-----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, OyRF7yXCtndXpVQPlx9FkRaNG7C3Gbju5S0ZBlzttVAJc+SW1SFNg+NlCavGkYcN TXp+w9I4oWlIRcD+OVQpgg== 0000820027-97-000308.txt : 19970329 0000820027-97-000308.hdr.sgml : 19970329 ACCESSION NUMBER: 0000820027-97-000308 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970131 FILED AS OF DATE: 19970328 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: 97566173 BUSINESS ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: T33/52 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 BUSINESS PHONE: 6123722772 N-30D 1 1997 semiannual report IDS New Dimensions Fund The goal of New DimensionsFund, 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. Distributed by American Express Financial Advisors Inc. 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 poised to continue growing due to their superior management, marketing innovation and/or technological advances. Contents From the president 3 From the portfolio manager 3 Ten largest holdings 5 Financial statements (Fund) 6 Notes to financial statements (Fund) 9 Financial statements (Portfolio) 19 Notes to financial statements (Portfolio) 22 Investments in securities 30 Board members and officers 35 IDS mutual funds 36 To our shareholders From the president (picture of William R. Pearce) If you're an experienced investor, you know that the past two years have been unusually strong ones in many financial markets. Perhaps just as important, you also know that history shows that bull markets don't last forever. Though they're often unpredictable, declines - whether they're brief or long-lasting, moderate or substantial - are always a possibility. That fact reinforces the need for investors to periodically review their long-term goals and examine whether their investment program remains on track to achieving them. Your quarterly investment statements are one part of that monitoring process. The other is a meeting with your American Express financial advisor. That becomes even more important if there's a major change in your financial situation or in the financial markets. William R. Pearce From the portfolio manager (picture of Gordon M. Fines) IDS New Dimensions Fund recorded an exceptional gain during the first half of its fiscal year - August 1996 through January 1997 - as it capitalized on a favorable environment for stocks. For investors in Class A shares, the Fund produced a total return, which includes net asset value change and distributions, of 22.4%. Shaking off a mid-summer slump, the stock market began moving higher almost in step with the start of the fiscal period. Supported by strong cash flows into stock mutual funds, reports of moderate inflation and largely healthy corporate profits, stocks put together four months of strong gains before faltering in the face of higher long-term interest rates last December. The market soon got back on its feet, however, and registered still another impressive advance in January. 'Large-cap' growth leads the way Characteristic of the market in recent years, stocks of large companies, or "large caps," generally fared better than their smaller counterparts during the past six months. Moreover, those with above-average earnings increases - growth stocks - were in particular favor with investors. For a large-cap growth fund such as this one, that proved to be an ideal combination. As has been the case for some time, stocks in the technology/telecommunications, health care and financial/business services sectors - where I continue to find most of corporate America's greatest earnings growth - comprised the bulk of the Fund's portfolio. Looking at individual stocks, several of the largest holdings were stellar performers, including Intel, Cisco Systems, General Electric and Citicorp. Aside from a few refinements, the basic structure of the portfolio was virtually unchanged during the past six months. Fundamentals still favorable The same could be said of the investment environment. As I prepare this report in mid-February, inflation remains well-behaved, the economy continues to grow, companies continue to report decent profits, long-term interest rates have yet to reach a threateningly high level and investors continue to pour money into the stock market. All of those factors work in stocks' favor. Still, after two straight years of substantial advances, it's difficult to imagine that the stock market will always have the wind at its back during the rest of 1997. If not, investors may well have to settle for less-generous results in the near term. In any event, I am sticking with the investment themes that have been successful for the Fund in recent years, as I continue to expect them to prove rewarding over the long run. In the meantime, I'll update you on the Fund's progress six months from now. Gordon Fines (picture of) William R. Pearce President of the Fund (picture of) Gordon M. Fines Portfolio manager Class A 6-month performance (All figures per share) Net asset value (NAV) ---------------------------- Jan. 31, 1997 $21.86 ---------------------------- July 31, 1996 $18.54 ---------------------------- Increase $ 3.32 ---------------------------- Distributions Aug. 1, 1996 - Jan. 31, 1997 ---------------------------- From income $ 0.13 ---------------------------- From capital gains $ 0.67 ---------------------------- Total distributions $ 0.80 ---------------------------- Total return* +22.4 %** ---------------------------- Class B 6-month performance (All figures per share) Net asset value (NAV) ---------------------------- Jan. 31, 1997 $21.68 ---------------------------- July 31, 1996 $18.38 ---------------------------- Increase $ 3.30 ---------------------------- Distributions Aug. 1, 1996 - Jan. 31, 1997 ---------------------------- From income $ 0.04 ---------------------------- From capital gains $ 0.67 ---------------------------- Total distributions $ 0.71 ---------------------------- Total return* +21.9%** ---------------------------- Class Y 6-month performance (All figures per share) Net asset value (NAV) ---------------------------- Jan. 31, 1997 $21.87 ---------------------------- July 31, 1996 $18.56 ---------------------------- Increase $ 3.31 ---------------------------- Distributions Aug. 1, 1996 - Jan. 31, 1997 ---------------------------- From income $ 0.16 ---------------------------- From capital gains $ 0.67 ---------------------------- Total distributions $ 0.83 ---------------------------- Total return* +22.5%** ---------------------------- * The prospectus discusses the effect of sales charges, if any, on the various classes. ** The total return is a hypothetical investment in the Fund with all distributions reinvested. The Portfolio's ten largest holdings Growth Trends Portfolio (pie chart) The ten holdings listed here make up 27.86% of the Portfolio's net assets - -------------------------------------------------------------------------------- Percent Value (of Portfolio's net assets)(as of Jan. 31, 1997) - -------------------------------------------------------------------------------- Intel 4.28% $486,750,000 The