SERVICES (6.4%) ALLTEL 272,299 16,346,109 AT&T 1,564,893 40,608,973 BellSouth 1,181,229 33,983,958 Chunghwa Telecom ADR 424,567(c) 7,905,438 Citizens Communications 233,479 2,864,787 Philippine Long Distance Telephone ADR 161,152(c) 5,767,630 Qwest Communications Intl 1,619,321(b) 9,748,312 Sprint Nextel 15,630,387 357,779,559 Telewest Global 209,615(b,c) 4,884,030 Verizon Communications 2,264,870 71,705,777 --------------- Total 551,594,573 - ------------------------------------------------------------------------------ ELECTRIC UTILITIES (1.6%) Allegheny Energy 38,052(b) 1,323,829 Ameren 50,146 2,545,411 American Electric Power 97,204 3,627,653 CenterPoint Energy 71,102 908,684 Cinergy 50,804 2,207,434 Consolidated Edison 60,471 2,842,742 DTE Energy 44,299 1,869,418 Edison Intl 80,416 3,523,829 Entergy 266,924 18,553,887 Exelon 602,547 34,598,248 FirstEnergy 83,677 4,192,218 FPL Group 180,716 7,552,122 PG&E 90,937 3,392,859 Pinnacle West Capital 24,583 1,047,482 PPL 364,833 10,992,418 Progress Energy 62,037 2,706,054 Southern 639,492 22,254,322 TECO Energy 52,240 892,259 TXU 112,598 5,701,963 Xcel Energy 394,851 7,668,006 --------------- Total 138,400,838 - ------------------------------------------------------------------------------ See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 11 - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) - ------------------------------------------------------------------------------ ISSUER SHARES VALUE(a) ELECTRICAL EQUIPMENT (0.2%) American Power Conversion 44,432 $1,053,038 Cooper Inds Cl A 23,908 1,952,088 Emerson Electric 103,061 7,982,075 Rockwell Automation 45,120 2,981,078 --------------- Total 13,968,279 - ------------------------------------------------------------------------------ ELECTRONIC EQUIPMENT & INSTRUMENTS (0.1%) Flextronics Intl 767,307(b,c) 8,026,031 - ------------------------------------------------------------------------------ ENERGY EQUIPMENT & SERVICES (1.9%) Baker Hughes 82,803 6,412,264 BJ Services 81,470 3,298,720 Cooper Cameron 192,153(b) 9,298,284 Halliburton 742,530 59,068,261 Nabors Inds 36,440(b,c) 2,960,750 Natl Oilwell Varco 40,044(b) 3,046,147 Noble 32,418 2,607,704 Rowan Companies 25,394 1,138,413 Schlumberger 254,808 32,475,280 TODCO Cl A 34,186 1,524,696 Transocean 317,744(b) 25,784,926 Weatherford Intl 364,739(b) 16,333,012 --------------- Total 163,948,457 - ------------------------------------------------------------------------------ FOOD & STAPLES RETAILING (1.4%) CVS 328,139 9,109,139 Safeway 2,076,752 48,679,067 Wal-Mart Stores 1,369,568 63,150,780 --------------- Total 120,938,986 - ------------------------------------------------------------------------------ FOOD PRODUCTS (1.2%) Cadbury Schweppes 1,764,794(c) 17,328,462 Campbell Soup 391,497 11,717,505 General Mills 313,159 15,222,659 Kellogg 1,437,538 61,670,381 --------------- Total 105,939,007 - ------------------------------------------------------------------------------ GAS UTILITIES (0.1%) KeySpan 42,949 1,542,728 Nicor 10,797 441,597 NiSource 68,569 1,407,722 ONEOK 291,767 8,245,335 Peoples Energy 10,059 374,396 --------------- Total 12,011,778 - ------------------------------------------------------------------------------ HEALTH CARE EQUIPMENT & SUPPLIES (2.0%) Alcon 43,671(c) 5,586,394 Baxter Intl 1,965,487 72,428,196 Boston Scientific 825,633(b) 18,056,594 - ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) - ------------------------------------------------------------------------------ ISSUER SHARES VALUE(a) HEALTH CARE EQUIPMENT & SUPPLIES (CONT.) Guidant 741,319 $54,561,078 Hospira 101,486(b) 4,541,499 PerkinElmer 560,732 12,751,046 --------------- Total 167,924,807 - ------------------------------------------------------------------------------ HEALTH CARE PROVIDERS & SERVICES (3.0%) Cardinal Health 990,488 71,354,755 Caremark Rx 47,373(b) 2,335,489 HCA 913,508 44,834,973 HealthSouth 1,980,137(b) 9,514,558 IMS Health 66,700 1,640,820 Magellan Health Services 228,290(b) 8,328,019 McKesson 97,805 5,183,665 Medco Health Solutions 516,595(b) 27,947,790 UnitedHealth Group 1,136,611 67,537,426 Universal Health Services Cl B 77,585 3,686,063 WellPoint 165,983(b) 12,747,494 --------------- Total 255,111,052 - ------------------------------------------------------------------------------ HOTELS, RESTAURANTS & LEISURE (0.6%) Carnival Unit 132,337 6,849,763 Harrah's Entertainment 61,963 4,560,477 Kerzner Intl 118,572(b,c) 7,735,637 Marriott Intl Cl A 114,210(e) 7,610,954 McDonald's 626,107 21,920,006 Orient-Express Hotels Cl A 45,409(c) 1,465,803 --------------- Total 50,142,640 - ------------------------------------------------------------------------------ HOUSEHOLD DURABLES (0.4%) Centex 31,487 2,247,857 DR Horton 65,241 2,434,794 Fortune Brands 37,850 2,837,236 Harman Intl Inds 56,443 6,208,730 KB HOME 20,447 1,558,061 Leggett & Platt 46,300 1,139,906 Maytag 19,423 334,464 Pulte Homes 56,409 2,250,719 Snap-On 13,460 540,150 Sony 305,349(c) 14,837,931 Stanley Works 18,426 903,611 Whirlpool 16,425 1,325,169 --------------- Total 36,618,628 - ------------------------------------------------------------------------------ HOUSEHOLD PRODUCTS (2.3%) Colgate-Palmolive 441,178 24,216,260 Procter & Gamble 2,254,213 133,517,036 Spectrum Brands 2,320,027(b) 43,871,711 --------------- Total 201,605,007 - ------------------------------------------------------------------------------ See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 12 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) - ------------------------------------------------------------------------------ ISSUER SHARES VALUE(a) INDUSTRIAL CONGLOMERATES (2.6%) General Electric 5,263,054 $172,365,018 Tyco Intl 2,077,751(c) 54,125,414 --------------- Total 226,490,432 - ------------------------------------------------------------------------------ INSURANCE (4.2%) ACE 973,891(c) 53,320,532 American Intl Group 2,774,233 181,601,292 Aon 601,836 20,594,828 Arch Capital Group 235,044(b,c) 12,772,291 Aspen Insurance Holdings 1,162,573(c) 26,948,442 Chubb 235,728 22,240,937 Endurance Specialty Holdings 133,690(c) 4,402,412 Hartford Financial Services Group 296,081 24,346,741 Max Re Capital 401,976(c) 10,656,384 Prudential Financial 94,519 7,121,061 --------------- Total 364,004,920 - ------------------------------------------------------------------------------ INTERNET & CATALOG RETAIL (0.2%) eBay 405,180(b) 17,463,258 - ------------------------------------------------------------------------------ INTERNET SOFTWARE & SERVICES (1.1%) Google Cl A 186,660(b,d) 80,870,445 Yahoo! 323,915(b) 11,123,241 --------------- Total 91,993,686 - ------------------------------------------------------------------------------ IT SERVICES (0.9%) Accenture Cl A 91,164(c) 2,874,401 Affiliated Computer Services Cl A 352,510(b) 22,067,126 Automatic Data Processing 216,058 9,493,589 Cognizant Technology Solutions Cl A 35,177(b) 1,842,219 Computer Sciences 96,987(b) 4,917,241 First Data 660,593 29,792,743 Ness Technologies 96,326(b,c) 1,115,455 Patni Computer Systems ADR 87,397(b,c) 2,023,241 Paychex 44,870 1,631,025 --------------- Total 75,757,040 - ------------------------------------------------------------------------------ LEISURE EQUIPMENT & PRODUCTS (--%) Mattel 152,555 2,517,158 - ------------------------------------------------------------------------------ MACHINERY (1.0%) Caterpillar 495,804 33,665,091 Cummins 10,634 1,034,688 Danaher 68,409 3,874,686 Deere & Co 158,547 11,377,332 Dover 51,589 2,369,483 - ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) - ------------------------------------------------------------------------------ ISSUER SHARES VALUE(a) MACHINERY (CONT.) Eaton 37,743 $2,498,587 Illinois Tool Works 131,714 11,102,173 Ingersoll-Rand Cl A 225,571(c) 8,858,173 ITT Inds 39,073 4,004,983 Navistar Intl 16,581(b) 451,003 PACCAR 42,756 2,975,818 Pall 31,667 912,010 --------------- Total 83,124,027 - ------------------------------------------------------------------------------ MEDIA (7.4%) CBS Cl B 789,235(b) 32,737,468 Clear Channel Communications 339,122 9,926,101 Clear Channel Outdoor Holdings Cl A 134,678(b) 2,686,826 Comcast Cl A 2,306,899(b) 64,177,930 Comcast Special Cl A 960,291(b) 26,619,267 EchoStar Communications Cl A 87,412(b) 2,412,571 Liberty Global Cl A 1,753,847(b) 37,532,326 Liberty Global Series C 886,777(b) 17,930,631 Liberty Media Cl A 3,233,135(b) 27,029,009 News Corp Cl A 3,987,096 62,836,633 NTL 3,210,023(b) 203,033,954 Time Warner 3,018,282 52,910,483 Vivendi Universal ADR 2,327,228(c) 72,865,509 Walt Disney 706,553 17,882,856 WorldSpace Cl A 256,861(b,f) 3,262,135 --------------- Total 633,843,699 - ------------------------------------------------------------------------------ METALS & MINING (0.7%) Alcan 222,799(c) 10,870,363 Alcoa 320,318 10,090,017 Allegheny Technologies 20,650 1,070,703 Coeur d'Alene Mines 2,380,921(b) 12,333,171 Freeport-McMoRan Copper & Gold Cl B 42,457 2,727,862 Newmont Mining 388,611 24,016,159 Nucor 35,695 3,006,590 --------------- Total 64,114,865 - ------------------------------------------------------------------------------ MULTILINE RETAIL (1.1%) Dollar General 88,404 1,494,028 Federated Dept Stores 265,125 17,665,279 JC Penney 544,687 30,393,535 Kohl's 333,742(b) 14,814,807 Target 568,348(e) 31,117,052 --------------- Total 95,484,701 - ------------------------------------------------------------------------------ See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 13 - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) - ------------------------------------------------------------------------------ ISSUER SHARES VALUE(a) MULTI-UTILITIES & UNREGULATED POWER (0.5%) AES 158,402(b) $2,699,170 Calpine 119,711(b) 26,576 CMS Energy 53,254(b) 770,585 Constellation Energy Group 42,946 2,502,463 Dominion Resources 343,775 25,965,326 Duke Energy 230,824 6,543,860 Dynegy Cl A 92,071(b) 506,391 Public Service Enterprise Group 57,838 4,026,682 Sempra Energy 58,167 2,794,924 --------------- Total 45,835,977 - ------------------------------------------------------------------------------ OFFICE ELECTRONICS (0.1%) Xerox 390,760(b) 5,591,776 - ------------------------------------------------------------------------------ OIL & GAS (8.1%) Amerada Hess 66,746 10,332,281 Anadarko Petroleum 438,902 47,322,414 Apache 82,846 6,257,358 Ashland 16,259 1,071,793 BP ADR 256,279(c) 18,531,534 Burlington Resources 94,095 8,587,110 Chevron 1,457,000 86,516,660 ConocoPhillips 1,368,884 88,566,795 Devon Energy 453,905 30,960,860 El Paso 156,903 2,111,914 EOG Resources 60,827 5,142,315 Exxon Mobil 4,610,332 289,298,334 Kerr-McGee 28,189 3,111,784 Kinder Morgan 25,813 2,484,501 Marathon Oil 241,215 18,542,197 Newfield Exploration 165,750(b) 8,685,300 Occidental