IDS Life Variable Annuity Fund B
PAGE
1995 Annual Report
IDS Life
Variable
Annuity
Fund B
Invests in a wide range of securities with the
objective
of long-term capital appreciation for contract
owners.
Managed by IDS Life Insurance Company
PAGE
Message from the Executive Vice President
(picture of Janis E. Miller)
Dear Contract Owner,
The record-high stock market in 1995 will be
hard to beat. It was a year in
which the Dow Jones Industrials hit a record
5,000 points and finished at its highest ever
one-year-point gain. Because the performance of
the stock market drives this Fund, we can report
very good news for contract owners. To read more
about the specific gains in the Fund and
strategies for the future, please
see the letter from the Fund's portfolio
manager.
Our economists project a positive outlook for
the stock market in 1996 as
well, based on their forecast of controlled
inflation and declining interest
rates. Nevertheless, we must repeat our first
thought. Although we're extremely pleased with
the Fund's performance, we can't predict a
repeat of 1995's record performance in 1996.
Still, there is one solid prediction that we can
make based on history: Financial markets will
likely be volatile in the short term. Moreover,
because the Fund emphasizes investments in
stocks of rapidly growing companies, it's
somewhat more affected by short-term market
volatility than stocks in general.
Such volatility is a fact of life. But history
also tells us that, in the long run, the stock
market has been a solid performer. So we urge
contract owners to continue to take a long-term
perspective, which the structure of this Fund
provides for you.
One way to benefit from short-term market
fluctuation is by making regular investments of
fixed amounts of money. This systematic
approach, called dollar-cost averaging, smoothes
the effects of stock market volatility. Here's
how:
- -You invest a fixed amount of money at regular
time periods.
- -Your fixed investment amount buys more
accumulations units when stock market prices are
low and buys fewer units when prices are high.
- -Over time, if you continue to invest through
volatile markets, you obtain accumulation units
at a lower average cost than the general market
prices.
Dollar-cost averaging doesn't ensure a profit or
protect against a loss if the market declines at
the time you withdraw funds, but it is an
effective way for contract owners to meet long-
term goals, provided they continue investing
through changing market conditions.
If your contract allows additional payments, you
can dollar-cost average. And if your contract
has a fixed account, you can also set up a
systematic transfer program from the fixed
account to the variable account in order to
dollar-cost average, subject to certain
restrictions.
Your financial advisor can tell you more about
systematic investing and how it can help you
meet your financial objectives. He or she also
can help keep your investment strategies in line
with your financial objectives. As your goals
and time horizons change, talk to your financial
advisor about the broad range of products and
services offered by American Express Financial
Corporation and IDS Life designed to help you
meet a variety of investment and protections
needs.
Sincerely,
Janis E. Miller
Executive Vice President, Variable Assets
IDS Life Insurance Company
PAGE
From Your Portfolio Manager: A Perspective
(picture of Mitzi Malevich)
Mitzi Malevich serves as portfolio manager for
IDS Life Variable Annuity Fund B. She also
manages IDS Growth Fund.
A well-positioned portfolio and the strongest
stock market in 20 years made 1995 a very
profitable period for contract owners.
On Dec. 31, 1995, the accumulation unit value of
IDS Life Variable Annuity Fund B was $16.55,
compared with $12.18 at the beginning of the
year. The increase represented a gain of 35.88%
for the 12-month period. (If you purchased
additional accumulation units during the period,
your return would have been affected by the
sales and administrative charges, as described
in the prospectus.)
After struggling throughout nearly all of 1994,
the stock market got off to a strong start last
year. The driving factors included an ongoing
low inflation rate, good-to-excellent corporate
profits and declining long-term interest rates -
- - an almost sure-fire formula for rising stock
prices. With those factors in place throughout
the year, the stock market mounted its strongest
annual advance since 1975.
To the particular benefit of this Fund, growth
stocks responded particularly well to the
positive environment. More specifically, stocks
of technology companies, especially those of
semiconductor producers, were at the forefront
of the market rally for much of the year.
Because they most often met our key investment
criterion of above-average profit growth,
technology companies comprised the largest
portion of the portfolio. Complementing the
gains by those issues were good performances by
health care and financial services stocks, to
which we also had considerable exposure. There
were a number of winners in other sectors as
well, including energy, retailing, metals,
food/beverage and telecommunications.