world's number one semiconductor manufacturer, Intel produces microcomputer components, modules and systems. Cisco Systems 3.68 418,500,000 A leading designer and builder of devices that link personal computers for application in the fast-growing business network market. General Electric 3.45 391,400,000 A diversified company with interests in manufacturing, broadcasting (NBC), financial services and technology. Citicorp 3.28 372,400,000 The parent of Citibank, the largest bank in the U.S., it has a substantial worldwide corporate and retail banking presence. Pfizer 2.62 297,200,000 A leading producer of pharmaceuticals, hospital products, animal health items, non-prescription medications and specialty chemicals. Monsato 2.33 265,125,000 This company and its subsidiaries manufacture and sell a diverse line of agricultural products; chemical products, including plastics and manufactured fibers; pharmaceuticals; and food products, including low-calorie sweeteners. Microsoft 2.15 244,800,000 Microsoft has a leading franchise in microcomputer operating systems, DOS, Windows and Windows NT. Boeing 2.12 241,031,250 The largest producer of commercial aircraft in the free world with over 50% of the market. Norwest 2.02 229,552,500 As a diversified financial services organization, this company operates through subsidiaries engaged in banking and related businesses. Johnson & Johnson 1.93 218,975,000 A major producer of health-care products, including consumer products, medical and dental devices and products and a wide variety of ethical and over-the-counter drugs. Financial statements Statement of assets and liabilities IDS New Dimensions Fund, Inc. Jan. 31, 1997 Assets (Unaudited) Investment in Growth Trends Portfolio (Note 1) $ 11,336,298,977 ------------------ Total assets 11,336,298,977 ------------------ Liabilities Accrued distribution fee 21,472 Accrued service fee 38,900 Accrued transfer agency fee 30,710 Accrued administrative services fee 10,763 Other accrued expenses 1,002,321 ------------------ Total liabilities 1,104,166 ------------------ Net assets applicable to outstanding capital stock $ 11,335,194,811 ================== Represented by Capital stock -- authorized 10,000,000,000 shares of $.01 par value $ 5,189,054 Additional paid-in-capital 7,256,401,683 Undistributed net investment income 2,953,092 Accumulated net realized gain (Note 1) 135,908,705 Unrealized appreciation 3,934,742,277 ================== Total - representing net assets applicable to outstanding capital stock $ 11,335,194,811 ================== Net assets applicable to outstanding shares: Class A $ 7,219,260,069 Class B $ 1,070,887,240 Class Y $ 3,045,047,502 Net asset value per share of outstanding capital stock: Class A shares 330,272,049 $ 21.86 Class B shares 49,406,262 $ 21.68 Class Y shares 139,227,096 $ 21.87 See accompanying notes to financial statements. Statement of operations IDS New Dimensions Fund, Inc. Six months ended Jan. 31, 1997 Investment income (Unaudited) Income: Dividends $ 48,889,201 Interest 29,112,067 ------------------ Total income 78,001,268 ------------------ Expenses (Note 2): Expenses, including investment management services fee allocated from Growth Trends Portfolio 30,766,440 Distribution fee -- Class B 3,132,654 Transfer agency fee 5,497,384 Incremental transfer agency fee -- Class B 51,016 Service fee Class A 5,624,665 Class B 728,184 Administrative services fees and expenses 1,827,171 Compensation of board members 18,421 Compensation of officers 34,434 Postage 33,800 Registration fees 1,170,956 Reports to shareholders 119,600 Audit fees 3,428 Administrative 65,482 Other 12,219 ------------------ Total expenses 49,085,854 Earnings credits on cash balances (Note 2) (126,656) ------------------ Total net expenses 48,959,198 ------------------ Investment income -- net 29,042,070 ------------------ Realized and unrealized gain -- net Net realized gain on security transactions 200,242,562 Net change in unrealized appreciation or depreciation 1,757,029,425 ------------------ Net gain on investments 1,957,271,987 ------------------ Net increase in net assets resulting from operations $1,986,314,057 ================== See accompanying notes to financial statements. Statements of changes in net assets IDS New Dimensions Fund, Inc. Operations and distributions Jan. 31, 1997 July 31, 1996 Six months ended Ten-month (Unaudited) period ended Investment income - net $ 29,042,070 $ 51,583,889 Net realized gain on investments 200,242,562 325,967,822 Net change in unrealized appreciation or depreciation 1,757,029,425 463,113,975 ------------------ --------------- Net increase in net assets resulting from operations 1,986,314,057 840,665,686 -------------------- --------------- Distributions to shareholders from: Net investment income Class A (39,650,112) (39,448,269) Class B (1,722,858) (1,492,148) Class Y (20,903,094) (19,131,175) Net realized gain Class A (211,691,845) (162,150,758) Class B (30,220,222) (8,111,389) Class Y (89,184,320) (68,560,165) --------------------- -------------- Total distributions (393,372,451) (298,893,904) --------------------- -------------- Capital share transactions (Note 3) Proceeds from sales Class A shares (Note 2) 744,921,084 1,078,880,570 Class B shares 354,304,258 442,410,073 Class Y shares 577,635,492 862,302,096 Reinvestment of distributions at net asset value Class A shares 245,298,340 198,597,094 Class B shares 31,838,529 9,572,264 Class Y shares 110,087,414 87,691,340 Payments for redemptions Class A shares (432,463,137) (593,204,599) Class B shares (Note 2) (33,645,548) (24,532,266) Class Y shares (414,899,431) (560,414,845) --------------------- -------------- Increase in net assets from capital share transactions 1,183,077,001 1,501,301,727 --------------------- -------------- Total increase in net assets 2,776,018,607 2,043,073,509 Net assets at beginning of period 8,559,176,204 6,516,102,695 --------------------- -------------- Net assets at end of period (including undistributed net investment income of $2,953,092 and $36,187,086) $11,335,194,811 $8,559,176,204 ===================== ============== See accompanying notes to financial statements. Notes to financial statements IDS New Dimensions Fund, Inc. (Unaudited as to Jan. 31, 1997) - -------------------------------------------------------------------------------- 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 may be subject to a contingent deferred sales charge and such shares automatically convert to Class A after eight years. Class Y shares 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. Investment in Growth Trends Portfolio Effective May 13, 1996, the Fund began investing all of its assets in the Growth Trends Portfolio (Portfolio), a series of Growth Trust, an open-end investment company that has the same objectives as the Fund. This was accomplished by transferring the Fund's assets to the Portfolio in return for a proportionate ownership interest in the Portfolio. 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 occuring. 