Petroleum 99,896 9,760,838 Royal Dutch Shell ADR Series A 129,956(c) 8,851,303 Sunoco 32,119 3,057,729 Ultra Petroleum 159,027(b) 10,939,467 Valero Energy 355,453 22,190,931 Williams Companies 137,692 3,282,577 XTO Energy 88,584 4,347,703 --------------- Total 689,953,698 - ------------------------------------------------------------------------------ PAPER & FOREST PRODUCTS (0.4%) Bowater 172,148 4,706,526 Intl Paper 383,805 12,523,557 Louisiana-Pacific 27,116 798,566 MeadWestvaco 46,559 1,242,660 Weyerhaeuser 205,427 14,330,588 --------------- Total 33,601,897 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) - ------------------------------------------------------------------------------ ISSUER SHARES VALUE(a) PHARMACEUTICALS (6.9%) Abbott Laboratories 57,400 $2,476,810 AstraZeneca 346,128(c) 16,759,142 Bristol-Myers Squibb 1,223,296 27,878,916 Eli Lilly & Co 317,027 17,950,069 GlaxoSmithKline ADR 253,357(c) 12,982,013 Johnson & Johnson 842,212 48,460,878 Merck & Co 836,811 28,869,980 Novartis ADR 755,065(c) 41,649,385 Pfizer 9,576,726 245,930,324 Roche Holding 191,679(c) 30,291,940 Schering-Plough 2,195,394 42,041,795 Teva Pharmaceutical Inds ADR 624,211(c) 26,610,115 Wyeth 1,126,533 52,102,151 --------------- Total 594,003,518 - ------------------------------------------------------------------------------ REAL ESTATE INVESTMENT TRUST (0.2%) Apartment Investment & Management Cl A 99,481 4,229,932 Equity Office Properties Trust 267,172 8,501,413 HomeBanc 499,000 4,156,670 --------------- Total 16,888,015 - ------------------------------------------------------------------------------ ROAD & RAIL (0.1%) Norfolk Southern 136,409 6,798,625 - ------------------------------------------------------------------------------ SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (2.6%) Analog Devices 554,391 22,048,130 Applied Materials 585,285 11,149,679 Atmel 97,752(b) 386,120 Broadcom Cl A 108,008(b) 7,366,146 Credence Systems 191,319(b) 1,674,041 Cypress Semiconductor 452,159(b) 7,655,052 Freescale Semiconductor Cl A 1,039,134(b) 26,144,611 Freescale Semiconductor Cl B 520,528(b) 13,143,332 Infineon Technologies ADR 179,900(b,c) 1,696,457 Integrated Device Technology 684,231(b) 9,503,969 Intel 2,895,211 61,581,137 Linear Technology 284,703 10,593,799 Maxim Integrated Products 54,966 2,255,805 MEMC Electronic Materials 495,584(b) 14,163,791 PMC-Sierra 287,245(b) 2,717,338 Texas Instruments 1,014,164 29,644,014 --------------- Total 221,723,421 - ------------------------------------------------------------------------------ See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- 14 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) - ------------------------------------------------------------------------------ ISSUER SHARES VALUE(a) SOFTWARE (3.4%) Adobe Systems 854,900 $33,956,628 Cadence Design Systems 707,414(b) 12,492,931 Computer Associates Intl 367,702 10,038,265 Compuware 1,365,657(b) 11,253,014 Mercury Interactive 416,194(b) 14,462,742 Microsoft 4,886,644 137,559,028 Oracle 3,585,409(b) 45,068,591 Symantec 895,597(b) 16,461,073 TIBCO Software 849,903(b) 6,790,725 --------------- Total 288,082,997 - ------------------------------------------------------------------------------ SPECIALTY RETAIL (0.9%) AutoNation 53,832(b) 1,199,915 AutoZone 15,843(b) 1,548,653 Best Buy 252,542 12,793,778 Home Depot 801,985 32,520,491 Lowe's Companies 188,520 11,980,446 Office Depot 76,484(b) 2,535,445 OfficeMax 18,410 525,974 RadioShack 33,249 738,128 Sherwin-Williams 30,181 1,596,575 Staples 181,250 4,297,438 Urban Outfitters 163,359(b) 4,461,334 --------------- Total 74,198,177 - ------------------------------------------------------------------------------ TEXTILES, APPAREL & LUXURY GOODS (0.3%) Jones Apparel Group 31,647 989,918 Liz Claiborne 26,511 920,462 Nike Cl B 307,406 24,884,516 Reebok Intl 13,270 782,797 VF 24,254 1,345,612 --------------- Total 28,923,305 - ------------------------------------------------------------------------------ THRIFTS & MORTGAGE FINANCE (2.4%) Countrywide Financial 1,993,655 66,667,823 Fannie Mae 1,486,484 86,126,883 Freddie Mac 700,813 47,557,170 Washington Mutual 140,856 5,961,026 --------------- Total 206,312,902 - ------------------------------------------------------------------------------ TOBACCO (1.7%) Altria Group 2,068,705 149,650,120 - ------------------------------------------------------------------------------ TRADING COMPANIES & DISTRIBUTORS (--%) WW Grainger 20,909 1,483,075 - ------------------------------------------------------------------------------ WIRELESS TELECOMMUNICATION SERVICES (2.6%) Centennial Communications 208,236 1,963,665 Hutchison Telecommunications Intl ADR 821,415(b,c) 20,576,446 - ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) - ------------------------------------------------------------------------------ ISSUER SHARES VALUE(a) WIRELESS TELECOMMUNICATION SERVICES (CONT.) Motient 285,310(b,f) $5,948,714 NeuStar Cl A 896,551(b) 26,008,945 O2 4,878,341(c) 17,355,178 Orascom Telecom Holding GDR 766,987(c) 50,774,539 Partner Communications ADR 81,633(c) 650,615 Vodafone Group 38,054,341(c) 79,875,417 Vodafone Group ADR 848,854(c) 17,919,308 --------------- Total 221,072,827 - ------------------------------------------------------------------------------ TOTAL COMMON STOCKS (Cost: $7,805,446,660) $8,248,171,971 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ OPTIONS PURCHASED (--%) - ------------------------------------------------------------------------------ ISSUER CONTRACTS EXERCISE EXPIRATION VALUE(a) PRICE DATE PUTS Google Cl A 332 $430 Feb. 2006 $773,560 - ------------------------------------------------------------------------------ TOTAL OPTIONS PURCHASED (Cost: $674,519) $773,560 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ SHORT-TERM SECURITIES (3.1%)(g) - ------------------------------------------------------------------------------ ISSUER EFFECTIVE AMOUNT VALUE(a) YIELD PAYABLE AT MATURITY COMMERCIAL PAPER Gemini Securitization 02-01-06 4.48% $80,500,000(h) $80,489,982 General Electric 02-01-06 4.48 38,100,000 38,095,259 Goldman Sachs Group 02-02-06 4.44 39,900,000 39,890,158 02-06-06 4.48 44,100,000 44,067,072 HSBC Finance 02-01-06 4.48 16,700,000 16,697,922 UBS Finance (Delaware) LLC 02-01-06 4.38 50,000,000 49,993,917 - ------------------------------------------------------------------------------ TOTAL SHORT-TERM SECURITIES (Cost: $269,267,639) $269,234,310 - ------------------------------------------------------------------------------ TOTAL INVESTMENTS IN SECURITIES (Cost: $8,075,388,818(i) $8,518,179,841 ============================================================================== See accompanying notes to investments in securities. - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 15 - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------ NOTES TO INVESTMENTS IN SECURITIES - ------------------------------------------------------------------------------ (a) Securities are valued by 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, 2006, the value of foreign securities represented 9.0% of net assets. (d) At Jan. 31, 2006, securities valued at $80,844,450 were held to cover open call options written as follows (see Note 5 to the financial statements): ISSUER CONTRACTS EXERCISE EXPIRATION VALUE(a) PRICE DATE ----------------------------------------------------------------------- Google Cl A 1,866 $460 Feb. 2006 $2,966,940 (e) Partially pledged as initial margin deposit on the following open stock index futures contracts (see Note 6 to the financial statements): TYPE OF SECURITY CONTRACTS ----------------------------------------------------------------------- PURCHASE CONTRACTS S&P 500 Index, March 2006 446 (f) At Jan. 31, 2006, security was partially or fully on loan. See Note 4 to the financial statements. (g) Cash collateral received from security lending activity is invested in short-term securities and represents 0.4% of net assets. See Note 4 to the financial statements. 2.7% of net assets is the Portfolio's cash equivalent position. (h) Commercial paper sold within terms of a private placement memorandum, exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors." This security has been determined to be liquid under 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, 2006, the value of these securities amounted to $80,489,982 or 0.9% of net assets. (i) At Jan. 31, 2006, the cost of securities for federal income tax purposes was approximately $8,075,389,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $ 587,877,000 Unrealized depreciation (145,086,000) ----------------------------------------------------------------------- Net unrealized appreciation $ 442,791,000 ----------------------------------------------------------------------- The Global Industry Classification Standard (GICS) 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. 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 www.riversource.com/funds. - -------------------------------------------------------------------------------- 16 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES Growth Trends Portfolio JAN. 31, 2006 (UNAUDITED)
- ------------------------------------------------------------------------------------------------ ASSETS - ------------------------------------------------------------------------------------------------ Investments in securities, at value (Note 1)* (identified cost $8,075,388,818) $8,518,179,841 Cash in bank on demand deposit 5,598,280 Foreign currency holdings (identified cost $171,019) (Note 1) 172,504 Dividends and accrued interest receivable 5,130,389 Receivable for investment securities sold 255,333,531 Unrealized appreciation on foreign currency contracts held, at value (Note 7) 14,147 - ------------------------------------------------------------------------------------------------ Total assets 8,784,428,692 - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ LIABILITIES - ------------------------------------------------------------------------------------------------ Payable for investment securities purchased 157,450,720 Unrealized depreciation on foreign currency contracts held, at value (Note 7) 19,171 Payable upon return of securities loaned (Note 4) 37,495,000 Accrued investment management services fee 126,810 Other accrued expenses 452,341 Options contracts written, at value (premiums received $5,819,301) (Note 5) 2,966,940 - ------------------------------------------------------------------------------------------------ Total liabilities 198,510,982 - ------------------------------------------------------------------------------------------------ Net assets $8,585,917,710 ================================================================================================ * Including securities on loan, at value (Note 4) $ 36,382,260 - ------------------------------------------------------------------------------------------------ See accompanying notes to financial statements.
