-----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, E0DSTZRXoZP3zfOYawF4+W9BlFsMxjEdkoxU1FlNBe4yYgY6wa3f4KM0OIpBRTer FaCrUX+Wagg1DyJKOQ+YgA== 0000820027-96-000381.txt : 19960625 0000820027-96-000381.hdr.sgml : 19960625 ACCESSION NUMBER: 0000820027-96-000381 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960624 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: 96584506 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 PAGE IDS Stock Fund 1996 semiannual report 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. Distributed by American Express Financial Advisors Inc. Big names, big business While some investors like to strive for the potentially outstanding returns that can be generated by stocks of newer companies, others are more comfortable with the usually steadier performance provided by stocks of more established businesses. IDS Stock Fund focuses on stocks in the latter group, many of which long ago made their marks in American enter- rise and in some cases, also have a strong international business presense. These stocks offer the potential dual benefit of growth along with a steady stream of dividend income. Contents From the president 3 From the portfolio manager 3 Ten largest holdings 5 Financial statements 6 Notes to financial statements 9 Investments in securities 23 Board members and officers 28 IDS mutual funds 29 To our shareholders William R. Pearce President of the Fund Richard H. Warden Portfolio manager From the president If you're an experienced investor, you know that 1995 and the opening months of 1996 were an unusually strong period for the U.S. stock market. Perhaps just as important, you also know that history shows that bull markets don't last forever. Though they're often unpredictable, declines-- whether they're brief or long-lasting, moderate or substantial--are always a possibility. That fact reinforces the need for investors to periodically review their long-term goals and examine whether their investment program remains on track to achieving them. Your quarterly investment statements are one part of that monitoring process. The other is a meeting with your American Express financial advisor. That becomes even more important if there's a major change in your financial situation or in the financial markets. William R. Pearce From the portfolio manager The stock market continued its powerful rally during the past six months, setting the stage for a positive performance by IDS Stock Fund. Our portfolio was well-structured for the environment, and ultimately generated a total return of more than 12% for the November 1995 through April 1996 period, the first half of the Fund's fiscal year. (Please note that a portion of the Fund's total return came in the form of a capital gain paid to sharesholders last December, which reduced the Fund's net asset value by a like amount at that time.) With the favorable forces of falling interest rates, low inflation and strong corporate profits still in effect, stocks got off to a strong start last November and maintained their momentum through February. At that point, with long-term interest rates on the rise and increasing concern about the possiblity of higher inflation ahead, stocks began to sag a bit, finishing only slightly higher over the final two months of the period. Somewhat conservative structure pays off As we noted in our last shareholder report, we planned to take a relatively conservative approach into the current fiscal year. This included concentrating on large, high-quality companies with substantial dividends and the wherewithal to succeed in what we expected would be a more challenging environment. As it turned out, and with some notable exceptions, companies largely enjoyed relatively smooth sailing during the period. For the Fund, much of the most positive performance came from our holdings in the aerospace, metals (chiefly gold), financial services, chemicals and retailing sectors. Prominent names included Boeing, Firstmiss Gold, NationsBank and Gap. On the other hand, among the weaker sectors for us was the household product group, including Procter & Gamble and Gillette. Foreign stocks, which comprised about 15% of portfolio assets, gave us generally good results. Also enhancing Fund performance was our decision to hold very little cash reserves, approximately 1% to 2%. Instead of using a higher level of cash to provide a cushion in the event of a market downturn, we bought put options on the market. Although the market experienced only minor setbacks, the options proved to be a more efficient way to buy some market "insurance" than to hold substantial cash reserves. Convertible securities help shore up yield Because of the market's lengthy advance, stock yields continued to decline during the period, reducing the Fund's yield in the process. To try to combat this trend, we added more convertible preferred stocks and convertible bonds, which offer considerably higher yields than most common stocks. As we head into the second half of the fiscal year, while we don't believe a major downturn is necessarily in the offing, we do expect stocks to find tougher going than they enjoyed in 1995. Therefore, the volatility we've seen thus far in 1996 probably will continue. Given that outlook, we plan to hold to a somewhat more