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 value which is equal to the Fund's proportionate ownership interest in the net assets of the Portfolio. The percentage of the Portfolio owned by the Fund at Jan. 31, 1997 was 99.76%. Valuation of securities held by the Portfolio is discussed in Note 1 of the Portfolio's "Notes to financial statements", which are included elsewhere in this report. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the period. Actual results could differ from those estimates. 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 the shareholders, no provision for income or excise taxes is required. Net investment income (loss) and net realized gains (losses) allocated from the Portfolio may differ for financial statement and tax purposes primarily because of the deferral of losses on certain futures contracts, the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes, and losses deferred due to "wash sale" transactions. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the Fund. Dividends to shareholders An annual dividend declared and paid at the end of the calendar year from net investment income is reinvested in additional shares of the Fund at net asset value or payable in cash. Capital gains, when available, are distributed along with the income dividend. - -------------------------------------------------------------------------------- 2. Expenses and sales charges In addition to the expenses allocated from the Portfolio, the Fund accrues its own expenses as follows: Effective March 20, 1995, the Fund entered into agreements with American Express Financial Corporation (AEFC) for providing administrative services and serving as transfer agent. Under its 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. Additional administrative services paid by the Fund are office expenses, consultant's fees and compensation of officers and employees. Under this agreement, the Fund also pays taxes, audit and certain legal fees, registration fees for shares, compensation of board members, corporate filing fees, organizational expenses, and any other expenses properly payable by the Fund approved by the board. 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. 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. Sales charges received by American Express Financial Advisors for distributing Fund shares were $12,902,875 for Class A and $295,533 for Class B for the six months ended Jan. 31, 1997. For the six months ended Jan. 31, 19977, the Fund's transfer agency fees were reduced by $126,656 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, 1997 Class A Class B Class Y - --------------------------- ---------------- ----------------- ---------------- Sold 35,837,174 17,209,850 27,704,707 Issued for reinvested 11,712,146 1,532,019 5,254,017 distributions Redeemded (20,740,588) (1,618,609) (19,797,792) - --------------------------- ---------------- ----------------- ---------------- Net increase 26,808,732 17,123,260 13,160,932 - --------------------------- ---------------- ----------------- ---------------- Fiscal period ended July 31, 1996 Class A Class B Class Y - --------------------------- ---------------- ----------------- ---------------- Sold 59,377,568 24,364,763 47,643,756 Issued for reinvested 11,500,909 556,495 5,077,375 distributions Redeemded (32,745,436) (1,354,343) (30,480,217) - --------------------------- ---------------- ----------------- ---------------- Net increase 38,133,041 23,566,915 22,240,914 - --------------------------- ---------------- ----------------- ---------------- - -------------------------------------------------------------------------------- 4. Change of Fund's fiscal year The By-Laws of the Fund were amended on Jan. 11, 1996, changing it's fiscal year end from Sept. 30 to July 31, effective 1996.
5. Financial highlights The tables below show certain important financial information for evaluating the Fund's results. Fiscal period ended July 31, Per share income and capital changes* Class A 1997*** 1996** 1995 1994 1993 1992 1991 1990 1989 1988 1987 Net asset value, $18.54 $17.24 $14.06 $14.87 $12.57 $12.01 $9.45 $10.45 $7.94 $9.84 $8.16 beginning of period Income from investment operations: Net investment income .05 .17 .16 .09 .06 .06 .15 .24 .16 .14 .16 Net gains (losses) 4.07 1.88 3.64 (.18) 3.01 1.13 3.59 (.52) 2.39 (1.12) 3.19 (both realized and unrealized) Total from investment 4.12 2.05 3.80 (.09) 3.07 1.19 3.74 (.28) 2.55 (.98) 3.35 operations Less distributions: Dividends from net (.13) (.15) (.12) (.07) (.04) (.14) (.22) (.19) (.04) (.12) (.16) investment income Distributions from (.67) (.60) (.50) (.65) (.73) (.49) (.96) (.53) -- (.80) (1.51) realized gains Total distributions (.80) (.75) (.62) (.72) (.77) (.63) (1.18) (.72) (.04) (.92) (1.67) Net asset value, $21.86 $18.54 $17.24 $14.06 $14.87 $12.57 $12.01 $9.45 $10.45 $7.94 $9.84 end of period Ratios/supplemental data Class A 1997*** 1996** 1995 1994 1993 1992 1991 1990 1989 1988 1987 Net assets, end of $7,219 $5,626 $4,575 $4,296 $3,544 $2,253 $1,553 $815 $762 $636 $759 period (in millions) Ratio of expenses to .95%+ .94%+ .90% .90% .92% .95% .90% .88% .82% .87% .79% average daily net assets # Ratio of net income .59%+ .78%+ 1.07% .75% .51% .57% 1.65% 2.43% 1.70% 1.65% 1.60% to average daily net assets Total return ++ 22.4% 12.2% 28.4% (.7%) 25.1% 9.6% 43.3% (2.8%) 32.4% (9.7%) 41.0% Portfolio turnover rate 15% 41% 54% 48% 60% 75% 81% 91% 67% 119% 113% (excluding short-term securities) for the underlying Portfolio Average brokerage $0.0569 -- -- -- -- -- -- -- -- -- -- commission rate for the underlying Portfolio## *For a share outstanding throughout the period. Rounded to the nearest cent. **The Fund's fiscal year-end was changed from Sept 30 to July 31, effective 1996. ***Six months ended Jan. 31, 1997 (Unaudited). +Adjusted to an annual basis. ++Total return does not reflect payment of a sales charge. # Effective fiscal year 1996, expense ratio is based on total expenses of the Fund before reduction of earnings credits on cash balances. ##Effective fiscal year 1996, the Fund is required to disclose an average brokerage commission rate. The rate is calculated by dividing the total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period by the total number of related shares purchased and sold.
