-----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, DBtZMRz47/UW1v6kylS9UnBI90RiGs0QKEjQBT5x2mddlOL8zMnFKsO7z3NGrGwd Zx2xIEpqx/nGTFJcW/cbUQ== 0000820027-96-000006.txt : 19960104 0000820027-96-000006.hdr.sgml : 19960104 ACCESSION NUMBER: 0000820027-96-000006 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951031 FILED AS OF DATE: 19960103 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDS STOCK FUND INC CENTRAL INDEX KEY: 0000052423 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 410839317 STATE OF INCORPORATION: MN FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-00498 FILM NUMBER: 96500426 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 IDS Stock Fund 1995 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. (This annual report includes a prospectus that describes in detail the Fund's objective, investment policies, risks, sales charges, fees and other matters of interest. Please read the prospectus carefully before you invest or send money.) Distributed by American Express Financial Advisors Inc. PAGE 2 (Icon of) 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 open book inside of another. The purpose of this annual report is to tell investors how the fund performed. The prospectus, which is bound into the middle of this annual report, describes the fund in detail. 1995 annual report From the president 4 From the portfolio manager 4 Ten largest holdings 6 Making the most of your fund 7 Long-term performance 8 Independent auditors' report 9 Financial statements 10 Notes to financial statements 13 Investments in securities 23 IDS mutual funds 28 Federal income tax information 31 1995 prospectus The Fund in brief Goals 3p Types of Fund investments and their risks 3p Proposed conversion to master/feeder structure 3p Manager and distributor 3p Portfolio manager 3p Alternative purchase arrangements 3p Sales charge and Fund expenses 4p Performance Financial highlights 6p Total returns 8p Investment policies and risks Facts about investments and their risks 10p Valuing Fund shares 14p How to purchase, exchange or redeem shares Alternative purchase arrangements 15p How to purchase shares 18p How to exchange shares 20p How to redeem shares 20p Reductions and waivers of the sales charge 25p Special shareholder services Services 29p Quick telephone reference 29p Distributions and taxes Dividend and capital gain distributions 30p Reinvestments 30p Taxes 31p How to determine the correct TIN 33p How the Fund is organized Shares 34p Voting rights 34p Shareholder meetings 34p Special considerations regarding master/feeder structure 35p Directors and officers 38p Investment manager and transfer agent 40p Distributor 42p About American Express Financial Corporation General information 45p Appendix Descriptions of derivative instruments 46p PAGE 4 To our shareholders (Photo of) William R. Pearce, President of the Fund (Photo of) Richard H. Warden, Portfolio manager From the president If you're an experienced investor, you know that 1995 was an unusually strong year for the U.S. and some foreign 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 review periodically their long-term goals and assess 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 Supported by the stock market's strongest sustained advance in recent years, IDS Stock Fund generated a double-digit total return for shareholders during the past 12-month period - November 1994 through October 1995. (Please note that the change in net asset value was affected by a substantial capital gain paid to shareholders in December 1994. That distribution reduced the Fund's net asset value by the same amount at that time.) The rising-interest-rate trend that had kept the stock market off balance almost all of 1994 was still in force when the period began last November. Although long-term rates had actually begun to level off by then, concern about a potential run-up spawned a round of stock-selling that pushed the market down sharply for the month. The Fund's performance was similarly affected. PAGE 5 Rally begins By mid-December, however, concern about higher interest rates began to dissipate as the focus shifted more toward the generally strong profits companies were reporting. Investors reacted positively to the profit trend, which, when subsequently combined with declining long-term interest rates, lent some much-awaited support to stocks. From that point, it didn't take long for the stock market to turn a moderate upturn into a robust rally that continued with only minor interruptions through the end of the fiscal year. Most of the time, growth stocks, especially those of high-technology companies, led the advance. While this Fund participated in the rally, its performance was muted by three factors: a relatively small amount of technology stocks in the portfolio, poor performance by our foreign holdings early in the fiscal year, and a somewhat conservative portfolio structure designed to protect the Fund in the event of a stock- market downturn. The latter strategy worked to our disadvantage during the summer and fall as the market continued to gain ground. Financial services strong Outside of our technology holdings, the portfolio received its biggest boost from stocks in the financial services sector, including banks and insurance companies. The bank stocks, in particular, were helped by falling long-term interest rates. To the Fund's benefit, financial services constituted the portfolio's largest stock exposure throughout most of the fiscal year. Looking to the current fiscal year, as of mid-November the investment environment, although still largely positive, appears somewhat less encouraging than it was early in 1995. While the economy appears to still be moving forward and inflation remains subdued, the third stock-market propellant, corporate profits, are showing signs of slackening. Given that, we believe it's prudent to stick with our relatively conservative strategy, which should allow the Fund to take part in potential market upturns while providing something of a cushion should stocks retreat. Richard H. Warden Class A 12-month performance (All figures per share) Net assest value (NAV) Oct. 31, 1995 $19.96 Oct. 31, 1994 $19.48 Increase $ 0.48 Distributions Nov. 1, 1994-Oct. 31, 1995 From income $ 0.71 From capital gains $ 1.29 Total distributions $ 2.00 Total return** +14.4%*** Class B March 20, 1995-Oct. 31, 1995 (All figures per share) Net asset value (NAV) Oct. 31, 1995 $19.91 March 20, 1995* $18.03 Increase $ 1.88 Distributions March 20, 1995*-Oct. 31, 1995 From income $ 0.31 From capital gains $ -- Total distributions $ 0.31 Total return** +12.1%*** Class Y March 20, 1995-Oct. 31, 1995 (All figures per share) Net asset value (NAV) Oct. 31, 1995 $19.96 March 20, 1995* $18.03 Increase $ 1.93 Distributions March 20, 1995*-Oct. 31, 1995 From income $ 0.37 From capital gains $ -- Total distributions $ 0.37 Total return** +12.8%*** *Inception date. **The prospectus discusses the effects of sales charges, if any, on the various classes. ***The total return is a hypothetical investment in the Fund with all distributions reinvested. PAGE 6
IDS Stock Fund, Inc. Your Fund's ten largest holdings (Pie chart) The ten holdings listed here make up 12.69% of the Funds net assets _____________________________________________________________________________________ Percent Value Fund's net assets)(as of Oct. 31, 1995) _____________________________________________________________________________________ Royal Dutch Petroleum 1.56% $43,006,250 A major oil company that includes Royal Dutch (the Dutch version) and Shell Transport (the English version). Kimberly-Clark 1.32 36,312,500 World's largest manufacturer of tissue products and other household, personal care and industrial paper products. Schering-Plough 1.27 34,856,250 A diversified company with products in both the ethical and over-the-counter markets. Merck 1.25 34,500,000 One of the world's largest drug manufacturers. Pfizer 1.25 34,425,000 The leading producer of pharmaceuticals, hospital products, animal health items, non-prescription medications and specialty chemicals. First Chicago 1.23 33,937,500 A bank holding company whose main business is commercial banking, but with retail banking and credit card operation as well. Philip Morris 1.23 33,800,000 The largest cigarette company in the world and a fast growing packaged-food company, as a result of the Kraft acquisition. General Electric 1.21 33,206,250 A diversified company with interest in manufacturing, broadcasting (NBC), financial services and technology. Johnson & Johnson 1.18 32,600,000 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. General Re 1.18 32,596,875 A reinsurance holding company that operates in three principal businesses: domestic property/casualty and life reinsurance, international property/casualty and life reinsurance and financial services.
