IDS Discovery Fund
1995 semiannual report
(icon of) ship
The goal of IDS Discovery Fund, Inc. is long-term growth of capital. The
fund invests primarily in common stocks.
Distributed by American Express Financial Advisors Inc.
Your piece of the future
Glance through current business magazine and newspaper articles on the
fastest-growing companies in America - and you'll find many of the stocks
that Discovery Fund owns. The fund seeks small-to medium-size firms at
the forefront of rapidly growing markets or industries. From
high-tech companies in computer networking or biotechnology to firms that
have found new ways to make, manage or market traditional products and
services, these are the companies that are creating jobs and reshaping
U.S. industry today.
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 18
Directors and officers 24
IDS mutual funds 25
To our shareholders
(Picture of William Pearce)
William R. Pearce
President of the fund
From the president
All of the funds in the IDS MUTUAL FUND GROUP held shareholder meetings
on Nov. 9, 1994. The meetings, which were well-attended, approved all of
the proposals advanced by management. Among the proposals were:
- - The election of directors and the selection of KPMG Peat Marwick LLP
as independent auditors for each of the funds in the group.
- - A new investment management agreement that will become effective for
each fund when it begins offering multiple classes of shares, now planned
to occur in March, 1995.
- - A change in investment policy that will permit the fund to adopt a
master/feeder structure if and when the board of each fund determines
that it is in the best interest of shareholders.
- - Finally, a change with respect to the number of "fundamental investment
polices" that allows the board to modify them should it deem appropriate.
No other business was presented at the meeting, which was concluded by
a report to shareholders from the American Express Financial Corporation
Investment Department.
Lastly, I want to introduce the fund's new portfolio manager, Kurt
Winters, who assumed that responsibility in January. Please see his
letter for a review of the past period, as well as his investment plans.
Thanks to all of you for your effort in reviewing the proxy material and
voting your proxies.
William R. Pearce
From the portfolio manager
(Picture of Kurt Winters)
Kurt Winters
Portfolio manager
Volatility continued to pervade the stock market, and the growth-stock
sector in particular, during the first half of the fund's fiscal year
(August 1994 through January 1995). Nevertheless, we were able to take
advantage of market upswings and ultimately posted a positive return
greater than that of the stock market as a whole (as measured by the
Standard & Poor's 500 Stock Index, an unmanaged group of stocks often
used to measure stocks' overall performance).
Concerns about rising interest rates kept the stock market unsettled in
1994. Despite the market's uneasiness, Discovery Fund took an aggressive
investment approach to the current fiscal period. The strategy paid off
quickly as the period got off to a remarkably strong start, with the fund
surging more than 7% last August. The upturn provided a welcome relief
from many months of generally poor performance by growth stocks of
smaller companies - the foundation of this fund. In addition, the run-up
reinforced the merits of taking a long-term investment approach and being
willing to wait out unproductive periods.
Telecommunications, technology strong
The bulk of the gain came from our holdings among technology (largely
computer-related) and telecommunications stocks, two sectors to which
we've maintained considerable exposure for some time. With additional
help from stocks of health care-related companies, the positive trend
continued during September and October, although to a far less dramatic
degree.
The story changed abruptly in November, however, as the stock market was
derailed by persistently rising interest rates and turmoil in the
municipal bond market. Smaller stocks, especially those in the technology
sector, were hard hit by the rash of selling. Our holdings were affected
by the trend, which ultimately resulted in the fund giving back much of
its previous gain. The up-and-down pattern continued during December and
January, resulting in a slight gain for those months.
Portfolio modifications
As the fund's new manager, I want to point out some changes I plan to
make to the structure of Discovery Fund. While the fund will continue to
concentrate on stocks of smaller companies, eventually there will be
considerably fewer stocks held in the portfolio. Conversely, I intend to
broaden the number of industries represented by the stocks in the
portfolio. For instance, our exposure to technology stocks will be
reduced. This should provide something of a cushion for the portfolio if
stocks in a particular industry experience a downturn. Ultimately, I
believe these changes will improve the fund's ability to meet its
principal objective of providing long-term capital appreciation for
investors.
Kurt Winters
<PAGE>
6-month performance
(All figures per share)
Net asset value (NAV)
Jan. 31, 1995 $10.93
July 31, 1994 $10.33
Increase $ 0.60
Distributions
Aug. 1, 1994 - Jan. 31, 1995
From income $ --
From capital gains $ 0.03
Total distributions $ 0.03
Total return* +6.1%
*If you purchased shares in the fund during this period, your return also
would have been affected by the sales charge, as described in the
prospectus.
<PAGE>
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<TABLE><CAPTION>
IDS Discovery Fund, Inc.
Your fund's ten largest holdings
(Pie chart) The ten holdings listed here make up 15.56% of the fund's net assets
_____________________________________________________________________________________________________________
Percent Value
(of fund's net assets)(as of Jan. 31, 1995)
____________________________________________________________________________________
<S> <C> <C>
Parametric Technology 2.48 $15,931,125
A producer of software products for the automation
of complex engineering tasks that are essential to
the development of virtually all manufactured products.