IDS New Dimensions Fund, Inc. Financial highlights Fiscal period ended July 31, Per share income and capital changes* Class B Class Y 1997+++ 1996** 1995*** 1997+++ 1996** 1995*** Net asset value, $18.38 $17.18 $14.21 $18.56 $17.26 $14.21 beginning of period Income from investment operations: Net investment income -- .03 .02 .07 .19 .10 Net gains(losses) 4.01 1.88 2.95 4.07 1.88 2.95 (both realized and unrealized) Total from investment 4.01 1.91 2.97 4.14 2.07 3.05 operations Less distributions: Dividends from net (.04) (.11) -- (.16) (.17) -- investment income Distributions from (.67) (.60) -- (.67) (.60) -- realized gains Total distributions (.71) (.71) -- (.83) (.77) -- Net asset value, $21.68 $18.38 $17.18 $21.87 $18.56 $17.26 end of period Ratios/supplemental data Class B Class Y 1997+++ 1996** 1995*** 1997+++ 1996** 1995*** Net assets, end of $1,071 $593 $150 $3,045 $2,340 $1,792 period (in millions) Ratio of expenses to 1.72%+ 1.71%+ 1.72%+ .78%+ .77%+ .76%+ average daily net assets # Ratio of net income (.19%)+ .01%+ .33%+ .76%+ .95%+ 1.26%+ to average daily net assets Total return++ 21.9% 11.5% 20.9% 22.5% 12.3% 21.5% Portfolio turnover rate 15% 41% 54% 15% 41% 54% (excluding short-term securities) for the underlying Portfolio Average brokerage $0.0569 -- -- -- -- -- commission rate for the underlying Portfolio## *For a share outstanding throughout the period. Rounded to the nearest cent. **The Fund's fiscal year-end was changed from Sept. 30 to July 31, effective 1996. ***Inception date was March 20, 1995 for Class B and Class Y. +Adjusted to an annual basis. ++Total return does not reflect payment of a sales charge. +++Six months ended Jan. 31, 1997 (Unaudited). # Effective fiscal year 1996, expense ratios are based on total expenses of the Fund before reduction of earnings credits on cash balances. ## Effective fiscal year 1996, the Fund is required to disclose an average brokerage commission rate. The rate is calculated by dividing the total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period by the total number of related shares purchased and sold.
Financial statements Statement of assets and liabilities Growth Trends Portfolio Jan. 31, 1997 - ------------------------------------------------------------------------------------------------------------- Assets - ------------------------------------------------------------------------------------------------------------- Investments in securities, at value (Note 1) (Unaudited) Investments in securities of unaffiliated issuers (identified cost $7,342,754,112) $ 11,206,666,987 Investments in securities of affiliated issuer (identified cost $79,923,187) 156,600,000 Cash in bank on demand deposit 15,335,357 Dividends and accrued interest receivable 6,347,470 Receivable for investment securities sold 84,904,520 ------------------- Total assets 11,469,854,334 ------------------- Liabilities - ------------------------------------------------------------------------------------------------------------- Payable for investment securities purchased 104,062,587 Accrued investment management services fee 941,993 Other accrued expenses 889,222 ------------------- Total liabilities 105,893,802 ------------------- Net assets $ 11,363,960,532 =================== See accompanying notes to financial statements. Financial statements Statement of operations Growth Trends Portfolio Six months ended Jan. 31, 1997 - ------------------------------------------------------------------------------------------------------------- Investment income - ------------------------------------------------------------------------------------------------------------- Income: (Unaudited) Interest $ 29,139,851 Dividends (net of foreign taxes withheld of $114,429) 48,170,898 Dividends earned from affiliates 848,000 ------------------- Total income 78,158,749 ------------------- Expenses (Note 2): Investment management services fee 29,880,087 Compensation of board members 15,500 Custodian fees 881,263 Audit fees 14,000 Administrative 30,522 Other 35,408 ------------------- Total expenses 30,856,780 Earnings credits on cash balances (Note 2) (9,200) ------------------- Total net expenses 30,847,580 ------------------- Investment income -- net 47,311,169 ------------------- Realized and unrealized gain -- net - ------------------------------------------------------------------------------------------------------------- Net realized gain on security transactions (Note 3) 200,388,061 Net change in unrealized appreciation or depreciation 1,762,140,756 ------------------- Net gain on investments 1,962,528,817 =================== Net increase in net assets resulting from operations $ 2,009,839,986 =================== See accompanying notes to financial statements. Statements of changes in net assets Growth Trends Portfolio - ------------------------------------------------------------------------------------------------------------- Operations - ------------------------------------------------------------------------------------------------------------- Six months ended For the period from Jan. 31, 1997 May 13, 1996* to (Unaudited) July 31, 1996 Investment income -- net $ 47,311,169 $ 20,723,600 Net realized gain on investments 200,388,061 44,047,563 Net change in unrealized appreciation or depreciation 1,762,140,756 (147,155,473) ------------------ ------------------ Net increase (decrease) in net assets resulting from operations 2,009,839,986 (82,384,310) Net contributions 769,281,348 8,667,173,508 ------------------ ------------------ Total increase in net assets 2,779,121,334 8,584,789,198 Net assets at beginning of period (Note 1) 8,584,839,198 50,000 =================== ================= Net assets at end of period $11,363,960,532 $8,584,839,198 =================== ================= *Commencement of operations. See accompanying notes to financial statements.
Notes to financial statements Growth Trends Portfolio (Unaudited as to Jan. 31, 1997) - -------------------------------------------------------------------------------- 1. Summary of significant accounting policies The Growth Trends Portfolio (Portfolio) is a series of Growth Trust (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. On April 15, 1996, American Express Financial Corporation (AEFC) contributed $50,000 to the Portfolio. Operations did not formally commence until May 13, 1996, at which time an existing fund transferred its assets to the Portfolio in return for an ownership percentage of the Portfolio. Significant accounting polices followed by the Portfolio are summarized below: Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the period. Actual results could differ from those estimates. 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. 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 Portfolio 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 Portfolio 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 Portfolio gives up the opportunity of 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 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 Portfolio 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 Portfolio may buy and sell stock index futures contracts traded on any U.S. or foreign exchange. The Portfolio 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 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 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 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 the obligations of the contract. 