-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, q5B9aPXpHE56aPw5/GmCt1E1hkas6q9pSOs0+bEaXovOKjDVlsfzK4B+cBzsA1Sn aYtq9vQ38AgZavjQjjWPcw== 0000820027-94-000004.txt : 19940112 ACCESSION NUMBER: 0000820027-94-000004 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931031 FILED AS OF DATE: 19940104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDS STOCK FUND INC CENTRAL INDEX KEY: 0000052423 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 410839317 STATE OF INCORPORATION: MN FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 40 SEC FILE NUMBER: 811-00498 FILM NUMBER: 94500188 BUSINESS ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: T33/52 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 BUSINESS PHONE: 6126712727 FORMER COMPANY: FORMER CONFORMED NAME: INVESTORS STOCK FUND INC DATE OF NAME CHANGE: 19831221 N-30D 1 IDS STOCK FUND, INC. PAGE 1 FINANCIAL PLANNING IDS Stock Fund 1993 annual report (prospectus enclosed) (Icon of) building with columns The goals of IDS Stock Fund, Inc. are current income and growth of capital. The fund invests primarily in common stocks and securities convertible into common stock. IDS An American Express company AMERICAN EXPRESS Distributed by IDS Financial Services Inc. PAGE 2 (Icon of) building with columns Big names, big business These are the names you know. They are the movers and shakers of today's business world. Whether representing established U.S. firms or companies that have made their mark over-seas, the securities found in Stock Fund make up a veritable who's who in the financial market. These stocks offer a dual benefit of ongoing growth potential along with a steady stream of dividend income. And as we move toward a more global economy, these blue chip, multi-national companies are well-positioned to prosper in the 21st century. PAGE 3 Contents (Icon of) One book inside of another and their both being opened together. 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. 1993 annual report From the president 4 From the portfolio manager 4 Ten largest holdings 6 Long-term performance 7 Making the most of your fund 8 Independent auditors' report 9 Financial statements 10 Notes to financial statements 13 Investments in securities 20 IDS mutual funds 24 Federal income tax information 27 1993 prospectus The fund in brief Goals 3p Types of fund investments 3p Manager and distributor 3p Portfolio manager 3p Sales charge and fund expenses Sales charge 4p Operating expenses 4p Performance Financial highlights 5p Total returns 6p Key terms 7p How to buy, exchange or sell shares How to buy shares 8p How to exchange shares 10p How to sell shares 10p Reductions of the sales charge 14p Waivers of the sales charge 16p Special shareholder services Services 17p Quick telephone reference 17p Distributions and taxes Dividend and capital gain distributions 18p Reinvestments 19p Taxes 20p PAGE 4 Investment policies Facts about investments and their risks 23p Valuing assets 26p How the fund is organized Shares 27p Voting rights 27p Shareholder meetings 27p Directors and officers 27p Investment manager and transfer agent 29p Distributor 30p About IDS General information 31p PAGE 5 To our shareholders (Photo of) William R. Pearce, President of the fund (Photo of) Joe Barsky, Portfolio manager From the president As you read this report, you'll find it very different from those you've received from us in the past. We've made substantial changes in the design and organization to make the information easier to find and understand. The annual report and prospectus are combined into a single document, and each provides information important to you. The annual report gives you the fund's performance information and a snapshot of its investments. A good place to begin is with the portfolio manager's letter, which describes the events and investment strategies that most influenced the fund's performance during the year. The prospectus includes essential data such as the fund's investment policies and service information. In redesigning our reports, we asked IDS financial planners and some of you for suggestions and recommendations. We believe that you'll find the results of our work worthwhile. William R. Pearce From the portfolio manager Strong performance by foreign stocks and U.S. stocks that benefit from an improving economy played a key role in helping IDS Stock Fund turn in an above-average performance for the fiscal year ended October 31. Those holdings - combined with favorable market conditions - enabled the fund to outperform the market as whole, based on the Standard & Poor's 500 stock index (an unmanaged list of larger stocks commonly used to measure market performance). During the first half of the year, we took advantage of the favorable climate for value stocks (those of companies whose stock prices currently do not reflect the true value of their underlying assets) and pared our holdings in consumer stocks such as tobacco, food and health care as their potential declined. We also continued to add "cyclical" stocks, whose performance is closely tied to economic trends. Among those, our holdings in financial services, energy and housing fared particularly well in the first six months as the economy continued its slow improvement. Although we added some value stocks during the first half, we also continued to emphasize companies with strong growth prospects. That strategy worked especially well later in the fiscal year, when the market shifted from favoring value stocks to growth stocks. Foreign holdings raised Because of the increasing influence of foreign stock markets on the total investment market-place, in mid-period the fund's board approved a policy change regarding the maximum percentage of foreign holdings. The limit was raised from 15% to 25%, allowing us to continue adding promising foreign stocks across a broad range of sectors, including banks and thrifts, telecommunications equipment/service and utilities. We think foreign markets will remain attractive, and we expect to take greater advantage of our increased flexibility in this area. Capitalizing on opportunities both at home and abroad kept the fund almost fully invested throughout the fiscal year, resulting in a low cash level of approximately 7%. In addition, we attempted to moderate the portfolio's volatility by investing in convertible preferred stocks and bonds (corporate securities that are exchangeable for common stock). These "convertibles" also provide substantial yields, which can help over-come any price volatility in the security. Improving economies The fund's management team continues to seek opportunities in cyclical industries, both in overseas markets and at home. We expect many foreign economies to move from recessionary environments to growth environments. Greater growth also is expected in the U.S. economy, which should benefit stocks. However, the over-all market probably will continue to be volatile if, as we expect, short-term interest rates rise. Currently, consumer and health care stocks offer some good values, created by large sell-offs earlier in the year. The fund has added some of these stocks to the portfolio, including PepsiCo, a diversified food-and-beverage company, Foundation Health, a health- maintenance organization, and Reader's Digest, a media company. Looking ahead, we do not expect to make major shifts in fund strategies based on short-term events. We feel shareholders are better served by a long-term investment philosophy, and we'll continue to abide by that. Joe Barksy 12-month performance (All figures per share) Net asset value (NAV) Oct. 31, 1993 $21.24 Oct. 31, 1992 $20.05 Increase $ 1.19 Distributions Nov. 1, 1992 - Oct. 31, 1993 From income $ .72 From capital gains $ 1.57 Total distributions $ 2.29 Total return* 18.8% *If you purchased shares in the fund during this period, your return also would have been affected by the sales charge, as described in the prospectus. PAGE 6 Your fund's ten largest holdings (pie chart representing) The ten holdings listed here make up 14.52% of the fund's net assets.