PAGE 7 Making the most of your Fund Average annual total return (as of Oct. 31, 1995) Class A 1 year 5 years 10 years +8.72% +13.62% +13.87% Total returns for Class A, Class B and Class Y for the period from March 20, 1995 to Oct. 31, 1995 were +6.99%, +7.14% and +12.77%, respectively. March 20, 1995 was the inception date for Class B and Class Y. Total return for Class A is shown for comparative purposes. The performance of Class B and Class Y will vary from the performance of Class A based on differences in sales charges and fees. Your investment and return values fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Figures for Class A and Class B reflect the effect of the maximum 5% sales charge. This was a period of widely fluctuating security prices. Past performance is no guarantee of future results. Build your assets systematically One of the best ways to invest in the Fund is by dollar-cost averaging -- a time-tested strategy that can make market fluctuations work for you. To dollar-cost average, simply invest a fixed amount of money regularly. You'll automatically buy more shares when the Fund's share price is low, fewer shares when it is high. This does not ensure a profit or avoid a loss if the market declines. But, if you can continue to invest regularly through changing market conditions, it can be an effective way to accumulate shares to meet your long-term goals. How dollar-cost averaging works Month Amount Per-share Number of shares purchased invested market price Jan $100 $20 5.00 Feb 100 18 5.56 Mar 100 17 5.88 Apr 100 15 6.67 May 100 16 6.25 June 100 18 5.56 July 100 17 5.88 Aug 100 19 5.26 Sept 100 21 4.76 Oct 100 20 5.00 (footnotes to table) By investing an equal number of dollars each month... (arrow in table pointing to April) you automatically buy more shares when the per share market price is low. (arrow in table pointing to September) and fewer shares when the per share market price is high. You have paid an average price of only $17.91 per share over the 10 months, while the average market price actually was $18.10. PAGE 8 Your Fund's long-term performance Three ways to benefit from a mutual fund: o your shares increase in value when the Fund's investments do well o you receive capital gains when the gains on investments sold by the Fund exceed losses o you receive income when the Fund's stock dividends, interest and short-term gains exceed its expenses. All three make up your total return. And you potentially can increase your investment if, like most investors, you reinvest your dividends and capital gain distributions to buy additional shares of the Fund or another fund. Class A* How your $10,000 has grown in IDS Stock Fund Average annual total return (as of Oct. 31, 1995) 1 year 5 years 10 years +8.72% +13.62% +13.87% $36,669 Stock Fund S&P 500 Stock Index $30,000 Lipper Growth & Income Fund Index $20,000 $9,500 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 * The graph above is for Class A only. Class B and Class Y are not shown. Total returns for class A, Class B and Class Y for the period from March 20, 1995 to Oct. 31, 1995 were +6.99%, +7.14% and +12.77%, respectively. March 20, 1995 was the inception date for Class B and Class Y. Total return for Class A is shown for comparative purposes. The performance of Class B and Class Y will vary from the performance of Class A based on differences in sales charges and fees. Assumes: Holding period from 10/31/85 to 10/31/95. Returns do not reflect taxes payable on distributions. Reinvestment of all income and capital gain distributions for the Fund, with a value of $25,357. Also see "Performance" in the Fund's current prospectus. 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., includes 30 funds that are generally similar to the Fund, although some funds in the index may have somewhat different investment policies or objectives. On the graph above you can see how the Fund's total return compared to two widely cited performance indexes, the S&P 500 and the Lipper Growth & Income Fund Index. In comparing Stock Fund to the two indexes, you should take into 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. Your investment and return values fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. This was a period of widely fluctuating security prices. Past performance is no guarantee of future results. PAGE 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, 1995, and the related statement of operations for the year then ended and the statements of changes in net assets for each of the years in the two-year period ended October 31, 1995, and the financial highlights for each of the years in the ten-year period ended October 31, 1995. These financial statements and the financial highlights are the responsibility of fund management. Our responsibility is to express an opinion on these financial statements and the financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Investment securities held in custody are confirmed to us by the custodian. As to securities purchased and sold but not received or delivered, and securities on loan, we request confirmations from brokers, and where replies are not received, we carry out other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of IDS Stock Fund, Inc. at October 31, 1995, and the results of its operations for the year then ended and the changes in its net assets for each of the years in the two-year period ended October 31, 1995, and the financial highlights for the periods stated in the first paragraph above, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Minneapolis, Minnesota December 1, 1995 PAGE 10
Financial statements Statement of assets and liabilities IDS Stock Fund, Inc. Oct. 31, 1995 _____________________________________________________________________________________________________________ Assets _____________________________________________________________________________________________________________ Investments in securities, at value (Note 1): Investments in securities of unaffiliated issuers (identified cost $2,430,378,566) $2,772,802,826 Investments in securities of affiliated issuers (identified cost $27,342,800) 24,600,000 Dividends and accrued interest receivable 6,035,874 Receivable for investment securities sold 5,422,474 _____________________________________________________________________________________________________________ Total assets 2,808,861,174 _____________________________________________________________________________________________________________ Liabilities _____________________________________________________________________________________________________________ Disbursements in excess of cash on demand deposit 7,171,281 Payable for investment securities purchased 162,653 Payable upon return of securities loaned (Note 5) 49,285,600 Accrued investment management services fee 47,059 Accrued distribution fee 2,360 Accrued service fee 38,423 Accrued transfer agency fee 34,110 Accrued administrative services fee 9,439 Other accrued expenses 272,948 _____________________________________________________________________________________________________________ Total liabilities 57,023,873 _____________________________________________________________________________________________________________ Net assets applicable to outstanding capital stock $2,751,837,301 _____________________________________________________________________________________________________________ Represented by _____________________________________________________________________________________________________________ Capital stock -- authorized 10,000,000,000 shares of $.01 par value; $ 1,378,824 Additional paid-in capital 2,318,131,202 Undistributed net investment income 3,258,540 Accumulated net realized gain (Note 1) 89,387,275 Unrealized appreciation of investments and on translation of assets and liabilities in foreign currencies (Note 7) 339,681,460 _____________________________________________________________________________________________________________ Total -- representing net assets applicable to outstanding capital stock $2,751,837,301 _____________________________________________________________________________________________________________ Net assets applicable to outstanding shares: Class A $1,984,334,434 Class B $ 29,432,290 Class Y $ 738,070,577 Net asset value per share of outstanding capital stock: Class A shares 99,428,489 $ 19.96 Class B shares 1,478,348 $ 19.91 Class Y shares 36,975,566 $ 19.96 See accompanying notes to financial statements. PAGE 11 Financial statements Statement of operations IDS Stock Fund, Inc. Year ended Oct. 31, 1995 _____________________________________________________________________________________________________________ Investment income _____________________________________________________________________________________________________________ Income: Dividends (net of foreign taxes withheld of $567,634) $ 62,719,795 Dividends earned on affiliated issuers 787,500 Interest 20,047,378 _____________________________________________________________________________________________________________ Total income 83,554,673 _____________________________________________________________________________________________________________ Expenses (Note 2): Investment management services fee 11,924,057 Distribution fee Class A 440,563 Class B 61,182 Transfer agency fee 3,006,638 Incremental transfer agency fee - Class B 1,635 Service fee Class A 2,083,463 Class B 14,268 Administrative services fee 516,430 Compensation of directors 39,823 Compensation of officers 16,890 Custodian fees 510,115 Postage 130,715 Registration fees 275,480 Reports to shareholders 125,896 Audit fees 33,000 Administrative 23,975 Other 38,497 _____________________________________________________________________________________________________________ Total expenses 19,242,627 Earnings credits on cash balances (Note 2) (13,795) _____________________________________________________________________________________________________________ Total net expenses 19,228,832 _____________________________________________________________________________________________________________ Investment income -- net 64,325,841 _____________________________________________________________________________________________________________ Realized and unrealized gain (loss) -- net _____________________________________________________________________________________________________________ Net realized gain on security and foreign currency transactions (including loss of $3,798 from foreign currency transactions) (Note 3) 89,316,951 Net realized gain on sale of affiliated security 987,571 Net realized gain on foreign index futures 87,131 Net realized loss on closed or expired option contracts written (Note 6) (1,203,021) _____________________________________________________________________________________________________________ Net realized gain on investments and foreign currency 89,188,632 Net change in unrealized appreciation or depreciation of investments and on translation of assets and liabilities in foreign currencies 191,467,078 _____________________________________________________________________________________________________________ Net gain on investments and foreign currency 280,655,710 _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations $ 344,981,551 _____________________________________________________________________________________________________________ See accompanying notes to financial statements.
PAGE 12
Financial statements Statements of changes in net assets IDS Stock Fund, Inc. Year ended Oct. 31, _____________________________________________________________________________________________________________ Operations and distributions 1995 1994 _____________________________________________________________________________________________________________ Investment income -- net $ 64,325,841 $ 65,435,636 Net realized gain on investments and foreign currency 89,188,632 184,211,972 Net change in unrealized appreciation or depreciation of investments and on translation of assets and liabilities in foreign currencies 191,467,078 (163,987,803) _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations 344,981,551 85,659,805 _____________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income Class A (51,850,665) (66,287,242) Class B (173,178) -- Class Y (13,057,749) -- Net realized gain Class A (184,130,267) (189,047,838) _____________________________________________________________________________________________________________ Total distributions (249,211,859) (255,335,080) _____________________________________________________________________________________________________________ Capital share transactions (Note 4) _____________________________________________________________________________________________________________ Proceeds from sales Class A shares (Note 2) 401,647,287 517,092,765 Class B shares 29,160,960 -- Class Y shares 743,895,793 -- Reinvestment of distributions at net asset value Class A shares 214,124,802 226,574,033 Class B shares 170,388 -- Class Y shares 11,651,129 -- Payments for redemptions Class A shares (1,025,683,435) (265,338,433) Class B shares (Note 2) (592,525) -- Class Y shares (86,057,183) -- _____________________________________________________________________________________________________________ Increase in net assets from capital share transactions 288,317,216 478,328,365 _____________________________________________________________________________________________________________ Total increase in net assets 384,086,908 308,653,090 Net assets at beginning of year 2,367,750,393 2,059,097,303 _____________________________________________________________________________________________________________ Net assets at end of year (including undistributed net investment income of $3,258,540 and $4,526,952) $2,751,837,301 $2,367,750,393 _____________________________________________________________________________________________________________ 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. The Fund offers Class A, Class B and Class Y shares. Class A shares are sold with a front-end sales charge. Class B shares, which the Fund began offering on March 20, 1995, may be subject to a contingent deferred sales charge. Class B shares automatically convert to Class A after eight years. Class Y shares, which the Fund also began offering on March 20, 1995, have no sales charge and are offered only to qualifying institutional investors. All classes of shares have identical voting, dividend, liquidation and other rights, and the same terms and conditions, except that the level of distribution fee, transfer agency fee and service fee (class specific expenses) differs among classes. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses on investments are allocated to each class of shares based upon its relative net assets. Significant accounting policies followed by the Fund are summarized below: Valuation of securities All securities are valued at the close of each business day. Securities traded on national securities exchanges or included in national market systems are valued at the last quoted sales price; securities for which market quotations are not readily available are valued at fair value according to methods selected in good faith by the board of directors. Determination of fair value involves, among other things, reference to market indexes, matrixes and data from independent brokers. Short-term securities maturing in more than 60 days from the valuation date are valued at the market price or approximate market value based on current interest rates; those maturing in 60 days or less are valued at amortized cost. Option transactions In order to produce incremental earnings, protect gains, and facilitate buying and selling of securities for investment purposes, the Fund may buy or write options traded on any U.S. or foreign exchange or in the over-the-counter market where the completion of the obligation is dependent upon the credit standing of the other party. The Fund also may buy and sell put and call options and write covered call options on portfolio securities and may write cash-secured put options. The risk in writing a call option is that the Fund gives up the opportunity of profit if the market price of the security increases. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying PAGE 14 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. Futures transactions In order to gain exposure to or protect itself from changes in the market, the Fund may buy and sell futures contracts traded on any U.S. or foreign exchange. The Fund also may buy or write put and call options on these futures contracts. Risks of entering into futures contracts and related options include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities in an amount (initial margin) equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Foreign currency translations and foreign currency contracts Securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars at the closing rate of exchange. Foreign currency amounts related to the purchase or sale of securities and income and expenses are translated at the exchange rate on the transaction date. The effect of changes in foreign exchange rates on realized and unrealized security gains or losses is reflected as a component of such gains or losses. In the statement of operations, net realized gains or losses from foreign currency transactions may arise from sales of foreign currency, closed forward contracts, exchange gains or losses realized between the trade date and settlement dates on securities transactions, and other translation gains or losses on dividends, interest income and foreign withholding taxes. The Fund may enter into forward foreign currency exchange contracts for operational purposes and to protect against adverse exchange rate fluctuation. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates from an independent pricing service. The Fund is subject to the credit risk that the other party will not complete the obligations of the contract. PAGE 15 Federal taxes Since the Fund's policy is to comply with all sections of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders, no provision for income or excise taxes is required. Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of the deferral of losses on certain futures contracts, the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes, and losses deferred due to "wash sale" transactions. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. 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 decreased by $512,661 and accumulated net realized gain has been increased by $101,051, resulting in a net reclassification adjustment to increase additional paid-in capital by $411,610. 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. ___________________________________________________________________ 2. Expenses and sales charges Under terms of a prior agreement that ended March 19, 1995, the Fund paid AEFC a fee for managing its investments, recordkeeping and other specified services. The fee was a percentage of the Fund's average daily net assets consisting of a group asset charge in reducing percentages from 0.46% to 0.32% annually on the combined net assets of all non-money market funds in the IDS MUTUAL FUND GROUP and an individual annual asset charge of 0.14% of average daily net assets. The fee was adjusted upward or downward by a performance incentive adjustment based on the Fund's average daily net assets over a rolling 12-month period as measured against the change in the Lipper Growth and Income Fund Index. The maximum adjustment was 0.08% of the Fund's average daily net assets after PAGE 16 deducting 1% from the performance difference. If the performance difference was less than 1%, the adjustment would have been zero. The adjustment decreased the fee by $738,312 for the year ended Oct. 31, 1995. Also under terms of the prior agreement, the Fund paid AEFC a distribution fee at an annual rate of $6 per shareholder account and a transfer agency fee at an annual rate of $15 per shareholder account. Effective March 20, 1995, when the Fund began offering multiple classes of shares, the Fund entered into agreements with AEFC for managing its portfolio, providing administrative services and serving as transfer agent as follows: Under its Investment Management Services Agreement, AEFC determines which securities will be purchased, held or sold. The management fee is a percentage of the Fund's average daily net assets in reducing percentages from 0.53% to 0.4% annually. The performance incentive adjustment remains unchanged from the prior agreement. Under an Administrative Services Agreement, the Fund pays AEFC for administration and accounting services at a percentage of the Fund's average daily net assets in reducing percentages from 0.04% to 0.02% annually. Under a separate Transfer Agency Agreement, AEFC maintains shareholder accounts and records. The Fund pays AEFC an annual fee per shareholder account for this service as follows: o Class A $15 o Class B $16 o Class Y $15 Also effective March 20, 1995, the Fund entered into agreements with American Express Financial Advisors Inc. for distribution and shareholder servicing-related services as follows: Under a Plan and Agreement of Distribution, the Fund pays a distribution fee at an annual rate of 0.75% of the Fund's average daily net assets attributable to Class B shares for distribution-related services. Under a Shareholder Service Agreement, the Fund pays a fee for service provided to shareholders by financial advisors and other servicing agents. The fee is calculated at a rate of 0.175% of the Fund's average daily net assets attributable to Class A and Class B shares. AEFC will assume and pay any expenses (except taxes and brokerage commissions) that exceed the most restrictive applicable state expense limitation. Sales charges received by American Express Financial Advisors Inc. for distributing Fund shares were $2,808,479 for Class A and $4,170 for Class B for the year ended Oct. 31, 1995. The Fund also pays custodian fees to American Express Trust Company, an affiliate of AEFC. PAGE 17 During the year ended Oct. 31, 1995, the Fund's custodian and transfer agency fees were reduced by $13,795 as a result of earnings credits from overnight cash balances. 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 $18,663 for the year ended Oct. 31, 1995. ___________________________________________________________________ 3. Securities transactions Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated $1,919,457,082 and $1,608,877,026, respectively, for the year ended Oct. 31, 1995. Realized gains and losses are determined on an identified cost basis. Brokerage commissions paid to brokers affiliated with AEFC were $378,480 for the year ended Oct. 31, 1995. ___________________________________________________________________ 4. Capital share transactions Transactions in shares of capital stock for the years indicated are as follows:
_______________________________________________________________________________________ Year ended Oct. 31, 1995 Year ended 10/31/94 Class A Class B* Class Y* Class A _______________________________________________________________________________________ Sold 21,417,041 1,499,973 40,820,045 26,559,784 Issued for reinvested 12,361,651 8,607 606,754 11,576,290 distributions Redeemed (55,899,864) (30,232) (4,451,233) (13,522,239) _______________________________________________________________________________________ Net increase (decrease) (22,121,172) 1,478,348 36,975,566 24,613,835 _______________________________________________________________________________________ *Inception date was March 20, 1995.