conservative strategy, including letting the cash reserves build up a bit, while we continue to focus on enhancing the Fund's yield. Richard H. Warden Class A 6-month performance (All figures per share) Net asset value (NAV) April 30, 1996 $ 21.61 Oct. 31, 1995 $ 19.96 Increase $ 1.65 Distributions Nov. 1, 1995 - April 30, 1996 From income $ 0.21 From capital gains $ 0.64 Total distributions $ 0.85 Total return* +12.8%** Class B 6-month performance (All figures per share) Net asset value (NAV) April 30, 1996 $21.53 Oct. 31, 1995 $19.91 Increase $ 1.62 Distributions Nov. 1, 1995 - April 30, 1996 From income $ 0.15 From capital gains $ 0.64 Total distributions $ 0.79 Total return* +12.4%** Class Y (All figures per share) Net asset value (NAV) April 30, 1996 $21.61 Oct. 31, 1995 $19.96 Increase $ 1.65 Distributions Nov. 1, 1995 - April 30, 1996 From income $ 0.23 From capital gains $ 0.64 Total distributions $ 0.87 Total return* +12.9%** *The prospectus discusses the effect of sales charges, if any, on the various classes. **The total return is a hypothetical investment in the Fund with all distributions reinvested. PAGE
IDS Stock Fund, Inc. The Fund's ten largest holdings The ten holdigs listed here make up 11.12% of the Fund's net assets _____________________________________________________________________________________ Percent Value Fund's net assets)(as of April 30, 1996) _____________________________________________________________________________________ General Electric 1.31% $40,687,500 A diversified company with interest in manufacturing, broadcasting (NBC), financial services and technology. Pfizer 1.22 37,881,250 The leading producer of pharmaceuticals, hospital products, animal health items, non-prescription medications and specialty chemicals. Kimberly-Clark 1.17 36,312,500 World's largest manufacturer of tissue products and other household, personal care and industrial paper products. Duracell 1.09 33,937,500 A leading battery company in the world, operating in over 90 countries. Illinois Tool Works 1.07 33,356,000 A highly-regarded industrial manufacturer, with a broad, leading-edge base of capital goods and consumer component products. GAP 1.06 33,137,500 An international specialty retailer which operates stores selling casual apparel, shoes and other accessories for men, women, and children under a number of trade names, including: Gap, Gapkids, BabyGap, Banana Republic and Old Navy Clothing Co. First Chicago 1.06 33,000,000 A bank holding company whose main business is commercial banking, but with retail banking and credit card operation as well. Freeport-McMoRan Cooper & Gold 1.06 32,875,000 Engaged in the exploration for and development of, mining and milling of ore containing cooper, gold and silver in Indonesia. Gillette 1.04 32,400,000 A leading marketer of blades and razors, toiletry products and writing instruments. Johnson & Johnson 1.04 32,375,000 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.
PAGE
Financial statements Statement of assets and liabilities IDS Stock Fund, Inc. April 30, 1996 _____________________________________________________________________________________________________________ Assets _____________________________________________________________________________________________________________ (Unaudited) Investments in securities, at value (Note 1) (identified cost $2,603,815,209) $3,137,507,775 Dividends and accrued interest receivable 4,791,214 Receivable for investment securities sold 53,305,535 U.S. government securities held as collateral (Note 4) 14,421,321 _____________________________________________________________________________________________________________ Total assets 3,210,025,845 _____________________________________________________________________________________________________________ Liabilities _____________________________________________________________________________________________________________ Disbursements in excess of cash on demand deposit 732,090 Payable for investment securities purchased 24,809,630 Payable upon return of securities loaned (Note 4) 72,810,338 Unrealized depreciation on foreign currency contracts held, at value (Notes 1 and 7) 2,974 Accrued investment management services fee 92,698 Accrued distribution fee 5,673 Accrued service fee 43,472 Accrued transfer agency fee 36,368 Accrued administrative services fee 10,330 Other accrued expenses 576,008 _____________________________________________________________________________________________________________ Total liabilities 99,119,581 _____________________________________________________________________________________________________________ Net assets applicable to outstanding capital stock $3,110,906,264 _____________________________________________________________________________________________________________ Represented by _____________________________________________________________________________________________________________ Capital stock -- authorized 10,000,000,000 shares of $.01 par value $ 1,439,862 Additional paid-in capital 2,442,029,965 Undistributed net investment income 4,733,639 Accumulated net realized gain (Note 1) 129,013,101 Unrealized appreciation of investments and on translation of assets and liabilities in foreign currencies (Note 7) 533,689,697 _____________________________________________________________________________________________________________ Total -- representing net assets applicable to outstanding capital stock $3,110,906,264 _____________________________________________________________________________________________________________ Net assets applicable to outstanding shares: Class A $2,218,270,053 Class B $ 69,976,638 Class Y $ 822,659,573 Net asset value per share of outstanding capital stock: Class A shares 102,668,175 $ 21.61 Class B shares 3,249,696 $ 21.53 Class Y shares 38,068,304 $ 21.61 See accompanying notes to financial statements. PAGE Financial statements Statement of operations IDS Stock Fund, Inc. Six months ended April 30, 1996 _____________________________________________________________________________________________________________ Investment income _____________________________________________________________________________________________________________ (Unaudited) Income: Dividends (net of foreign taxes withheld of $231,876) $ 29,896,504 Interest 8,276,900 _____________________________________________________________________________________________________________ Total income 38,173,404 _____________________________________________________________________________________________________________ Expenses (Note 2): Investment management services fee 6,657,317 Distribution fee -- Class B 181,514 Transfer agency fee 1,646,449 Incremental transfer agency fee -- Class B 3,799 Service fee Class A 1,779,513 Class B 42,043 Administrative services fee 454,524 Compensation of board members 112,035 Compensation of officers 11,872 Custodian fees 166,696 Postage 108,303 Registration fees 148,539 Reports to shareholders 80,073 Audit fees 16,500 Administrative 10,559 Other 14,491 _____________________________________________________________________________________________________________ Total expenses 11,434,227 Earnings credits on cash balances (Note 2) (3,917) _____________________________________________________________________________________________________________ Total net expenses 11,430,310 _____________________________________________________________________________________________________________ Investment income -- net 26,743,094 _____________________________________________________________________________________________________________ Realized and unrealized gain (loss)--net _____________________________________________________________________________________________________________ Net realized gain on security and foreign currency transactions (including loss of $19,946 from foreign currency transactions) (Note 3) 138,190,847 Net realized loss on sale of affiliated security (5,215,951) Net realized gain on expired option contracts written (Note 6) 227,367 _____________________________________________________________________________________________________________ Net realized gain on investments and foreign currency 133,202,263 Net change in unrealized appreciation or depreciation of investments and on translation of assets and liabilities in foreign currencies 194,008,237 _____________________________________________________________________________________________________________ Net gain on investments and foreign currency 327,210,500 _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations $353,953,594 _____________________________________________________________________________________________________________ See accompanying notes to financial statements. /TABLE PAGE
Financial statements Statements of changes in net assets IDS Stock Fund, Inc. _____________________________________________________________________________________________________________ Operations and distributions April 30, 1996 Oct. 31, 1995 _____________________________________________________________________________________________________________ Six months ended Year ended (Unaudited) Investment income -- net $ 26,743,094 $ 64,325,841 Net realized gain on investments and foreign currency 133,202,263 89,188,632 Net change in unrealized appreciation or depreciation of investments and on translation of assets and liabilities in foreign currencies 194,008,237 191,467,078 _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations 353,953,594 344,981,551 _____________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income Class A (17,645,040) (51,850,665) Class B (271,827) (173,178) Class Y (7,351,128) (13,057,749) Net realized gain Class A (66,949,954) (184,130,267) Class B (1,317,953) -- Class Y (25,308,530) -- _____________________________________________________________________________________________________________ Total distributions (118,844,432) (249,211,859) _____________________________________________________________________________________________________________ Capital share transactions (Note 5) _____________________________________________________________________________________________________________ Proceeds from sales Class A shares (Note 2) 176,304,464 401,647,287 Class B shares 37,691,592 29,160,960 Class Y shares 130,526,230 743,895,793 Reinvestment of distributions at net asset value Class A shares 77,784,958 214,124,802 Class B shares 1,578,883 170,388 Class Y shares 28,482,937 11,651,129 Payments for redemptions Class A