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. Accordingly, as a "pass-through" entity, the Portfolio 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 level-yield amortization of premium and discount, is accrued daily. - -------------------------------------------------------------------------------- 2. Fees and expenses The Trust, on behalf of the Portfolio, has entered into an Investment Management Services Agreement with AEFC for managing its portfolio. Under this agreement, AEFC determines which securities will be purchased, held or sold. The management fee is a percentage of the Portfolio's average daily net assets in reducing percentages from 0.6% to 0.5% annually. The fees may be increased or decreased by a performance adjustment based on a comparison of the performance of Class A shares of IDS New Dimensions Fund to the Lipper Growth Fund Index. The maximum adjustment is 0.12% of the Portfolio's average daily net assets on an annual basis. The adjustment increased the fee by $2,961,635 for the six months ended Jan. 31, 1997. Under the agreement, the Trust also pays taxes, brokerage commissions and nonadvisory expenses, which include custodian fees to be paid to an affiliate of AEFC, audit and certain legal fees, fidelity bond premiums, registration fees for units, Portfolio 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, approved by the board. For the period ended Jan. 31, 1997, the Portfolio's custodian fees were reduced by $9,200 as a result of earnings credits from overnight cash balances. Pursuant to a Placement Agency Agreement, American Express Financial Advisors Inc. acts as placement agent of the units of the Trust. - -------------------------------------------------------------------------------- 3. Securities transactions Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated $1,949,477,837 and $1,365,047,483, respectively, for the six months ended Jan. 31, 1997. For the same period, the portfolio turnover rate was 15%. Realized gains and losses are determined on an identified cost basis. Brokerage commissions paid to brokers affiliated with AEFC were $179,373 for this period.
Growth Trends Portfolio (Percentages represent value of Jan. 31, 1997 (Unaudited) investments compared to net assets) Investments in securities of unaffiliated issuers - --------------------------------------------------------------------------------------------------- Common stocks (87.8%) - --------------------------------------------------------------------------------------------------- Issuer Shares Value (a) - --------------------------------------------------------------------------------------------------- Aerospace & defense (4.3%) Boeing 2,250,000 $ 241,031,250 Lockheed Martin 1,200,000 110,400,000 United Technologies 2,000,000 139,500,000 ---------------------- Total 490,931,250 - ---------------------------------------------------------------------------------------------------- Airlines (1.1%) AMR 1,600,000 (b) 128,800,000 - ---------------------------------------------------------------------------------------------------- Automotive & related (1.1%) Chrysler 3,400,000 118,575,000 - ---------------------------------------------------------------------------------------------------- Banks and savings & loans (7.8%) Barnett Banks 1,350,000 59,400,000 Citicorp 3,200,000 372,400,000 MBNA 3,000,000 103,500,000 Norwest 4,820,000 229,552,500 State Street Boston 1,700,000 124,312,500 ---------------------- Total 889,165,000 - ---------------------------------------------------------------------------------------------------- Beverages & tobacco (2.6%) Anheuser-Busch 2,500,000 106,250,000 Coca-Cola 3,200,000 185,200,000 ---------------------- Total 291,450,000 - ---------------------------------------------------------------------------------------------------- Building materials & construction (0.8%) Tyco Intl 1,500,000 85,687,500 - ---------------------------------------------------------------------------------------------------- Chemicals (3.8%) IMC Global 1,600,000 61,000,000 Monsanto 7,000,000 265,125,000 Praxair 800,000 37,100,000 See accompanying notes to investments in securities. USA Waste Service 2,000,000 (b) 73,000,000 ---------------------- Total 436,225,000 - ---------------------------------------------------------------------------------------------------- Communications equipment & services (2.3%) ADC Telecommunications 2,200,000 (b) 78,925,000 Andrew 1,200,000 (b) 68,925,000 Ascend Communications 400,000 (b) 27,850,000 Tellabs 2,000,000 (b) 82,375,000 ---------------------- Total 258,075,000 - ---------------------------------------------------------------------------------------------------- Computers & office equipment (15.5%) Cisco Systems 6,000,000 (b) 418,500,000 Compaq Computer 2,100,000 (b) 182,437,500 Computer Associates Intl 1,400,000 63,525,000 Computer Sciences 1,500,000 (b) 106,125,000 First Data 3,000,000 108,000,000 Hewlett-Packard 3,400,000 178,925,000 Ikon Office Solutions 1,350,000 59,568,750 Microsoft 2,400,000 (b) 244,800,000 Oracle 3,400,000 (b) 132,175,000 Parametric Technology 2,500,000 (b) 144,375,000 3Com 1,800,000 (b) 120,825,000 ---------------------- Total 1,759,256,250 - ---------------------------------------------------------------------------------------------------- Electronics (4.3%) Intel 3,000,000 486,750,000 - ---------------------------------------------------------------------------------------------------- Energy (2.4%) Exxon 1,000,000 103,625,000 Mobil 1,000,000 131,250,000 Unocal 1,000,000 42,125,000 ---------------------- Total 277,000,000 - ---------------------------------------------------------------------------------------------------- Energy equipment & services (1.0%) Fluor 1,600,000 113,800,000 - ---------------------------------------------------------------------------------------------------- Financial services (1.5%) Household Intl 600,000 59,475,000 Morgan Stanley 1,400,000 79,975,000 Travelers Group 597,500 31,294,062 ---------------------- Total 170,744,062 - --------------------------------------------------------------------------------------------------- Food (2.0%) ConAgra 4,000,000 202,000,000 Pioneer Hi-Bred Intl 400,000 26,950,000 ---------------------- Total 228,950,000 - ---------------------------------------------------------------------------------------------------- Health care (9.0%) Amgen 2,000,000 (b) 112,750,000 Boston Scientific 1,000,000 (b) 68,250,000 Johnson & Johnson 3,800,000 218,975,000 Lilly (Eli) 200,000 17,425,000 Medtronic 1,720,000 117,820,000 Merck 2,100,000 190,575,000 Pfizer 3,200,000 297,200,000 ---------------------- Total 1,022,995,000 - ---------------------------------------------------------------------------------------------------- Health care services (1.4%) Cardinal Health 1,300,000 81,412,500 HBO & Co 1,300,000 81,412,500 ---------------------- Total 162,825,000 - ---------------------------------------------------------------------------------------------------- Household products (2.7%) Gillette 2,100,000 171,150,000 Procter & Gamble 1,200,000 138,600,000 ---------------------- Total 309,750,000 - --------------------------------------------------------------------------------------------------- Industrial equipment & services (1.9%) Deere & Co 3,600,000 153,900,000 Illinois Tool Works 720,000 58,770,000 ---------------------- Total 212,670,000 - ---------------------------------------------------------------------------------------------------- Insurance (2.7%) ACE Limited 1,600,000 94,600,000 AFLAC 600,000 