Cisco Systems 1.76 11,347,500
The designer and builder of devices that link personal
computers in powerful networks, Cisco is a leader in
the fast-growing business network market.
Oracle Systems 1.66 10,656,250
One of the largest independent vendors of database-
management software, offering a variety of new
products, enhancements and applications software.
U.S. HealthCare 1.64 10,522,500
A strong regional health maintenance organization
operating in the East, including New York, northern
New Jersey and Pennsylvania.
Mexican Tesobonos 1.57 10,077,306
24.62% Zero Coupon 1995
Cardinal Distribution 1.51 9,743,906
A wholesale distributor of pharmaceutical surgical
and hospital supplies and health and beauty aids.
Applied Materials 1.35 8,662,500
A leading independent producer of wafer-fabrication systems
for the semiconductor industry, including manufacturers of
advanced microprocessors, logic and memory devices.
HBO & Co 1.25 8,015,625
A health-care information service company that provides
a variety of computer-based information systems and
services to hospitals and their affiliates.
PETsMART 1.18 7,590,000
PETsMART is the leading operator of pet superstores in
the United States, specializing in food, supplies and
services at prices that are lower that grocery stores and
other traditional pet food and pet supply outlets.
Tellabs 1.16 7,462,500
Tellabs designs, manufactures and markets a broad range
of products and equipment for use by telephone companies,
the Bell System, specialized common carrier and other
providers of telecommunication services.
/TABLE
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Financial statements
<TABLE><CAPTION>
Statement of assets and liabilities
IDS Discovery Fund, Inc.
Jan. 31, 1995
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
(Unaudited)
Investments in securities, at value (Note 1)
(identified cost $561,593,856) $631,399,232
Cash in bank on demand deposit 20,596,625
Receivable for investment securities sold 50,744,474
Dividends and accrued interest receivable 265,090
Receivable for foreign currency contracts held, at value (Notes 1 and 6) 1,493,029
_____________________________________________________________________________________________________________
Total assets 704,498,450
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Payable for investment securities purchased 52,245,660
Payable for foreign currency contracts held, at value (Notes 1 and 6) 1,460,962
Accrued investment management and services fee 353,263
Accrued distribution fee 48,475
Accrued transfer agency fee 120,964
Other accrued expenses 117,526
Open option contracts written, at value
(premium received $8,200,937)(Note 5) 7,487,842
_____________________________________________________________________________________________________________
Total liabilities 61,834,692
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $642,663,758
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 58,797,212 shares $ 587,972
Additional paid-in capital 557,630,789
Net operating loss (717,571)
Accumulated net realized gain (Note 1) 14,612,030
Unrealized appreciation (Note 6) 70,550,538
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $642,663,758
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 10.93
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
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Financial statements
Statement of operations
IDS Discovery Fund, Inc.
Six months ended Jan. 31, 1995
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
(Unaudited)
Income:
Interest $ 1,031,600
Dividends (net of foreign taxes withheld of $10,799) 1,104,317
_____________________________________________________________________________________________________________
Total income 2,135,917
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 1,651,955
Distribution fee 270,732
Transfer agency fee 675,509
Compensation of directors 943
Compensation of officers 2,657
Custodian fees 40,739
Postage 54,801
Registration fees 63,151
Reports to shareholders 67,852
Audit fees 10,750
Administrative 4,508
Other 9,891
_____________________________________________________________________________________________________________
Total expenses 2,853,488
_____________________________________________________________________________________________________________
Investment loss -- net (717,571)
_____________________________________________________________________________________________________________
Realized and unrealized gain -- net
_____________________________________________________________________________________________________________
Net realized gain on investment and foreign currency transactions (including loss
of $1,619 from foreign currency transactions) (Note 3) 13,518,597
Net realized gain on closed option contracts written (Note 5) 1,433,157
_____________________________________________________________________________________________________________
Net realized gain on investments and foreign currency 14,951,754
Net change in unrealized appreciation or depreciation 17,251,910
_____________________________________________________________________________________________________________
Net gain on investments and foreign currency 32,203,664
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $31,486,093
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
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<TABLE><CAPTION>
Financial statements
Statements of changes in net assets
IDS Discovery Fund, Inc.
_____________________________________________________________________________________________________________
Operations and distributions Jan. 31, 1995 July 31, 1994
_____________________________________________________________________________________________________________
<S> <C> <C>
Six months ended Year ended
(Unaudited)
Investment loss -- net $ (717,571) $ (1,970,128)
Net realized gain on investments and foreign currency 14,951,754 7,782,215
Net change in unrealized appreciation or depreciation 17,251,910 (38,905,761)
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations 31,486,093 (33,093,674)
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net realized gain (1,459,160) (19,913,775)
_____________________________________________________________________________________________________________
Capital share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
15,101,802 and 20,596,481 shares (Note 2) 165,487,993 238,713,182
Net asset value of 130,618 and 1,654,348 shares
issued in reinvestment of distributions 1,450,384 19,774,404
Payments for redemptions of
7,004,491 and 10,838,537 shares (76,908,266) (127,923,797)
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions
representing net addition of
8,227,929 and 11,412,292 shares 90,030,111 130,563,789
_____________________________________________________________________________________________________________
Total increase in net assets 120,057,044 77,556,340
Net assets at beginning of period 522,606,714 445,050,374
_____________________________________________________________________________________________________________
Net assets at end of period $642,663,758 $522,606,714
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
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Notes to financial statements
IDS Discovery Fund, Inc.
