-----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, TX3QuRVcImTPTTXcVYfJY5B5DD/HQKdbKvYMEtKtvKcDxMJsSoIEOGS6yA8+X2OW RzxEf+kwlNtXntlvBj+mgQ== 0000820027-95-000593.txt : 19951205 0000820027-95-000593.hdr.sgml : 19951205 ACCESSION NUMBER: 0000820027-95-000593 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951204 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDS NEW DIMENSIONS FUND INC CENTRAL INDEX KEY: 0000049717 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 410940846 STATE OF INCORPORATION: MN FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-01629 FILM NUMBER: 95598777 BUSINESS ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: T33/52 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 BUSINESS PHONE: 6123722772 N-30D 1 IDS NEW DIMENSIONS FUND, INC PAGE 1 IDS New Dimensions Fund 1995 annual report (prospectus enclosed) (Icon of) A Dimension The goal of IDS New Dimensions Fund, Inc. is long-term growth of capital. The Fund invests primarily in common stocks of companies showing potential for significant growth and operating in areas where economic or technological changes are occurring. (This annual report includes a prospectus that describes in detail the Fund's objective, investment policies, risks, sales charges, fees and other matters of interest. Please read the prospectus carefully before you invest or send money.) Distributed by American Express Financial Advisors Inc. PAGE 2 (Icon of) A Dimension Fast-track stocks What type of stock has been the driving force behind the dramatic increases posted by U.S. and foreign stock markets in recent years? The answer is growth stocks - that is, stocks of companies that have a track record of increasing their business and profits at a rapid pace. These companies, some large and well-known, others smaller and newly discovered, form the foundation of IDS New Dimensions Fund. The fund looks for companies from around the world that not only have a history of continuous growth, but are believed to be poised to continue growing over the long term due to their management, marketing innovation and/or technological advances. PAGE 3 Contents (Icon of) One open book inside of another. The purpose of this annual report is to tell investors how the Fund performed. The prospectus, which is bound into the middle of this annual report, describes the Fund in detail. 1995 annual report From the president 4 From the portfolio manager 4 Ten largest holdings 6 Making the most of your Fund 7 Long-term performance 8 Independent auditors' report 9 Financial statements 10 Notes to financial statements 13 Investments in securities 23 IDS mutual funds 28 Federal income tax information 31 1995 prospectus The Fund in brief Goal 3p Types of Fund investments and their risks 3p Proposed conversion to master/feeder structure 3p Manager and distributor 3p Portfolio manager 3p Alternative purchase arrangements 3p Sales charge and Fund expenses 4p Performance Financial highlights 6p Total returns 8p Investment policies and risks Facts about investments and their risks 11p Valuing Fund shares 15p How to purchase, exchange or redeem shares Alternative purchase arrangements 16p How to purchase shares 19p How to exchange shares 22p How to redeem shares 22p Reductions and waivers of the sales charge 27p Special shareholder services Services 33p Quick telephone reference 33p Distributions and taxes Dividend and capital gain distributions 34p Reinvestments 35p Taxes 35p How to determine the correct TIN 37p How the Fund is organized Shares 38p Voting rights 38p Shareholder meetings 38p Special considerations regarding master/ feeder structure 39p Directors and officers 41p Investment manager and transfer agent 43p Distributor 44p About American Express Financial Corporation General information 45p Appendix Descriptions of derivative instruments 46p PAGE 4 To our shareholders (Photo of) William R. Pearce, President of the Fund (Photo of) Gordon M. Fines, Portfolio manager From the president As I indicated in the Fund's previous reports new agreements between the Fund and American Express Financial Corporation (AEFC) were approved by shareholders in November 1994. The new agreements became effective when the Fund began offering multiple classes of shares on March 20, 1995. The advantage of offering more than a single class of shares is that investors may choose how they wish to pay sales charges. A portion of these charges compensates your American Express financial advisor (formerly called your IDS planner), who is committed to providing you with outstanding services. Adding new classes of mutual funds shares does make the presentation of financial information in this report more complex. However, we will continue our effort to make the reports easier to read and understand. Meanwhile, your American Express financial advisor is available to answer your questions. William R. Pearce From the portfolio manager A surging stock market, often led by growth stocks, resulted in a substantial gain by IDS New Dimensions Fund during the past fiscal year (October 1994 through September 1995). The total return of more than 20%, which includes net asset value change and distributions to shareholders, marked the Fund's best 12-month performance since 1991. After struggling throughout most of 1994, the stock market began to show some signs of strength last winter as an overall positive investment environment began to emerge. The driving factors included a low inflation rate, improving corporate profits and declining long-term interest rates - almost a sure-fire formula for rising stock prices. By spring, stocks were enjoying a robust rally that continued almost unabated through the end of the fiscal year. Growth stocks catch fire To the particular benefit of this Fund, growth stocks, which had been lackluster performers for much of the previous two years, responded especially well to the positive forces. Often at the forefront of the market's advance were stocks of rapidly growing technology companies. Particularly strong were stocks of semiconductor producers, whose products related to the "information superhighway" and whose generally impressive profits captured both the fancy and the capital of investors. This Fund was well-positioned to take advantage of the upturn because of its heavy weighting in technology/telecommunications stocks; they comprised about a third of the portfolio throughout the 12 months. Technology leaders such as Intel, Motorola, Microsoft and Cisco Systems were among several strong performers for the Fund. On other fronts, we also enjoyed good overall results from our holdings in the health care and financial services sectors (the latter group benefited from falling long-term interest rates), as well as stocks of large, consumer-products companies with substantial international business operations. Our portfolio mix stayed essentially the same during the fiscal year, and we stuck to a relatively aggressive investment approach, which includes a cash- reserve level of 10-12%. Environment good for growth After the exhilarating run we experienced in the past fiscal year, it's natural to speculate about what the stock market will do for an encore. The normal course of events calls for a market "correction" - that is, a moderate, temporary decline - before too long. While that certainly could happen, and could ultimately prove to be healthy for longer-term market performance, we don't find the current investment environment particularly threatening. Inflation has yet to become a problem; the economy has slowed down but appears unlikely to slip into recession; and, at this writing, long-term interest rates remain at a reasonable level. Therefore, unless there's a meaningful change to that backdrop, we expect to stay with what has worked for the Fund: an emphasis on large and mid-size companies with above-average growth rates, especially those in the technology/telecommunications arena. Gordon M. Fines Class A 12-month performance (All figures per share) Net assest value (NAV) Sept. 30, 1995 $17.24 Sept. 30, 1994 $14.06 Increase $ 3.18 Distributions Oct. 1, 1994-Sept. 30, 1995 From income $ 0.12 From capital gains $ 0.50 Total distributions $ 0.62 Total return** +28.4%*** Class B March 20, 1995-Sept. 30, 1995 (All figures per share) Net asset value (NAV) Sept. 30, 1995 $17.18 March 20, 1995* $14.21 Increase $ 2.97 Distributions March 20, 1995*-Sept. 30, 1995 From income $ -- From capital gains $ -- Total distributions $ -- Total return** +20.9%*** Class Y March 20, 1995-Sept. 30, 1995 (All figures per share) Net asset value (NAV) Sept. 30, 1995 $17.26 March 20, 1995* $14.21 Increase $ 3.05 Distributions March 20, 1995*-Sept. 30, 1995 From income $ -- From capital gains $ -- Total distributions $ -- Total return** +21.5%*** *Inception date. **The prospectus discusses the effects of sales charges, if any, on the various classes. ***The total return is a hypothetical investment in the Fund with all distributions reinvested. PAGE 5