- -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 17 - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS Growth Trends Portfolio
SIX MONTHS ENDED JAN. 31, 2006 (UNAUDITED) - ------------------------------------------------------------------------------------------------ INVESTMENT INCOME - ------------------------------------------------------------------------------------------------ Income: Dividends $ 62,559,007 Interest 6,236,294 Fee income from securities lending (Note 4) 358,322 Less foreign taxes withheld (179,538) - ------------------------------------------------------------------------------------------------ Total income 68,974,085 - ------------------------------------------------------------------------------------------------ Expenses (Note 2): Investment management services fee 19,286,429 Compensation of board members 29,850 Custodian fees 388,800 Audit fees 18,750 Other 228,027 - ------------------------------------------------------------------------------------------------ Total expenses 19,951,856 - ------------------------------------------------------------------------------------------------ Earnings credits on cash balances (Note 2) (1,302) - ------------------------------------------------------------------------------------------------ Total net expenses 19,950,554 - ------------------------------------------------------------------------------------------------ Investment income (loss) -- net 49,023,531 - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) -- NET - ------------------------------------------------------------------------------------------------ Net realized gain (loss) on: Security transactions (Note 3) 1,323,123,889 Foreign currency transactions (450,340) Futures contracts 19,350,222 Options contracts written (Note 5) (3,358,933) - ------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments 1,338,664,838 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (1,032,936,230) - ------------------------------------------------------------------------------------------------ Net gain (loss) on investments and foreign currencies 305,728,608 - ------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from operations $ 354,752,139 ================================================================================================ See accompanying notes to financial statements.
- -------------------------------------------------------------------------------- 18 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS Growth Trends Portfolio
JAN. 31, 2006 JULY 31, 2005 SIX MONTHS ENDED YEAR ENDED (UNAUDITED) - ------------------------------------------------------------------------------------------------------------------- OPERATIONS - ------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net $ 49,023,531 $ 182,403,635 Net realized gain (loss) on investments 1,338,664,838 754,697,875 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (1,032,936,230) 158,660,856 - ------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 354,752,139 1,095,762,366 - ------------------------------------------------------------------------------------------------------------------- Proceeds from contributions 40,472,621 75,006,308 Fair value of withdrawals (3,331,650,829) (4,968,829,051) - ------------------------------------------------------------------------------------------------------------------- Net contributions (withdrawals) from partners (3,291,178,208) (4,893,822,743) - ------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets (2,936,426,069) (3,798,060,377) Net assets at beginning of period 11,522,343,779 15,320,404,156 - ------------------------------------------------------------------------------------------------------------------- Net assets at end of period $ 8,585,917,710 $11,522,343,779 =================================================================================================================== See accompanying notes to financial statements.
- -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 19 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Growth Trends Portfolio (Unaudited as to Jan. 31, 2006) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Growth Trends Portfolio (the Portfolio) is a series of Growth Trust (the Trust) and is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. Growth Trends Portfolio invests primarily in common stocks of companies showing potential for significant growth and operating in areas where economic or technological changes are occurring. The Declaration of Trust permits the Trustees to issue non-transferable interests in the Portfolio. The Portfolio'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. VALUATION OF SECURITIES All securities are valued at the close of each business day. Securities traded on national securities exchanges or included in national market systems are valued at the last quoted sales price. 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. Pursuant to procedures adopted by the Board of Trustees of the portfolios, Ameriprise Financial, Inc. (Ameriprise Financial) utilizes Fair Value Pricing (FVP). FVP determinations are made in good faith in accordance with these procedures. If a development or event is so significant that there is a reasonably high degree of certainty that the effect of the development or event has actually caused the closing price to no longer reflect the actual value, the closing prices, as determined at the close of the applicable foreign market, may be adjusted to reflect the fair value of the affected foreign securities as of the close of the New York Stock Exchange. Significant events include material movements in the U.S. securities markets prior to the opening of foreign markets on the following trading day. FVP results in an estimated price that reasonably reflects the current market conditions in order to value the portfolio holdings such that shareholder transactions receive a fair net asset value. 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. - -------------------------------------------------------------------------------- 20 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- OPTION TRANSACTIONS To produce incremental earnings, protect gains and facilitate buying and selling of securities for investments, the Portfolio 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. The Portfolio 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 Portfolio gives up the opportunity for profit if the market price of the security increases. The risk in writing a put option is that the Portfolio 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 Portfolio pays a premium whether or not the option is exercised. The Portfolio 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. The Portfolio will realize a gain or loss when the option 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. FUTURES TRANSACTIONS To gain exposure to or protect itself from market changes, the Portfolio may buy and sell financial futures contracts traded on any U.S. or foreign exchange. The Portfolio 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. Upon entering into a futures contract, the Portfolio 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 Portfolio 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 Portfolio recognizes a realized gain or loss when the contract is closed or expires. FOREIGN CURRENCY TRANSLATIONS AND FOREIGN CURRENCY CONTRACTS Securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars. 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, 2006, foreign currency holdings consisted of multiple denominations, primarily British pounds. - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 21 - -------------------------------------------------------------------------------- The Portfolio may enter into forward foreign currency exchange contracts for operational purposes and to protect against adverse exchange rate fluctuation. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Portfolio and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates from an independent pricing service. The Portfolio is subject to the credit risk that the other party will not complete its contract obligations. GUARANTEES AND INDEMNIFICATIONS Under the Portfolio's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Portfolio. In addition, certain of the Portfolio's contracts with its service providers contain general indemnification clauses. The Portfolio's maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Portfolio cannot be determined and the Portfolio has no historical basis for predicting the likelihood of any such claims. FEDERAL TAXES For federal income tax purposes the Portfolio qualifies as a partnership and each investor in the Portfolio is treated as the owner of its proportionate share of the net assets, income, expenses and realized and unrealized gains and losses of the Portfolio. As a "pass-through" entity, the Portfolio therefore does not pay any income dividends or capital gain distributions. 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. 2. FEES AND EXPENSES The Trust, on behalf of the Portfolio, has an Investment Management Services Agreement with RiverSource Investments, LLC (the Investment Manager) to manage its portfolio. Prior to Oct. 1, 2005, investment management services were provided by Ameriprise Financial. Under this agreement, the Investment Manager determines which securities will be purchased, held or sold. The management fee is a percentage of the Portfolio's average daily net assets that declines from 0.6% to 0.48% annually as the Portfolio's assets increase. The fee may be adjusted upward or downward by a performance incentive adjustment based on a comparison of the performance of Class A shares of RiverSource New Dimensions Fund to the Lipper Large-Cap Core Funds Index. Prior to Nov. 1, 2005, the performance incentive adjustment was based on a comparison of the performance of Class A shares of the Fund to the Lipper Large-Cap Growth 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 fee by $7,647,780 for the six months ended Jan. 31, 2006. - -------------------------------------------------------------------------------- 22 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- Under the agreement, the Trust also pays taxes, brokerage commissions and nonadvisory expenses, which include custodian fees, audit and certain legal fees, fidelity bond premiums, registration fees for units, office expenses, consultants' fees, compensation of trustees, corporate filing fees, expenses incurred in connection with lending securities of the Portfolio and any other expenses properly payable by the Trust or Portfolio and approved by the Board. Under a Deferred Compensation Plan (the Plan), non-interested trustees may defer receipt of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the underlying Fund or other RiverSource funds. The Portfolio's liability for these amounts is adjusted for market value changes and remains in the Portfolio until distributed in accordance with the Plan. During the six months ended Jan. 31, 2006, the Portfolio's custodian fees were reduced by $1,302 as a result of earnings credits from overnight cash balances. The Portfolio also pays custodian fees to Ameriprise Trust Company, an affiliate of Ameriprise Financial. According to a Placement Agency Agreement, Ameriprise Financial Services, Inc. acts as placement agent of the Trust's units. 