___________________________________________________________________ 5. Lending of portfolio securities At Oct. 31, 1995, securities valued at $46,961,550 were on loan to brokers. For collateral, the Fund received $49,285,600 in cash. Income from securities lending amounted to $714,751 for the year ended Oct. 31, 1995. The risks to the Fund of securities lending are that the borrower may not provide additional collateral when required or return the securities when due. ___________________________________________________________________ 6. Option contracts written The number of contracts and premium amounts associated with option contracts written is as follows: PAGE 18
Year ended Oct. 31, 1995 ______________________________________________________ Puts Calls Contracts Premium Contracts Premium ______________________________________________________________________________ Balance Oct. 31, 1994 16,075 $ 941,712 13,750 $ 848,471 Opened 14,090 1,248,794 30,726 1,834,074 Closed (7,471) (863,178) (14,750) (991,091) Exercised (5,354) (418,526) (4,335) (387,990) Expired (17,340) (908,802) (25,391) (1,303,464) ______________________________________________________________________________ Balance Oct. 31, 1995 -- $ -- -- $ -- ______________________________________________________________________________
___________________________________________________________________ 7. Foreign currency contracts At Oct. 31, 1995, the Fund had entered into a foreign currency exchange contract that obligates the Fund to deliver currency at a specified future date. The terms of the open contract is as follows:
Exchange date Currency to be Currency to be Unrealized delivered received appreciation/ depreciation ___________________________________________________________________________ Nov. 3, 1995 4,012,052 2,850,076 $ -- Deutsche Mark U.S. Dollar ___________________________________________________________________________
___________________________________________________________________ 8. Financial highlights "Financial highlights" showing per share data and selected information is presented on pages 6 and 7 of the prospectus. PAGE 19
Investments in securities IDS Stock Fund, Inc. (Percentages represent value of Oct. 31, 1995 investments compared to net assets) Investments in securities of unaffiliated issuers _____________________________________________________________________________________________________________________________ Common stocks (82.1%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Aerospace & defense (3.8%) Boeing 300,000 $ 19,687,500 General Dynamics 222,800 12,337,550 General Motors Cl H 600,000 25,200,000 Raytheon 500,000 21,812,500 United Technologies 300,000 26,625,000 ______________ Total 105,662,550 _____________________________________________________________________________________________________________________________ Automotive & related (1.2%) General Motors 200,000 8,750,000 Genuine Parts 600,000 23,775,000 ______________ Total 32,525,000 _____________________________________________________________________________________________________________________________ Banks and savings & loans (6.2%) Bank of Boston 250,000 11,125,000 BankAmerica 500,000 28,750,000 First Chicago 500,000 33,937,500 Morgan (JP) 400,000 30,850,000 NationsBank 400,000 26,300,000 Signet Banking 500,000 (c) 11,875,000 State Street Boston 700,000 27,212,500 ______________ Total 170,050,000 _____________________________________________________________________________________________________________________________ Beverages & tobacco (2.9%) PepsiCo 400,000 21,100,000 Philip Morris 400,000 33,800,000 UST 800,000 24,000,000 ______________ Total 78,900,000 _____________________________________________________________________________________________________________________________ Chemicals (2.1%) duPont (EI) deNemours 300,000 18,712,500 Hercules 400,000 21,350,000 Nalco Chemical 400,000 12,000,000 Praxair 200,000 5,400,000 ______________ Total 57,462,500 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. PAGE 20 Communications equipment (0.6%) General Instrument 253,100 (b) 4,808,900 Northern Telecom 325,000 11,700,000 ______________ Total 16,508,900 _____________________________________________________________________________________________________________________________ Computers & office equipment (3.8%) Amer Power Conversion 600,000 (b,c) 6,150,000 Cisco Systems 300,000 23,250,000 COMPAQ Computer 550,000 30,662,500 General Motors Cl E 200,000 9,425,000 Pitney Bowes 500,000 21,812,500 Silicon Graphics 141,700 (b) 4,711,525 Sterling Software 200,000 (b) 9,225,000 ______________ Total 105,236,525 _____________________________________________________________________________________________________________________________ Energy (3.1%) Amoco 400,000 25,550,000 Mobil 200,000 20,150,000 TOTAL Cl B 700,000 21,612,500 Ultramar 316,400 7,712,250 Union Texas Petroleum 500,000 9,000,000 ______________ Total 84,024,750 _____________________________________________________________________________________________________________________________ Financial services (3.6%) Block (H&R) 400,000 16,500,000 Crown Amer REIT 400,000 3,050,000 Duke Realty Investors 200,000 6,125,000 Equity Residential REIT 200,000 5,600,000 Mid-Amer Apart Communities REIT 264,600 6,085,800 Mutual Risk Management 400,000 14,750,000 Omega Healthcare Investors 200,000 5,075,000 Simon Property REIT 500,000 11,625,000 Storage USA REIT 200,000 5,850,000 Travelers 500,000 25,250,000 ______________ Total 99,910,800 _____________________________________________________________________________________________________________________________ Food (2.2%) ConAgra 500,000 19,312,500 General Mills 400,000 22,950,000 Heinz (HJ) 400,000 18,600,000 ______________ Total 60,862,500 _____________________________________________________________________________________________________________________________ Health care (6.9%) Amer Home Products 300,000 26,587,500 Amgen 300,000 (b) 14,400,000 Johnson & Johnson 400,000 32,600,000 Medtronic 200,000 11,550,000 Merck 600,000 34,500,000 Pfizer 600,000 34,425,000 Schering-Plough 650,000 34,856,250 ______________ Total 188,918,750 Health care services (1.2%) Columbia Healthcare 372,500 18,299,062 Service Corp Intl 400,000 16,050,000 ______________ Total 34,349,062 _____________________________________________________________________________________________________________________________ Industrial equipment & services (2.6%) Amer Standard 600,000 (b) 16,050,000 Caterpillar 225,000 12,628,125 Deere 175,000 15,640,625 Illinois Tool Works 496,000 28,830,000 ______________ Total 73,148,750 _____________________________________________________________________________________________________________________________ Industrial transportation (1.7%) Norfolk Southern 300,000 23,175,000 Union Pacific 350,000 22,881,250 ______________ Total 46,056,250 _____________________________________________________________________________________________________________________________ PAGE 21 Insurance (4.4%) Amer Intl Group 300,000 25,312,500 General Re 225,000 32,596,875 Lincoln Natl 600,000 26,775,000 Prudential Reinsurance Holdings 536,600 (b) 10,933,225 Unum 500,000 26,312,500 ______________ Total 121,930,100 _____________________________________________________________________________________________________________________________ Media (3.6%) Amer Greetings Cl A 902,100 28,416,150 Bell Cablemedia 160,000 (b) 2,380,000 Liberty Media Cl A 125,000 (b) 3,078,125 McGraw-Hill 250,000 20,468,750 Tele-Communications Cl A 500,000 (b) 8,500,000 Time Warner 550,000 20,075,000 Viacom Cl B 300,000 (b) 15,000,000 ______________ Total 97,918,025 _____________________________________________________________________________________________________________________________ Metals (2.3%) Aluminum Co Amer 312,800 15,952,800 Freeport-McMoRan Cooper & Gold Cl B 1,000,000 22,750,000 Santa Fe Pacific Gold 1,800,000 17,775,000 UCAR Intl 276,100 (b) 7,868,850 ______________ Total 64,346,650 _____________________________________________________________________________________________________________________________ Multi-industry conglomerates (1.2%) General Electric 525,000 33,206,250 _____________________________________________________________________________________________________________________________ Paper & packaging (2.1%) Crown Cork & Seal 600,000 (b) 20,925,000 Kimberly-Clark 500,000 36,312,500 ______________ Total 57,237,500 Retail (4.4%) Gap 750,000 29,531,250 Home Depot 600,000 22,350,000 Intimate Brands 800,000 (b,c) 13,400,000 Office Depot 709,900 (b) 20,320,888 Penney (JC) 550,000 23,168,750 Pep Boy Manny Moe & Jack 600,000 13,125,000 ______________ Total 121,895,888 _____________________________________________________________________________________________________________________________ Soaps & cosmetics (2.4%) Duracell 500,000 26,187,500 Gillette 600,000 29,025,000 Procter & Gamble 145,600 11,793,600 ______________ Total 67,006,100 _____________________________________________________________________________________________________________________________ Textiles & apparel (0.7%) Warnaco Group Cl A 800,000 18,600,000 _____________________________________________________________________________________________________________________________ Utilities - electric (0.5%) Powergen 775,000 (c) 12,884,375 _____________________________________________________________________________________________________________________________ Utilities - natural gas (0.7%) Columbia Gas System 500,000 (b) 19,250,000 _____________________________________________________________________________________________________________________________ Utilities - telephone (5.3%) AirTouch Communications 900,000 (b) 25,650,000 AT&T 400,000 25,600,000 BellSouth 400,000 30,600,000 MFS Communications 187,557 (b) 7,572,614 SBC Communications 500,000 27,937,500 U S WEST 600,000 28,575,000 ______________ Total 145,935,114 _____________________________________________________________________________________________________________________________ Foreign (12.6%)(d) British Petro ADR 90,000 7,942,500 Central Puerto ADR 500,000 (e) 7,562,500 Ericsson (LM) ADR 9,000,000 27,000,000 General Cable 910,000 (b) 13,536,250 Grupo Carso ADR 275,000 (b) 2,879,297 PAGE 22 Madeco ADR 175,000 4,353,125 Millicom Intl Cellular 500,000 (b) 16,500,000 National Power 850,000 10,625,000 Nedcor 110,000 (b) 6,325,000 Nokia Perferred 500,000 27,875,000 NYNEX CableComms Group 467,500 (b) 9,525,313 Qantas Airways 275,500 (b,e) 4,868,800 Repsol ADR 800,000 23,700,000 Royal Dutch Petroleum 350,000 43,006,250 Schlumberger 500,000 31,125,000 SGL Carbon 370,200 (b,e) 24,272,903 SmithKline Beecham 600,000 31,125,000 Tele Italia Mobile 10,000,000 11,110,000 Telecom Italia 10,000,000 (b) 11,800,000 Veba 500,000 20,526,000 Videotron Holdings ADR 780,000 (b) 10,286,250 ______________ Total 345,944,188 _____________________________________________________________________________________________________________________________ Total common stocks of unaffiliated issuers (Cost: $1,921,769,599) $2,259,770,527 _____________________________________________________________________________________________________________________________ Preferred stocks (4.7%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Alco Standard 6.50% Cm Cv 193,900 $ 16,578,450 Best Buy 6.50% Cm Cv 220,000 (c) 8,965,000 Ceridan $2.75 Cm Cv 275,000 26,812,500 COINTEL 5.04% Cv 225,000 (f) 9,675,000 First Chicago Nextell 5.50% Cm Cv 900,000 (c) 15,862,500 General Motors 3.25% Cm Cv 300,000 20,100,000 Kenetech $1.67 Cm Cv 783,000 (f) 4,208,625 MascoTech 6% Cm Cv 280,400 3,505,000 MFS Communication 2.68% Cm Cv 575,000 22,712,500 _____________________________________________________________________________________________________________________________ Total preferred stocks (Cost: $129,412,934) $ 128,419,575 _____________________________________________________________________________________________________________________________ Bonds (7.4%) _____________________________________________________________________________________________________________________________ Principal Issuer and coupon rate amount Value(a) _____________________________________________________________________________________________________________________________ Domestic (4.8%) Baby Superstore 4.875% Cv 2000 $10,000,000 $ 10,600,000 Conner Peripherals 6.75% Cv 2001 10,000,000 9,425,000 Equitable Companies 6.125% Cv 2024 20,000,000 20,450,000 Intl Cable Telephone 7.25% Cv 2005 10,700,000 12,318,375 NAC Re 5.25% Cv 2002 15,000,000 (e) 14,887,500 Roche Holdings Zero Coupon 7% Cv 2010 30,000,000 (e,g) 12,412,500 Rogers Communications Zero Coupon 4.74% Cv 2013 50,000,000 (g) 17,625,000 SynOptics Communications 5.25% 2003 20,000,000 (e) 22,400,000 U.S. Filter 6% Cv 2005 10,000,000 (e) 10,512,500 ______________ Total 130,630,875 _____________________________________________________________________________________________________________________________ PAGE 23 Foreign (2.6%)(d) Banco Nacional de Mexico 7% Cv 1999 7,500,000 (e) 6,000,000 Grand Metropolitan 6.50% Cv 2000 15,000,000 (e) 17,100,000 Mutual Risk Zero Coupon 7.03% Cv 2010 42,200,000 (e,g) 15,139,250 Sahaviriya Steel 3.50% Cv 2005 10,000,000 (c,e) 8,500,000 Sapi 7.50% Cv 2002 11,000,000 (e) 11,206,250 Scandinavian Broadcasting 7.25% Cv 2005 13,260,000 14,221,350 ______________ Total 72,166,850 _____________________________________________________________________________________________________________________________ Total bonds (Cost: $195,988,314) $ 202,797,725 _____________________________________________________________________________________________________________________________
Options purchased (0.5%) _____________________________________________________________________________________________________________________________ Issuer Number Exercise Expiration Value(a) of contracts price date _____________________________________________________________________________________________________________________________ Put S&P 500 6,500 $585 Nov. 1995 $ 4,793,750 9,000 585 Dec. 1995 9,562,500 _____________________________________________________________________________________________________________________________ Total options purchased (Cost: $15,730,750) $ 14,356,250 _____________________________________________________________________________________________________________________________