shares (188,802,904) (1,025,683,435) Class B shares (Note 2) (2,365,034) (592,525) Class Y shares (137,241,325) (86,057,183) _____________________________________________________________________________________________________________ Increase in net assets from capital share transactions 123,959,801 288,317,216 _____________________________________________________________________________________________________________ Total increase in net assets 359,068,963 384,086,908 Net assets at beginning of period 2,751,837,301 2,367,750,393 _____________________________________________________________________________________________________________ Net assets at end of period (including undistributed net investment income of $4,733,639 and $3,258,540) $3,110,906,264 $2,751,837,301 _____________________________________________________________________________________________________________ See accompanying notes to financial statements. /TABLE PAGE Notes to financial statements IDS Stock Fund, Inc. (Unaudited as to April 30, 1996) ________________________________________________________________________ 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 invests primarily in common stocks and securities convertible into common stock. The Fund offers Class A, Class B and Class Y shares. Class A shares are sold with a front-end sales charge. Class B shares may be subject to a contingent deferred sales charge and such shares automatically convert to Class A after eight years. Class Y shares have no sales charge and are offered only to qualifying institutional investors. All classes of shares have identical voting, dividend, liquidation and other rights, and the same terms and conditions, except that the level of distribution fee, transfer agency fee and service fee (class specific expenses) differs among classes. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses on investments are allocated to each class of shares based upon its relative net assets. Significant accounting policies followed by the Fund are summarized below: Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the period. Actual results could differ from those estimates. Valuation of securities All securities are valued at the close of each business day. Securities traded on national securities exchanges or included in national market systems are valued at the last quoted sales price; securities for which market quotations are not readily available are valued at fair value according to methods selected in good faith by the board. Determination of fair value involves, among other things, reference to market indexes, matrixes and data from independent brokers. Short-term securities maturing in more than 60 days from the valuation date are valued at the market price or approximate market value based on current interest rates; those maturing in 60 days or less are valued at amortized cost. Option transactions In order to produce incremental earnings, protect gains, and facilitate buying and selling of securities for investment purposes, the Fund may buy or write options traded on any U.S. or foreign exchange or in the over-the-counter market where the completion of the obligation is dependent upon the credit standing of the other party. The Fund also may buy and sell put and call options and write covered call options on portfolio securities and may write cash-secured put options. The risk in writing a call option is that the Fund gives up the opportunity of profit if the market price of the security increases. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option 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. 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. 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 Effective March 20, 1995, the Fund entered into agreements with American Express Financial Corporation (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 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 $474,903 for the six months ended April 30, 1996. 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 $1,534,367 for Class A and $14,267 for Class B for the six months ended April 30, 1996. The Fund also pays custodian fees to American Express Trust Company, an affiliate of AEFC. During the six months ended April 30, 1996, the Fund's custodian and transfer agency fees were reduced by $3,917 as a result of earnings credits from overnight cash balances. The Fund has a retirement plan for its independent board members. Upon retirement, board members receive monthly payments equal to one-half of the retainer fee for as many months as they served as board members 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 board members serve on the board. The retirement plan expense amounted to $10,218 for the six months ended April 30, 1996. The plan was terminated April 30, 1996. The total liability for the plan is $101,355, which will be paid out at some future date. ______________________________________________________________________________ 3. Securities transactions Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated $1,369,675,601 and $1,380,166,295, respectively, for the six months ended April 30, 1996. Realized gains and losses are determined on an identified cost basis. Brokerage commissions paid to brokers affiliated with AEFC were $109,132 for the six months ended April 30, 1996. 