3. SECURITIES TRANSACTIONS Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated $10,926,489,212 and $14,198,644,485, respectively, for the six months ended Jan. 31, 2006. Realized gains and losses are determined on an identified cost basis. 4. LENDING OF PORTFOLIO SECURITIES At Jan. 31, 2006, securities valued at $36,382,260 were on loan to brokers. For collateral, the Portfolio received $37,495,000 in cash. Cash collateral received is invested in short-term securities, which are included in the short-term section of the "Investments in securities." Income from securities lending amounted to $358,322 for the six months ended Jan. 31, 2006. The risks to the Portfolio of securities lending are that the borrower may not provide additional collateral when required or return the securities when due. 5. OPTIONS CONTRACTS WRITTEN Contracts and premiums associated with options contracts written are as follows:
SIX MONTHS ENDED JULY 31, 2006 CALLS - ----------------------------------------------------------------------------------------------- CONTRACTS PREMIUMS - ----------------------------------------------------------------------------------------------- Balance July 31, 2005 34,749 $ 6,283,053 Opened 16,186 8,633,636 Closed (36,170) (5,851,940) Exercised (9,899) (2,969,460) Expired (3,000) (275,988) - ----------------------------------------------------------------------------------------------- Balance Jan. 31, 2006 1,866 $ 5,819,301 - -----------------------------------------------------------------------------------------------
See "Summary of significant accounting policies." - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 23 - -------------------------------------------------------------------------------- 6. STOCK INDEX FUTURES CONTRACTS At Jan. 31, 2006, investments in securities included securities valued at $13,848,420 that were pledged as collateral to cover initial margin deposits on 446 open purchase contracts. The notional market value of the open purchase contracts at Jan. 31, 2006 was $143,121,400 with a net unrealized loss of $441,325. See "Summary of significant accounting policies" and "Notes to investments in securities." 7. FORWARD FOREIGN CURRENCY CONTRACTS At Jan. 31, 2006, the Fund has forward foreign currency exchange contracts that obligate it to deliver currencies at specified future dates. The unrealized appreciation and/or depreciation on these contracts is included in the accompanying financial statements. See "Summary of significant accounting policies." The terms of the open contracts are as follows:
EXCHANGE DATE CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION - ------------------------------------------------------------------------------------------------- Feb. 1, 2006 1,261,878 713,570 $ 7,421 $ -- U.S. Dollar British Pound Feb. 2, 2006 964,952 749,140 -- 5,791 Swiss Franc U.S. Dollar Feb. 2, 2006 935,719 1,651,076 -- 13,380 British Pound U.S. Dollar Feb. 2, 2006 1,266,247 715,636 6,726 -- U.S. Dollar British Pound - ------------------------------------------------------------------------------------------------- Total $14,147 $19,171 - -------------------------------------------------------------------------------------------------
8. FINANCIAL HIGHLIGHTS The table below shows certain important financial information for evaluating the Portfolio's results.
- -------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------------------------- Fiscal period ended July 31, 2006(e) 2005 2004 2003 2002 Ratio of expenses to average daily net assets(a) .39%(b) .46% .45% .58% .61% - -------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets .97%(b) 1.34% .91% .92% .64% - -------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 114% 75% 49% 20% 27% - -------------------------------------------------------------------------------------------------------------------------- Total return(c) 4.04%(d) 8.30% 4.05% 10.01% (20.76%) - --------------------------------------------------------------------------------------------------------------------------
(a) Expense ratio is based on total expenses of the Portfolio before reduction of earnings credits on cash balances. The ratio does not include feeder fund expenses. (b) Adjusted to an annual basis. (c) Total return is based on a calculated Portfolio net asset value and does not reflect payment of a sales charge. (d) Not annualized. (e) Six months ended Jan. 31, 2006 (Unaudited). - -------------------------------------------------------------------------------- 24 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES RiverSource New Dimensions Fund
JAN. 31, 2006 (UNAUDITED) - ------------------------------------------------------------------------------------------------------------ ASSETS - ------------------------------------------------------------------------------------------------------------ Investment in Portfolio (Note 1) $8,585,839,960 Capital shares receivable 782,194 - ------------------------------------------------------------------------------------------------------------ Total assets 8,586,622,154 - ------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------ LIABILITIES - ------------------------------------------------------------------------------------------------------------ Capital shares payable 603,602 Accrued distribution fee 74,389 Accrued service fee 5,040 Accrued transfer agency fee 1,050 Accrued administrative services fee 10,506 Other accrued expenses 953,788 - ------------------------------------------------------------------------------------------------------------ Total liabilities 1,648,375 - ------------------------------------------------------------------------------------------------------------ Net assets applicable to outstanding capital stock $8,584,973,779 ============================================================================================================ - ------------------------------------------------------------------------------------------------------------ REPRESENTED BY - ------------------------------------------------------------------------------------------------------------ Capital stock -- $.01 par value (Note 1) $ 4,307,000 Additional paid-in capital 7,831,720,968 Undistributed net investment income 6,741,360 Accumulated net realized gain (loss) (Note 5) 297,007,951 Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 445,196,500 - ------------------------------------------------------------------------------------------------------------ Total -- representing net assets applicable to outstanding capital stock $8,584,973,779 ============================================================================================================ Net assets applicable to outstanding shares: Class A $5,295,087,825 Class B $1,337,395,446 Class C $ 33,350,942 Class I $ 92,721,026 Class Y $1,826,418,540 Net asset value per share of outstanding capital stock: Class A shares 262,851,398 $ 20.14 Class B shares 71,352,809 $ 18.74 Class C shares 1,782,165 $ 18.71 Class I shares 4,579,939 $ 20.25 Class Y shares 90,133,726 $ 20.26 - ------------------------------------------------------------------------------------------------------------ See accompanying notes to financial statements.
- -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 25 - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS RiverSource New Dimensions Fund
SIX MONTHS ENDED JAN. 31, 2006 (UNAUDITED) - ------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME - ------------------------------------------------------------------------------------------------------------------------ Income: Dividends $ 62,558,533 Interest 6,170,168 Fee income from securities lending 358,300 Less foreign taxes withheld (179,537) - ------------------------------------------------------------------------------------------------------------------------ Total income 68,907,464 - ------------------------------------------------------------------------------------------------------------------------ Expenses (Note 2): Expenses allocated from Portfolio 19,950,403 Distribution fee Class A 7,812,826 Class B 8,020,882 Class C 198,778 Transfer agency fee 9,419,833 Incremental transfer agency fee Class A 538,202 Class B 359,892 Class C 9,584 Service fee -- Class Y 1,085,757 Administrative services fees and expenses 2,172,432 Compensation of board members 15,583 Printing and postage 1,621,500 Registration fees 45,100 Audit fees 6,250 Other 114,107 - ------------------------------------------------------------------------------------------------------------------------ Total expenses 51,371,129 Earnings credits on cash balances (Note 2) (331,678) - ------------------------------------------------------------------------------------------------------------------------ Total net expenses 51,039,451 - ------------------------------------------------------------------------------------------------------------------------ Investment income (loss) -- net 17,868,013 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) -- NET - ------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on: Security transactions 1,323,117,036 Foreign currency transactions (450,335) Futures contracts 19,350,222 Options contracts written (3,358,933) - ------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments 1,338,657,990 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (1,032,932,021) - ------------------------------------------------------------------------------------------------------------------------ Net gain (loss) on investments and foreign currencies 305,725,969 - ------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from operations $ 323,593,982 ======================================================================================================================== See accompanying notes to financial statements.