23,925,000 American Intl Group 1,000,000 121,125,000 UNUM 840,000 63,525,000 ---------------------- Total 303,175,000 - ---------------------------------------------------------------------------------------------------- Leisure time & entertainment (1.8%) Marriot Intl 2,400,000 127,500,000 Mattel 1,000,000 28,125,000 Mirage Resorts 2,000,000 (b) 50,250,000 ---------------------- Total 205,875,000 - ---------------------------------------------------------------------------------------------------- Media (0.2%) Belo (AH) Cl A 700,000 26,687,500 - ---------------------------------------------------------------------------------------------------- Metals (0.6%) Aluminum Co of America 1,000,000 69,000,000 - ---------------------------------------------------------------------------------------------------- Multi-industry conglomerates (5.9%) Emerson Electric 1,700,000 167,875,000 General Electric 3,800,000 391,400,000 Minnesota Mining & Mfg 1,000,000 85,250,000 Westinghouse Electric 1,500,000 27,562,500 ---------------------- Total 672,087,500 - ---------------------------------------------------------------------------------------------------- Paper & packaging (0.5%) Crown Cork & Seal 1,000,000 57,500,000 - ---------------------------------------------------------------------------------------------------- Restaurants & lodging (1.0%) HFS 1,200,000 84,000,000 Promus Hotel 1,000,000 32,625,000 ---------------------- Total 116,625,000 - ---------------------------------------------------------------------------------------------------- Retail (2.0%) Albertson's 760,000 26,600,000 CUC Intl 1,120,000 27,720,000 Home Depot 600,000 29,700,000 Safeway 3,000,000 (b) 143,250,000 ---------------------- Total 227,270,000 - ---------------------------------------------------------------------------------------------------- Textiles & apparel (1.0%) Fruit of the Loom 800,000 32,100,000 Nike Cl B 1,200,000 81,450,000 ---------------------- Total 113,550,000 - ---------------------------------------------------------------------------------------------------- Utilities -- electric (0.5%) CMS Energy 1,750,000 58,625,000 - ---------------------------------------------------------------------------------------------------- Utilities -- telephone (1.1%) AirTouch Communications 2,000,000 (b) 51,750,000 BellSouth 1,500,000 66,562,500 ---------------------- Total 118,312,500 - ---------------------------------------------------------------------------------------------------- Foreign (5.0%)(c) British Telecommunications ADR 400,000 27,450,000 Ericsson (LM) ADR 4,000,000 134,687,500 Northern Telecommunications 100,000 7,362,500 Royal Dutch Petroleum 1,000,000 173,500,000 Schlumberger 700,000 77,787,500 SmithKline Beecham ADR 2,000,000 144,500,000 ---------------------- Total 565,287,500 - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- Total common stocks of unaffiliated issuers (Cost: $6,112,887,161) $ 9,977,644,062 - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- Short-term securities (10.8%) - ---------------------------------------------------------------------------------------------------- Issuer Annualized Amount Value (a) yield on payable at date of maturity purchase - ---------------------------------------------------------------------------------------------------- Certificates of deposit (0.4%) Morgan Guaranty 04-28-97 5.40% $30,800,000 $ 30,389,128 Harris Trust 02-10-97 5.33 16,600,000 16,600,000 Total 46,989,128 - ---------------------------------------------------------------------------------------------------- Commercial paper (10.2%) ABB Treasury Center (USA) 02-19-97 5.31 7,600,000 (d) 7,579,898 03-12-97 5.37 8,200,000 (d) 8,149,605 ABN Amro 07-21-97 5.50 8,900,000 8,666,219 A.I Credit 04-08-97 5.42 5,400,000 5,344,524 Albertson's 02-14-97 5.33 10,000,000 9,980,825 Aluminum Co of America 03-06-97 5.32 10,000,000 9,951,508 American General Capital 04-10-97 5.40 6,500,000 (d) 6,431,230 04-18-97 5.41 8,800,000 (d) 8,696,101 American General Finance 03-19-97 5.43 8,000,000 7,943,464 Ameritech Capital Funding 03-05-97 5.37 10,000,000 9,949,844 04-14-97 5.37 6,300,000 (d) 6,229,482 ANZ (Delaware) 02-25-97 5.36 9,900,000 9,861,552 05-01-97 5.41 16,900,000 16,665,935 Aon 02-24-97 5.36 10,000,000 9,963,332 03-10-97 5.38 8,500,000 8,451,328 Associates North America 02-21-97 5.38 7,000,000 6,979,195 02-26-97 5.37 15,000,000 14,939,424 03-31-97 5.36 7,500,000 7,432,066 AVCO Financial Services 02-03-97 5.39 10,300,000 10,296,705 03-27-97 5.35 10,000,000 9,914,461 03-28-97 5.35 13,200,000 13,087,924 04-01-97 5.35 14,700,000 14,564,798 05-05-97 5.40 13,800,000 13,600,375 BBV Finance 02-24-97 5.32 8,400,000 8,371,557 BellSouth 02-07-97 5.36 6,900,000 6,893,285 03-13-97 5.42 10,000,000 9,937,038 Beneficial 03-06-97 5.33 8,800,000 8,757,166 CAFCO 02-24-97 5.45 4,300,000 (d) 4,283,904 03-20-97 5.35 12,100,000 12,016,117 04-17-97 5.39 8,000,000 (d) 7,906,773 Cargill 02-10-97 5.31 7,200,000 (d) 7,190,478 03-17-97 5.34 8,400,000 (d) 8,345,587 Chevron 03-13-97 5.35 7,000,000 (d) 6,958,622 Ciesco LP 02-07-97 5.36 8,100,000 8,092,818 02-25-97 5.39 10,600,000 10,562,193 CIT Group 02-18-97 5.33 7,500,000 7,481,229 03-13-97 5.39 3,750,000 3,726,389 Clorox 04-17-97 5.44 13,200,000 13,046,176 Commercial Credit 02-20-97 5.31 10,100,000 10,071,801 02-20-97 5.33 7,000,000 6,980,419 02-28-97 5.33 14,900,000 14,840,661 Commerzbank U.S. Finance 02-04-97 5.37 12,000,000 11,994,670 03-04-97 5.39 10,000,000 9,953,931 Consolidated Natural Gas 02-04-97 5.63 1,600,000 1,599,253 CPC Intl 02-24-97 5.41 17,000,000 (d) 16,936,365 03-05-97 5.39 10,000,000 (d) 9,948,965 03-11-97 5.35 12,000,000 (d) 11,929,043 04-03-97 5.41 13,800,000 (d) 13,668,808 04-07-97 5.41 6,900,000 (d) 6,830,172 05-23-97 5.40 9,000,000 (d) 8,844,880 Dean Witter Discover & Co 03-19-97 5.38 5,600,000 5,559,731 03-20-97 5.34 15,000,000 14,896,208 04-15-97 5.38 15,000,000 14,829,800 04-25-97 5.38 15,000,000 14,806,800 Deutsche Bank Financial 02-10-97 5.37 6,300,000 6,290,307 First Union Bank 02-18-97 5.36 16,800,000 16,751,617 Fleet Funding 02-26-97 5.31 8,000,000 (d) 7,970,611 Ford Motor Credit 02-12-97 5.37 20,200,000 20,156,345 03-05-97 5.33 7,000,000 6,967,022 Gateway Fuel 02-05-97 5.37 9,164,000 9,157,208 02-10-97 5.36 6,850,000 6,840,890 General Electric Capital 03-17-97 5.35 6,700,000 6,656,435 Goldman Sachs 04-17-97 5.39 5,000,000 4,941,733 Household Finance 02-19-97 5.36 11,200,000 11,164,384 03-06-97 5.32 11,800,000 11,742,672 03-11-97 5.34 20,000,000 19,887,900 03-13-97 5.35 6,000,000 5,961,482 Kredietbank North America Finance 02-25-97 5.30 4,900,000 4,882,752 05-06-97 5.42 6,000,000 5,912,283 Merrill Lynch 04-07-97 5.44 10,000,000 9,898,800 Metlife Funding 02-18-97 5.37 6,600,000 6,581,294 02-27-97 5.36 15,054,000 14,987,867 03-06-97 5.37 8,200,000 8,156,672 03-24-97 5.44 7,600,000 7,540,453 Michigan Consolidated Gas 02-11-97 5.41 5,000,000 4,991,643 02-20-97 5.42 5,000,000 4,984,077 02-21-97 5.42 5,000,000 4,982,982 02-28-97 5.36 8,200,000 8,162,734 Mobil Australia Finance (Delaware) 02-03-97 5.36 10,100,000 (d) 10,096,216 03-03-97 5.39 10,000,000 (d) 9,948,214 