Consistent with the change in portfolio managers
that took place in the spring
of 1995, the Fund carried minimal cash reserves
during the period. This strategy also paid off
in improved Fund performance, as the return from
stocks far exceeded that generated by cash. The
low cash level will be an ongoing trait of the
Fund. While we expect this management approach
to be a benefit during positive market trends,
it will also likely mean more negative
performance during downturns. In the long run,
however we believe results will be enhanced.
As of this writing (mid-January), the investment
environment is little changed from a year ago.
The same could be said of this portfolio. We
remain invested in stocks of a variety of
companies that have demonstrated an ability to
grow at an above-average rate. Regardless of
what may be happening in the market at any given
time, over the long term we expect this approach
to continue to be rewarding for the Fund and its
contract owners. We'll update you on our
progress six months from now in our semiannual
report.
Mitzi Malevich
PAGE
<TABLE>
<CAPTION>
Ten Largest Holdings Dec. 31, 1995
______________________________________________________________________
______________
Percent of
Fund's
Common stocks Value Net Assets
______________________________________________________________________
______________
<S> <C> <C>
Medtronic $ 22,350,000 3.64%
A major, diversified medical device company.
Computer Association Intl 21,242,812 3.46
The largest vendor of non-microcomputer products in the software
industry.
Pfizer 19,920,600 3.25
Leading producer of pharmaceuticals, hospital products, animal health
items,
non-prescription medications and specialty chemicals.
Oracle Systems 19,238,250 3.13
One of the largest independent vendors of database-management software
offering a variety of new products, enhancements and applications
software.
MFS Communications 15,975,000 2.60
The company owns and operates digital fiber optic telecommunication
networks
in fourteen metropolitan areas across the United States.
First Chicago 15,850,441 2.59
A $50 billion Chicago-based bank holding company. Key businesses
include
nationwide credit card operations, retail and middle market activities
in Chicago and
Midwest states and nationwide corporate banking.
HEALTHSOUTH 15,651,775 2.55
A fast-growing chain of hospitals and outpatient centers.
Nucor Steel 15,252,375 2.48
One of the largest and most profitable domestic steel mini-mills,
Nucor Steel is a
leading producer of joist and girders used in construction.
First Data 14,932,786 2.43
The company operates in one business segment providing high-quality,
high volume
information processing and related services to specific client groups:
the transaction
card, payment instruments, teleservices, mutual fund, health care,
receivables and
information management industries.
Cisco Systems 14,925,000 2.43
The leading designer and builder of devices that link personal
computers in
powerful networks, Cisco is a leader in the fast-growing business
network market.
______________________________________________________________________
_______________
Total $175,339,039 28.56%
______________________________________________________________________
_______________
Excludes short-term securities.
</TABLE>
PAGE
Investment Illustration
On the chart below you can see how IDS Life
Variable Annuity Fund B's total return compared
to the Standard & Poor's 500 Index (S&P 500), an
unmanaged list of common stocks, frequently used
as a general measure of market performance. In
comparing the Fund to the S&P, you should take
into account the fact that the Fund's
performance reflects a 5.65 percent total
sales and administrative charge, while no such
sales charge is reflected in the performance of
the S&P 500.
Investment performance of the Fund, after
charges, is reflected in the unit value
calculation. There are no dividend or capital
gain distributions, therefore, the assumed units
purchased would remain constanct throughout the
period.
How your $10,000 has grown in IDS Life Variable
Annuity Fund B
(picture of mountain chart)
[/TABLE]
[CAPTION]
1985 1986 1987 1988 1989 1990 1991 1992
1993 1994 1995
[S] [C] [C] [C] [C] [C] [C] [C]
[C] [C] [C]
$9,435 11,015 14,157 15,141 19,904 20,325 30,292 32,327 35,374
33,960 46,135
Dec. 31 Unit Value
$3.385 3.952 5.079 5.432 7.141 7.292 10.868 11.598
12.691 12.184 16.552
[/TABLE]
The above represents an assumed investment of
$10,000 into a single payment annuity contract
on Dec. 31, 1985. Values are calculated on Dec.
31 of each year. (No new contracts are currently
being sold).
Average Annual Total Return on Each of Three
Investments
Date of Investment Period investment
Average annual
investment held in years
total return
Dec. 31, 1985 10
+16.52%
Dec. 31, 1990 5
+16.45
Dec. 31, 1994 1
+28.17
The returns reflect the deduction of a sales and
administrative charge and mortality and expense
risk chareges.
Your investment and return values fluctuate so
that your accumulation units, when redeemed, may
be worth more or less than their original cost.
This was a period of fluctuating security
prices. Past performance is no guarantee of
future results.