Short-term securities (6.1%) _____________________________________________________________________________________________________________________________ Issuer Annualized Amount Value(a) yield on payable at date of maturity purchase _____________________________________________________________________________________________________________________________ U.S. government agencies (0.5%) Federal Home Loan Bank Disc Note 11-06-95 5.65% $ 7,400,000 $ 7,394,214 U.S. Treasury Bills 01-11-96 5.32 5,000,000 4,947,000 ______________ Total 12,341,214 _____________________________________________________________________________________________________________________________ Commercial paper (5.6%) A.I. Credit 12-04-95 5.75 6,100,000 6,068,016 Aon 11-17-95 5.72 8,090,000 8,069,613 AT&T Capital 11-01-95 5.73 10,200,000 10,200,000 CAFCO 11-15-95 5.75 4,200,000 (h) 4,190,657 12-08-95 5.75 9,300,000 9,245,422 Campbell Soup 11-30-95 5.70 4,900,000 (h) 4,875,338 Cargill 11-10-95 5.74 5,000,000 4,992,850 Ciesco LP 11-09-95 5.72 4,000,000 3,994,960 Colgate-Palmolive 11-27-95 5.77 5,300,000 (h) 5,278,067 Commerzbank U.S. Finance 11-10-95 5.76 4,000,000 3,992,360 CPC Intl 11-10-95 5.73 6,700,000 (h) 6,690,486 PAGE 24 Dean Witter, Discover & Co. 01-18-96 5.76 3,500,000 3,454,531 Deutsche Bank Financial 11-09-95 5.75 6,000,000 5,992,373 11-20-95 5.76 8,000,000 7,975,849 General Electric Capital 11-29-95 5.76 3,900,000 3,882,649 Goldman Sachs Group 11-16-95 5.74 7,100,000 7,080,129 11-22-95 5.75 7,900,000 7,873,640 Household Finance 11-22-95 5.76 4,200,000 4,185,962 Lincoln Natl 11-14-95 5.73 3,100,000 (h) 3,092,319 Merrill Lynch 12-01-95 5.77 3,100,000 3,085,197 Norfolk Southern 12-13-95 5.70 8,747,000 (h) 8,682,101 PACCAR Financial 11-20-95 5.75 4,200,000 4,187,321 SAFECO Credit 11-16-95 5.75 4,400,000 4,389,513 11-21-95 5.75 7,000,000 6,977,756 Siemens 11-16-95 5.74 2,200,000 2,194,766 USAA Capital 11-28-95 5.74 8,000,000 7,965,740 Wachovia Bank 12-12-95 5.75 6,500,000 6,499,920 ______________ Total 155,117,535 _____________________________________________________________________________________________________________________________ Total short-term securities (Cost: $167,476,969) $ 167,458,749 _____________________________________________________________________________________________________________________________ Total investments in securities of unaffiliated issuers (Cost: $2,430,378,566) $2,772,802,826 _____________________________________________________________________________________________________________________________ Investments in securities of affiliated issuer (i) _____________________________________________________________________________________________________________________________ Common stock (0.9%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Lukens 800,000 $ 24,600,000 _____________________________________________________________________________________________________________________________ Total investments in securities of affiliated issuer (Cost: $27,342,800) $ 24,600,000 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $2,457,721,366)(j) $2,797,402,826 _____________________________________________________________________________________________________________________________ Notes to investments in securities _____________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Presently non-income producing. (c) Security is partially or fully on loan. See Note 5 to the financial statements. (d) Foreign security values and principal amounts are stated in U.S. dollars. (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) PRIDES - Preferred Redeemed Increased Dividend Equity Securities are structured as convertible preferred securities issued by a company. Investors receive an enhanced yield but based upon a specific formula, potential appreciation is limited. PRIDES pay dividends, have voting rights, are noncallable for three years and upon maturity, convert into shares of common stocks. (g) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition. (h) Commercial paper sold within terms of a private placement memorandum, exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors." This security has been determined to be liquid under the guidelines established by the board of directors. (i) Investments representing 5% or more of the outstanding voting securities of the issuer. (j) At Oct. 31, 1995, the cost of securities for federal income tax purposes was $2,461,485,805 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $436,034,133 Unrealized depreciation (100,117,112) _____________________________________________________________________________________________ Net unrealized appreciation $335,917,021 _____________________________________________________________________________________________
PAGE 25 IDS mutual funds Cash equivalent investments These money market funds have three main goals: conservation of capital, constant liquidity and the highest possible current income consistent with these objectives. Very limited risk. IDS Cash Management Fund Invests in such money market securities as high quality commercial paper, bankers' acceptances, certificates of deposits (CDs) and other bank securities. (icon of) piggy bank IDS Tax-Free Money Fund Invests primarily in short-term bonds and notes issued by state and local governments to seek high current income exempt from federal income taxes. (icon of) shield with piggy bank enclosed Income investments The funds in this group invest their assets primarily in corporate bonds or government securities to seek interest income. Secondary objective is capital growth. Risk varies by bond quality. IDS Global Bond Fund Invests primarily in debt securities of U.S. and foreign issuers to seek high total return through income and growth of capital. (icon of) globe IDS Extra Income Fund Invests mainly in long-term, high-yielding corporate fixed-income securities in the lower rated, higher risk bond categories to seek high current income. Secondary objective is capital growth. (icon of) cornucopia IDS Bond Fund Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk bond categories, or the equivalent, and in government bonds. (icon of) greek column PAGE 26 IDS Selective Fund Invests in high-quality corporate bonds and other highly rated debt instruments including government securities and short-term investments. Seeks current income and preservation of capital. (icon of) skyline IDS Federal Income Fund Invests primarily in securities issued or guaranteed as to the timely payment of principal and interest by the U.S. government, its agencies and instrumentalities. Seeks a high level of current income and safety of principal consistent with its type of investments. (icon of) federal building Tax-exempt income investments These funds provide tax-free income by investing in municipal bonds. The income is generally free from federal income tax. Risk varies by bond quality. IDS High Yield Tax-Exempt Fund Invests primarily in medium- and lower-quality municipal bonds and notes. Lower-quality securities generally involve greater risk of principal and income. (icon of) shield with basket of apples enclosed IDS State Tax-Exempt Funds (CA, MA, MI, MN, NY, OH) Invests primarily in high- and medium-grade municipal securities to provide income to residents of each respective state that is exempt from federal, state and local income taxes. (New York is the only state that is exempt at the local level.) (icon of) shield with U.S. enclosed IDS Tax-Exempt Bond Fund Invests mainly in bonds and