IDS New Dimensions Fund, Inc. Your Fund's ten largest holdings (Pie chart) The ten holdings listed here make up 22.91% of the Fund's net assets. _______________________________________________________________________________________________________ Percent Value (of fund's net assets) (as of Sept. 30, 1995) _______________________________________________________________________________________________________ Cisco Systems 3.39% $220,800,000 A leading designer and builder of devices that link personal computers for application in the fast-growing business network market. Citicorp 3.26 212,250,000 The parent of Citibank, the largest bank in the U.S., it has a substantial worldwide corporate and retail banking presence. Intel 2.58 168,350,000 The world's number one semiconductor manufacturer, Intel produces microcomputer components, modules and systems. Pfizer 2.29 149,450,000 A leading producer of pharmaceuticals, hospitals products, animal health items, non-prescription medications and specialty chemicals. General Electric 2.15 140,250,000 A diversified company with interest in manufacturing, broadcasting (NBC), financial services and technology. ConAgra 1.95 126,800,000 Engaged in a variety of basic food businesses, including feed and fertilizer, grain processing and merchandising, agricultural chemicals, worldwide trading, fresh and processed red meats, poultry products, and frozen prepared foods and seafood. Royal Dutch Petroleum 1.88 122,750,000 A major oil company that includes Royal Dutch (the Dutch version) and Shell Transport (the English version). Amgen 1.84 119,700,000 A premier biotechnology (biotech) company that develops, manufactures and markets drugs based on advances in recombinant DNA and molecular biology for human health care. Medtronic 1.81 118,250,000 A major, diversified medical device company. McDonald's 1.76 114,750,000 Operates, licenses and services the world's largest chain of fast-food restaurants.
PAGE 6 Making the most of your Fund Average annual total return (as of Sept. 30, 1995) Class A 1 year 5 years 10 years +22.00% +18.95% +17.64% Total returns for Class A, Class B and Class Y for the period from March 20, 1995 to Sept. 30, 1995 were +15.33%, +15.89% and +21.48%, respectively. March 20, 1995 was the inception date for Class B and Class Y. Total return for Class A is shown for comparative purposes. The performance of Class B and Class Y will vary from the performance of Class A based on differences in sales charges and fees. Your investment and return values fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Figures for Class A and Class B reflect the effect of the maximum 5% sales charge. This was a period of widely fluctuating security prices. Past performance is no guarantee of future results. Build your assets systematically One of the best ways to invest in the Fund is by dollar-cost averaging -- a time-tested strategy that can make market fluctuations work for you. To dollar-cost average, simply invest a fixed amount of money regularly. You'll automatically buy more shares when the Fund's share price is low, fewer shares when it is high. This does not ensure a profit or avoid a loss if the market declines. But, if you can continue to invest regularly through changing market conditions, it can be an effective way to accumulate shares to meet your long-term goals. How dollar-cost averaging works Month Amount Per-share Number of shares purchased invested market price Jan $100 $20 5.00 Feb 100 18 5.56 Mar 100 17 5.88 Apr 100 15 6.67 May 100 16 6.25 June 100 18 5.56 July 100 17 5.88 Aug 100 19 5.26 Sept 100 21 4.76 Oct 100 20 5.00 (footnotes to table) By investing an equal number of dollars each month... (arrow in table pointing to April) you automatically buy more shares when the per share market price is low (arrow in table pointing to September) and fewer shares when the per share market price is high. You have paid an average price of only $17.91 per share over the 10 months, while the average market price actually was $18.10. PAGE 7 Three ways to benefit from a mutual fund: o your shares increase in value when the Fund's investments do well o you receive capital gains when the gains on investments sold by the Fund exceed losses o you receive income when the Fund's stock dividends, interest and short-term gains exceed its expenses. All three make up your total return. And you potentially can increase your investment if, like most investors, you reinvest your dividends and capital gain distributions to buy additional shares of the fund or another fund. Class A* How your $10,000 has grown in IDS New Dimensions Fund Average annual total return (as of Sept. 30, 1995) $50,822 New Dimensions Fund 1 year 5 years 10 years +22.00% +18.95% +17.64% $30,000 S&P 500 Stock Index $20,000 Lipper Growth Fund Index $9,500 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 * The graph above is for Class A only. Class B and Class Y are not shown. Total returns for Class A, Class B and Class Y for the period from March 20, 1995 to Sept. 30, 1995 were +15.33%, +15.89%, and +21.48%, respectively. March 20, 1995 was the inception date for Class B and Class Y. Total return for Class A is shown for comparative purposes. The performance of Class B and Class Y will vary from the performance of Class A based on differences in sales charges and fees. Assumes: Holding period from 9/30/85 to 9/30/95. Returns do not reflect taxes payable on distributions. Reinvestment of all income and capital gain distributions for the Fund, with a value of $30,558. Also see "Performance" in the Fund's current prospectus. Standard & Poor's 500 Stock Index (S&P 500), an unmanaged list of common stocks, is frequently used as a general measure of market performance. However, the S&P 500 companies are generally larger than those in which the Fund invests. Lipper Growth Fund Index, published by Lipper Analytical Services, Inc., includes 30 funds that are generally similar to this Fund, although some funds in the index may have somewhat different investment policies or objectives. On the graph above you can see how the Fund's total return compared to two widely cited performance indexes, the S&P 500 and the Lipper Growth Fund Index. In comparing New Dimensions Fund to the two indexes, you should take into account the fact that the Fund's performance reflects the maximum sales charge of 5%, while such charges are not reflected in the performance of the indexes. If you were actually to buy either individual stocks or growth mutual funds, any sales charges that you pay would reduce your total return as well. Your investment and return values fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. This was a period of widely fluctuating security prices. Past performance is no guarantee of future results. PAGE 8 Independent auditors' report ___________________________________________________________________ The board of directors and shareholders IDS New Dimensions Fund, Inc.: We have audited the accompanying statement of assets and liabilities, including the schedule of investments in securities, of IDS New Dimensions Fund, Inc. as of September 30, 1995, and the related statement of operations for the year then ended and the statements of changes in net assets for each of the years in the two-year period ended September 30, 1995, and the financial highlights for each of the years in the ten-year period ended September 30, 1995. These financial statements and the financial highlights are the responsibility of fund management. Our responsibility is to express an opinion on these financial statements and the financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Investment securities held in custody are confirmed to us by the custodian. As to securities purchased and sold but not received or delivered, and securities on loan, we request confirmations from brokers, and where replies are not received, we carry out other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of IDS New Dimensions Fund, Inc. at September 30, 1995, and the results of its operations for the year then ended and the changes in its net assets for each of the years in the two-year period ended September 30, 1995, and the financial highlights for the periods stated in the first paragraph above, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Minneapolis, Minnesota November 3, 1995 PAGE 9