(Unaudited as to Jan. 31, 1995)
______________________________________________________________________________
1. Summary of significant accounting policies
The fund is registered under the Investment Company
Act of 1940 (as amended) as a diversified, open-end
management investment company. Significant accounting
policies followed by the fund are summarized below:
Valuation of securities
All securities are valued at the close of each
business day. Securities traded on national
securities exchanges or included in national market
systems are valued at the last quoted sales price;
securities for which market quotations are not
readily available, including illiquid securities, are
valued at fair value according to methods selected in
good faith by the board of directors. Determination
of fair value involves, among other things, reference
to market indexes, matrixes and data from independent
brokers. Short-term securities maturing in more than
60 days from the valuation date are valued at the
market price or approximate market value based on
current interest rates; those maturing in 60 days or
less are valued at amortized cost.
Options transactions
In order to produce incremental earnings, protect
gains, and facilitate buying and selling of
securities for investment purposes, the fund may buy
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.
<PAGE>
PAGE
Notes to financial statements
IDS Discovery Fund, Inc.
______________________________________________________________________________
Option contracts are valued daily at the closing
prices on their primary exchanges and unrealized
appreciation or depreciation is recorded. The fund
will realize a gain or loss upon expiration or
closing of the option transaction. When an option is
exercised, the proceeds on sales for a written call
option, the purchase cost for a written put option or
the cost of a security for a purchased put or call
option is adjusted by the amount of premium received
or paid.
Futures transactions
In order to gain exposure to or protect itself from
changes in the market, the fund may buy and sell
stock index futures contracts traded on any U.S. or
foreign exchange. The fund also may buy or write put
and call options on these 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 security.
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.<PAGE>
PAGE
Notes to financial statements
IDS Discovery Fund, Inc.
______________________________________________________________________________
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
An annual dividend declared and paid at the end of
the calendar year from net investment income is
reinvested in additional shares of the fund at net
asset value or payable in cash. Capital gains, when
available, are distributed along with the income
dividend.
Other
Security transactions are accounted for on the date
securities are purchased or sold. Dividend income is
recognized on the ex-dividend date and interest
income, including level-yield amortization of premium
and discount, is accrued daily.<PAGE>
PAGE
Notes to financial statements
IDS Discovery Fund, Inc.
______________________________________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991, the
fund pays American Express Financial Corporation a
fee for managing its investments, recordkeeping and
other specified services. The fee is a percentage of
the fund's average daily net assets consisting of a
group asset charge in reducing percentages from 0.46%
to 0.32% annually on the combined net assets of all
non-money market funds in the IDS MUTUAL FUND GROUP
and an individual annual asset charge of 0.23% of
average daily net assets. The fee is adjusted upward
or downward by a performance incentive adjustment
based on the fund's average daily net assets over a
rolling 12-month period as measured against the
change in the Lipper Small Company Growth Fund Index.
The maximum adjustment is 0.12% 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 $265,352 for the six
months ended Jan. 31, 1995.
The fund also pays American Express Financial
Corporation a distribution fee at an annual rate of
$6 per shareholder account and a transfer agency fee
at an annual rate of $15 per shareholder account. The
transfer agency fee is reduced by earnings on monies
pending shareholder redemptions.
American Express Financial Corporation will assume
and pay any expenses (except taxes and brokerage
commissions) that exceed the most restrictive
applicable state expense limitation.
Sales charges by American Express Financial Advisors
Inc. for distributing fund shares were $2,065,445 for
the six months ended Jan. 31, 1995. The fund also
pays custodian fees to American Express Trust
Company, an affiliate of American Express Financial
Corporation.
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 $1,267 for
the six months ended Jan. 31, 1995.
<PAGE>
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Notes to financial statements
IDS Discovery Fund, Inc.
______________________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of
securities (other than short-term obligations)
aggregated $410,527,597 and $471,206,453,
respectively, for the six months ended Jan. 31, 1995.
Realized gains and losses are determined on an
identified cost basis.
Brokerage commissions paid to brokers affiliated with
American Express Financial Corporation were $91,498
for the six months ended Jan. 31, 1995.
Income from securities lending amounted to $15,514
for the six months ended Jan. 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 done.
______________________________________________________________________________
4. Illiquid securities
At Jan. 31, 1995 investments in securities included
issues that are illiquid. The fund currently limits
investments in illiquid securities to 10% of the net
assets, at market value, at the time of purchase. The
aggregate value of such securities at Jan. 31, 1995
was $4,080,000, which represents 0.6% of net assets.
Pursuant to guidelines adopted by the fund's board of
directors, certain unregistered securities are
determined to be liquid and are not included within
the 10% limitation specified above.