Your fund's ten largest holdings _____________________________________________________________________________________________________________ Percent Value (of fund's net assets) (as of Oct. 31, 1993) _____________________________________________________________________________________________________________ Kimberly-Clark de Mexico Class A 1.69% $ 34,866,000 An independent company co-founded by Dallas-based Kimberly Clark, a large producer of paper and packaging materials. Pacific Telesis Group 1.53 31,553,125 The sixth-largest U.S. telephone holding company, it provides local phone service in parts of California and Nevada. General Motors Class H 1.52 31,300,000 A high-technology applications company engaged in automotive electronics, defense electronics, telecommunication and commercial technology. Dana Corp. 1.42 29,187,500 A producer of truck and car components and parts for use in the original equipment manufacturing automotive aftermarket. General Electric 1.41 29,100,000 General Electric is a diversified company with interest in manufacturing, broadcasting (NBC), financial services and technology. Royal Dutch Petroleum 1.41 29,081,250 Royal Dutch Petroleum Co, which includes Royal Dutch (the Dutch version) and Shell Transport (the English version) is a major oil company. Texaco 1.41 28,953,125 One of the "smaller" international integrated oil suppliers, the company has several important joint ventures in Saudi Arabia and the Far East. CIGNA Corp. 1.39 28,528,125 Among the largest insurance-based financial services firms, CIGNA is a leader in the property/casualty, group life/health insurance fields. Eastman Kodak 1.38 28,350,000 The world's largest photo-products company, the company also produces chemicals and drugs. Hong Kong Telecom 1.36 28,080,000 The holding company for Hong Kong Telephone Company, which has exclusive rights to provide Hong Kong's local and international telephone and telex services.
PAGE 7 Your fund's long-term performance How your $10,000 has grown in IDS Stock Fund $40,000 $35,731 Stock Fund $30,000 S&P 500 Stock Index $20,000 Lipper Growth & Income Fund Index $9,500 83 84 85 86 87 88 89 90 91 92 93 Assumes: Holding period from 10/31/83 to 10/31/93. Returns do not reflect taxes payable on distributions. Also see "Performance" in the fund's current prospectus. Reinvestment of all income and capital gain distributions for the fund, with a value of $22,972. The Standard & Poor's 500 Stock Index, an unmanaged list of larger stocks, is frequently used as a general measure of market performance. Lipper Growth and Income Fund Index, published by Lipper Analytical Services, Inc., include 30 funds that are generally similar to the fund, although some funds in the index may have somewhat different investment policies or objectives. If you invested $10,000 in Stock Fund in 1983 and held the fund for ten years, reinvesting all dividends, your investment would have more than tripled by 1993, to $35,731. On the chart 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 & Income Fund Index. In comparing Stock Fund to the two indexes, you should take account of 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. Average annual total return (as of Oct. 31, 1993) 1 year 5 years 10 years +12.85% +14.24% +13.57% Your investment and return value fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Figures reflect the effect of the 5% sales charge. Past performance is no guarantee of future results. PAGE 8 Making the most of your fund Build your assets systematically To keep your assets growing steadily, 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 16 6.25 Mar 100 9 11.11 Apr 100 5 20.00 May 100 7 14.29 June 100 10 10.00 July 100 15 6.67 Aug 100 20 5.00 Sept 100 17 5.88 Oct 100 12 8.33 (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 August) and fewer shares when the per share market price is high. You have paid an average price of only $10.81 per share over the 10 months, while the average market price actually was $13.10. Three ways to benefit from a mutual fund: o your shares increase in value when the fund's investments do well o you receive capital gains when the gains on investments sold by the fund exceed losses o you receive income when the fund's stock dividends, interest and short-term gains exceed its expenses. All three make up your total return. And you potentially can increase your investment if, like most investors, you reinvest your dividends and capital gain distributions to buy additional shares of the fund or another fund. PAGE 9 Independent auditors' report ___________________________________________________________________ The board of directors and shareholders IDS Stock Fund, Inc.: We have audited the accompanying statement of assets and liabilities, including the schedule of investments in securities, of IDS Stock Fund, Inc. as of October 31, 1993, 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 October 31, 1993, and the financial highlights for each of the years in the ten-year period ended October 31, 1993. 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 Stock Fund, Inc. at October 31, 1993, 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 October 31, 1993, and the financial highlights for the periods stated in the first paragraph above, in conformity with generally accepted accounting principles. KPMG Peat Marwick Minneapolis, Minnesota December 3, 1993 PAGE 10 Financial statements