Statement of assets and liabilities IDS New Dimensions Fund, Inc. Sept. 30, 1995 _____________________________________________________________________________________________________________ Assets _____________________________________________________________________________________________________________ Investments in securities, at value (Note 1) (identified cost $4,783,096,717) $6,497,676,317 Cash in bank on demand deposit 6,921,258 Dividends and accrued interest receivable 7,304,208 Receivable for investment securities sold 24,639,611 U.S. government securities held as collateral (Note 5) 25,788,895 _____________________________________________________________________________________________________________ Total assets 6,562,330,289 _____________________________________________________________________________________________________________ Liabilities _____________________________________________________________________________________________________________ Payable for investment securities purchased 19,126,668 Payable upon return of securities loaned (Note 5) 25,788,895 Accrued investment management services fee 359,397 Accrued distribution fee 5,977 Accrued service fee 44,795 Accrued transfer agency fee 41,244 Accrued administrative services fee 25,051 Other accrued expenses 835,567 _____________________________________________________________________________________________________________ Total liabilities 46,227,594 _____________________________________________________________________________________________________________ Net assets applicable to oustanding capital stock $6,516,102,695 _____________________________________________________________________________________________________________ Represented by _____________________________________________________________________________________________________________ Capital stock -- authorized 10,000,000,000 shares of $.01 par value $ 3,778,716 Additional paid-in capital 4,573,433,293 Undistributed net investment income 44,674,789 Accumulated net realized gain (Note 1) 179,617,020 Unrealized appreciation of investments and on translation of assets and liabilities in foreign currencies 1,714,598,877 _____________________________________________________________________________________________________________ Total -- representing net assets applicable to outstanding capital stock $6,516,102,695 _____________________________________________________________________________________________________________ Net assets applicable to outstanding shares: Class A $4,574,550,532 Class B $ 149,746,709 Class Y $1,791,805,454 Net asset value per share of outstanding capital stock: Class A shares 265,330,276 $ 17.24 Class B shares 8,716,087 $ 17.18 Class Y shares 103,825,250 $ 17.26 See accompanying notes to financial statements. PAGE 10 Financial statements Statement of operations IDS New Dimensions Fund, Inc. Year ended Sept. 30, 1995 _____________________________________________________________________________________________________________ Investment income _____________________________________________________________________________________________________________ Income: Interest $ 38,283,887 Dividends (net of foreign taxes withheld of $594,784) 63,023,110 _____________________________________________________________________________________________________________ Total income 101,306,997 _____________________________________________________________________________________________________________ Expenses (Note 2): Investment management services fee 29,578,200 Distribution fee Class A 1,308,907 Class B 266,792 Transfer agency fee 7,380,832 Incremental transfer agency fee - Class B 7,932 Service fee Class A 3,821,216 Class B 61,962 Administrative services fee 1,213,287 Compensation of directors 96,993 Compensation of officers 51,083 Custodian fees 418,415 Postage 479,572 Registration fees 311,170 Reports to shareholders 188,047 Audit fees 33,000 Administrative 39,986 Other 64,160 _____________________________________________________________________________________________________________ Total expenses 45,321,554 Earnings credits on cash balances (Note 2) (34,732) _____________________________________________________________________________________________________________ Total net expenses 45,286,822 _____________________________________________________________________________________________________________ Investment income -- net 56,020,175 _____________________________________________________________________________________________________________ Realized and unrealized gain (loss) -- net _____________________________________________________________________________________________________________ Net realized gain on security and foreign currency transactions (including gain of $10,005 from foreign currency transactions) (Note 3) 188,746,482 Net realized loss on closed or expired option contracts written (Note 6) (711,754) _____________________________________________________________________________________________________________ Net realized gain on investments and foreign currency 188,034,728 Net change in unrealized appreciation or depreciation of investments and on translation of assets and liabilities in foreign currencies 1,122,806,020 _____________________________________________________________________________________________________________ Net gain on investments and foreign currency 1,310,840,748 _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations $1,366,860,923 _____________________________________________________________________________________________________________ See accompanying notes to financial statements.
PAGE 11
Financial statements Statements of changes in net assets IDS New Dimensions Fund, Inc. Year ended Sept. 30, _____________________________________________________________________________________________________________ Operations and distributions 1995 1994 _____________________________________________________________________________________________________________ Investment income -- net $ 56,020,175 $ 29,201,190 Net realized gain on investments and foreign currency 188,034,728 166,293,405 Net change in unrealized appreciation or depreciation of investments and on translation of assets and liabilities in foreign currencies 1,122,806,020 (222,741,514) _____________________________________________________________________________________________________________ Net increase (decrease) in net assets resulting from operations 1,366,860,923 (27,246,919) _____________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income Class A (37,824,704) (17,668,942) Net realized gain Class A (161,781,539) (162,990,687) Excess distributions of realized gain Class A (10,005) -- _____________________________________________________________________________________________________________ Total distributions (199,616,248) (180,659,629) _____________________________________________________________________________________________________________ Capital share transactions (Note 4) _____________________________________________________________________________________________________________ Proceeds from sales Class A shares (Note 2) 1,277,766,445 1,370,588,852 Class B shares 139,503,525 -- Class Y shares 1,678,216,434 -- Reinvestment of distributions at net asset value Class A shares 197,521,609 178,695,921 Payments for redemptions Class A shares (2,058,310,273) (588,638,959) Class B shares (Note 2) (2,112,953) -- Class Y shares (180,172,610) -- _____________________________________________________________________________________________________________ Increase in net assets from capital share transactions 1,052,412,177 960,645,814 _____________________________________________________________________________________________________________ Total increase in net assets 2,219,656,852 752,739,266 Net assets at beginning of year 4,296,445,843 3,543,706,577 _____________________________________________________________________________________________________________ Net assets at end of year (including undistributed net investment income of $44,674,789 and $26,440,936) $6,516,102,695 $4,296,445,843 _____________________________________________________________________________________________________________ See accompanying notes to financial statements.