4. Lending of portfolio securities At April 30, 1996, securities valued at $66,995,298 were on loan to brokers. For collateral, the Fund received $58,389,017 in cash and U.S. government securities valued at $14,421,321. Income from securities lending amounted to $171,842 for the six months ended April 30, 1996. 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. ______________________________________________________________________________ 5. Capital share transactions Transactions in shares of capital stock for the periods indicated are as follows: Six months ended April 30, 1996 Class A Class B Class Y ____________________________________________________________ Sold 8,465,367 1,806,539 6,261,569 Issued for reinvested 3,831,413 77,977 1,402,119 distributions Redeemed (9,057,094) (113,168) (6,570,950) ____________________________________________________________ Net increase 3,239,686 1,771,348 1,092,738 ____________________________________________________________ Year ended Oct. 31, 1995 Class A Class B* Class Y* _____________________________________________________________ Sold 21,417,041 1,499,973 40,820,045 Issued for reinvested 12,361,651 8,607 606,754 distributions Redeemed (55,899,864) (30,232) (4,451,233) _____________________________________________________________ Net increase (decrease) (22,121,172) 1,478,348 36,975,566 _____________________________________________________________ *Inception date was March 20, 1995. 6. Option contracts written The number of contracts and premium amounts associated with covered call options contracts written is as follows: Six months ended April 30, 1996 __________________________________ Contracts Premium ________________________________________________________________ Balance Oct. 31, 1995 -- $ -- Opened 3,500 227,367 Expired (3,500) (227,367) ________________________________________________________________ Balance April 30, 1996 -- $ -- ________________________________________________________________ ________________________________________________________________________ 7. Foreign currency contracts At April 30, 1996, the Fund had entered into two foreign currency exchange contracts that obligate the Fund to deliver currencies at specified future dates. The unrealized appreciation and/or depreciation on these contracts is included in the accompanying financial statements. The terms of the open contracts are as follows: Exchange date Currency to be Currency to be Unrealized delivered received depreciation ____________________________________________________________________ May 2, 1996 2,360,230 3,212,745 $1,819 U.S. Dollar Canadian Dollar May 3, 1996 1,604,540 2,184,212 1,155 U.S. Dollar Canadian Dollar ______ $2,974 8. Financial highlights The tables below show certain important financial information for evaluating the Fund's results. Fiscal period ended Oct. 31, Per share income and capital changes*
Class A 1996** 1995 1994 1993 1992 1991 Net asset value, $19.96 $19.48 $21.24 $20.05 $20.02 $17.26 beginning of period Income from investment operations: Net investment income .19 .52 .58 .55 .64 .68 Net gains (both realized 2.31 1.96 .21 2.93 1.11 4.02 and unrealized) Total from investment 2.50 2.48 .79 3.48 1.75 4.70 operations Less distributions: Dividends from net (.17) (.49) (.60) (.53) (.63) (.74) investment income Dividends from (.68) (1.51) (1.95) (1.76) (1.09) (1.20) realized gains Total distributions (.85) (2.00) (2.55) (2.29) (1.72) (1.94) Net asset value, $21.61 $19.96 $19.48 $21.24 $20.05 $20.02 end of period Ratios/supplemental data Class A 1996** 1995 1994 1993 1992 1991 Net assets, end of period $2,218 $1,984 $2,368 $2,059 $1,658 $1,513 (in millions) Ratio of expenses to .81%+ .79% .76% .73% .72% .65% average daily net assets Ratio of net income 1.78%+ 2.61% 2.99% 2.75% 3.21% 3.59% to average daily net assets Portfolio turnover rate 48% 69% 75% 76% 77% 58% (excluding short-term securities) Total return++ 12.8% 14.4% 3.9% 18.8% 9.4% 29.0% *For a share outstanding throughout the period. Rounded to the nearest cent. **Six months ended April 30, 1996 (Unaudited). +Adjusted to an annual basis. ++Total return does not reflect payment of a sales charge. /TABLE Financial highlights Fiscal period ended Oct. 31, Per share income and capital changes*
Class B Class Y 1996*** 1995** 1996*** 1995** Net asset value, $19.91 $18.03 $19.96 $18.03 beginning of period Income from investment operations: Net investment income (.08) .27 .20 .29 (loss) Net gains (both realized 2.49 1.92 2.32 2.01 and unrealized) Total from investment 2.41 2.19 2.52 2.30 operations Less distributions: Dividends from net (.11) (.31) (.19) (.37) investment income Dividends from (.68) -- (.68) -- realized gains Total distributions (.79) (.31) (.87) (.37) Net asset value, $21.53 $19.91 $21.61 $19.96 end of period Ratios/supplemental data Class B Class Y 1996*** 1995** 1996*** 1995** Net assets, end of period $70 $29 $823 $738 (in millions) Ratio of expenses to 1.58%+ 1.61%+ .64%+ .64%+ average daily net assets Ratio of net income 1.01%+ 1.37%+ 1.95%+ 2.38%+ to average daily net assets Portfolio turnover rate 48% 69% 48% 69% (excluding short-term securities) Total return++ 12.4% 12.1% 12.9% 12.8% *For a share outstanding throughout the period. Rounded to the nearest cent. **Inception date was March 20, 1995 for Class B and Class Y. ***Six months ended April 30, 1996 (Unaudited). +Adjusted to an annual basis. ++Total return does not reflect payment of a sales charge. /TABLE PAGE