______________________________________________________________________________
5. Option contracts written
The number of contracts and premium amounts
associated with options written is as follow:
Six months ended Jan. 31, 1995
________________________________________________
Puts Calls
________________________________________________
Contracts Premium Contracts Premium
_______________________________________________________________________
Balance July 31, 1994 -- $ -- -- $ --
Opened 50,800 4,357,522 52,443 7,443,366
Closed (3,950) (404,060) (8,122) (1,892,470)
Exercised -- -- (5,282) (1,102,894)
Expired (2,300) (31,554) (4,032) (168,973)
_______________________________________________________________________
Balance Jan. 31, 1995 44,550 $3,921,908 35,007 $4,279,029
_______________________________________________________________________
<PAGE>
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Notes to financial statements
IDS Discovery Fund, Inc.
______________________________________________________________________________
6. Foreign currency contracts
<TABLE><CAPTION>
At Jan. 31, 1995, the fund had entered into 12
foreign currency exchange contracts that obligate the
fund to deliver currencies at specified future dates.
The net unrealized appreciation of $32,067 on these
contracts is included in the accompanying financial
statements. The terms of the open contracts are as
follows:
U.S. Dollar value U.S. Dollar value
Currency to be as of Currency to be as of
Exchange date delivered Jan. 31, 1995 received Jan. 31, 1995
____________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Jan. 26, 1995 1,738,069 $ 224,702 224,763 $ 224,763
Hong Kong Dollar U.S. Dollar
Jan. 26, 1995 323,260 323,260 456,864 324,143
U.S. Dollar Canadian Dollar
Jan. 26, 1995 35,023 35,023 77,716,100 35,055
U.S. Dollar Indonesian Rupiah
Jan. 26, 1995 14,654 14,654 20,756 14,726
U.S. Dollar Canadian Dollar
Jan. 27, 1995 1,783,230 373,760 376,209 376,209
Finnish Markka U.S. Dollar
Jan. 27, 1995 260,173 33,636 33,637 33,637
Hong Kong Dollar U.S. Dollar
Jan. 27, 1995 75,755 75,755 107,163 76,031
U.S. Dollar Canadian Dollar
Jan. 27, 1995 3,021 3,021 6,699,228 3,022
U.S. Dollar Indonesian Rupiah
Jan. 30, 1995 421,404 54,480 54,470 54,470
Hong Kong Dollar U.S. Dollar
Jan. 30, 1995 2,047 2,047 4,541,850 2,049
U.S. Dollar Indonesian Rupiah
Jan. 31, 1995 396,170 83,036 82,907 82,907
Finnish Markka U.S. Dollar
Jan. 31, 1995 237,588 237,588 1,556,200 266,017
U.S. Dollar Mexican Peso
__________ __________
$1,460,962 $1,493,029
/TABLE
<PAGE>
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Notes to financial statements
<TABLE><CAPTION>
IDS Discovery Fund, Inc.
______________________________________________________________________________
7. Financial highlights
The table below shows certain important financial
information for evaluating the fund's results.
Fiscal period ended July 31,
Per share income and capital changes*
1995** 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $10.33 $11.37 $ 9.87 $9.58 $9.05 $7.75
beginning of period
Income from investment operations:
Net investment income (.01) (.04) (.02) (.01) .04 .14
(loss)
Net gains (losses) .64 (.52) 1.75 1.01 1.03 1.35
(both realized
and unrealized)
Total from investment .63 (.56) 1.73 1.00 1.07 1.49
operations
Less distributions:
Dividends from net -- -- -- (.02) (.11) (.14)
investment income
Distributions from (.03) (.48) (.23) (.69) (.43) (.05)
realized gains
Total distributions (.03) (.48) (.23) (.71) (.54) (.19)
Net asset value, $10.93 $10.33 $11.37 $9.87 $9.58 $9.05
end of period
Ratios/supplemental data
1995** 1994 1993 1992 1991 1990
Net assets, end of period $643 $523 $445 $293 $207 $168
(in millions)
Ratio of expenses to .93%*** .97% 1.03% 1.04% .98% .76%
average daily net assets
Ratio of net income (loss) (.23)*** (.39%) (.17%) (.11%) .40% 1.51%
to average daily net assets
Portfolio turnover rate 73% 67% 76% 90% 95% 76%
(excluding short-term
securities)
Total return+ 6.1%++ (5.5%) 17.5% 9.9% 13.4% 19.8%
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended Jan. 31, 1995 (Unaudited).
***Adjusted to an annual basis.
+Total return does not reflect payment of a sales charge.
++For the fiscal period ended Jan. 31, 1995, the annualized total return is 12.3%.