PAGE 12 Notes to financial statements IDS New Dimensions Fund, Inc. ___________________________________________________________________ 1. Summary of significant accounting policies The Fund is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. The Fund offers Class A, Class B and Class Y shares. Class A shares are sold with a front-end sales charge. Class B shares, which the Fund began offering on March 20, 1995, may be subject to a contingent deferred sales charge. Class B shares automatically convert to Class A after eight years. Class Y shares, which the Fund also began offering on March 20, 1995, have no sales charge and are offered only to qualifying institutional investors. All classes of shares have identical voting, dividend, liquidation and other rights, and the same terms and conditions, except that the level of distribution fee, transfer agency fee and service fee (class specific expenses) differs 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. Significant accounting policies followed by the Fund are summarized below: Valuation of securities All securities are valued at the close of each business day. Securities traded on national securities exchanges or included in national market systems are valued at the last quoted sales price; securities for which market quotations are not readily available are valued at fair value according to methods selected in good faith by the board of directors. Determination of fair value involves, among other things, reference to market indexes, matrixes and data from independent brokers. Short-term securities maturing in more than 60 days from the valuation date are valued at the market price or approximate market value based on current interest rates; those maturing in 60 days or less are valued at amortized cost. Option transactions In order to produce incremental earnings, protect gains and facilitate buying and selling of securities for investment purposes, the Fund may buy or write options traded on any U.S. or foreign exchange or in the over-the-counter market where the completion of the obligation is dependent upon the credit standing of the other party. The Fund also may buy and sell put and call options and write covered call options on portfolio securities and may write cash-secured put options. The risk in writing a call option is that the Fund gives up the opportunity of profit if the market price of the security increases. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option PAGE 13 is exercised. The Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Option contracts are valued daily at the closing prices on their primary exchanges and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option or the cost of a security for a purchased put or call option is adjusted by the amount of premium received or paid. Futures transactions In order to gain exposure to or protect itself from changes in the market, the Fund may buy and sell stock index futures contracts traded on any U.S. or foreign exchange. The Fund also may buy or write put and call options on these futures contracts. Risks of entering into futures contracts and related options include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities in an amount (initial margin) equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Foreign currency translations and foreign currency contracts Securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars at the closing rate of exchange. Foreign currency amounts related to the purchase or sale of securities and income and expenses are translated at the exchange rate on the transaction date. The effect of changes in foreign exchange rates on realized and unrealized security gains or losses is reflected as a component of such gains or losses. In the statement of operations, net realized gains or losses from foreign currency transactions may arise from sales of foreign currency, closed forward contracts, exchange gains or losses realized between the trade date and settlement dates on securities transactions, and other translation gains or losses on dividends, interest income and foreign withholding taxes. The Fund may enter into forward foreign currency exchange contracts for operational purposes and to protect against adverse exchange rate fluctuation. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates from an independent pricing service. The Fund is subject to the credit risk that the other party will not complete the obligations of the contract. PAGE 14 Federal taxes Since the Fund's policy is to comply with all sections of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders, no provision for income or excise taxes is required. Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of the deferral of losses on certain futures contracts, the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes, and losses deferred due to "wash sale" transactions. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. The effect on dividend distributions of certain book-to- tax differences is presented as "excess distributions" in the statement of changes in net assets. 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. On the statement of assets and liabilities, as a result of permanent book-to-tax differences, undistributed net investment income has been increased by $40,784 and accumulated net realized gain has been decreased by $8,493, resulting in a net reclassification adjustment to decrease additional paid-in capital by $32,291. Dividends to shareholders An annual dividend declared and paid at the end of the calendar year from net investment income is reinvested in additional shares of the Fund at net asset value or payable in cash. Capital gains, when available, are distributed along with the income dividend. Other Security transactions are accounted for on the date securities are purchased or sold. Dividend income is recognized on the ex-dividend date and interest income, including level-yield amortization of premium and discount, is accrued daily. ___________________________________________________________________ 2. Expenses and sales charges Under terms of a prior agreement that ended March 19, 1995, the Fund paid AEFC a fee for managing its investments, recordkeeping and other specified services. The fee was a percentage of the Fund's average daily net assets consisting of a group asset charge in reducing percentages from 0.46% to 0.32% annually on the combined net assets of all non-money market funds in the IDS MUTUAL FUND GROUP and an individual annual asset charge of 0.23% of average daily net assets. The fee was adjusted upward or downward by a performance incentive adjustment based on the Fund's average daily net assets over a rolling 12-month period as measured against the change in the Lipper Growth Fund Index. The maximum adjustment PAGE 15 is 0.12% of the Fund's average daily net assets after deducting 1% from the performance difference. If the performance difference was less than 1%, the adjustment would have been zero. The adjustment decreased the fee by $123,296 for the year ended Sept. 30, 1995. Also under terms of a prior agreement, the Fund paid AEFC a distribution fee at an annual rate of $6 per shareholder account and a transfer agency fee at an annual rate of $15 per shareholder account. During the year ended Sept. 30, 1995, the Fund's custodian and transfer agency fees were reduced by $34,732 as a result of earnings credits from overnight cash balances. Effective March 20, 1995, when the Fund began offering multiple classes of shares, the Fund entered into agreements with AEFC for managing its portfolio, providing administrative services and serving as transfer agent as follows: Under its Investment Management Services Agreement, AEFC determines which securities will be purchased, held or sold. The management fee is a percentage of the Fund's average daily net assets in reducing percentages from 0.6% to 0.5% annually. The performance incentive adjustment remains unchanged from the prior agreement. Under an Administrative Services Agreement, the Fund pays AEFC for administration and accounting services at a percentage of the Fund's average daily net assets in reducing percentages from 0.05% to 0.03% annually. Under a separate Transfer Agency Agreement, AEFC maintains shareholder accounts and records. The Fund pays AEFC an annual fee per shareholder account for this service as follows: o Class A $15 o Class B $16 o Class Y $15 Also effective March 20, 1995, the Fund entered into agreements with American Express Financial Advisors Inc. for distribution and shareholder servicing-related services as follows: Under a Plan and Agreement of Distribution, the Fund pays a distribution fee at an annual rate of 0.75% of the Fund's average daily net assets attributable to Class B shares for distribution-related services. Under a Shareholder Service Agreement, the Fund pays a fee for service provided to shareholders by financial advisors and other servicing agents. The fee is calculated at a rate of 0.175% of the Fund's average daily net assets attributable to Class A and Class B shares. AEFC will assume and pay any expenses (except taxes and brokerage commissions) that exceed the most restrictive applicable state expense limitation. Sales charges received by American Express Financial Advisors Inc. for distributing Fund shares were $17,019,008 for Class A and $18,252 for Class B for the year ended Sept. 30, 1995. PAGE 16 The Fund has a retirement plan for its independent directors. Upon retirement, directors receive monthly payments equal to one-half of the retainer fee for as many months as they served as directors up to 120 months. There are no death benefits. The plan is not funded but the Fund recognizes the cost of payments during the time the directors serve on the board. The retirement plan expense amounted to $40,550 for the year ended Sept. 30, 1995. ___________________________________________________________________ 3. Securities transactions Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated $3,158,444,447 and $2,440,411,185, respectively, for the year ended Sept. 30, 1995. Realized gains and losses are determined on an identified cost basis. Brokerage commissions paid to brokers affiliated with AEFC were $617,469 for the year ended Sept. 30, 1995. ___________________________________________________________________ 4. Capital share transactions
Transactions in shares of capital stock for the periods indicated are as follows: ________________________________________________________________________________________ Year ended Sept. 30, 1995 Year ended 9/30/94 Class A Class B* Class Y* Class A ________________________________________________________________________________________ Sold 87,791,383 8,845,958 115,253,413 96,121,314 Issued for reinvested 14,863,540 -- -- 12,444,004 distributions Redeemed (142,988,018) (129,871) (11,428,163) (41,274,919) ________________________________________________________________________________________ Net increase (decrease) (40,333,095) 8,716,087 103,825,250 67,290,399 ________________________________________________________________________________________ *Inception date was March 20, 1995.