Statement of assets and liabilities IDS Stock Fund, Inc. Year ended Oct. 31, 1993 _____________________________________________________________________________________________________________ Assets _____________________________________________________________________________________________________________ Investments in securities, at value (Note 1) (identified cost $1,778,964,746) $2,091,170,302 Cash in bank on demand deposit 18,620,781 Dividends and accrued interest receivable 7,998,374 Receivable for investment securities sold 9,651,991 Receivable for forward foreign currency contracts held, at value (Notes 1 and 4) 1,820,705 U.S. government securities held as collateral (Note 6) 3,389,578 _____________________________________________________________________________________________________________ Total assets 2,132,651,731 _____________________________________________________________________________________________________________ Liabilities _____________________________________________________________________________________________________________ Payable for investment securities purchased 33,111,910 Payable for forward foreign currency contracts held, at value (Notes 1 and 4) 1,824,076 Payable upon return of securities loaned (Note 6) 37,215,878 Accrued investment management and services fee 848,312 Accrued distribution fee 64,003 Accrued transfer agency fee 160,008 Other accrued expenses 330,241 _____________________________________________________________________________________________________________ Total liabilities 73,554,428 _____________________________________________________________________________________________________________ Net assets applicable to outstanding capital stock $2,059,097,303 _____________________________________________________________________________________________________________ Represented by _____________________________________________________________________________________________________________ Capital stock -- authorized 10,000,000,000 shares of $.01 par value; outstanding 96,935,826 shares $ 969,358 Additional paid-in capital 1,551,492,571 Undistributed net investment income 5,437,453 Accumulated net realized gain on investments (Note 1) 188,995,736 Unrealized appreciation of investments (Note 4) 312,202,185 _____________________________________________________________________________________________________________ Total -- representing net assets applicable to outstanding capital stock $2,059,097,303 _____________________________________________________________________________________________________________ Net asset value per share of outstanding capital stock $ 21.24 _____________________________________________________________________________________________________________ See accompanying notes to financial statements.
PAGE 11 Financial statements
Statement of operations IDS Stock Fund, Inc. Year ended Oct. 31, 1993 _____________________________________________________________________________________________________________ Investment income _____________________________________________________________________________________________________________ Income: Dividends (net of foreign taxes withheld of $1,034,384) $ 45,639,931 Interest 17,624,205 _____________________________________________________________________________________________________________ Total income 63,264,136 _____________________________________________________________________________________________________________ Expenses (Note 2): Investment management and services fee 9,693,683 Distribution fee 734,292 Transfer agency fee 1,820,496 Compensation of directors 88,130 Compensation of officers 29,842 Custodian fees 295,915 Postage 225,172 Registration fees 109,320 Reports to shareholders 76,248 Audit fees 29,500 Administrative 34,689 Other 62,500 _____________________________________________________________________________________________________________ Total expenses 13,199,787 _____________________________________________________________________________________________________________ Investment income -- net 50,064,349 _____________________________________________________________________________________________________________ Realized and unrealized gain on investments and foreign currency -- net _____________________________________________________________________________________________________________ Net realized gain on security and foreign currency transactions (including gain of $28,968 from foreign currency translations) (Note 3) 189,124,974 Net realized gain on closed options contracts written (Note 5) 66,509 _____________________________________________________________________________________________________________ Net realized gain on investments and foreign currency 189,191,483 Net change in unrealized appreciation or depreciation of investments 75,180,622 _____________________________________________________________________________________________________________ Net gain on investments and foreign currency 264,372,105 _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations $314,436,454 _____________________________________________________________________________________________________________ See accompanying notes to financial statements.