/TABLE
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<TABLE><CAPTION>
Investments in securities
IDS Discovery Fund, Inc. (Percentages represent value of
Jan. 31, 1995 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (69.5%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Banks and savings & loans (1.7%)
BB&T Financial 150,000 $ 4,443,750
First Tennessee Natl 37,000 (c) 1,456,875
Roosevelt Financial 300,000 4,912,500
____________
Total 10,813,125
_____________________________________________________________________________________________________________________________
Communications equipment (1.3%)
DSC Communications 25,000 (b) 803,125
Tellabs 150,000 (b,c) 7,462,500
____________
Total 8,265,625
_____________________________________________________________________________________________________________________________
Computers & office equipment (19.1%)
Amer Power Conversion 225,000 (b) 3,515,625
Avid Technology 64,600 (b) 1,784,575
Broadway & Seymour 225,000 (b) 4,710,938
Broderbund Software 73,500 (b,c) 3,399,375
Cisco Systems 340,000 (b,c) 11,347,500
Compaq Computer 100,000 (b) 3,575,000
Compuware 150,000 (b) 5,587,500
Informix 185,000 (b,c) 5,966,250
Intuit 100,000 (b) 6,600,000
Komag 146,000 (b) 3,412,750
Landmark Graphics 125,000 (b) 2,406,250
Network General 90,500 (b,c) 2,149,375
Oracle Systems 250,000 (b) 10,656,250
Parametric Technology 433,500 (b,c) 15,931,125
ParcPlace Systems 225,000 (b) 3,825,000
Powersoft 50,000 (b) 3,453,125
Sanmina 125,000 (b) 3,250,000
Silicon Graphics 180,000 (b,c) 5,625,000
Sterling Software 155,000 (b) 5,541,250
Sybase Software 125,000 (b,c) 5,437,500
Synopsys 100,000 (b,c) 4,525,000
Tech Data 395,800 (b) 5,244,350
Wall Data 125,000 (b) 4,562,500
____________
Total 122,506,238
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE
_____________________________________________________________________________________________________________________________
Electronics (6.5%)
Applied Materials 225,000 (b) 8,662,500
Atmel 125,000 (b) 3,921,875
Cirrus Logic 75,000 (b) 2,090,625
Credence Systems 175,000 (b) 3,981,250
Itron 55,000 (b) 1,155,000
Lam Research 125,000 (b,c) 4,687,500
Linear Technology 125,000 6,187,500
Micro-chip 75,000 (b) 1,678,125
Teradyne 36,400 (b,c) 1,183,000
Xilinx 50,000 (b) 2,887,500
Zilog 175,000 (b) 5,075,000
____________
Total 41,509,875
_____________________________________________________________________________________________________________________________
Energy (0.1%)
HS Resources 46,700 (b) 706,337
_____________________________________________________________________________________________________________________________
Financial services (1.1%)
Paychex 180,000 (c) 7,020,000
_____________________________________________________________________________________________________________________________
Health care (5.7%)
Amylin Pharmaceuticals 22,500 (b) 123,750
Anesta 105,000 (b) 577,500
Centocor 140,000 (b,c) 2,432,500
Cordis 15,000 (b,c) 941,250
Forest Laboratories 135,800 (b,c) 6,722,100
Genentech 107,100 (b) 5,167,575
Heart Technology 195,000 (b,c) 3,875,625
IDEXX Laboratories 200,000 (b) 7,100,000
PLC Systems Unit 300,000 (b) 1,387,500
Scherer (RP) 80,000 (b,c) 3,580,000
STERIS 130,000 (b,c) 4,566,250
____________
Total 36,474,050
_____________________________________________________________________________________________________________________________
Health care services (16.3%)
Amer Medical Response 145,000 (b) 4,060,000
Cardinal Distribution 211,250 (c) 9,743,906
Cerner 50,000 (b) 2,262,500
Coventry 140,000 (b,c) 3,640,000
Express Script 104,200 (b) 3,438,600
Foundation Health 200,000 (b) 5,900,000
HBO 225,000 8,015,625
Healthsource 80,000 (b) 3,420,000
HEALTHSOUTH Rehabilitation 170,000 (b,c) 6,460,000
Horizon Healthcare 200,000 (b) 5,300,000
Medaphis 80,000 (b,c) 4,000,000
Mid Atlantic Medical Services 250,000 (b,c) 5,937,500
Oxford Health 40,000 (b) 3,395,000
PhyCor 225,000 (b) 6,637,500
Quantum Health Resources 140,000 (b,c) 4,252,500<PAGE>
PAGE
Sun Healthcare Group 165,000 (b,c) 4,393,125
Surgical Care Affiliates 305,000 (c) 6,328,750
United Healthcare 150,000 7,275,000
US Health Care 230,000 (c) 10,522,500
____________
Total 104,982,506
_____________________________________________________________________________________________________________________________
Industrial equipment & services (0.9%)
Calgon Carbon 6,000 (c) 62,250
Cincinnati Milacron 225,000 5,175,000
Energy Biosystem 71,900 (b) 449,375
____________
Total 5,686,625
_____________________________________________________________________________________________________________________________
Industrial transportation (0.4%)
Amer Freightways 60,000 (b) 1,290,000
Heartland Express 50,000 (b) 1,406,250
____________
Total 2,696,250
_____________________________________________________________________________________________________________________________
Insurance (0.7%)
Equitable of Iowa 145,000 4,277,500
_____________________________________________________________________________________________________________________________
Leisure time & entertainment (--%)