notes of state or local government units, with at least 75% in the four highest rated, lowest risk bond categories. (icon of) shield with Greek column IDS Insured Tax-Exempt Fund Invests primarily in municipal securities that are insured as to the timely payment of principal and interest. The insurance feature minimizes credit risk of the fund but does not guarantee the market value of the fund's shares. (icon of) shield with eagle head PAGE 27 Growth and income investments These funds focus on securities of medium to large, well- established companies that offer long-term growth of capital and reasonable income from dividends and interest. Moderate risk. IDS International Fund Invests primarily in common stocks of foreign companies that offer potential for superior growth. The fund may invest up to 20% of its assets in the U.S. market. (icon of) three flags IDS Managed Retirement Fund Invests in a combination of common stocks, fixed-income investments and money market securities to seek a maximum total return through a combination of growth of capital and current income. (icon of) bird in a nest IDS Equity Select Fund Invests primarily in a combination of moderate growth stocks, higher-yielding equities and bonds. Seeks growth of capital and income. (icon of) three apple trees IDS Blue Chip Advantage Fund Invests in selected stocks from a major market index. Securities purchased are those recommended by our research analysts as the best from each industry represented on the index. Offers potential for long-term growth as well as dividend income. (icon of) ribbon IDS Stock Fund Invests in common stock of companies representing many sectors of the economy. Seeks current income and growth of capital. (icon of) building with columns IDS Equity Value Fund Invests primarily in undervalued common stocks that offer potential for growth of capital and income. (icon of) three growing flowers PAGE 28 IDS Utilities Income Fund Invests primarily in the stocks of public utility companies to seek high current income and growth of income and capital with reduced volatility. (icon of) electrical cord IDS Diversified Equity Income Fund Invests primarily in high-yielding common stocks to seek high current income and, secondarily, to benefit from the growth potential offered by stock investments. (icon of) four puzzle pieces IDS Mutual Invests in a balance between common stocks and senior securities (preferred stocks and bonds). Seeks a balance of growth of capital and current income. (icon of) scale of justice Growth investments Funds in this group seek capital growth, primarily from common stocks. They are high risk mutual funds with a potential for high reward. IDS Discovery Fund Invests in small- and medium-size, growth-oriented companies emphasizing technological innovation and productivity enhancement. Buys and holds larger growth-oriented stocks. (icon of) ship IDS Strategy Aggressive Fund Invests primarily in common stocks of companies that are selected for their potential for above-average growth. Above-average means that their growth potential is better, in the opinion of the portfolio's investment manager, than the Standard & Poor's Corporation (S&P) 500 Stock Index. (icon of) chess piece IDS Growth Fund Invests primarily in companies that have above-average potential for long-term growth as a result of new management, marketing opportunities or technological superiority. (icon of) flower PAGE 29 IDS Global Growth Fund Invests in stocks of companies throughout the world that are positioned to meet market needs in a changing world economy. These companies offer above-average potential for long-term growth. (icon of) world IDS New Dimensions Fund Invests primarily in companies with significant growth potential due to superiority in technology, marketing or management. The fund frequently changes its industry mix. (icon of) dimension IDS Progressive Fund Invests primarily in undervalued common stocks. The fund holds stocks for the long term with the goal of capital growth. (icon of) shooting star Specialty growth investment This fund aggressively seeks capital growth as a hedge against inflation. IDS Precious Metals Fund Invests primarily in the securities of foreign or domestic companies that explore for, mine and process or distribute gold and other precious metals. This is the most aggressive and most speculative IDS mutual fund. (icon of) cart of precious gems For more complete information about any of these funds, including charges and expenses, you can obtain a prospectus by contacting your financial advisor or writing to American Express Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534. Read it carefully before you invest or send money. PAGE 30 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 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 advisor on how to report distributions for state and local purposes. IDS Stock Fund, Inc. Fiscal year ended Oct. 31, 1995 Class A Income distributions taxable as dividend income, 73.61% qualifying for deduction by corporations. Payable date Per share Dec. 29, 1994 $0.36500 March 30, 1995 0.12226 June 28, 1995 0.11105 Sept. 28, 1995 0.11727 Total $0.71558 Capital gain distribution taxable for long-term capital gain. Payable date Per share Dec. 29, 1994 $1.28788 Total distributions $2.00346 The distribution of $1.65288 per share, payable Dec. 29, 1994, consisted of $0.14000 derived from net investment income, $0.22500 from net short-term capital gains (a total of $0.36500 taxable as dividend income) and $1.28788 from net long-term capital gains. Class B Income distributions taxable as dividend income, 73.61% qualifying for deduction by corporations. March 30, 1995 0.12118 June 28, 1995 0.09275 Sept. 28, 1995 0.09412 Total distributions $0.30805 Class Y Income distributions taxable as dividend income, 73.61% qualifying for deduction by corporations. March 30, 1995 0.12321 June 28, 1995 0.11688 Sept. 28, 1995 0.12827 Total distributions $0.36836 PAGE 31 Quick telephone reference American Express Telephone Transaction Service Redemptions and exchanges, dividend payments or reinvestments and automatic payment arrangements National/Minnesota: 800-437-3133 Mpls./St. Paul area: 671-3800 American Express Shareholder Service Fund performance, objectives and account inquiries 612-671-3733 TTY Service For the hearing impaired 800-846-4852 American Express Infoline Automated account information (TouchToneR phones only), including current fund prices and performance, account values and recent account transactions National/Minnesota: 800-272-4445 Mpls./St. Paul area: 671-1630 AMERICAN EXPRESS FINANCIAL ADVISORS IDS Stock Fund IDS Tower 10 Minneapolis, MN 55440-0010 PAGE 32 STATEMENT OF DIFFERENCES Difference Description 1) The layout is different 1) Some of the layout in the throughout the annual report. annual report to shareholders is in two columns. 2) Headings. 2) The headings in the annual report and prospectus are placed in a blue strip at the top of the page. 3) There are pictures, icons 3) Each picture, icon and and graphs throughout the graph is described in annual report and prospectus. parentheses. 4) Footnotes for charts and 4) The footnotes for each graphs are described at chart or graph are typed the left margin. below the description of the chart or graph. -----END PRIVACY-ENHANCED MESSAGE-----