PAGE 12 Financial statements
Statements of changes in net assets IDS Stock Fund, Inc. Year ended Oct. 31, 1993 _____________________________________________________________________________________________________________ Operations and distributions 1993 1992 _____________________________________________________________________________________________________________ Investment income -- net $ 50,064,349 $ 51,506,684 Net realized gain on investments and foreign currency 189,191,483 144,492,268 Net change in unrealized appreciation or depreciation of investments 75,180,622 (53,965,961) _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations 314,436,454 142,032,991 _____________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income (47,684,415) (50,608,285) Net realized gain on investments (145,269,306) (82,243,219) Excess distribution of realized gain (Note 1) (28,968) -- _____________________________________________________________________________________________________________ Total distributions (192,982,689) (132,851,504) _____________________________________________________________________________________________________________ Capital share transactions _____________________________________________________________________________________________________________ Proceeds from sales of 13,265,220 and 8,183,088 shares (Note 2) 267,880,638 162,291,885 Net asset value of 9,177,264 and 6,332,048 shares issued in reinvestment of distributions 176,369,824 120,051,293 Payments for redemptions of 8,219,963 and 7,371,745 shares (165,004,017) (145,942,501) _____________________________________________________________________________________________________________ Increase in net assets from capital share transactions representing net addition of 14,222,521 and 7,143,391 shares 279,246,445 136,400,677 _____________________________________________________________________________________________________________ Total increase in net assets 400,700,210 145,582,164 _____________________________________________________________________________________________________________ Net assets at beginning of year 1,658,397,093 1,512,814,929 _____________________________________________________________________________________________________________ Net assets at end of year (including undistributed net investment income of $5,437,453 and $3,042,776) $2,059,097,303 $1,658,397,093 _____________________________________________________________________________________________________________ See accompanying notes to financial statements.
PAGE 13 Notes to financial statements IDS Stock 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. 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. Options transactions In order to produce incremental earnings, protect gains, and facilitate buying and selling of securities for investment purposes, the fund 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 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. PAGE 14 Notes to financial statements IDS Stock Fund, Inc. ___________________________________________________________________ 1. Summary of significant accounting policies 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. 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 forward 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. It is not practicable to identify that portion of realized and unrealized gain (loss) arising from changes in the exchange rates from the portion arising from changes in the market value of investments. 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. 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. PAGE 15 Notes to financial statements IDS Stock Fund, Inc. ___________________________________________________________________ 1. Summary of significant accounting policies 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 $14,743, resulting in a net reclassification adjustment to decrease paid-in-capital by $14,743. Dividends to shareholders Dividends from net investment income, declared and paid each calendar quarter, are reinvested in additional shares of the fund at net asset value or payable in cash. Capital gains, when available, are distributed along with the last income dividend of the calendar year. 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. PAGE 16 Notes to financial statements IDS Stock Fund, Inc. ___________________________________________________________________ 2. Expenses and sales charges Under terms of an agreement dated Nov. 14, 1991, the fund pays IDS Financial Corporation (IDS) a fee for managing its investments, recordkeeping and other specified services. The fee is 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 0.14% of average daily net assets. The fee is 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 and Income Fund Index. The maximum adjustment is 0.08% of the fund's average daily net assets after deducting 1% from the performance difference. If the performance difference is less than 1%, the adjustment will be zero. The adjustment decreased the fee by $190,356 for the year ended Oct. 31, 1993. The fund also pays IDS 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. The transfer agency fee is reduced by earnings on monies pending shareholder redemptions. IDS will assume and pay any expenses (except taxes and brokerage commissions) that exceed the most restrictive applicable state expense limitation. Sales charges by IDS Financial Services Inc. for distributing fund shares were $1,924,690 for the year ended Oct. 31, 1993. The fund also pays custodian fees to IDS Bank & Trust, an affiliate of IDS. 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 $30,433 for the year ended Oct. 31, 1993. ___________________________________________________________________ 3. Securities transactions Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated $1,307,656,060 and $1,311,828,516, respectively, for the year ended Oct. 31, 1993. Realized gains and losses are determined on an identified cost basis. Brokerage commissions paid to brokers affiliated with IDS were $459,287 for the year ended Oct. 31, 1993. PAGE 17 Notes to financial statements IDS Stock Fund, Inc. ___________________________________________________________________ 4. Forward foreign currency contracts At Oct. 31, 1993, the fund had entered into six forward foreign currency exchange contracts that obligate the fund to deliver currencies at specified future dates. The unrealized depreciation of $3,371 on these contracts is included in the accompanying financial statements. The terms of the open contracts are as follows:
U.S. Dollar value U.S. Dollar value Currency to be as of Currency to be as of Exchange date delivered Oct. 31, 1993 received Oct. 31, 1993 ____________________________________________________________________________________________________ Nov. 1, 1993 249,900 $ 189,096 188,903 $ 188,903 Canadian Dollar U.S. Dollar Nov. 1, 1993 111,632 111,632 166,719 110,993 U.S. Dollar Australian Dollar Nov. 3, 1993 202,555 202,555 303,408 201,994 U.S. Dollar Australian Dollar Nov. 3, 1993 535,792 535,792 804,251 535,430 U.S. Dollar Australian Dollar Nov. 5, 1993 581,605 581,605 871,318 580,080 U.S. Dollar Australian Dollar Nov. 8, 1993 203,396 203,396 305,377 203,305 U.S. Dollar __________ Australian Dollar __________ $1,824,076 $1,820,705
___________________________________________________________________ 5. Options contract written The number of contracts and premium amounts associated with call option contracts written is as follows: Year ended Oct. 31, 1993 ________________________ Contracts Premium _____________________________________________________ Balance Oct. 31, 1992 3,800 $675,007 Opened 200 24,519 Closed (1,975) (375,722) Exercised (2,025) (323,804) _____________________________________________________ Balance Oct. 31, 1993 -- $ -- _____________________________________________________ PAGE 18 Notes to financial statements IDS Stock Fund, Inc. ___________________________________________________________________ 6. Lending of portfolio securities At Oct. 31, 1993, securities valued at $36,118,463 were on loan to brokers. For collateral, the fund received $33,826,300 in cash and U.S. government securities valued at $3,389,578. Income from securities lending amounted to $60,460 for the year ended Oct. 31, 1993. 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. ___________________________________________________________________ 7. Financial highlights "Financial highlights" showing per share data and selected information is presented on page 5 of the prospectus. PAGE 19 Investments in securities
IDS Stock Fund, Inc. (Percentages represent value of Oct. 31, 1993 investments compared to net assets) _____________________________________________________________________________________________________________________________ Common stocks (73.1%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Aerospace & defense (1.2%) Northrop 700,000 $ 24,325,000 _____________________________________________________________________________________________________________________________ Automotive & related (4.1%) Dana 500,000 29,187,500 General Motors Cl H 800,000 31,300,000 Goodyear Tire & Rubber 550,000 24,612,500 _____________ Total 85,100,000 _____________________________________________________________________________________________________________________________ Banks and savings & loans (6.6%) Banco de Santander ADR 475,000 (b,c) 24,640,625 Chase Manhattan 300,000 9,900,000 First Chicago 200,000 8,975,000 HSBC Holdings 2,000,000 (b) 23,162,000 Mellon Bank 450,000 (c) 24,243,750 NationsBank 450,000 20,981,250 Royal Bank of Canada 1,150,000 (b) 23,712,685 ______________ Total 135,615,310 _____________________________________________________________________________________________________________________________ Beverages & tobacco (1.0%) PepsiCo 250,000 9,875,000 UST 400,000 10,550,000 ______________ Total 20,425,000 _____________________________________________________________________________________________________________________________ Building materials (2.4%) Masco 775,000 24,509,375 Weyerhaeuser 650,000 25,756,250 ______________ Total 50,265,625 _____________________________________________________________________________________________________________________________ Chemicals (1.0%) Nalco Chemical 300,000 10,612,500 Witco 350,000 10,456,250 ______________ Total 21,068,750 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
PAGE 20 Investments in securities
IDS Stock Fund, Inc. (Percentages represent value of Oct. 31, 1993 investments compared to net assets) _____________________________________________________________________________________________________________________________ Common stocks (continued) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Communications equipment (1.5%) Cisco Systems 200,000 (d) $ 10,250,000 LIN Broadcasting 100,000 (d) 11,350,000 Vodafone Group ADR 100,000 (b) 8,587,500 ______________ Total 30,187,500 _____________________________________________________________________________________________________________________________ Computers & office equipment (3.5%) Banyan 400,000 (d) 8,100,000 Informix 400,000 (d) 7,600,000 Microsoft 125,000 (d) 10,015,625 Pitney Bowes 500,000 19,625,000 Xerox 325,000 25,756,250 ______________ Total 71,096,875 _____________________________________________________________________________________________________________________________ Electronics (0.5%) Intel 150,000 9,487,500 _____________________________________________________________________________________________________________________________ Energy (7.3%) Atlantic Richfield 175,000 19,293,750 Enterprise Oil 3,500,000 (b) 25,109,000 Occidental Petroleum 1,100,000 20,350,000 Repsol ADR 900,000 (b) 26,662,500 Royal Dutch Petroleum 275,000 (b) 29,081,250 Texaco 425,000 28,953,125 ______________ Total 149,449,625 _____________________________________________________________________________________________________________________________ Energy equipment & services (1.2%) Schlumberger 375,000 (b) 23,765,625 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
PAGE 21 Investments in securities