Imax 45,000 (b) 315,000
_____________________________________________________________________________________________________________________________
Media (1.0%)
Competitive Tech 205,000 (b) 1,383,750
Hollywood Entertainment 55,000 (b,c) 1,402,500
Information Resources 75,000 (b,c) 1,031,250
Westcott Communciations 205,000 (b,c) 2,895,625
____________
Total 6,713,125
_____________________________________________________________________________________________________________________________
Metals (1.5%)
Birmingham Steel 300,000 6,187,500
Freeport McMoRan 175,000 3,587,500
_____________
Total 9,775,000
_____________________________________________________________________________________________________________________________
Restaurants & lodging (3.0%)
Boston Chicken 250,000 (b) 3,859,375
Brinker Intl 250,200 (b) 4,409,775
Cracker Barrel Old Country 58,300 (c) 1,282,600
Hospitality Franchise System 125,000 (b) 3,500,000
Outback Steakhouse 240,000 (b,c) 6,360,000
____________
Total 19,411,750
_____________________________________________________________________________________________________________________________
Retail (4.4%)
Best Buy 200,000 (b) 6,200,000
CUC Intl 75,000 (b) 2,596,875
Gap 200,000 6,500,000
OfficeMax 200,000 (b) 5,200,000
PETsMART 220,000 (b,c) 7,590,000
____________
Total 28,086,875
_____________________________________________________________________________________________________________________________
Utilities - gas (0.6%)
Enron 125,000 3,640,625
_____________________________________________________________________________________________________________________________
Utilities - telephone (0.2%)
ALC Communications 50,000 (b) 1,450,000
_____________________________________________________________________________________________________________________________
Miscellaneous Industry (0.1%)
TheraTx 25,000 (b) 537,500
_____________________________________________________________________________________________________________________________
Foreign (4.9%)(d)
AAmulehti 95,300 (b) 1,777,726
Nokia Preferred Free 100,000 (b) 7,312,500
Posadas de Mexico Cl A 3,620,000 (b) 1,980,140
Renaissance Energy 225,000 (b) 3,970,957
Sceptre Resources 750,000 (b) 4,523,025
T Tolmex Cl B 570,000 (b) 2,187,432
Television Broadcasts 104,000 372,424
United Tractors 338,500 (b) 686,817
Wharf Holdings 750,000 (b) 2,268,750
YPF ADR 300,000 6,187,500
____________
Total 31,267,271
_____________________________________________________________________________________________________________________________
Total common stocks
(Cost: $380,446,136) $446,135,277
_____________________________________________________________________________________________________________________________
Bonds (2.7%)(d)
_____________________________________________________________________________________________________________________________
Issuer and
coupon rate Principal Value(a)
amount
_____________________________________________________________________________________________________________________________
Banco Nacional de Mexico Euro
(U.S. Dollar)
7% Cv 1999 $ 5,000,000 $ 3,400,000
7% Cv 1999 6,000,000 (f) 4,080,000
Mexican Tesobonos
(Mexican Peso)
24.62% Zero Coupon 1995 10,631,000 (g) 10,077,306
_____________________________________________________________________________________________________________________________
Total bonds
(Cost: $17,889,109) $ 17,557,306
_____________________________________________________________________________________________________________________________
Preferred stocks (1.1%)
_____________________________________________________________________________________________________________________________
Energy Biosystem
8% Cv 24,000 (b,e) $ 1,020,000
SAP 10,000 6,259,840
_____________________________________________________________________________________________________________________________
Total preferred stocks
(Cost: $2,829,909) $ 7,279,840
_____________________________________________________________________________________________________________________________
/TABLE
<PAGE>
PAGE
<TABLE><CAPTION>
____________________________________________________________________________________________________________________________
Short-term securities (24.9%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (1.8%)
Federal Home Loan Mtge Corp
Disc Notes
02-02-95 5.47% $4,100,000 $ 4,099,378
02-02-95 5.50 2,600,000 2,599,604
Federal Natl Mtge Assn
Disc Notes
02-01-95 5.85 200,000 200,000
02-10-95 5.47 4,900,000 4,893,324
____________
Total 11,792,306
_____________________________________________________________________________________________________________________________
Commercial paper (23.1%)
Aon
02-13-95 5.69 5,900,000 5,888,849
02-15-95 5.80 8,800,000 8,780,220
02-21-95 6.02 3,000,000 2,990,000
AT&T Capital
02-23-95 5.88 3,400,000 3,387,845
Avco Financial
03-02-95 6.04 4,000,000 3,980,634
BBV Finance (Delaware)
02-27-95 5.87 9,100,000 9,061,618
Bell Atlantic Network Funding
02-21-95 5.83 6,200,000 6,180,022
BellSouth Telecommunications
03-03-95 5.86 4,500,000 4,478,175
03-03-95 5.89 3,000,000 2,985,375