Investments in securities IDS Stock Fund, Inc. (Percentages represent value of April 30, 1996 (Unaudited) investments compared to net assets) Common stocks (81.3%) Issuer Shares Value(a) Aerospace & defense (3.6%) Boeing 350,000 $ 28,743,750 General Motors Cl H 500,000 30,562,500 Lockheed Martin 300,000 24,187,500 Raytheon 500,000 25,312,500 United Technologies 22,300 2,464,150 Total 111,270,400 Airline (0.6%) AMR 200,000 (b) 17,850,000 Automotive & related (1.7%) Ford Motor 400,000 14,350,000 General Motors 200,000 10,850,000 Genuine Parts 600,000 26,550,000 Total 51,750,000 Banks and savings & loans (5.4%) Barnett Banks 400,000 25,350,000 First Chicago 800,000 33,000,000 First Union 400,000 24,600,000 KeyCorp 600,000 23,175,000 Morgan (JP) 200,000 16,825,000 NationsBank 400,000 31,900,000 Norwest Corp 400,000 14,450,000 Total 169,300,000 Beverages & tobacco (2.5%) Anheuser-Busch 300,000 20,137,500 PepsiCo 400,000 (c) 25,400,000 Philip Morris 350,000 31,543,750 See accompanying notes to investments in securities. Total 77,081,250 Chemicals (2.8%) duPont (EI) deNemours 300,000 24,112,500 Hercules 400,000 24,200,000 Monsanto 120,000 18,180,000 Nalco Chemical 400,000 12,200,000 Praxair 200,000 7,725,000 Total 86,417,500 Computers & office equipment (5.6%) Cisco Systems 600,000 31,125,000 Compaq Computer 465,000 21,680,625 Computer Associates Intl 200,000 14,675,000 General Motors Cl E 350,000 19,731,250 Oracle 750,000 (b) 25,312,500 Pitney Bowes 350,000 17,062,500 Silicon Graphics 1,000,000 (b) 29,625,000 Sterling Software 200,000 (b) 15,550,000 Total 174,761,875 Electronics (0.9%) Applied Materials 200,000 (b) 8,000,000 Intel 300,000 20,325,000 Total 28,325,000 Energy (0.8%) Amoco 125,000 9,125,000 Sun 500,000 15,500,000 Total 24,625,000 Financial services (2.7%) Block (H&R) 750,000 26,343,750 Omega Healthcare Investors 200,000 5,600,000 Simon Property Group REIT 500,000 11,500,000 Travelers 450,000 27,675,000 Travelers/Aetna Property Casualty 500,000 (b,c) 13,812,500 Total 84,931,250 Food (1.5%) ConAgra 230,500 8,903,062 General Mills 300,000 16,650,000 Heinz (HJ) 600,000 20,325,000 Total 45,878,062 Health care (8.0%) ALZA 400,000 (b) 11,400,000 American Home Products 300,000 31,650,000 Amgen 500,000 (b) 28,750,000 Forest Labs 309,300 (b) 14,266,462 Johnson & Johnson 350,000 32,375,000 Medtronic 300,000 15,937,500 Merck 317,526 19,210,323 Pfizer 550,000 37,881,250 Schering-Plough 550,000 31,556,250 SmithKline Beecham 500,000 27,000,000 Total 250,026,785 Health care services (1.8%) Columbia Healthcare 372,500 19,789,063 Service Corp Intl 400,000 (c) 21,250,000 Tenet Healthcare 700,000 (b) 14,350,000 Total 55,389,063 Industrial equipment & services (3.0%) American Standard 850,000 (b) 24,012,500 Caterpillar 225,000 14,400,000 Deere 525,000 20,409,375 Illinois Tool Works 496,000 33,356,000 Total 92,177,875 Industrial transportation (1.3%) Norfolk Southern 200,000 16,800,000 Union Pacific 350,000 23,843,750 Total 40,643,750 Insurance (3.6%) American Intl Group 300,000 27,412,500 EXEL 400,000 28,800,000 General Re 100,000 14,287,500 Prudential Reinsurance Holdings 536,600 12,207,650 UNUM 500,000 29,750,000 Total 112,457,650 Leisure time & entertainment (1.2%) Disney (Walt) 300,000 18,600,000 Harrah's Entertainment 500,000 (b) 17,250,000 Total 35,850,000 Media (1.7%) McGraw-Hill 500,000 22,062,500 Time Warner 650,000 26,568,750 Total 48,631,250 Metals (3.7%) Cameco 442,250 12,383,000 Firstmiss Gold 652,300 (b) 20,058,225 Freeport-McMoRan Copper & Gold 1,000,000 32,875,000 Newmont Mining 300,000 17,362,500 Stillwater Mining 500,000 12,000,000 UCAR Intl 500,000 20,500,000 Total 115,178,725 Multi-industry conglomerates (2.1%) Emerson Electric 300,000 25,087,500 General Electric 525,000 40,687,500 Total 65,775,000 Paper & packaging (2.1%) Crown Cork & Seal 600,000 28,275,000 Kimberly-Clark 500,000 36,312,500 Total 64,587,500 Restaurants & lodging (0.3%) Hilton Hotels 100,000 10,550,000 Retail (4.8%) Gap 1,100,000 33,137,500 Home Depot 600,000 28,425,000 Intimate Brands 800,000 16,900,000 Nordstrom 500,000 25,437,500 Penney (JC) 550,000 27,225,000 Pep Boys-Manny, Moe & Jack 600,000 20,025,000 Total 151,150,000 Soaps & cosmetics (2.5%) Duracell 750,000 33,937,500 Gillette 600,000 32,400,000 Procter & Gamble 145,600 12,303,200 Total 78,640,700 Textiles & apparel (0.7%) Warnaco Group Cl A 800,000 21,000,000 Utilities - natural gas (0.9%) Columbia Gas System 600,000 29,175,000 Utilities - telephone (2.8%) AirTouch Communications 501,000 (b) 15,656,250 BellSouth 700,000 28,000,000 GTE 500,000 21,687,500 Millicom Intl Cellular 500,000 (b) 23,625,000 Total 88,968,750 Foreign (12.7%) (d) Alberta Energy 1,000,000 (b) 19,577,590 Argentaria 535,000 21,652,259 Ashanti Goldfields 500,000 (b) 10,937,500 Bre-X Minerals 45,600 (b) 6,699,724 Canadian Natl Railway 366,900 6,971,100 Central Puerto ADR 340,000 (c,e) 6,205,000 Ericsson (LM) ADR 9,000,000 25,312,500 Lufthansa 115,000 (b,c) 18,243,711 Mutual Risk Management 400,000 15,800,000 National Power 928,500 (b) 24,721,313 Nedcor GDR 446,521 (b) 6,253,527 News Corp ADR 1,000,000 20,375,000 Nokia Preferred 500,000 18,187,500 Northern Telecommunications 325,000 16,737,500 Perez Companc ADR 904,000 (c) 11,245,760 Powergen ADR 775,000 (c) 19,762,500 Renaissance Energy 236,400 6,243,218 Repsol ADR 600,000 22,200,000 Schlumberger 350,000 30,887,500 SGL Carbon 300,000 (e,h) 28,324,077 TOTAL 700,000 23,975,000 Union Bank Norway 420,000 (e) 10,229,790 Veba 500,000 (c) 24,861,156 Total 395,403,225 Total common stocks (Cost: $2,003,089,361) $2,527,795,610