IDS Stock Fund, Inc. (Percentages represent value of Oct. 31, 1993 investments compared to net assets) _____________________________________________________________________________________________________________________________ Common stocks (continued) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Financial services (3.6%) Beneficial 300,000 $ 23,025,000 Block (H&R) 525,000 20,934,375 Bradley Real Estate Trust 400,000 3,700,000 Developers Diversified Realty 125,000 3,593,750 General Property Trust 1,320,600 (b) 2,329,538 Holly Residential Property 75,000 1,931,250 Kimco Realty 125,000 4,578,125 Kranzco Realty Trust 175,000 4,156,250 Merry Land & Investments 148,500 2,988,562 Sizeler Property 275,000 3,746,875 Southwestern Property Trust 250,000 3,593,750 ______________ Total 74,577,475 _____________________________________________________________________________________________________________________________ Furniture & appliances (1.0%) Maytag 1,350,000 21,093,750 _____________________________________________________________________________________________________________________________ Health care (1.1%) Bristol-Myers Squibb 400,000 23,500,000 _____________________________________________________________________________________________________________________________ Health care services (0.6%) Foundation Health 250,000 (d) 6,437,500 Humana 400,000 5,650,000 ______________ Total 12,087,500 _____________________________________________________________________________________________________________________________ Industrial equipment & services (3.8%) Caterpillar 300,000 27,450,000 General Signal 300,000 10,575,000 Giddings & Lewis 775,000 18,793,750 Ingersoll-Rand 600,000 21,900,000 ______________ Total 78,718,750 _____________________________________________________________________________________________________________________________ Industrial transportation (2.3%) CSX 300,000 24,300,000 Union Pacific 375,000 23,718,750 ______________ Total 48,018,750 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
PAGE 22 Investments in securities
IDS Stock Fund, Inc. (Percentages represent value of Oct. 31, 1993 investments compared to net assets) _____________________________________________________________________________________________________________________________ Common stocks (continued) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Insurance (2.6%) CIGNA 425,000 $ 28,528,125 Travelers 700,000 24,675,000 ______________ Total 53,203,125 _____________________________________________________________________________________________________________________________ Media (2.8%) Grupo Televisa ADR 475,000 (b,e) 26,065,625 McGraw-Hill 300,000 22,275,000 Reader's Digest Assn 238,700 9,935,888 ______________ Total 58,276,513 _____________________________________________________________________________________________________________________________ Metals (2.1%) Allegheny Ludlum 950,000 19,593,750 Cyprus Minerals 1,000,000 (c) 24,500,000 ______________ Total 44,093,750 _____________________________________________________________________________________________________________________________ Multi-industry conglomerates (4.4%) Eastman Kodak 450,000 28,350,000 General Electric 300,000 29,100,000 Hutchison Whampoa 6,000,000 (b) 22,590,000 ITT 125,000 11,640,625 ______________ Total 91,680,625 _____________________________________________________________________________________________________________________________ Paper & packaging (5.1%) Crown Cork & Seal 600,000 (d) 23,175,000 Kimberly-Clark 500,000 25,812,500 Kimberly-Clark de Mexico Cl A 2,250,000 (b) 34,866,000 Union Camp 475,000 20,425,000 ______________ Total 104,278,500 _____________________________________________________________________________________________________________________________ Restaurants & lodging (0.3%) Circus Circus Enterprises 200,000 (d) 7,175,000 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
PAGE 23 Investments in securities
IDS Stock Fund, Inc. (Percentages represent value of Oct. 31, 1993 investments compared to net assets) _____________________________________________________________________________________________________________________________ Common stocks (continued) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Retail (1.8%) May Dept Stores 500,000 $ 22,125,000 Sears Roebuck 250,000 14,343,750 ______________ Total 36,468,750 _____________________________________________________________________________________________________________________________ Textiles & apparel (1.0%) Shaw Inds 450,000 20,362,500 _____________________________________________________________________________________________________________________________ Utilities - electric (0.9%) Veba 65,000 (b) 18,183,685 _____________________________________________________________________________________________________________________________ Utilities - gas (4.1%) Enron 625,000 21,171,875 Tenneco 400,000 20,400,000 TransCanada Pipeline 1,400,000 (b) 21,452,083 Westcoast Energy 1,300,000 (b) 20,643,001 ______________ Total 83,666,959 _____________________________________________________________________________________________________________________________ Utilities - telephone (5.3%) Bell Atlantic 250,000 15,906,250 British Telecom ADR 500,000 (b,c) 15,750,000 Hong Kong Telecom 13,000,000 (b) 28,080,000 McCaw Cellular Cl A 150,000 (d) 7,987,500 New Zealand Tel ADR 203,200 (b) 10,109,200 Pacific Telesis Group 575,000 31,553,125 ______________ Total 109,386,075 _____________________________________________________________________________________________________________________________ Total common stocks (Cost: $1,219,047,894) $1,505,558,517 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
PAGE 24 Investments in securities