___________________________________________________________________ 5. Lending of portfolio securities At Sept. 30, 1995, securities valued at $24,949,250 were on loan to brokers. For collateral, the Fund received U.S. government securities valued at $25,788,895. Income from securities lending amounted to $561,132 for the year ended Sept. 30, 1995. The risks to the Fund of securities lending are that the borrower may not provide additional collateral when required or return the securities when due. ___________________________________________________________________ 6. Option contracts written The number of contracts and premium amounts associated with option contracts written is as follows: PAGE 17
Period ended Sept. 30, 1995 ________________________________________________________________________ Puts Calls Contracts Premium Contracts Premium ________________________________________________________________________ Balance Sept. 30, 1994 -- $ -- -- $ -- Opened 4,750 205,905 250 18,249 Closed (2,500) (89,997) (250) (18,249) Exercised (1,000) (47,998) -- -- Expired (1,250) (67,910) -- -- ________________________________________________________________________ Balance Sept. 30, 1995 -- $ -- -- $ -- ________________________________________________________________________
___________________________________________________________________ 7. Financial highlights "Financial highlights" showing per share data and selected information is presented on pages 6 and 7 of the prospectus. PAGE 18
Investments in securities IDS New Dimensions Fund, Inc. (Percentages represent value of Sept. 30, 1995 investments compared to net assets) _____________________________________________________________________________________________________________________________ Common stocks (88.8%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Aerospace & defense (3.4%) Boeing 1,050,000 $ 71,662,500 Loral 630,000 35,910,000 Raytheon 700,000 59,500,000 United Technologies 600,000 53,025,000 ______________ Total 220,097,500 _____________________________________________________________________________________________________________________________ Automotive & related (0.3%) General Motors 400,000 18,750,000 _____________________________________________________________________________________________________________________________ Banks and savings & loans (5.6%) Ahmanson (HF) 2,000,000 50,750,000 Citicorp 3,000,000 212,250,000 First Chicago 1,000,000 68,625,000 State Street Boston 800,000 32,000,000 ______________ Total 363,625,000 _____________________________________________________________________________________________________________________________ Beverages & tobacco (1.8%) Coca-Cola 1,600,000 110,400,000 PepsiCo 150,000 7,650,000 ______________ Total 118,050,000 _____________________________________________________________________________________________________________________________ Chemicals (1.6%) Hercules 300,000 17,400,000 Monsanto 885,000 89,163,750 ______________ Total 106,563,750 _____________________________________________________________________________________________________________________________ Communications equipment (4.3%) ADC Telecommunications 430,000 (b) 19,565,000 Andrew 280,000 (b) 17,115,000 DSC Communications 1,200,000 (b) 71,100,000 General Instrument 500,000 (b) 15,000,000 Glenayre Technologies 260,000 (b) 18,720,000 Motorola 1,000,000 76,375,000 StrataCom 350,000 (b) 19,337,500 Tellabs 1,000,000 (b) 42,125,000 ______________ Total 279,337,500 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. PAGE 19 Computers & office equipment (14.9%) Ceridian 400,000 (b) 17,750,000 Cisco Systems 3,200,000 (b) 220,800,000 Compaq Computer 650,000 (b) 31,443,750 Computer Assn Intl 1,500,000 63,375,000 Computer Sciences 970,000 (b) 62,443,750 Diamond Multimedia Systems 72,900 (b) 2,351,025 First Data 500,000 31,000,000 Hewlett-Packard 1,200,000 100,050,000 Intl Business Machines 360,000 33,975,000 Macromedia 10,000 (b) 571,250 Microsoft 1,000,000 (b) 90,500,000 Novell 1,500,000 (b) 27,375,000 Oracle Systems 2,300,000 (b) 88,262,500 Parametric Technology 1,200,000 (b) 73,800,000 Reynolds & Reynolds Cl A 2,020,000 69,437,500 Silicon Graphics 600,000 (b) 20,625,000 3Com 750,000 (b) 34,125,000 ______________ Total 967,884,775 _____________________________________________________________________________________________________________________________ Electronics (5.9%) Applied Materials 350,000 (b) 35,787,500 AVX 250,000 (b) 8,375,000 Intel 2,800,000 168,350,000 Linear Technology 840,000 34,860,000 LSI Logic 650,000 (b) 37,537,500 Teradyne 900,000 (b) 32,400,000 Texas Instruments 400,000 31,950,000 Vishay Intertechnology 900,000 (b) 37,800,000 ______________ Total 387,060,000 _____________________________________________________________________________________________________________________________ Energy (3.9%) Amoco 1,600,000 102,600,000 Exxon 1,000,000 72,250,000 Mobil 800,000 79,700,000 ______________ Total 254,550,000 _____________________________________________________________________________________________________________________________ Energy equipment & services (0.5%) Fluor 600,000 33,600,000 _____________________________________________________________________________________________________________________________ Financial services (3.8%) Dean Witter 1,300,000 73,125,000 First Financial Management 1,000,000 97,625,000 Household Intl 600,000 37,200,000 MBNA 900,000 37,462,500 ______________ Total 245,412,500 _____________________________________________________________________________________________________________________________ Food (2.2%) ConAgra 3,200,000 126,800,000 Pioneer Hi-Bred Intl 400,000 18,400,000 ______________ Total 145,200,000 _____________________________________________________________________________________________________________________________ Health care (9.8%) Abbott Laboratories 1,000,000 42,625,000 Amgen 2,400,000 (b) 119,700,000 Boston Scientific 700,000 (b) 29,837,500 Johnson & Johnson 1,500,000 111,187,500 Medtronic 2,200,000 118,250,000 Merck 1,200,000 67,200,000 Pfizer 2,800,000 149,450,000 ______________ Total 638,250,000 _____________________________________________________________________________________________________________________________ Health care services (1.5%) HBO 550,000 34,375,000 United Healthcare 1,300,000 63,537,500 ______________ Total 97,912,500 _____________________________________________________________________________________________________________________________ Household products (3.9%) Duracell Intl 1,200,000 53,850,000 Gillette 2,000,000 95,250,000 Procter & Gamble 1,400,000 107,800,000 ______________ Total 256,900,000 PAGE 20 Industrial equipment & services (1.8%) Caterpillar 1,000,000 56,875,000 Deere 180,000 14,647,500 Illinois Tool Works 280,000 16,485,000 WMX Technologies 1,000,000 28,500,000 ______________ Total 116,507,500 _____________________________________________________________________________________________________________________________ Industrial transportation (0.4%) CSX 350,000 29,443,750 _____________________________________________________________________________________________________________________________ Insurance (2.5%) Amer Intl Group 1,300,000 110,500,000 General Re 250,000 37,750,000 UNUM 225,000 11,868,750 ______________ Total 160,118,750 _____________________________________________________________________________________________________________________________ Leisure time & entertainment (0.9%) Marriott Intl 700,000 26,162,500 Mirage Resorts 900,000 (b) 29,587,500 ______________ Total 55,750,000 _____________________________________________________________________________________________________________________________ Media (1.9%) Time Warner 1,400,000 55,650,000 Tribune 250,000 16,593,750 Viacom Cl B 1,000,000 (b) 49,750,000 ______________ Total 121,993,750 _____________________________________________________________________________________________________________________________ Metals (0.9%) Aluminum Co Amer 1,100,000 58,162,500 Multi-industry conglomerates (3.3%) Alco Standard 500,000 42,375,000 General Electric 2,200,000 140,250,000 Manpower 1,200,000 34,800,000 ______________ Total 217,425,000 _____________________________________________________________________________________________________________________________ Paper & packaging (0.2%) Crown Cork & Seal 400,000 (b) 15,500,000 _____________________________________________________________________________________________________________________________ Restaurants & lodging (2.8%) Hospitality Franchise System 920,000 48,185,000 McDonald's 3,000,000 114,750,000 Promus Hotel 760,000 (b) 17,290,000 ______________ Total 180,225,000 _____________________________________________________________________________________________________________________________ Retail (2.1%) Albertson's 1,000,000 34,125,000 CUC Intl 1,100,000 (b) 38,362,500 Home Depot 1,000,000 39,875,000 Wal-Mart Stores 1,000,000 24,875,000 ______________ Total 137,237,500 _____________________________________________________________________________________________________________________________ Utilities - gas (1.0%) Enron 2,000,000 67,000,000 _____________________________________________________________________________________________________________________________ Utilities - telephone (2.2%) AirTouch Communications 1,000,000 (b) 30,625,000 AT&T 300,000 19,725,000 BellSouth 300,000 21,937,500 SBC Communications 400,000 22,000,000 U S WEST 1,000,000 47,125,000 ______________ Total 141,412,500 _____________________________________________________________________________________________________________________________ Foreign (5.4%)(c) British Airways 400,000 28,550,000 Ericsson Cl B ADR 1,400,000 34,300,000 Nokia Preferred 800,000 55,800,000 Reuters Holdings ADR 300,000 15,862,500 Royal Dutch Petroleum 1,000,000 122,750,000 Schlumberger 500,000 32,625,000 Seagram 928,000 33,292,000 SmithKline Beecham 350,000 17,718,750 Teva Pharmaceutical Inds ADR 420,000 15,172,500 PAGE 21 ______________ Total 356,070,750 _____________________________________________________________________________________________________________________________ Total common stocks (Cost: $4,076,548,158) $5,790,040,525 _____________________________________________________________________________________________________________________________ Preferred stock & other (0.3%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Ericsson ADR Rights 1,400,000 (c) $ 1,539,586 Jan Bell Warrants 2,689 (e) -- Sap 93,500 15,236,292 _____________________________________________________________________________________________________________________________ Total preferred stock & other (Cost: $7,357,430) $ 16,775,878 _____________________________________________________________________________________________________________________________
Bond (0.4%) _____________________________________________________________________________________________________________________________ Issue Coupon Maturity Principal Value(a) rate year amount _____________________________________________________________________________________________________________________________ U.S. government obligation U.S. Treasury 4.25% 1995 $25,000,000(d) $ 24,949,250 _____________________________________________________________________________________________________________________________ Total bond (Cost: $24,883,662) $ 24,949,250 _____________________________________________________________________________________________________________________________ Options purchased (--%) _____________________________________________________________________________________________________________________________ Issuer Number Exercise Expiration Value(a) of contracts price date _____________________________________________________________________________________________________________________________ Put S&P 500 10,000 $550 Oct. 1995 $ 625,000 _____________________________________________________________________________________________________________________________ Total options purchased (Cost: $8,924,657) $ 625,000 Short-term securities (10.2%) _____________________________________________________________________________________________________________________________ Issuer Annualized Amount Value(a) yield on payable at date of maturity purchase _____________________________________________________________________________________________________________________________ U.S. government agency (0.1%) Federal Home Loan Bank Disc Note 10-23-95 5.61% $ 5,370,000 $ 5,350,856 _____________________________________________________________________________________________________________________________ Commercial paper (10.1%) ABN Amro NA 10-13-95 5.73 8,400,000 8,381,684 A.I. Credit 10-10-95 5.75 11,700,000 11,681,410 Amer General Finance 10-11-95 5.78 7,000,000 6,987,723 Ameritech 12-11-95 5.94 6,000,000 5,928,217 Amgen 10-13-95 5.79 4,500,000 4,490,673 11-17-95 5.72 5,700,000 5,656,908 AON 10-10-95 5.75 9,700,000 9,682,474 10-27-95 5.76 7,000,000 6,967,575 11-02-95 5.94 5,000,000 4,972,399 Associates North Amer 10-12-95 5.79 6,500,000 6,487,563 10-18-95 5.77 6,900,000 6,880,232 PAGE 22 AT&T Capital 10-16-95 5.72 5,300,000 5,285,990 Avco Financial Services 11-02-95 5.74 7,400,000 7,361,403 Barclays U.S. Funding 11-01-95 5.77 15,000,000 14,923,467 BBV Finance (Delaware) 11-15-95 5.83 10,700,000 10,617,399 Bell Atlantic Network Funding 10-19-95 5.75 13,200,000 13,160,151 BellSouth Telecommunications 10-19-95 5.73 6,800,000 6,779,543 Beneficial 10-18-95 5.78 3,000,000 2,991,390 10-25-95 5.76 7,900,000 7,868,619 CAFCO 10-03-95 5.76 6,400,000 6,396,949 10-26-95 5.75 9,000,000 8,962,950 11-20-95 5.72 4,900,000 4,860,641 Campbell Soup 11-30-95 5.70 8,000,000 (f) 7,918,711 Ciesco