- -------------------------------------------------------------------------------- 26 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS RiverSource New Dimensions Fund
JAN. 31, 2006 JULY 31, 2005 SIX MONTHS ENDED YEAR ENDED (UNAUDITED) - ------------------------------------------------------------------------------------------------------------------------ OPERATIONS AND DISTRIBUTIONS - ------------------------------------------------------------------------------------------------------------------------ Investment income (loss) -- net $ 17,868,013 $ 100,873,015 Net realized gain (loss) on investments 1,338,657,990 754,695,766 Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies (1,032,932,021) 158,658,167 - ------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from operations 323,593,982 1,014,226,948 - ------------------------------------------------------------------------------------------------------------------------ Distributions to shareholders from: Net investment income Class A (19,745,623) (59,843,080) Class I (678,662) (402,754) Class Y (9,787,143) (25,264,241) Net realized gain Class A (1,048,466,486) (66,368,786) Class B (280,647,444) (21,459,161) Class C (6,973,212) (480,445) Class I (16,197,619) (279,703) Class Y (353,713,564) (22,415,431) - ------------------------------------------------------------------------------------------------------------------------ Total distributions (1,736,209,753) (196,513,601) - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS (NOTE 3) - ------------------------------------------------------------------------------------------------------------------------ Proceeds from sales Class A shares (Note 2) 305,538,588 309,583,153 Class B shares 40,079,320 135,535,176 Class C shares 1,839,701 6,964,606 Class I shares 20,049,554 70,265,265 Class Y shares 27,761,614 249,749,841 Reinvestment of distributions at net asset value Class A shares 1,030,753,819 122,902,169 Class B shares 277,893,433 21,266,905 Class C shares 6,867,837 472,693 Class I shares 16,875,343 682,371 Class Y shares 363,500,193 46,516,684 Payments for redemptions Class A shares (2,026,232,293) (3,400,714,842) Class B shares (Note 2) (745,778,311) (1,148,602,856) Class C shares (Note 2) (15,129,671) (28,365,050) Class I shares (521,137) (21,759,503) Class Y shares (827,271,557) (978,758,913) - ------------------------------------------------------------------------------------------------------------------------ Increase (decrease) in net assets from capital share transactions (1,523,773,567) (4,614,262,301) - ------------------------------------------------------------------------------------------------------------------------ Total increase (decrease) in net assets (2,936,389,338) (3,796,548,954) Net assets at beginning of period 11,521,363,117 15,317,912,071 - ------------------------------------------------------------------------------------------------------------------------ Net assets at end of period $ 8,584,973,779 $11,521,363,117 ======================================================================================================================== Undistributed net investment income $ 6,741,360 $ 19,084,775 - ------------------------------------------------------------------------------------------------------------------------ See accompanying notes to financial statements.
- -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 27 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS RiverSource New Dimensions Fund (formerly AXP New Dimensions Fund) (Unaudited as to Jan. 31, 2006) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Fund is a series of AXP Dimensions Series, Inc. and is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. AXP Dimensions Series, Inc. has 10 billion authorized shares of capital stock that can be allocated among the separate series as designated by the Board. The Fund offers Class A, Class B, Class C and Class Y shares. o Class A shares are sold with a front-end sales charge. o 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. o Class C shares may be subject to a CDSC. o Class Y shares have no sales charge and are offered only to qualifying institutional investors. The Fund offers an additional class of shares, Class I, exclusively to certain institutional investors. Class I shares have no sales charge and are made available through a separate prospectus supplement provided to investors eligible to purchase the shares. At Jan. 31, 2006, Ameriprise Financial and the RiverSource Portfolio Builder Funds owned 100% of Class I shares, which represents 1.08% of the Fund's net assets. All classes of shares have identical voting, dividend and liquidation rights. The distribution fee, transfer agency fees and service fee (class specific expenses) 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. INVESTMENT IN GROWTH TRENDS PORTFOLIO The Fund invests all of its assets in the Growth Trends Portfolio (the Portfolio), a series of Growth Trust (the Trust), an open-end investment company that has the same objectives as the Fund. The Portfolio invests primarily in common stocks of companies showing potential for significant growth and operating in areas where economic or technological changes are occurring. The Fund records daily its share of the Portfolio's income, expenses and realized and unrealized gains and losses. The financial statements of the Portfolio are included elsewhere in this report and should be read in conjunction with the Fund's financial statements. The Fund records its investment in the Portfolio at the value that is equal to the Fund's proportionate ownership interest in the Portfolio's net assets. The percentage of the Portfolio owned by the Fund at Jan. 31, 2006 was 99.99%. - -------------------------------------------------------------------------------- 28 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- All securities held by the Portfolio 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. Pursuant to procedures adopted by the Board of Trustees of the portfolios, Ameriprise Financial utilizes Fair Value Pricing (FVP). FVP determinations are made in good faith in accordance with these procedures. If a development or event is so significant that there is a reasonably high degree of certainty that the effect of the development or event has actually caused the closing price to no longer reflect the actual value, the closing prices, as determined at the close of the applicable foreign market, may be adjusted to reflect the fair value of the affected foreign securities as of the close of the New York Stock Exchange. Significant events include material movements in the U.S. securities markets prior to the opening of foreign markets on the following trading day. FVP results in an estimated price that reasonably reflects the current market conditions in order to value the portfolio holdings such that shareholder transactions receive a fair net asset value. 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. 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. 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. Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of deferred losses on certain futures contracts, the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes, and losses deferred due to "wash sale" transactions. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the Fund. - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 29 - -------------------------------------------------------------------------------- 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. 2. EXPENSES AND SALES CHARGES In addition to the expenses allocated from the Portfolio, the Fund accrues its own expenses as follows: Under the current 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. Prior to Oct. 1, 2005, the fee percentage of the Fund's average daily net assets declined from 0.05% to 0.02% annually as the Fund's assets increased. A minor portion of additional administrative service expenses paid by the Fund are consultants' fees and fund office expenses. Under this agreement, the Fund also pays taxes, audit and certain legal fees, registration fees for shares, compensation of board members, corporate filing fees and any other expenses properly payable by the Fund and approved by the Board. 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. Under a separate Transfer Agency Agreement, RiverSource Service Corporation (the Transfer Agent) maintains shareholder accounts and records. The Fund pays the Transfer Agent an annual fee per shareholder account for this service as follows: o Class A $19.50 o Class B $20.50 o Class C $20.00 o Class Y $17.50 The incremental transfer agency fee is the amount charged to the specific classes for the additional expense above the fee for Class Y. Class I pays a transfer agency fee at an annual rate per shareholder account of $1. This amount is included in the transfer agency fee on the statement of operations. The Transfer Agent charges an annual closed account 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. The Fund has agreements with Ameriprise Financial Services, Inc. (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 up to 0.25% of the Fund's average daily net assets attributable to Class A shares and up to 1.00% for Class B and Class C shares. - -------------------------------------------------------------------------------- 30 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- Under a Shareholder Service Agreement, the Fund pays the Distributor a fee for service provided to shareholders by financial advisors and other servicing agents. The fee is calculated at a rate of 0.10% of the Fund's average daily net assets attributable to Class Y shares. Sales charges received by the Distributor for distributing Fund shares were $2,398,488 for Class A, $1,372,791 for Class B and $3,303 for Class C for the six months ended Jan. 31, 2006. During the six months ended Jan. 31, 2006, the Fund's transfer agency fees were reduced by $331,678 as a result of earnings credits from overnight cash balances. 3. CAPITAL SHARE TRANSACTIONS Transactions in shares of capital stock for the periods indicated are as follows:
SIX MONTHS ENDED JAN. 31, 2006 CLASS A CLASS B CLASS C CLASS I CLASS Y - ------------------------------------------------------------------------------------------------------------------------ Sold 13,026,555 1,861,058 85,545 868,303 1,219,749 Issued for reinvested distributions 51,822,717 15,005,044 371,435 844,612 18,175,009 Redeemed (87,313,347) (33,999,750) (693,935) (22,566) (35,261,773) - ------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) (22,464,075) (17,133,648) (236,955) 1,690,349 (15,867,015) - ------------------------------------------------------------------------------------------------------------------------ YEAR ENDED JULY 31, 2005 CLASS A CLASS B CLASS C CLASS I CLASS Y - ------------------------------------------------------------------------------------------------------------------------ Sold 13,297,974 6,165,871 317,163 2,992,981 10,687,122 Issued for reinvested distributions 5,161,787 941,848 20,962 28,563 1,945,491 Redeemed (145,856,804) (52,123,835) (1,290,278) (930,034) (41,820,066) - ------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) (127,397,043) (45,016,116) (952,153) 2,091,510 (29,187,453) - ------------------------------------------------------------------------------------------------------------------------
4. BANK BORROWINGS The Fund has a revolving credit agreement with a syndicate of banks headed by JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The agreement went into effect Sept. 20, 2005. The Fund must maintain asset coverage for borrowings of at least 300%. The agreement, which enables the Fund to participate with other RiverSource funds, permits borrowings up to $500 million, collectively. Interest is charged to each Fund based on its borrowings at a rate equal to either the higher of the Federal Funds Effective Rate plus 0.40% or the JPMCB Prime Commercial Lending Rate. Borrowings are payable within 60 days after such loan is executed. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.07% per annum. Prior to this agreement, the Fund had a revolving credit agreement that permitted borrowings up to $500 million with The Bank of New York. The Fund had no borrowings outstanding during the six months ended Jan. 31, 2006. - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 31 - -------------------------------------------------------------------------------- 5. CAPITAL LOSS CARRY-OVER For federal income tax purposes, the Fund had a capital loss carry-over of $61,551,685 at July 31, 2005, that if not offset by capital gains realized will expire as follows: 2008 2009 2010 2011 $5,869,455 $42,999,536 $8,294,019 $4,388,675 As a result of a merger on June, 25, 2004, the Fund acquired capital loss carry-overs and unrealized capital gains. The yearly utilization of the acquired capital losses as well as the utilization of the acquired unrealized losses is limited by the Internal Revenue Code. 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. 6. SUBSEQUENT EVENT On Feb. 15, 2006, shareholders approved the merger of RiverSource New Dimensions Fund into RiverSource Large Cap Equity Fund. 7. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS In December 2005, without admitting or denying the allegations, American Express Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc. (Ameriprise Financial)), the parent company of RiverSource Investments, LLC (RiverSource Investments), entered into settlement agreements with the Securities and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC) related to market timing activities. In connection with these matters, the SEC and MDOC issued orders (the Orders) alleging that AEFC violated certain provisions of the federal and Minnesota securities laws by failing to adequately disclose market timing activities by allowing certain identified market timers to continue to market time contrary to disclosures in mutual fund and variable annuity product prospectuses. The Orders also alleged that AEFC failed to implement procedures to detect and prevent market timing in 401(k) plans for employees of AEFC and related companies and failed to adequately disclose that there were no such procedures. Pursuant to the MDOC Order, the MDOC also alleged that AEFC allowed inappropriate market timing to occur by failing to have written policies and procedures and failing to properly supervise its employees. - -------------------------------------------------------------------------------- 32 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- As a result of the Orders, 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. Pursuant to the terms of the Orders, AEFC agreed to pay disgorgement of $10 million and civil money penalties of $7 million. AEFC also agreed to make presentations at least annually to its board of directors and the relevant mutual funds' board that include an overview of policies and procedures to prevent market timing, material changes to these policies and procedures and whether disclosures related to market timing are consistent with the SEC order and federal securities laws. 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. In addition, AEFC agreed to complete and submit to the MDOC a compliance review of its procedures regarding market timing within one year of the MDOC Order, including a summary of actions taken to ensure compliance with applicable laws and regulations and certification by a senior officer regarding compliance and supervisory procedures. 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. Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal or arbitration proceedings, including routine 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 or arbitration 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. - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 33 - -------------------------------------------------------------------------------- 8. FINANCIAL HIGHLIGHTS The tables below show certain important financial information for evaluating the Fund's results.