PAGE
Annual Financial Information
________________________________________________
_______________Report of Independent Auditors
The Board of Managers and Contract Owners
IDS Life Variable Annuity Fund B:
We have audited the accompanying statement of
assets, liabilities and contract owners' equity
of IDS Life Variable Annuity Fund B, including
the schedule of investments in securities, as of
December 31, 1995, the related statement of
operations for the year then ended, the
statement of changes in contract owners' equity
for each of the two years in the period then
ended, and the selected per unit data and ratios
presented under "Financial highlights" for each
of the five years in the period then ended.
These financial statements and per unit data and
ratios are the responsibility of the Fund's
management. Our responsibility is to express an
opinion on these financial statements and per
unit data and ratios based on our audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to
obtain reasonable assurance about whether the
financial statements and per unit data and
ratios are free of material misstatement. An
audit includes examining, on a test basis,
evidence supporting the amounts and disclosures
in the financial statements. Our procedures
included confirmation of investments owned at
December 31, 1995, by correspondence with the
custodian and brokers. An audit also includes
assessing the accounting principles used and
significant estimates made by management, as
well as evaluating the overall financial
statement presentation. We believe that our
audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and
selected per unit data and ratios referred to
above present fairly, in all material respects,
the financial position of IDS Life Variable
Annuity Fund B at December 31, 1995, the results
of its operations for the year then ended, the
changes in its contract owners' equity for each
of the two years in the period then ended, and
the selected per unit data and ratios for each
of the five years in the period then ended in
conformity with generally accepted accounting
principles.
Ernst & Young LLP
Minneapolis, Minnesota
February 1, 1996
PAGE
<TABLE>
<CAPTION>
____________________________________________________________
__________________Statement of Assets, Liabilities and
Contract Owners' Equity Dec. 31, 1995
Assets
____________________________________________________________
__________________<S> <C>
Investments in securities, at value (Note 1)
(identified cost, $414,303,419) $613,840,063
Cash in bank on demand deposit 77,200
Dividends and interest receivable 467,346
Receivable from IDS Life Insurance Company for
contract purchase payments 40,016
____________________________________________________________
__________________Total assets $614,424,625
____________________________________________________________
__________________
Liabilities
____________________________________________________________
__________________Payable for contract terminations$ 459,760
Payable to IDS Life Insurance Company for:
Mortality and expense assurance fee 808
Investment management fee 22,620
____________________________________________________________
__________________Total liabilities 483,188
____________________________________________________________
__________________
Contract owners' equity
____________________________________________________________
__________________Contracts in accumulation period -
36,471,678 units at
$16.55 per unit (Note 5) 603,486,110
Contracts in payment period - 25,075 annuity units 10,455,327
____________________________________________________________
__________________Total contract owners' equity 613,941,437
____________________________________________________________
__________________Total liabilities and contract owners'
equity $614,424,625
____________________________________________________________
__________________See accompanying notes to financial
statements.
PAGE
____________________________________________________________
________________________
Statement of Operations Year ended Dec. 31, 1995
Investment loss - net
____________________________________________________________
________________________
Income:
Dividends (net of foreign taxes withheld of $90,417)$ 4,572,921
Interest 2,221,607
____________________________________________________________
________________________
Total income 6,794,528
____________________________________________________________
________________________
Expenses:
Mortality and expense assurance fee (Note 2) 5,604,098
Investment management fee (Note 3) 2,241,761
____________________________________________________________
________________________
Total expenses 7,845,859
____________________________________________________________
________________________
Investment loss - net (1,051,331)
____________________________________________________________
________________________
Realized and unrealized gain (loss) on investments - net
____________________________________________________________
________________________
Net realized gain on security transactions (Note 4) 68,424,639
Net realized loss on foreign currency transactions (1,217)
____________________________________________________________
________________________
Net realized gain on investments 68,423,422
Net change in unrealized appreciation or depreciation
of investments 103,044,323
____________________________________________________________
________________________
Net gain on investments 171,467,745
____________________________________________________________
________________________
Net increase in contract owners' equity from operations$170,416,414
____________________________________________________________
________________________
See accompanying notes to financial statements.