Campbell Soup
02-14-95 5.65 4,500,000 4,490,867
Cargill
03-01-95 5.91 6,700,000 6,669,359
Ciesco LP
02-23-95 5.81 5,000,000 4,982,339
Consolidated Rail
02-27-95 5.97 5,100,000 (h) 5,078,121
Eiger Capital
02-17-95 5.85 5,000,000 (h) 4,987,067
02-27-95 5.85 7,900,000 (h) 7,866,794
Exxon Asset Management
02-06-95 5.56 1,700,000 (h) 1,698,690
Ford Motor Credit
02-24-95 5.86 2,800,000 2,789,571
Hewlett-Packard
03-01-95 5.93 2,500,000 2,488,528
Lincoln Natl
03-01-95 5.90 6,000,000 (h) 5,972,607<PAGE>
PAGE
Mobil Australia
Finance (Delaware)
02-16-95 5.79 7,400,000 (h) 7,382,209
Natl Bank Detroit
Canada
02-27-95 5.87 6,500,000 6,472,584
Penney (JC) Funding
02-22-95 5.81 5,000,000 4,983,142
Pfizer
02-21-95 5.88 5,500,000 5,482,094
Pitney Bowes Credit
02-17-95 5.66 3,000,000 2,992,493
02-27-95 5.95 500,000 497,862
Sandoz
02-28-95 5.91 5,400,000 5,376,186
02-28-95 5.93 4,000,000 3,982,300
Sysco
03-28-95 6.08 3,600,000 (h) 3,564,997
USAA Capital
02-22-95 5.85 7,700,000 7,673,858
03-06-95 5.89 3,700,000 3,680,159
03-08-95 5.80 1,800,000 1,789,938
_____________
Total 148,634,503
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $160,428,702) $160,426,809
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $561,593,856)(i) $631,399,232
_____________________________________________________________________________________________________________________________
/TABLE
<PAGE>
PAGE
<TABLE><CAPTION>
_____________________________________________________________________________________________________________________________
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) At Jan. 31, 1995, securities valued at $110,116,238 were held to cover open call
options written as follows:
Issuer Number of Exercise Expiration Value(a)
contracts price date
________________________________________________________________________
<S> <C> <C> <C> <C>
Broderbund Software 735 $50 Feb. 1995 $ 64,313
Calgon Carbon 60 10 Feb. 1995 2,250
Cardinal Distribution 1,112 45 Feb. 1995 194,600
Centocor 1,400 15 Feb. 1995 358,750
Cisco Systems 900 40 Feb. 1995 16,875
Cordis 150 60 Feb. 1995 57,188
Coventry 750 25 March 1995 135,938
Coventry 250 25 April 1995 50,000
Cracker Barrel Old Country 583 20 Feb. 1995 109,313
First Tennessee Natl 370 40 Feb. 1995 25,438
Forest Laboratories 1,358 45 Feb. 1995 662,025
HEALTHSOUTH Rehabilitation 1,700 40 Feb. 1995 42,500
Heart Technology 950 20 Feb. 1995 59,375
Hollywood Entertainment 550 25 Feb. 1995 171,875
Informix 350 35 Feb. 1995 21,875
Information Resources 750 15 Feb. 1995 28,125
Lam Research 1,250 45 Feb. 1995 31,250
Medaphis 800 50 Feb. 1995 120,000
Mid Atlantic Medical Services 1,500 25 Feb. 1995 93,750
Network General 400 25 Feb. 1995 27,500
Outback Steakhouse 2,400 30 Feb. 1995 60,000
Parametric Technology 450 40 Feb. 1995 11,250
PETsMART 400 35 Aug. 1995 207,500
Paychex 1,800 40 Feb. 1995 135,000
Quantum Health Resources 1,400 30 Feb. 1995 192,500
Silicon Graphics 1,300 35 Feb. 1995 16,250
Scherer (RP) 300 45 Feb. 1995 15,000
STERIS 925 35 Feb. 1995 176,333
Sun Healthcare Group 1,650 25 Feb. 1995 299,063
Surgical Care Affiliates 3,050 20 Feb. 1995 343,125
Sybase Software 800 55 Feb. 1995 20,000
Synopsys 500 50 Feb. 1995 21,875
Tellabs 900 55 Feb. 1995 45,000
Teradyne 364 35 Feb. 1995 13,650
US Health Care 800 45 Feb. 1995 120,000
Westcott Communications 2,050 15 Feb. 1995 96,104
<PAGE>
PAGE
At Jan. 31, 1995, cash or short-term securities were designated to cover open
put options written as follows:
Issuer Number of Exercise Expiration Value(a)
contracts price date
________________________________________________________________________
Amer Power Conversion 2,000 $15 Feb. 1995 $100,000
Amer Power Conversion 1,500 17 Feb. 1995 328,125
Applied Materials 750 40 Feb. 1995 215,625
Bay Networks 1,500 25 Feb. 1995 18,750
Birmington Steel 250 20 Feb. 1995 7,800
Boston Chicken 2,000 15 Feb. 1995 75,000
Cincinnati Milacron 2,000 22 Feb. 1995 75,000
Cirrus Logic 1,000 25 Feb. 1995 15,630
Cirrus Logic 1,750 22 Feb. 1995 65,625
Compaq Computer 750 35 Feb. 1995 107,813
Compuware 750 35 Feb. 1995 28,125
DSC Communications 1,000 30 Feb. 1995 50,000
DSC Communications 1,750 35 Feb. 1995 525,000
Foundation Health 1,250 25 Feb. 1995 23,437
Foundation Health 2,000 30 Feb. 1995 275,000
Foster Wheeler 1,500 30 Feb. 1995 121,874
Foster Wheeler 1,000 30 March 1995 112,500
Freeport McMoRan 2,500 20 Feb. 1995 125,000
GAP 1,000 30 Feb. 1995 25,000
Komag 1,250 22 Feb. 1995 80,624
Landmark Graphics 750 17 April 1995 42,187
Newbridge Networks 500 35 Feb. 1995 68,750
ParcPlace Systems 1,000 17 March 1995 175,700
Sybase Software 500 40 March 1995 43,750
Solectron 2,250 22 Feb. 1995 42,187
Stewart & Stevenson 1,500 30 Feb. 1995 75,000
Tech Data 1,300 12 March 1995 81,250
TNT Freightways 2,500 25 March 1995 62,500
Wall Data 1,000 30 Feb. 1995 12,500
Wall Data 1,250 35 Feb. 1995 125,000
Wall Data 1,000 30 March 1995 50,000
Wabash Natl 1,500 35 Feb. 1995 187,500
YPF ADR 2,000 20 Feb. 1995 100,000
(d) Foreign security values are stated in U.S. dollars. For debt securities, principal
amounts are denominated in the currency indicated.