Preferred stocks and other (8.1%) Issuer Shares Value(a) AirTouch Communications 4% Cm Cv 525,000 $ 15,684,375 Alco Standard 6.50% Cm Cv 315,850 31,269,150 Calenergy Capital 6.25% Cm Cv 200,000 (e) 10,820,000 Ceridian 2.75% Cm Cv 275,000 29,425,000 Circuit City Stores 5.50% 535,715 (e) 15,997,789 Citicorp 5.50% Cv 250,000 19,250,000 COINTEL 7% Cv 225,000 (f) 12,909,375 Compaq Computer 5.50 % Cm Cv 380,000 17,008,420 ConAgra 4.50% Cv 350,000 13,606,250 Duracell 3% Cm Cv 195,000 9,018,750 First Chicago Nextell 5.50% Cv 237,900 (c) 4,520,100 Greenfield Capital Trust 6% Cm Cv 125,000 (e) 7,156,250 Kenetech $1.67 Cm Cv 783,000 (f) 929,813 MascoTech 6% Cv 280,400 (c) 3,890,550 Merck 4.50% Cv 225,000 13,668,750 Nedcor Warrants 110,000 316,250 Pittston Mineral 6.25% Cm Cv 150,000 (e) 5,550,000 Station Casinos 7% Cv 110,000 5,871,250 Vishay Intertechnology 6% Cm Cv 325,000 10,237,500 Wyman-Gordon 6% Cv 1,450,000 25,012,500 Total preferred stocks and other (Cost: $262,726,752) $ 252,142,072
Bonds (6.1%) Issuer Coupon Maturity Principal Value(a) rate year amount Domestic (3.8%) Applied Materials Cv 8.50 % 1998 $ 51,500,000 (e,h) $ 21,089,250 Baby Superstore Cv 4.875 2000 10,000,000 10,100,000 Healthsource Cv 5.00 2003 15,000,000 (e) 14,737,500 NAC Re Cv 5.25 2002 4,650,000 (e) 4,580,250 Roche Holdings Zero Coupon Cv 7.00 2010 30,000,000 (e,g) 13,162,500 SCI Systems Cv 5.00 2006 10,000,000 (e) 10,800,000 Softkey Cv Sr Nts 5.50 2000 15,000,000 (e) 13,050,000 SynOptics Communications Cv 5.25 2003 20,000,000 (e) 19,725,000 Tele Communications Intl Cv Sub Deb 4.50 2006 10,000,000 9,387,500 Total 116,632,000 Foreign (2.3%) (d) Ashanti Goldfields Cv 5.50 2003 15,000,000 14,962,500 BAA Euro 5.75 2006 6,000,000 9,838,122 Grand Metropolitan Cv 6.50 2000 15,000,000 (e) 17,081,250 Mutual Risk Management Zero Coupon Cv 7.03 2010 17,100,000 (e,g) 6,391,125 Scandinavian Broadcasting Cv Sub Deb 7.25 2005 15,000,000 15,637,500 Zurich Reinsurance Centre Cv 1.00 2003 10,000,000 (e) 7,912,500 Total 71,822,997 Total bonds (Cost: $162,445,958) $ 188,454,997
Option purchased (0.2%) Issuer Number Exercise Expiration Value(a) of contracts price date Put S&P 500 8,000 $635 June 1996$ 6,000,000 Total option purchased (Cost: $12,432,000) $ 6,000,000
Short-term securities (5.2%) Issuer Annualized Amount Value(a) yield on payable date of at purchase maturity U.S. government agency (0.4%) Federal Home Loan Mtge Disc Nts 05-13-96 5.18 % $7,685,000 $7,671,756 05-20-96 5.23 5,000,000 4,986,251 Total 12,658,007 Commercial paper (4.8%) ABN AMRO North American Finance 5-20-96 5.15 6,200,000 6,181,869 A.I . Credit 05-03-96 5.32 300,000 299,912 AIG Funding 05-13-96 5.34 3,400,000 3,393,971 Alabama Power 06-20-96 5.31 2,700,000 2,680,237 Albertson's 05-09-96 5.38 2,200,000 2,197,384 06-05-96 5.30 9,000,000 8,953,800 Barclays U.S. Funding 05-02-96 5.34 1,700,000 1,699,749 BellSouth Telecommunications 06-05-96 5.30 4,700,000 4,675,873 06-06-96 5.30 2,400,000 2,387,328 06-13-96 5.32 2,600,000 2,583,603 CAFCO 06-25-96 5.33 5,000,000 (i) 4,957,286 Ciesco LP 05-24-96 5.32 6,400,000 (i) 6,378,411 06-11-96 5.33 6,600,000 6,560,162 Commerzbank U.S. Finance 06-28-96 5.32 3,900,000 3,866,824 Gannett 05-13-96 5.34 1,000,000 998,227 05-23-96 5.30 8,200,000 (i) 8,173,541 Goldman Sachs 05-28-96 5.31 2,600,000 2,589,704 05-29-96 5.32 7,600,000 7,568,671 05-31-96 5.32 5,500,000 5,475,708 Lincoln Natl 05-16-96 5.31 3,700,000 (i) 3,691,875 Merrill Lynch 05-08-96 5.37 1,600,000 1,598,335 Mobil Australia Finance (Delaware) 05-30-96 5.30 6,000,000 (i) 5,974,480 Nestle Capital 05-13-96 5.34 3,800,000 3,793,261 Pacific Mutual Life 05-01-96 5.33 400,000 400,000 Penney (JC) Funding 06-13-96 5.31 6,500,000 6,459,007 Reed Elsevier 05-21-96 5.32 6,500,000 (i) 6,480,861 05-28-96 5.31 2,400,000 (i) 2,390,478 05-30-96 5.30 10,000,000 (i) 9,957,467 SAFECO Credit 05-16-96 5.34 500,000 498,892 Siemens 05-20-96 5.31 7,000,000 6,978,593 SmithKline Beecham 05-17-96 5.30 1,500,000 1,496,480 Toyota Motor Credit 06-07-96 5.32 7,500,000 7,459,223 Transamerica Finance 05-09-96 5.20 1,200,000 1,198,378 06-12-96 5.32 6,500,000 6,459,884 USAA Capital 05-17-96 5.31 4,007,000 3,997,615 Total 150,457,089 Total short-term securities (Cost: $163,121,138) $ 163,115,096 Total investments in securities (Cost: $2,603,815,209) (j) $3,137,507,775 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 4 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. (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) ELKS are equity-linked securities that are structured as an interest-bearing debt security of a brokerage firm and linked to the common stock of another company. The terms of ELKS differ from those of ordinary debt securities in that the principal amount received at maturity is not fixed but is based on the price of the common stock the ELK is linked to. The principal amount disclosed equals the current estimated future value of the amount to be received upon maturity. (i) 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. (j) At April 30, 1996, the cost of securities for the federal income tax purposes was approximately $2,603,502,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $597,443,000 Unrealized depreciation 1,010,304,824 Net unrealized appreciation $534,006,000