LP 10-13-95 5.75 5,100,000 5,089,466 10-30-95 5.76 8,000,000 7,961,800 10-31-95 5.75 6,700,000 6,667,114 11-09-95 5.72 8,800,000 8,744,560 11-21-95 5.74 5,200,000 5,155,480 11-22-95 5.77 12,500,000 12,394,736 CIT Group Holdings 10-20-95 5.76 10,000,000 9,968,222 Coca-Cola 11-16-95 5.73 10,000,000 9,922,572 Colgate-Palmolive 12-01-95 5.71 8,000,000 (f) 7,917,400 12-04-95 5.72 20,000,000 (f) 19,783,667 12-21-95 5.80 4,700,000 (f) 4,638,017 Commercial Credit 10-12-95 5.77 3,600,000 3,593,124 Consolidated Railway 10-04-95 5.76 10,000,000 (f) 9,993,633 11-07-95 5.80 3,500,000 (f) 3,477,839 11-17-95 5.71 5,300,000 (f) 5,257,402 Dresdner U.S. Finance 10-02-95 5.75 7,000,000 6,997,772 Dun & Bradstreet 10-31-95 5.75 11,900,000 11,836,578 11-21-95 5.79 8,000,000 7,931,508 Fleet Funding 10-24-95 5.77 5,000,000 (f) 4,980,900 11-02-95 5.74 3,741,000 (f) 3,721,453 11-10-95 5.84 4,300,000 (f) 4,271,596 Gateway Fuel 10-23-95 5.77 8,450,000 8,416,327 General Electric Capital Services 10-23-95 5.73 9,000,000 8,967,225 Harris Trust 11-03-95 5.75 1,000,000 1,000,000 Household Finance 10-17-95 5.77 13,200,000 13,164,283 Lilly (Eli) 10-13-95 5.70 10,000,000 9,976,668 Lincoln Natl 11-20-95 5.73 10,800,000 (f) 10,711,803 Merrill Lynch 12-08-95 5.80 7,000,000 6,919,694 Metlife Funding 11-03-95 5.80 6,500,000 6,464,579 11-09-95 5.77 5,000,000 4,968,167 Mobil Australia Finance 10-31-95 5.79 6,500,000 (f) 6,466,163 Morgan Stanley Group 10-06-95 5.78 36,900,000 36,864,822 Natl Australia Funding (Delaware) 10-05-95 5.70 7,000,000 6,993,568 10-05-95 5.71 4,500,000 4,495,865 Norfolk Southern 11-08-95 5.74 7,900,000 (f) 7,849,708 12-01-95 5.75 8,400,000 (f) 8,313,270 12-13-95 5.70 10,000,000 (f) 9,877,083 PAGE 23 PACCAR Financial 10-26-95 5.73 7,000,000 6,971,284 Pacific Mutual Life 10-16-95 5.76 22,300,000 22,243,308 11-07-95 5.73 8,000,000 7,952,078 Penney (JC) Funding 10-06-95 5.77 4,525,000 4,520,679 10-19-95 5.76 2,380,000 2,372,815 10-20-95 5.76 4,600,000 4,585,382 Pioneer Hi-Bred Intl 10-18-95 5.73 4,000,000 3,988,600 Pitney Bowes Credit 10-27-95 5.74 4,600,000 4,580,370 11-02-95 5.72 6,000,000 5,967,615 11-06-95 5.74 6,000,000 5,963,637 SAFECO Credit 10-02-95 5.77 4,600,000 4,598,232 11-17-95 5.74 7,000,000 6,941,059 Sandoz 10-05-95 5.74 3,500,000 3,496,697 10-24-95 5.75 6,000,000 5,975,179 11-20-95 5.79 4,500,000 4,462,149 Siemens 10-04-95 5.75 6,000,000 5,996,187 SmithKline Beecham 10-23-95 5.74 3,300,000 3,287,982 Southwestern Bell Capital 10-25-95 5.75 8,800,000 (f) 8,765,167 Toyota Motor Credit 10-16-95 5.77 7,805,000 7,785,158 10-26-95 5.75 7,700,000 7,668,302 Transamerica Finance 11-09-95 5.78 6,000,000 5,961,733 11-15-95 5.77 3,000,000 2,977,240 USAA Capital 10-03-95 5.74 6,000,000 5,997,145 10-11-95 5.77 6,300,000 6,288,989 USL Capital 10-12-95 5.77 5,400,000 5,389,686 Wachovia Bank 10-17-95 5.75 5,000,000 5,000,000 10-26-95 5.73 13,200,000 13,200,000 ______________ Total $ 659,934,808 _____________________________________________________________________________________________________________________________ Total short-term securities (Cost: $665,382,810) $ 665,285,664 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $4,783,096,717)(g) $6,497,676,317 _____________________________________________________________________________________________________________________________ Notes to investments in securities _____________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Presently non-income producing. (c) Foreign security values are stated in U.S. dollars. (d) Security is partially or fully on loan. See Note 5 to the financial statements. (e) Presently negligible market value. (f) 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 board of directors. (g) At Sept. 30, 1995, the cost of securities for federal income tax purposes was $4,784,312,477 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $1,733,572,786 Unrealized depreciation (20,208,946) ________________________________________________________________________________________________ Net unrealized appreciation $1,713,363,840 ________________________________________________________________________________________________
PAGE 24 IDS mutual funds Cash equivalent investments These money market funds have three main goals: conservation of capital, constant liquidity and the highest possible current income consistent with these objectives. Very limited risk. IDS Cash Management Fund Invests in such money market securities as high quality commercial paper, bankers' acceptances, certificates of deposits (CDs) and other bank securities. (icon of) piggy bank IDS Tax-Free Money Fund Invests primarily in short-term bonds and notes issued by state and local governments to seek high current income exempt from federal income taxes. (icon of) shield with piggy bank enclosed Income investments The funds in this group invest their assets primarily in corporate bonds or government securities to seek interest income. Secondary objective is capital growth. Risk varies by bond quality. IDS Global Bond Fund Invests primarily in debt securities of U.S. and foreign issuers to seek high total return through income and growth of capital. (icon of) globe IDS Extra Income Fund Invests mainly in long-term, high-yielding corporate fixed-income securities in the lower rated, higher risk bond categories to seek high current income. Secondary objective is capital growth. (icon of) cornucopia IDS Bond Fund Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk bond categories, or the equivalent, and in government bonds. (icon of) greek column PAGE 25 IDS Selective Fund Invests in high-quality corporate bonds and other highly rated debt instruments including government securities and short-term investments. Seeks current income and preservation of capital. (icon of) skyline IDS Federal Income Fund Invests primarily in securities issued or guaranteed as to the timely payment of principal and interest by the U.S. government, its agencies and instrumentalities. Seeks a high level of current income and safety of principal consistent with its type of investments. (icon of) federal building Tax-exempt income investments These funds provide tax-free income by investing in municipal bonds. The income is generally free from federal income tax. Risk varies by bond quality. IDS High Yield Tax-Exempt Fund Invests primarily in medium- and lower-quality municipal bonds and notes. Lower-quality securities generally involve greater risk of principal and income. (icon of) shield with basket of apples enclosed IDS State Tax-Exempt Funds (CA, MA, MI, MN, NY, OH) Invests primarily in high- and medium-grade municipal securities to provide income to residents of each respective state that is exempt from federal, state and local income taxes. (New York is the only state that is exempt at the local level.) (icon of) shield with U.S. enclosed IDS Tax-Exempt Bond Fund Invests mainly in bonds and notes of state or