CLASS A - ------------------------------------------------------------------------------------------------------------------------ PER SHARE INCOME AND CAPITAL CHANGES(a) - ------------------------------------------------------------------------------------------------------------------------ Fiscal period ended July 31, 2006(f) 2005 2004 2003 2002 Net asset value, beginning of period $23.99 $22.58 $21.90 $20.04 $25.43 - ------------------------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .06 .20 .08 .07 .05 Net gains (losses) (both realized and unrealized) .78 1.55 .71 1.82 (5.42) - ------------------------------------------------------------------------------------------------------------------------ Total from investment operations .84 1.75 .79 1.89 (5.37) - ------------------------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS: Dividends from net investment income (.09) (.16) (.11) (.03) (.02) Distributions from realized gains (4.60) (.18) -- -- -- - ------------------------------------------------------------------------------------------------------------------------ Total distributions (4.69) (.34) (.11) (.03) (.02) - ------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $20.14 $23.99 $22.58 $21.90 $20.04 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in millions) $5,295 $6,845 $9,319 $9,859 $9,863 - ------------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average daily net assets(b) .93%(c) .95% .91% 1.08% 1.06% - ------------------------------------------------------------------------------------------------------------------------ Ratio of net investment income (loss) to average daily net assets .43%(c) .85% .45% .42% .19% - ------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate (excluding short-term securities) 114% 75% 49% 20% 27% - ------------------------------------------------------------------------------------------------------------------------ Total return(d) 3.75%(e) 7.77% 3.59% 9.47% (21.14%) - ------------------------------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (c) Adjusted to an annual basis. (d) Total return does not reflect payment of a sales charge. (e) Not annualized. (f) Six months ended Jan. 31, 2006 (Unaudited). - -------------------------------------------------------------------------------- 34 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- CLASS B
- ------------------------------------------------------------------------------------------------------------------------ PER SHARE INCOME AND CAPITAL CHANGES(a) - ------------------------------------------------------------------------------------------------------------------------ Fiscal period ended July 31, 2006(f) 2005 2004 2003 2002 Net asset value, beginning of period $22.64 $21.34 $20.77 $19.12 $24.44 - ------------------------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (.02) .01 (.10) (.04) (.14) Net gains (losses) (both realized and unrealized) .72 1.47 .67 1.69 (5.16) - ------------------------------------------------------------------------------------------------------------------------ Total from investment operations .70 1.48 .57 1.65 (5.30) - ------------------------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS: Dividends from net investment income -- -- -- -- (.02) Distributions from realized gains (4.60) (.18) -- -- -- - ------------------------------------------------------------------------------------------------------------------------ Total distributions (4.60) (.18) -- -- (.02) - ------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $18.74 $22.64 $21.34 $20.77 $19.12 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in millions) $1,337 $2,004 $2,849 $3,457 $3,728 - ------------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average daily net assets(b) 1.71%(c) 1.73% 1.68% 1.85% 1.83% - ------------------------------------------------------------------------------------------------------------------------ Ratio of net investment income (loss) to average daily net assets (.34%)(c) 08% (.32%) (.35%) (.57%) - ------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate (excluding short-term securities) 114% 75% 49% 20% 27% - ------------------------------------------------------------------------------------------------------------------------ Total return(d) 3.35%(e) 6.93% 2.74% 8.63% (21.71%) - ------------------------------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (c) Adjusted to an annual basis. (d) Total return does not reflect payment of a sales charge. (e) Not annualized. (f) Six months ended Jan. 31, 2006 (Unaudited). - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 35 - -------------------------------------------------------------------------------- CLASS C
- ------------------------------------------------------------------------------------------------------------------------ PER SHARE INCOME AND CAPITAL CHANGES(a) - ------------------------------------------------------------------------------------------------------------------------ Fiscal period ended July 31, 2006(f) 2005 2004 2003 2002 Net asset value, beginning of period $22.61 $21.32 $20.74 $19.10 $24.42 - ------------------------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (.02) .01 (.09) (.04) (.14) Net gains (losses) (both realized and unrealized) .72 1.46 .67 1.68 (5.16) - ------------------------------------------------------------------------------------------------------------------------ Total from investment operations .70 1.47 .58 1.64 (5.30) - ------------------------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS: Dividends from net investment income -- -- -- -- (.02) Distributions from realized gains (4.60) (.18) -- -- - ------------------------------------------------------------------------------------------------------------------------ Total distributions (4.60) (.18) -- -- (.02) - ------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $18.71 $22.61 $21.32 $20.74 $19.10 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in millions) $33 $46 $63 $59 $44 - ------------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average daily net assets(b) 1.71%(c) 1.73% 1.69% 1.87% 1.85% - ------------------------------------------------------------------------------------------------------------------------ Ratio of net investment income (loss) to average daily net assets (.33%)(c) .07% (.33%) (.38%) (.60%) - ------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate (excluding short-term securities) 114% 75% 49% 20% 27% - ------------------------------------------------------------------------------------------------------------------------ Total return(d) 3.35%(e) 6.89% 2.80% 8.59% (21.73%) - ------------------------------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (c) Adjusted to an annual basis. (d) Total return does not reflect payment of a sales charge. (e) Not annualized. (f) Six months ended Jan. 31, 2006 (Unaudited). - -------------------------------------------------------------------------------- 36 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- CLASS I - ------------------------------------------------------------------------------------------- PER SHARE INCOME AND CAPITAL CHANGES(a) - -------------------------------------------------------------------------------------------
Fiscal period ended July 31, 2006(g) 2005 2004(b) Net asset value, beginning of period $24.14 $22.71 $24.37 - ------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .16 .31 .06 Net gains (losses) (both realized and unrealized) .75 1.56 (1.67) - ------------------------------------------------------------------------------------------- Total from investment operations .91 1.87 (1.61) - ------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.20) (.26) (.05) Distributions from realized gains (4.60) (.18) -- - ------------------------------------------------------------------------------------------- Total distributions (4.80) (.44) (.05) - ------------------------------------------------------------------------------------------- Net asset value, end of period $20.25 $24.14 $22.71 - ------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------- Net assets, end of period (in millions) $93 $70 $18 - ------------------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(c) .48%(d) .52% .50%(d) - ------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets .90%(d) 1.08% .87%(d) - ------------------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 114% 75% 49% - ------------------------------------------------------------------------------------------- Total return(e) 4.02%(f) 8.24% (6.61%)(f) - -------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Inception date is March 4, 2004. (c) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (d) Adjusted to an annual basis. (e) Total return does not reflect payment of a sales charge. (f) Not annualized. (g) Six months ended Jan. 31, 2006 (Unaudited). - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 37 - -------------------------------------------------------------------------------- CLASS Y
- ------------------------------------------------------------------------------------------------------------------------ PER SHARE INCOME AND CAPITAL CHANGES(a) - ------------------------------------------------------------------------------------------------------------------------ Fiscal period ended July 31, 2006(f) 2005 2004 2003 2002 Net asset value, beginning of period $24.12 $22.70 $22.02 $20.14 $25.51 - ----------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .10 .25 .11 .11 .09 Net gains (losses) (both realized and unrealized) .77 1.55 .72 1.83 (5.44) - ----------------------------------------------------------------------------------------------------------------------- Total from investment operations .87 1.80 .83 1.94 (5.35) - ----------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.13) (.20) (.15) (.06) (.02) Distributions from realized gains (4.60) (.18) -- -- -- - ----------------------------------------------------------------------------------------------------------------------- Total distributions (4.73) (.38) (.15) (.06) (.02) - ----------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $20.26 $24.12 $22.70 $22.02 $20.14 - ----------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in millions) $1,826 $2,557 $3,068 $3,472 $3,222 - ----------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average daily net assets(b) .74%(c) .78% .75% .91% .90% - ----------------------------------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average daily net assets .62%(c) 1.00% .61% .59% .36% - ----------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate (excluding short-term securities) 114% 75% 49% 20% 27% - ----------------------------------------------------------------------------------------------------------------------- Total return(d) 3.86%(e) 7.95% 3.75% 9.64% (21.00%) - -----------------------------------------------------------------------------------------------------------------------