(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) Identifies issues considered to be illiquid (see Note 4 to the financial statements).
Information concerning such security holdings as Jan. 31, 1995, is as follows:
Security Acquisition Cost
date
Banco Nacional de Mexico Euro
7% Cv 1999 1-18-95 $3,625,000
7% Cv 1999 1-31-95 590,000
<PAGE>
PAGE
(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 guidelines established by the board of directors.
(i) At Jan. 31, 1995, the cost of securities for federal income tax purposes was approximately
$561,587,000 and the approximate aggregate gross unrealized appreciation and depreciation
based on that cost was:
Unrealized appreciation 84,971,000
Unrealized depreciation (15,159,000)
____________________________________________________________
Net unrealized appreciation $69,812,000
____________________________________________________________
/TABLE
<PAGE>
PAGE
Directors and officers
Directors and officers of the fund
_____________________________________________________________________
President and interested director
William R. Pearce
President of all funds in the IDS MUTUAL FUND GROUP.
_____________________________________________________________________
Independent directors
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.
Donald M. Kendall
Former chairman and chief executive officer, PepsiCo, Inc.
Melvin R. Laird
Senior counsellor for national and international affairs,
The Reader's Digest Association, Inc.
Lewis W. Lehr
Former chairman and chief executive officer,
Minnesota Mining and Manufacturing Company (3M).
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
C. Angus Wurtele
Chairman of the board and chief executive officer, The Valspar Corporation.
_____________________________________________________________________
Interested directors who are officers and/or employees of American
Express Financial Corporation.
William H. Dudley
Exective vice president, American Express Financial Corporation.
David R. Hubers
President and chief executive officer, American Express Fianacial
Corporation.
John R. Thomas
Senior vice president, American Express Financial Corporation.
_____________________________________________________________________
Other officer
Leslie L. Ogg
Vice president of all funds in the IDS MUTUAL FUND GROUP and general
counsel and treasurer of the publicly offered funds.<PAGE>
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) cornucopia<PAGE>
PAGE
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher rated,
lower risk bond categories, or the equivalent, and in government bonds.
(icon of) greek column
IDS Strategy, Income Fund
Invests primarily in corporate and government bonds to seek high
current income while conserving capital. Also may seek capital
appreciation when consistent with its primary goals.
(icon of) chess piece
IDS Selective Fund
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
IDS Strategy, Short-Term Income Fund
Invests primarily in short-term and intermediate-term bonds and notes
to seek a high level of current income.
(icon of) chess piece
Tax-exempt income investments
These funds provide tax-free income by investing in municipal bonds.
The income is generally free from federal income tax. Risk varies
by bond quality.
IDS High Yield Tax-Exempt Fund
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<PAGE>
PAGE
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
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 Strategy, Worldwide Growth Fund
Invests primarily in common stocks of companies throughout the world
that offer potential for superior growth. Holdings may range from
small- to large- capitalization stocks, including those of companies
involved in areas of rapid economic growth.
(icon of) chess piece
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
<PAGE>
PAGE
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 stocks of companies representing many
sectors of the economy. Seeks current income and growth of capital.
(icon of) building with columns
IDS Strategy, Equity Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) chess piece
IDS Utilities Income Fund
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<PAGE>
PAGE
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 Equity Fund
Invests primarily in common stocks of companies that are selected
for their potential for above-average growth. Above-average means
that their growth potential is better, in the opinion of the
portfolio's investment manager, than the Standard & Poor's
Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS 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
<PAGE>
PAGE
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
planner 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>
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 Discovery Fund
IDS Tower 10
Minneapolis, MN 55440-0010