03-17-97 5.41 6,600,000 (d) 6,553,573 04-02-97 5.37 7,000,000 (d) 6,934,527 Morgan Stanley Group 02-27-97 5.32 8,900,000 8,865,933 Natl Australia Funding (Delaware) 02-05-97 5.34 8,800,000 8,793,483 02-10-97 5.34 6,100,000 6,091,887 03-26-97 5.46 7,000,000 6,941,135 04-16-97 5.41 10,000,000 9,885,000 04-25-97 5.40 5,000,000 4,937,700 NationsBank 02-13-97 5.37 9,600,000 9,580,086 Northern States Power 03-10-97 5.41 10,400,000 10,338,103 03-25-97 5.46 12,000,000 11,902,564 PACCAR 02-27-97 5.32 6,000,000 5,977,033 02-28-97 5.35 6,800,000 6,772,817 Pfizer 03-03-97 5.30 7,000,000 (d) 6,969,258 03-12-97 5.37 10,600,000 (d) 10,532,386 Rabobank USA Finance 04-17-97 5.44 10,000,000 9,883,467 Reed Elsevier 03-14-97 5.36 6,000,000 (d) 5,961,754 03-18-97 5.37 12,300,000 (d) 12,212,016 SAFECO Credit 02-06-97 5.37 10,000,000 9,991,236 03-21-97 5.34 15,000,000 14,894,000 03-24-97 5.52 5,300,000 5,258,474 04-02-97 5.36 6,800,000 6,736,397 04-11-97 5.37 7,000,000 6,927,589 Siemens 03-05-97 5.35 6,000,000 5,971,573 04-14-97 5.41 14,700,000 14,535,458 Societe Generale North America 02-11-97 5.34 9,458,000 9,441,238 02-13-97 5.36 11,000,000 10,977,005 02-14-97 5.35 5,700,000 5,686,922 03-07-97 5.36 6,500,000 6,467,341 Sysco 02-06-97 5.37 2,200,000 (d) 2,198,080 02-25-97 5.38 8,000,000 (d) 7,966,698 Toyota Motor 02-14-97 5.40 4,450,000 4,440,246 Transamerica Financial 02-03-97 5.39 3,200,000 3,198,808 02-21-97 5.35 10,000,000 9,964,396 02-26-97 5.30 5,000,000 4,981,701 03-20-97 5.38 7,300,000 7,247,349 03-27-97 5.47 6,900,000 6,840,978 04-21-97 5.38 9,600,000 9,482,240 USAA Capital 02-14-97 5.37 6,400,000 6,385,904 02-20-97 5.42 13,000,000 12,958,047 02-28-97 5.38 22,600,000 22,497,700 03-10-97 5.37 9,100,000 9,046,945 03-17-97 5.37 10,000,000 9,930,912 05-15-97 5.41 7,100,000 6,986,369 U S WEST Communications 03-07-97 5.37 15,000,000 14,917,282 03-13-97 5.36 12,900,000 12,823,603 03-26-97 5.36 6,200,000 6,151,440 Total 1,161,593,880 - ---------------------------------------------------------------------------------------------------- Letters of credit (0.2%) Bank of America -- Formosa Plastics 02-04-97 5.40 13,300,000 13,292,483 03-18-97 5.42 7,200,000 7,147,434 Total 20,439,917 - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- Total short-term securities (Cost: $1,229,866,951) $ 1,229,022,925 - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- Total investment in securities of unaffiliated issuers (Cost: $7,342,754,112) $ 11,206,666,987 - ---------------------------------------------------------------------------------------------------- Investments in securities of affiliated issuer (e) - ---------------------------------------------------------------------------------------------------- Common stock (1.4%) Issuer Shares Value (a) - ---------------------------------------------------------------------------------------------------- Reynolds & Reynolds Cl A 5,800,000 $ 156,600,000 - ---------------------------------------------------------------------------------------------------- Total investments in securities of affiliated issuer (Cost: $79,923,187) $ 156,600,000 - ---------------------------------------------------------------------------------------------------- Total investments in securities (Cost: $7,422,677,299)(f) $ 11,363,266,987 - ---------------------------------------------------------------------------------------------------- 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. (d) 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. (e) Investment representing 5% or more of the outstanding voting securities of the issuer. Transactions with companies that are or were affiliates during the six months ended Jan. 31, 1997 are as follows: Beginning Purchase Sales Ending Dividend Issuer cost cost cost cost income - --------------------------------------------------------------------------------------------------------------------- Reynolds & Reynolds Cl A $72,334,647 $7,588,540 $ -- $79,923,187 $848,000 (f) At Jan. 31, 1997, the cost of securities for federal income tax purposes was approximately $7,422,677,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $ 3,963,500,000 Unrealized depreciation (22,910,000) - --------------------------------------------------------------------------------------------------- Net unrealized appreciation $ 3,940,590,000 - ---------------------------------------------------------------------------------------------------
IDS mutual funds Global/International funds Funds in this group seek capital growth and/or income by investing primarily in foreign securities. Foreign investments may be subject to currency fluctuations and political and economic risks of the countries in which the investments are made. They are high risk mutual funds with a potential for high reward. IDS Emerging Markets Fund Invests in a Portfolio comprised primarily of stocks of companies in developing countries throughout the world that are believed to offer growth potential. Seeks to provide long-term growth of capital. (icon of) world globe IDS Global Growth Fund Invests in a Portfolio comprised primarily of stocks of companies throughout the world that are positioned to meet market needs in a changing world economy. These companies offer above-average potential for long-term growth. (icon of) world IDS International Fund Invests primarily in common stocks of foreign companies that offer potential for superior growth. The Fund may invest up to 20% of its assets in the U.S. market. (icon of) three flags IDS Global Balanced Fund Invests in stocks-and bonds in, for the most part, major markets throughout the world, including the U.S. Seeks to provide a balance of growth of capital and current income. (icon of) scale of globes IDS Global Bond Fund Invests in a Portfolio comprised primarily of debt securities of U.S. and foreign issuers to seek high total return through income and growth of capital. (icon of) globe Growth funds Funds in this group seek capital growth, primarily from common stocks. They are high risk mutual funds with a potential for high reward. IDS Precious Metals Fund Invests primarily in the securities of foreign or domestic companies that explore for, mine and process or distribute gold and other precious metals. A highly aggressive and speculative fund that seeks long-term growth of capital. (icon of) cart of precious gems IDS Discovery Fund Invests in small- and medium-size, growth-oriented companies emphasizing technological innovation and productivity enhancement. Buys and holds larger growth-oriented stocks. (icon of) ship IDS Small Company Index Fund Invests in all or a representative group of the equity securities comprising the S&P SmallCap 600 Index, as it strives to provide long-term capital appreciation. (icon of) building IDS Strategy Aggressive Fund Invests primarily in common stocks of companies that are selected for their potential for above-average growth. Above-average means that their growth potential is better, in the opinion of the portfolio's investment manager, than the Standard & Poor's Corporation (S&P) 500 Stock Index. (icon of) chess piece IDS