(a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. (c) Adjusted to an annual basis. (d) Total return does not reflect payment of a sales charge. (e) Not annualized. (f) Six months ended Jan. 31, 2006 (Unaudited). - -------------------------------------------------------------------------------- 38 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- 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, including management fees; distribution and service (12b-1) fees; and other Fund 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. 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, 2006. 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. - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 39 - --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED AUG. 1, 2005 JAN. 31, 2006 THE PERIOD(a) EXPENSE RATIO Class A Actual(b) $1,000 $1,037.50 $4.83(c) .93% Hypothetical (5% return before expenses) $1,000 $1,020.74 $4.79(c) .93% Class B Actual(b) $1,000 $1,033.50 $8.86(c) 1.71% Hypothetical (5% return before expenses) $1,000 $1,016.77 $8.79(c) 1.71% Class C Actual(b) $1,000 $1,033.50 $8.86(c) 1.71% Hypothetical (5% return before expenses) $1,000 $1,016.77 $8.79(c) 1.71% Class I Actual(b) $1,000 $1,040.20 $2.50(c) .48% Hypothetical (5% return before expenses) $1,000 $1,023.03 $2.47(c) .48% Class Y Actual(b) $1,000 $1,038.60 $3.84(c) .74% Hypothetical (5% return before expenses) $1,000 $1,021.71 $3.81(c) .74%
(a) Expenses are equal to the Fund's annualized expense ratio as indicated above, multiplied by the average account value over the period, multiplied by 186/365 (to reflect the one-half year period). (b) Based on the actual return for the six months ended Jan. 31, 2006: +3.75% for Class A, +3.35% for Class B, +3.35% for Class C, +4.02% for Class I and +3.86% for Class Y. (c) Effective Oct. 1, 2005, the Fund's Board of Directors approved a change to the fee schedule under the Administrative Services Agreement between Ameriprise Financial and the Fund. If the revised fee schedule under the Administrative Services Agreement had been in place for the entire six-month period ended Jan. 31, 2006, the actual expenses paid would have been $4.88 for Class A, $8.91 for Class B, $8.91 for Class C, $2.55 for Class I and $3.90 for Class Y; the hypothetical expenses paid would have been $4.84 for Class A, $8.84 for Class B, $8.84 for Class C, $2.53 for Class I and $3.86 for Class Y. - -------------------------------------------------------------------------------- 40 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- APPROVAL OF INVESTMENT MANAGEMENT SERVICES AGREEMENT RiverSource Investments, LLC (RiverSource), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial, formerly American Express Financial Corporation), serves as the investment manager to the Fund. Under an investment management services agreement (the IMS Agreement), the investment manager provides investment advice and other services to the Fund. Throughout the year, the Fund's Board of Directors (the Board) and the Board's Investment Review and Contracts Committees monitor these services. Ameriprise Financial had served as investment manager to the Fund until Sept. 29, 2005. On that date, and pursuant to the consent of the Board, Ameriprise Financial transferred its rights, title, and interest and its burdens and obligations under the IMS Agreement to RiverSource, its wholly-owned subsidiary. Each year, the Board determines whether to continue the IMS Agreement by evaluating the quality and level of services received and the costs associated with those services. To assist the Board in making this determination, the investment manager prepares detailed reports for the Board and its Contracts Committee in March and April and provides data prepared by independent organizations. The Board gives considerable weight to the work, deliberations and conclusions of the Contracts and Investment Review Committees in determining whether to continue the IMS Agreement. BACKGROUND This past year, prior to the Board's annual review process, on Feb. 1, 2005, American Express Company, the former parent of Ameriprise Financial, announced its intention to pursue a spin-off of Ameriprise Financial by distributing shares of the common stock of Ameriprise Financial to shareholders of American Express Company. Following this announcement, the Board determined to proceed with its annual review process and, after thorough review of the reports and data provided, at a meeting held in person on April 14, 2005, the Board, including all of its independent members, determined that the quality and level of advisory services provided pursuant to the IMS Agreement were satisfactory and that fees were fair and reasonable. However, in light of the announced plans of the spin-off, the Board approved continuation of the IMS Agreement with Ameriprise Financial for only an interim period ending on the later of (i) the effective date of the spin-off; or (ii) the approval of a new IMS Agreement with Ameriprise Financial (or its subsidiary) by the shareholders of the Fund, but in no event for a period longer than one year. During the course of the six-month period following the April 2005 meeting, the Board evaluated whether to approve new investment management services agreements for each of the funds within the Ameriprise Financial fund complex (together, the Funds) with post-spin Ameriprise Financial (or RiverSource). Independent counsel, Schulte Roth & Zabel LLP (Schulte), assisted the Boards in fulfilling their statutory and other responsibilities associated with the spin-off and the resulting consideration of new contracts, including the new IMS Agreement. The Board and its committees were provided with a wealth of written and oral information in this regard. Furthermore, in connection with the Board's considerations as to whether post-spin Ameriprise Financial, as an entity independent from American Express Company, would be capable of continuing to provide a high quality of services to the Funds, - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 41 - -------------------------------------------------------------------------------- the Board's independent members retained their own financial adviser, Credit Suisse First Boston LLC (CSFB), to assist them in analyzing the capital adequacy of post-spin Ameriprise Financial. (The costs of independent counsel and CSFB and of additional meetings of the Boards were borne by Ameriprise Financial as part of the commitment of the American Express Company to ensure a complete and thorough review of the proposed spin-off and its effect on the services provided by Ameriprise Financial and its subsidiaries.) At a meeting of the Board held on Sept. 8, 2005, the Board, including all of its independent members, approved, and recommended that shareholders approve, a proposed new IMS Agreement with RiverSource (the New IMS Agreement). At a meeting of the Fund's shareholders held on Feb. 15, 2006, shareholders approved the New IMS Agreement. The following section, "Board Considerations Related to the New IMS Agreement," provides a detailed discussion of the Board's considerations and determinations respecting the New IMS Agreement. BOARD CONSIDERATIONS RELATED TO THE NEW IMS AGREEMENT In carrying out its legal responsibilities associated with the consideration of the New IMS Agreement, the Board evaluated the following factors: Nature, Extent and Quality of Services to be Provided by Post-Spin Ameriprise Financial (and Its Subsidiaries) The Board recognized that only a few months had passed since its April 2005 conclusion that the nature, extent and quality of services provided by Ameriprise Financial were satisfactory and consistent with those that would be expected for a fund family of the size of the Funds and its determination to renew the IMS Agreement for the interim period. However, the Board also recognized the need to supplement this assessment with an evaluation of whether the spin-off or other factors would result in changes to the advisory services being provided under the current IMS Agreement. The Board focused its evaluation on the following factors potentially impacting the nature, extent and quality of advisory services to be provided by Ameriprise Financial: (i) Ameriprise Financial's projected capital structure and capital adequacy as a stand-alone entity; (ii) its legal and regulatory risks; (iii) its ability to retain and attract personnel; and (iv) its ability to successfully re-brand its products and services. Based on extensive presentations and reports by Ameriprise Financial, CSFB and Schulte, the Board concluded that the proposed capital structure (which includes certain indemnification commitments made by American Express Company) should enable RiverSource to continue to provide a high quality and level of advisory services to the Fund. In making this determination, the Board took into account representations by management of Ameriprise Financial that projected capital levels would allow Ameriprise Financial and RiverSource to meet legal and compliance responsibilities, build their distribution network, pursue technological upgrades, make capital commitments necessary to retain and attract key personnel devoted to legal and compliance responsibilities, portfolio management and distribution, and pursue smaller asset management acquisitions to help grow the asset management business. The Board accorded significant weight to CSFB's confirmation as to the reasonableness of the proposed capital structure. The Board also considered the fact that there were no expected departures of key personnel involved in the portfolio management, operations and marketing of the Funds as a result of the announcement of the spin-off. - -------------------------------------------------------------------------------- 42 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- The Board concluded that, based on all of the materials and information provided, post-spin Ameriprise Financial (including RiverSource) would be in a position to continue to provide a high quality and level of advisory services to the Fund. Investment Performance The Board next focused on investment performance. The Board reviewed reports documenting the Fund's performance over one-, three- and/or five-year periods, as well as the entire period during which its current portfolio manager has managed the Fund, and compared to relevant Lipper and market indices. The Board took into account its determination in April 2005 that although the Fund's investment performance in 2004 was below median, Ameriprise Financial had taken steps to address the below median performance. The Board also considered that it had been receiving monthly performance reports for the Fund and that there had been no significant deviations from April's overall performance data. Cost of Services Provided The Board evaluated comparative fees and the costs of services under the current IMS Agreement and the New IMS Agreement, including fees charged by Ameriprise Financial (including RiverSource and other subsidiaries) to institutional clients. The Board observed that the proposed advisory fee changes are designed to work in tandem with proposed changes to administrative services fees and that advisory fees under the New IMS Agreement would decrease. The Board studied RiverSource's effort (i.e., its "pricing philosophy") to set substantially all Funds' total expense ratios at or below the median expense ratio of comparable mutual funds (as compiled by Lipper). It also noted that RiverSource has agreed to voluntarily impose expense caps or waivers to achieve this pricing objective whenever the expense ratio exceeded the median expense ratio by more than three basis points (unless the higher ratio was due to the impact of the performance fee adjustment). The Board also took into account the effect of the proposed performance incentive adjustment on the advisory fee. In this regard, the Board recalled its past determinations regarding the appropriateness of (i) the use of the