IDS Stock Fund, Inc. (Percentages represent value of Oct. 31, 1993 investments compared to net assets) _____________________________________________________________________________________________________________________________ Preferred stocks (7.0%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Bethlehem Steel $3.50 Cm Cv 190,000 (e) $ 10,022,500 Equitable 6% Cm Cv 275,000 (e) 17,806,250 First Chicago 2.875% Cm Cv 325,000 18,443,750 Ford Motor 4.20% Cv 225,000 23,568,750 General Motors 3.25% Cv 350,000 19,862,500 Sears Roebuck 3.75% Cv 350,000 20,081,250 Tenneco 2.80% Cm Cv 325,000 13,446,875 USX 3.25% Cm Cv 375,000 20,718,750 _____________________________________________________________________________________________________________________________ Total preferred stocks (Cost: $122,818,537) $143,950,625 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
PAGE 25 Investments in securities
IDS Stock Fund, Inc. (Percentages represent value of Oct. 31, 1993 investments compared to net assets) _____________________________________________________________________________________________________________________________ Bonds (12.5%) _____________________________________________________________________________________________________________________________ Principal Issuer and coupon rate amount Value(a) _____________________________________________________________________________________________________________________________ Domestic (10.7%) Automatic Data Processing Zero Coupon Cv 2012 (5.24% annualized yield on date of purchase) $45,000,000 (f) $ 18,675,000 Comcast 7% Cv 2001 10,000,000 20,950,000 Conner Peripherals 6.75% 2001 25,000,000 21,375,000 Container Corp Amer 13.50% Sr Sub Nt 1999 10,000,000 11,150,000 Costco Wholesale 5.75% Cv 2002 20,000,000 19,500,000 Kroger 6.375% 1999 15,000,000 18,600,000 8.25% Cv 2011 5,000,000 (e) 5,337,500 Medical Care Intl 6.75% 2006 20,000,000 (e) 18,250,000 NAC Re 5.25% Cv 2002 20,000,000 (e) 20,000,000 Rogers Communications Zero Coupon Cv 2013 (5.49% annualized yield on date of purchase) 15,000,000 (c,f) 6,000,000 Stone Container 6.75% Cv 2007 25,000,000 14,312,500 SynOptics Communications 5.25% Cv 2003 25,000,000 (e) 24,375,000 Unifi 6% Cv 2002 20,000,000 21,950,000 ______________ Total 220,475,000 _____________________________________________________________________________________________________________________________ Foreign (1.8%)(b) Banco Nacional de Mexico 7% Cv 1999 20,000,000 (e) 21,900,000 Henderson Land Group 4% Euro Cv 1996 15,000,000 (e) 15,150,000 ______________ Total 37,050,000 _____________________________________________________________________________________________________________________________ Total bonds (Cost: $252,959,693) $ 257,525,000 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
PAGE 26 Investments in securities
IDS Stock Fund, Inc. (Percentages represent value of Oct. 31, 1993 investments compared to net assets) _____________________________________________________________________________________________________________________________ Short-term securities (9.0%) _____________________________________________________________________________________________________________________________ Annualized Amount yield on payable date of at Issuer purchase maturity Value(a) _____________________________________________________________________________________________________________________________ U.S. government agencies (0.3%) Federal Home Loan Mtge Corp Disc Note 11-09-93 3.04% $ 5,400,000 $ 5,395,455 Federal Natl Mtge Assn Disc Note 11-01-93 3.05 300,000 299,949 ______________ Total 5,695,404 _____________________________________________________________________________________________________________________________ Commercial paper (8.4%) A.I. Credit 11-02-93 3.00 6,800,000 6,798,300 Aon 11-29-93 3.09 7,700,000 7,680,237 BBV Finance (Delaware) 12-09-93 3.09 5,000,000 4,982,889 Beneficial 12-02-93 3.09 8,000,000 7,977,413 Cargill 11-19-93 3.09 6,500,000 6,488,878 Ciesco LP 12-08-93 3.09 4,700,000 4,684,318 Commerzbank U.S. Finance 11-18-93 3.09 8,400,000 8,386,345 Consolidated Rail 11-15-93 3.12 6,100,000 (g) 6,091,595 11-16-93 3.11 7,000,000 (g) 6,989,753 Corporate Asset Funding 11-29-93 3.09 1,100,000 1,097,177 Dillard Investment 11-16-93 3.09 4,700,000 4,693,164 Dow Chemical 11-01-93 2.95 7,200,000 7,198,820 Goldman Sachs Group LP 11-02-93 3.07 10,000,000 9,997,442 11-24-93 3.10 7,100,000 7,084,765 K mart 11-10-93 3.11 6,400,000 6,393,938 Lincoln Natl 12-14-93 3.12 7,200,000 (g) 7,172,100 See accompanying notes to investments in securities.
PAGE 27 Investments in securities
IDS Stock Fund, Inc. (Percentages represent value of Oct. 31, 1993 investments compared to net assets) _____________________________________________________________________________________________________________________________ Short-term securities (continued) _____________________________________________________________________________________________________________________________ Annualized Amount yield on payable date of at Issuer purchase maturity Value(a) _____________________________________________________________________________________________________________________________ Commercial paper (cont'd) Merrill Lynch 12-01-93 3.11% $ 5,700,000 $ 5,684,293 Morgan Stanley Group 11-19-93 3.14 6,800,000 6,786,486 Natl Australia Funding (Delaware) 11-22-93 3.09 5,300,000 5,289,571 Penney (JC) Funding 11-01-93 3.10 6,000,000 5,998,970 11-04-93 3.13 2,400,000 2,398,960 11-10-93 3.11 8,417,000 8,409,027 Pioneer Hi-Bred Intl 11-24-93 3.10 2,600,000 2,594,421 Reed Publishing (USA) 11-04-93 3.10 6,000,000 (g) 5,997,425 12-07-93 3.09 5,900,000 (g) 5,880,818 St. Paul Companies 11-03-93 3.11 1,800,000 (g) 1,799,380 11-09-93 3.13 3,600,000 (g) 3,596,880 Southwestern Bell Capital 11-08-93 3.11 4,400,000 (g) 4,396,590 Sysco 11-08-93 3.11 3,000,000 (g) 2,997,675 USAA Capital 11-04-93 3.11 900,000 899,612 Woolworth 11-02-93 3.12 7,000,000 6,998,186 ______________ Total 173,445,428 _____________________________________________________________________________________________________________________________ Letter of credit (0.3%) Mellon Bank- Oxford Finance 11-08-93 3.17 5,000,000 4,995,328 _____________________________________________________________________________________________________________________________ Total short-term securities (Cost: $184,138,622) $ 184,136,160 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $1,778,964,746)(h) $2,091,170,302 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities.