Research Opportunities Fund Invests in a Portfolio comprised primarily of equity securities of companies included in the S&P 500 Index that are believed to have strong growth potential. The Portfolio is managed using a research methodology by the Research Department of AEFC. Goal is long-term appreciation. (icon of) magnifying glass IDS Growth Fund Invests in a Portfolio comprised primarily of companies that have above-average potential for long-term growth as a result of new management, marketing opportunities or technological superiority. (icon of) flower IDS New Dimensions Fund Invests in a Portfolio comprised primarily of companies with significant growth potential due to superiority in technology, marketing or management. The Fund frequently changes its industry mix. (icon of) dimension IDS Progressive Fund Invests primarily in undervalued common stocks. The Fund holds stocks for the long term with the goal of capital growth. (icon of) shooting star Growth and income funds These funds focus on securities of medium to large, well-established companies that offer long-term growth of capital and reasonable income from dividends and interest. 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 pine trees IDS Blue Chip Advantage Fund Invests in selected stocks from a major market index. Securities purchased are those recommended by our research analysts as the best from each industry represented on the index. Offers potential for long-term growth as well as dividend income. (icon of) ribbon IDS Managed Allocation Fund Invests in a Portfolio comprised primarily of U.S. equity securities, U.S. and foreign debt securities, foreign equity securities and money market instruments. The Fund provides diversification among these major investment categories and has a target mix that represents the way the Fund's investments will be allocated over the long term. Seeks maximum total return. (icon of) spinning toy IDS Stock Fund Invests in a Portfolio comprised primarily of common stocks of companies representing many sectors of the economy. Seeks current income and growth of capital. (icon of) building with columns IDS Equity Value Fund Invests primarily in undervalued common stocks that offer potential for growth of capital and income. (icon of) three growing flowers IDS Utilities Income Fund Invests primarily in the stocks of public utility companies to seek high current income and growth of income and capital with reduced volatility. (icon of) light bulb IDS Diversified Equity Income Fund Invests in a Portfolio comprised primarily in high-yielding common stocks to seek high current income and, secondarily, to benefit from the growth potential offered by stock investments. (icon of) two puzzle pieces IDS Mutual Invests in a Portfolio which seeks to balance between common stocks and senior securities (preferred stocks and bonds). Seeks a balance of growth of capital and current income. (icon of) scale of justice Income funds The funds in this group invest their assets primarily in corporate bonds or government securities to seek interest income. Secondary objective is capital growth. Risk varies by bond quality. IDS Extra Income Fund Invests in a Portfolio comprised mainly 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) two coins IDS Bond Fund Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk bond categories, or the equivalent, and in government bonds. (icon of) Greek column IDS Selective Fund Invests in a Portfolio comprised primarily of high-quality corporate bonds and other highly rated debt instruments including government securities and short-term investments. Seeks current income and preservation of capital. (icon of) skyline IDS Federal Income Fund Invests in a Portfolio comprised primarily of securities issued or guaranteed as to the timely payment of principal and interest by the U.S. government, its agencies and instrumentalities. Seeks a high level of current income and safety of principal consistent with its type of investments. (icon of) shield with eagle head Tax-exempt income funds These funds provide tax-free income by investing in municipal bonds. The income is generally free from federal income tax, but a portion of the income may be subject to state and local taxes. Risk varies by bond quality. IDS Tax-Exempt Bond Fund Invests mainly in bonds and notes of state or local government units, with at least 75% in the four highest rated, lowest risk bond categories. (icon of) shield with Greek column IDS Insured Tax-Exempt Fund Invests primarily in municipal securities that are insured as to the timely payment of principal and interest. The insurance feature minimizes credit risk of the Fund but does not guarantee the market value of the Fund's shares. (icon of) shield with star IDS State Tax-Exempt Funds (CA, MA, MI, MN, NY, OH) Invests primarily in high- and medium-grade municipal securities to provide income to residents of each respective state that is exempt from federal, state and local income taxes. (New York is the only state that is exempt at the local level.) (icon of) shield with U.S. enclosed IDS High Yield Tax-Exempt Fund Invests in a Portfolio comprised primarily of medium- and lower-quality municipal bonds and notes. Lower-quality securities generally involve greater risk of principal and income. (icon of) shield with basket of apples enclosed IDS Intermediate Tax-Exempt Fund Invests in mainly investment-grade bonds and other debt securities with intermediate-term maturities issued by state and local government units. Goal is to seek a high level of current income exempt from federal taxes. (icon of) shield with tree enclosed Money market funds These money market funds have three main goals: conservation of capital, constant liquidity and the highest possible current income consistent with these objectives. An investment in these funds is neither insured nor guaranteed by the U.S. government, and there can be no assurance that these funds will be able to maintain a stable net asset value of $1.00 per share. Very limited risk. IDS Cash Management Fund Invests in such money market securities as high quality commercial paper, bankers' acceptances, certificates of deposit (CDs) and other bank securities. (icon of) piggy bank IDS Tax-Free Money Fund Invests primarily in short-term bonds and notes issued by state and local governments to seek high current income exempt from federal income taxes. (icon of) shield with piggy bank enclosed Quick telephone reference American Express Telephone Transaction Service Redemptions and exchanges, dividend payments or reinvestments and automatic payment arrangements National/Minnesota: 800-437-3133 Mpls./St. Paul area: 671-3800 American Express Shareholder Service Fund performance, objectives and account inquiries 612-671-3733 TTY Service For the hearing impaired 800-846-4852 American Express Infoline Automated account information (TouchTone(R) 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 PAGE AMERICAN EXPRESS FINANCIAL ADVISORS IDS New Dimensions Fund IDS Tower 10 Minneapolis, MN 55440-0010 -----END PRIVACY-ENHANCED MESSAGE-----