relevant index for the performance comparison; (ii) the methodology for determining when the Board may change an index used to calculate the performance incentive adjustment; (iii) the periods used for averaging the Fund's assets and computing investment performance; and (iv) the length of the period over which performance is computed. The Board next considered the expected profitability to Ameriprise Financial and RiverSource derived from their relationship with the Fund, recalling the April 2005 determination that the profitability level was appropriate. The Board noted that projected profitability of Ameriprise Financial would allow it to operate effectively and, at the same time, reinvest in RiverSource and its other asset management businesses. The Board also considered that the proposed changes in advisory fees and the mergers of certain other Funds would result in revenue gains to Ameriprise Financial, but that these increases would not materially alter profit margins due to expected increases in costs associated with the spin-off, particularly re-branding and separation. CSFB also reported that Ameriprise Financial's projected level of return on equity was generally reasonable in light of the returns on equity of its industry competitors. In evaluating profitability, the Board also considered the benefits Ameriprise Financial obtains through the use of commission dollars paid on portfolio transactions for the Fund and from other business relationships that result from managing the Fund. The Board also considered - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 43 - -------------------------------------------------------------------------------- the fees charged by Ameriprise Financial (and its subsidiaries) to institutional clients as well as the fees paid to, and charged by, subadvisers, noting the differences in services provided in each case. In light of these considerations, the Board concluded that projected profitability levels were appropriate. Economies of Scale The Board also considered the "breakpoints" in fees that would be triggered as Fund net asset levels grew and the extent to which shareholders would benefit from such growth. The Board observed that the revised fee schedules under the proposed New IMS Agreement would continue to provide breakpoints similar to those in place pursuant to the current IMS Agreement. Accordingly, the Board concluded that the proposed New IMS Agreement provides adequate opportunity for shareholders to realize benefits as Fund assets grow. Other Considerations In addition, the Board accorded weight to the fact that, under the New IMS Agreement, RiverSource Investments is held to a higher standard of care than under the current IMS Agreement. The Board also noted Ameriprise Financial's commitment to a culture that adheres to ethical business practice, assigns accountability to senior management and seeks to identify conflicts and propose appropriate action to minimize the risks posed by the conflicts. Furthermore, the Board recognized that it was not limited to considering management's proposed New IMS Agreement. In this regard, the Board evaluated the circumstances under which it would consider the retention of an investment adviser different from RiverSource Investments. The Board concluded, based on its consultation with independent counsel, that pursuing the retention of a different adviser was not necessary, primarily because, in its best judgment, Ameriprise Financial continues to be basically the same organization (from a functional and managerial standpoint), as it was prior to the spin-off. The Board reasoned that shareholders purchased shares of the Fund with an expectation that the current investment advisory organization would be servicing the Fund. At a meeting of the Fund's shareholders on Feb. 15, 2006, the Fund's shareholders approved a merger of the Fund into RiverSource Large Cap Equity Fund. Completion of the merger is expected to close before the end of first quarter 2006. PROXY VOTING The policy of the Board is to vote all proxies of the companies in which the Fund holds investments. The procedures are stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling (800) 862-7919; by looking at the website www.riversource.com/funds; or by 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 during the most recent 12-month period ended June 30 is available without charge by calling the Fund's administrator, Board Services Corporation, collect at (612) 330-9283; by looking at the website www.riversource.com/funds; or by searching the website of the SEC at www.sec.gov. - -------------------------------------------------------------------------------- 44 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- RESULTS OF MEETING OF SHAREHOLDERS RIVERSOURCE NEW DIMENSIONS FUND REGULAR MEETING OF SHAREHOLDERS HELD ON FEB. 15, 2006 (UNAUDITED) A brief description of each proposal voted upon at the meeting and the votes cast for, against or withheld, as well as the number of abstentions and broker non-votes as to each proposal is set forth below. A vote is based on total dollar interest in a fund. 1. APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION Affirmative 4,803,263,242.70 Against 203,034,179.86 Abstain 174,309,310.65 Broker Non-votes 3,924,979.51 TOTAL 5,184,531,712.72 2. ELECTION OF BOARD MEMBERS KATHLEEN BLATZ Affirmative 4,935,529,235.98 Withhold 249,002,476.74 Abstain 0.00 TOTAL 5,184,531,712.72 ARNE H. CARLSON Affirmative 4,927,383,650.58 Withhold 257,148,062.14 Abstain 0.00 TOTAL 5,184,531,712.72 PATRICIA M. FLYNN Affirmative 4,944,154,103.69 Withhold 240,377,609.03 Abstain 0.00 TOTAL 5,184,531,712.72 - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 45 - -------------------------------------------------------------------------------- ANNE P. JONES Affirmative 4,931,661,423.07 Withhold 252,870,289.65 Abstain 0.00 TOTAL 5,184,531,712.72 JEFFREY LAIKIND Affirmative 4,937,731,158.38 Withhold 246,800,554.34 Abstain 0.00 TOTAL 5,184,531,712.72 STEPHEN R. LEWIS, JR. Affirmative 4,947,616,551.84 Withhold 236,915,160.88 Abstain 0.00 TOTAL 5,184,531,712.72 CATHERINE JAMES PAGLIA Affirmative 4,941,796,903.85 Withhold 242,734,808.87 Abstain 0.00 TOTAL 5,184,531,712.72 VIKKI L. PRYOR Affirmative 4,941,835,030.40 Withhold 242,696,682.32 Abstain 0.00 TOTAL 5,184,531,712.72 ALAN K. SIMPSON Affirmative 4,920,122,699.15 Withhold 264,409,013.57 Abstain 0.00 TOTAL 5,184,531,712.72 - -------------------------------------------------------------------------------- 46 -- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- ALISON TAUNTON-RIGBY Affirmative 4,943,316,006.67 Withhold 241,215,706.05 Abstain 0.00 TOTAL 5,184,531,712.72 WILLIAM F. TRUSCOTT Affirmative 4,940,877,809.59 Withhold 243,653,903.13 Abstain 0.00 TOTAL 5,184,531,712.72 3. APPROVE AN AMENDMENT TO THE ARTICLES OF INCORPORATION Affirmative 4,777,816,064.50 Against 219,203,029.96 Abstain 183,587,638.75 Broker Non-votes 3,924,979.51 TOTAL 5,184,531,712.72 4. APPROVE AN INVESTMENT MANAGEMENT SERVICES AGREEMENT WITH RIVERSOURCE INVESTMENTS, LLC Affirmative 4,798,197,914.21 Against 205,452,689.21 Abstain 176,956,129.79 Broker Non-votes 3,924,979.51 TOTAL 5,184,531,712.72 - -------------------------------------------------------------------------------- RIVERSOURCE NEW DIMENSIONS FUND -- 2006 SEMIANNUAL REPORT -- 47 - -------------------------------------------------------------------------------- [Logo RiverSource(SM) Investments] RIVERSOURCE INVESTMENTS 200 AMERIPRISE FINANCIAL CENTER MINNEAPOLIS, MN 55474 This report must be accompanied or preceded by the Fund's current prospectus. RiverSource Funds are managed by RiverSource Investments, LLC and distributed by Ameriprise Financial Services, Inc., Member NASD. Both companies are part of Ameriprise Financial, Inc. Item 2. Code of Ethics. Not applicable for semi-annual reports. Item 3. Audit Committee Financial Expert. Not applicable for semi-annual reports. Item 4. Principal Accountant Fees and Services. Not applicable for semi-annual reports. Item 5. Audit Committee of Listed Registrants. Not applicable. Item 6. The complete schedule of investments is included in Item 1 of this Form N-CSR. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable. Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable. Item 10. Submission of matters to a vote of security holders. Not applicable. Item 11. Controls and Procedures. (a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's Principal Financial Officer and Principal Executive Officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no changes in the registrant's internal controls over financial reporting that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12. Exhibits. (a)(1) Not applicable for semi-annual reports. (a)(2) Separate certification for the Registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached as EX.99.CERT. (a)(3) Not applicable. (b) A certification by the Registrant's principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(b) under the Investment Company Act of 1940, is attached as EX.99.906 CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) AXP Dimensions Series, Inc. By /s/ Paula R. Meyer ------------------ Paula R. Meyer President and Principal Executive Officer Date April 3, 2006 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ Paula R. Meyer ------------------ Paula R. Meyer President and Principal Executive Officer Date April 3, 2006 By /s/ Jeffrey P. Fox ------------------ Jeffrey P. Fox Treasurer and Principal Financial Officer Date April 3, 2006 EX-99.CERT 2 dimensions_cert.txt CERTIFICATION PURSUANT TO 270.30A-2 OF THE INVESTMENT COMPANY ACT OF 1940 Certification Pursuant to 270.30a-2 of the Investment Company Act of 1940 I, Paula Meyer, certify that: 1. I have reviewed this report on Form N-CSR of AXP Dimensions Series, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this report based on such evaluation; d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 17, 2006 /s/ Paula R. Meyer -------------------------------- Name: Paula R. Meyer Title: President and Chief Executive Officer Certification Pursuant to 270.30a-2 of the Investment Company Act of 1940 I, Jeffrey Fox, certify that: 1. I have reviewed this report on Form N-CSR of AXP Dimensions Series, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this report based on such evaluation; d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 17, 2006 /s/ Jeffrey P. Fox -------------------------------- Name: Jeffrey P. Fox Title: Treasurer and Chief Financial Officer EX-99.906 CERT 3 dimensions_906cert.txt CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATION AXP Dimensions Series, Inc. (the Registrant) Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Each of the undersigned below certifies that 1. This report on Form N-CSR of the Registrant (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: March 17, 2006 /s/ Paula R. Meyer ------------------ Paula R. Meyer President and Chief Executive Officer Date: March 17, 2006 /s/ Jeffrey P. Fox ------------------ Jeffrey P. Fox Treasurer and Chief Financial Officer A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, OR OTHER DOCUMENT AUTHENTICATING, ACKNOWLEDGING, OR OTHERWISE ADOPTING THE SIGNATURE THAT APPEARS IN TYPED FORM WITHIN ELECTRONIC VERSION OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, HAS BEEN PROVIDED TO THE REGISTRANT AND WILL BE RETAINED BY THE REGISTRANT AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR filed with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----