PAGE 28 Investments in securities
IDS Stock Fund, Inc. Oct. 31, 1993 _____________________________________________________________________________________________________________________________ Notes to investments in securities _____________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Foreign security values and principal amounts are stated in U.S. dollars. (c) Security is partially or fully on loan. See Note 6 to the financial statements. (d) Presently non-income producing. (e) Represents a security sold under Rule 144A which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the board of directors. (f) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition. (g) 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 the guidelines established by the board of directors. (h) At Oct. 31, 1993, the cost of securities for federal income tax purposes was $1,779,010,208 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $335,304,638 Unrealized depreciation (23,144,544) ___________________________________________________________________________________________ Net unrealized appreciation $312,160,094 ___________________________________________________________________________________________
PAGE 29 IDS mutual funds Cash equivalent investments These money market funds have three main goals: conversation 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 Planned Investment Account Invests in money market securities to provide maximum current income consistent with liquidity and stability of principal of principal, while serving as a base for systematic exchanges into IDS fixed income and equity funds. (icon of) stair steps 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 achieve 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 provide high current income. Secondary objective is capital growth. (icon of) cornucopia PAGE 30 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 Strategy Income Fund Invests primarily in corporate and government bonds to seek high current income while conserving capital. Also may seek capital appreciation when consistent with its primary goals. (icon of) chess piece IDS Selective Fund, Inc. 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, Inc. Invests primarily in securities issued or guaranteed as to 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 IDS Strategy, Short-Term Income Fund Invests primarily in short-term and intermediate-term bonds and notes to seek a high level of current income. (icon of) chess piece 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, Inc. Invests primarily in medium- and lower-quality municipal bonds and notes. (icon of) shield with basket of apples enclosed PAGE 31 IDS State Tax-Exempt Funds (California, Massachusetts, Michigan, Minnesota, New York, Ohio) 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, Inc. Invests mainly in bonds and notes of state or local government units, with at least 75 percent 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 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, Inc. Invests primarily in common stocks of foreign companies that offer potential for superior growth. The Fund may invest up to 20 percent of its assets in the U.S. market. (icon of) three flags IDS Strategy, Worldwide Growth Fund Invests primarily in common stocks of companies throughout the world that offer potential for superior growth. Holding may range from small- to large-capitalization stocks, including those of companies involve in areas of rapid economic growth. (icon of) chess piece IDS Managed Retirement Fund, Inc. 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 PAGE 32 IDS Equity Plus Fund, Inc. 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 IDS 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, Inc. Invests primarily in common stocks of blue chip U.S. companies representing almost every major sector of the economy. Seeks current income and growth of capital. (icon of) building with columns IDS Strategy, Equity Fund Invests primarily in undervalued common stocks that offer potential for growth of capital and income. (icon of) chess piece IDS Utilities Income Fund, Inc. Invests primarily in the stocks of public utility companies to provide 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 provide 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 PAGE 33 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 Discovery Fund, Inc. Invests in small and medium-sized, growth-oriented companies emphasizing technological innovation and productivity enhancement. Buys and holds larger growth-oriented stocks. (icon of) ship IDS Growth Fund, Inc. 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 IDS Strategy, Aggressive Equity 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 New Dimensions Fund, Inc. Invests primarily in domestic 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, Inc. Invests primarily in undervalued common stocks. The Fund holds stocks for the long-term with the goal of capital growth. (icon of) shooting star 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 Specialty growth investment This fund aggressively seeks capital growth as a hedge against inflation. PAGE 34 IDS Precious Metals Fund, Inc. 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 IDS personal financial planner or writing to IDS Shareholder Service, P.O. Box 534, Minneapolis, MN 55440. Read it carefully before you invest or send money. PAGE 35 Federal income tax information IDS Stock 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. Some of the dividends listed below were reported to you on a Form 1099-DIV, Dividends and Distributions, last January. Dividends paid to you since the end of last year will be reported to you on a tax statement sent next January. Shareholders should consult a tax adviser on how to report distributions for state and local purposes. IDS Stock Fund, Inc. Fiscal year ended Oct. 31, 1993 Income distributions taxable as dividend income, 40.85% qualifying for deduction by corporations. Payable date Per share Dec. 29, 1992 $0.3320 March 29, 1993 0.1250 June 28, 1993 0.1350 Sept. 27, 1993 0.1250 Total $0.7170 Capital gain distribution taxable as long-term capital gain. Payable date Per share Dec. 29, 1992 $1.5743 Total distributions $2.2913 The distribution of $1.9063 per share, payable Dec. 29, 1992, consisted of $0.1475 derived from net investment income, $0.1845 from net short-term capital gains (a total of $0.3320 taxable as dividend income) and $1.5743 from net long-term capital gains. PAGE 36 Quick telephone reference IDS 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 IDS Shareholder Service Fund performance, objectives and account inquiries 612-671-3733 TTY Service For the hearing impaired 800-846-4852 IDS 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 Your IDS financial planner: IDS Stock Fund IDS Tower 10 Minneapolis, MN 55440-0010 PAGE 37 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 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-----