local government units, with at least 75% in the four highest rated, lowest risk bond categories. (icon of) shield with Greek column IDS Insured Tax-Exempt Fund Invests primarily in municipal securities that are insured as to the timely payment of principal and interest. The insurance feature minimizes credit risk of the fund but does not guarantee the market value of the fund's shares. (icon of) shield with eagle head PAGE 26 Growth and income investments These funds focus on securities of medium to large, well- established companies that offer long-term growth of capital and reasonable income from dividends and interest. Moderate risk. IDS International Fund Invests primarily in common stocks of foreign companies that offer potential for superior growth. The fund may invest up to 20% of its assets in the U.S. market. (icon of) three flags IDS Managed Retirement Fund Invests in a combination of common stocks, fixed-income investments and money market securities to seek a maximum total return through a combination of growth of capital and current income. (icon of) bird in a nest IDS Equity Select Fund Invests primarily in a combination of moderate growth stocks, higher-yielding equities and bonds. Seeks growth of capital and income. (icon of) three apple trees IDS Blue Chip Advantage Fund Invests in selected stocks from a major market index. Securities purchased are those recommended by our research analysts as the best from each industry represented on the index. Offers potential for long-term growth as well as dividend income. (icon of) ribbon IDS Stock Fund Invests in common stock of companies representing many sectors of the economy. Seeks current income and growth of capital. (icon of) building with columns IDS Equity Value Fund Invests primarily in undervalued common stocks that offer potential for growth of capital and income. (icon of) three growing flowers PAGE 27 IDS Utilities Income Fund Invests primarily in the stocks of public utility companies to seek high current income and growth of income and capital with reduced volatility. (icon of) electrical cord IDS Diversified Equity Income Fund Invests primarily in high-yielding common stocks to seek high current income and, secondarily, to benefit from the growth potential offered by stock investments. (icon of) four puzzle pieces IDS Mutual Invests in a balance between common stocks and senior securities (preferred stocks and bonds). Seeks a balance of growth of capital and current income. (icon of) scale of justice Growth investments Funds in this group seek capital growth, primarily from common stocks. They are high risk mutual funds with a potential for high reward. IDS Discovery Fund Invests in small- and medium-size, growth-oriented companies emphasizing technological innovation and productivity enhancement. Buys and holds larger growth-oriented stocks. (icon of) ship IDS Strategy Aggressive Fund Invests primarily in common stocks of companies that are selected for their potential for above-average growth. Above-average means that their growth potential is better, in the opinion of the portfolio's investment manager, than the Standard & Poor's Corporation (S&P) 500 Stock Index. (icon of) chess piece IDS Growth Fund Invests primarily in companies that have above-average potential for long-term growth as a result of new management, marketing opportunities or technological superiority. (icon of) flower PAGE 28 IDS Global Growth Fund Invests in stocks of companies throughout the world that are positioned to meet market needs in a changing world economy. These companies offer above-average potential for long-term growth. (icon of) world IDS New Dimensions Fund Invests primarily in companies with significant growth potential due to superiority in technology, marketing or management. The fund frequently changes its industry mix. (icon of) dimension IDS Progressive Fund Invests primarily in undervalued common stocks. The fund holds stocks for the long term with the goal of capital growth. (icon of) shooting star Specialty growth investment This fund aggressively seeks capital growth as a hedge against inflation. IDS Precious Metals Fund Invests primarily in the securities of foreign or domestic companies that explore for, mine and process or distribute gold and other precious metals. This is the most aggressive and most speculative IDS mutual fund. (icon of) cart of precious gems For more complete information about any of these funds, including charges and expenses, you can obtain a prospectus by contacting your financial advisor or writing to American Express Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534. Read it carefully before you invest or send money. PAGE 29 Federal income tax information IDS New Dimensions Fund, Inc. ___________________________________________________________________ The Fund is required by the Internal Revenue Code of 1986 to tell its shareholders about the tax treatment of the dividends it pays during its fiscal year. The dividends listed below were reported to you on a Form 1099-DIV, Dividends and Distributions, last January. Shareholders should consult a tax advisor on how to report distributions for state and local purposes. IDS New Dimensions Fund, Inc. Fiscal year ended Sept. 30, 1995 Income distribution taxable as dividend income, 100% qualifying for deduction by corporations. Payable date Per share Dec. 30, 1994 $0.1180 Capital gain distribution taxable as long-term capital gain. Payable date Per share Dec. 30, 1994 $0.5050 Total distributions $0.6230 PAGE 30 Quick telephone reference American Express Telephone Transaction Service Redemptions and exchanges, dividend payments or reinvestments and automatic payment arrangements National/Minnesota: 800-437-3133 Mpls./St. Paul area: 671-3800 American Express Shareholder Service Fund performance, objectives and account inquiries 612-671-3733 TTY Service For the hearing impaired 800-846-4852 American Express Infoline Automated account information (TouchToneR phones only), including current fund prices and performance, account values and recent account transactions National/Minnesota: 800-272-4445 Mpls./St. Paul area: 671-1630 AMERICAN EXPRESS FINANCIAL ADVISORS IDS New Dimensions Fund IDS Tower 10 Minneapolis, MN 55440-0010 PAGE 31 STATEMENT OF DIFFERENCES Difference Description 1) The layout is different 1) Some of the layout in the throughout the annual report. annual report to shareholders is in two columns. 2) Headings. 2) The headings in the annual report and prospectus are placed in a blue strip at the top of the page. 3) There are pictures, icons 3) Each picture, icon and and graphs throughout the graph is described in annual report and prospectus. parentheses. 4) Footnotes for charts and 4) The footnotes for each graphs are described at chart or graph are typed the left margin. below the description of the chart or graph. -----END PRIVACY-ENHANCED MESSAGE-----