PAGE Board members and officers Board members and officers of the Fund _____________________________________________________________________ President and interested board member William R. Pearce President of all funds in the IDS MUTUAL FUND GROUP. _____________________________________________________________________ Independent board members Lynne V. Cheney Distinguished fellow, American Enterprise Institute for Public Policy Research. Robert F. Froehlke Former president of all funds in the IDS MUTUAL FUND GROUP. Heinz F. Hutter Former president and chief operating officer, Cargill, Inc. Anne P. Jones Attorney and telecommunications consultant. Melvin R. Laird Senior counsellor for national and international affairs, The Reader's Digest Association, Inc. Edson W. Spencer Former chairman and chief executive officer, Honeywell, Inc. Wheelock Whitney Chairman, Whitney Management Company. C. Angus Wurtele Chairman of the board, The Valspar Corporation. _____________________________________________________________________ Interested board members who are officers and/or employees of AEFC William H. Dudley Exective vice president, AEFC. David R. Hubers President and chief executive officer, AEFC. PAGE John R. Thomas Senior vice president, AEFC. _____________________________________________________________________ Officers who also are officers and/or employees of AEFC. Peter J.Anderson Vice president of all funds in the IDS MUTUAL FUND GROUP. Melinda S. Urion Treasurer of all funds in the IDS MUTUAL FUND GROUP. _____________________________________________________________________ Other officer Leslie L. Ogg Vice president, general counsel and secretary of all funds in the IDS MUTUAL FUND GROUP. PAGE 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 deposit (CDs) and other bank securities. (icon of) piggy bank IDS Tax-Free Money Fund Invests primarily in short-term bonds and notes issued by state and local governments to seek high current income exempt from federal income taxes. (icon of) shield with piggy bank enclosed 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) two coins IDS Bond Fund Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk bond categories, or the equivalent, and in government bonds. (icon of) greek column PAGE 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) shield with eagle head enclosed 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 enclosed IDS Insured Tax-Exempt Fund Invests primarily in municipal securities that are insured as to the timely payment of principal and interest. The insurance feature minimizes credit risk of the fund but does not guarantee the market value of the fund's shares. (icon of) shield with star enclosed PAGE 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 U.S. equity securities, U.S. and foreign debt securities, foreign equity securities and money market instruments. The fund provides diversification among these major investment categories and has a target mix that represents the way the fund's investments will be allocated over the long term. (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 pine trees IDS Blue Chip Advantage Fund Invests in selected stocks from a major market index. Securities purchased are those recommended by our research analysts as the best from each industry represented on the index. Offers potential for long-term growth as well as dividend income. (icon of) ribbon IDS Stock Fund Invests in common stocks of companies representing many sectors of the economy. Seeks current income and growth of capital. (icon of) building with columns IDS Equity Value Fund Invests primarily in undervalued common stocks that offer potential for growth of capital and income. (icon of) three growing flowers PAGE IDS Utilities Income Fund Invests primarily in the stocks of public utility companies to seek high current income and growth of income and capital with reduced volatility. (icon of) light bulb IDS Diversified Equity Income Fund Invests primarily in high-yielding common stocks to seek high current income and, secondarily, to benefit from the growth potential offered by stock investments. (icon of) two puzzle pieces IDS Mutual Invests in a 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 PAGE 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 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 Quick telephone reference American Express Telephone Transaction Service Redemptions and exchanges, dividend payments or reinvestments and automatic payment arrangements National/Minnesota: 800-437-3133 Mpls./St. Paul area: 671-3800 American Express Shareholder Service Fund performance, objectives and account inquiries 612-671-3733 TTY Service For the hearing impaired 800-846-4852 American Express Infoline Automated account information (TouchTone 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 -----END PRIVACY-ENHANCED MESSAGE-----