</TABLE>
PAGE
<TABLE>
<CAPTION>
____________________________________________________________
__________________Statement of Changes in Contract Owners'
Equity
Year ended Year ended
Operations Dec. 31, 1995Dec. 31,1994
____________________________________________________________
__________________<S> <C> <C>
Investment income (loss) - net $ (1,051,331) $ 1,285,716
Net realized gain on investments 68,423,422 28,474,677
Net change in unrealized appreciation or depreciation
of investments 103,044,323(50,904,689)
____________________________________________________________
__________________Net increase (decrease) in contract
owners' equity
from operations 170,416,414(21,144,296)
____________________________________________________________
__________________
Contract Transactions
____________________________________________________________
__________________Net contract purchase payments (Note 2)4,919,086 5,788,027
Repayment of temporary withdrawals 3,330 6,455
Net transfers from (to) fixed annuities(3,554,698) 6,690,823
Actuarial adjustment for mortality assurance on annuities
in payment period (Note 2) 72,885 119,711
Contract termination payments and temporary withdrawals(51,173,507)
(30,379,558)
Annuity payments (1,262,018)(1,117,667)
____________________________________________________________
__________________Net decrease from contract transactions(50,994,922)
(18,892,209)
____________________________________________________________
__________________Net increase (decrease) in contract
owners' equity 119,421,492(40,036,505)
____________________________________________________________
__________________
Contract owners' equity at beginning of year494,519,945534,556,450
____________________________________________________________
__________________
Contract owners' equity at end of year$613,941,437$494,519,945
____________________________________________________________
__________________See accompanying notes to financial
statements.
</TABLE>
PAGE
Notes to Financial Statements
________________________________________________
_________1. Organization and summary of
significant accounting policies
IDS Life Variable Annuity Fund B (the Fund) is
organized as a segregated asset account of IDS
Life Insurance Company (IDS Life) under
Minnesota law and is registered under the
Investment Company Act of 1940 as a diversified,
open-end management investment company. The
Fund's assets are held for the exclusive benefit
of its variable annuity contract owners and are
not chargeable with any liabilities arising from
the other business activities of IDS Life. The
significant accounting policies followed by the
Fund are summarized as follows:
Investments in securities
Securities traded on national securities
exchanges are valued at the last quoted sales
price on the principal exchange on which traded.
Securities traded in the over-the-counter market
are valued at the mean of the last quoted bid
and asked price. Short-term securities that
mature in 60 days or less are valued at
amortized cost. Those 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. Short-term
securities originally purchased with maturities
of more than 60 days but which currently mature
in 60 days or less are valued on an amortized
cost basis using the market value or approximate
market value on the 61st day before maturity.
Bonds and other securities are valued at fair
value as determined by the Board of Managers
when market quotations are not readily
available. Determination of fair value involves
among other things, references to market
indexes, matrices and data from independent
brokers.
Security transactions are accounted for on the
date the securities are purchased and sold.
Dividend income is recorded on the ex-dividend
date.
Option contracts
In order to produce incremental earnings,
protect gains and facilitate buying and selling
of securities for investment purposes, the Fund
may buy and sell put and call options and write
covered call options on portfolio securities.
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.
During the year ended Dec. 31, 1995, the Fund
did not buy or sell any put or call options or
write any covered call or put options. There
were no option contracts outstanding at Dec. 31,
1995.
Futures contracts
In order to gain exposure to or protect itself
from changes in the market, the Fund may buy and
sell stock index futures contracts and related
options. 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 the 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.
During the year ended Dec. 31, 1995, the Fund
did not buy or sell stock index futures
contracts and related options. There were no
stock index futures contracts outstanding at
Dec.31, 1995.
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 rate of
exchange on the transaction date. It
is not practicable to identify that portion of
realized and unrealized gain or
loss arising from changes in the exchange rates
from the portion arising from changes in the
market value of investments.
The Fund may also 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.
There were no forward foreign currency exchange
contracts outstanding at Dec. 31, 1995.
Federal income taxes
IDS Life is taxed as a life insurance company.
The Fund is treated as part of IDS Life for
federal income tax purposes. Under current
federal income tax law, no taxes are payable
with respect to any income of the Fund.
________________________________________________
_________
2. Mortality and expense assurance fee and
sales charges
IDS Life makes contractual assurances to the
Fund that possible future adverse changes in
administrative expenses and mortality experience
of the annuitants and beneficiaries will not
affect the Fund. The mortality and expense
assurance fee paid to IDS Life is computed daily
and is equal on an annual basis to 1 percent of
the average daily net assets of the Fund.
Charges by IDS Life for its sales and
administrative services applicable to the
variable annuity contracts amounted to $183,040
in 1995 and $216,240 in 1994. Such charges are
not an expense of the Fund. They are deducted
from contract purchase payments and are not
included in the net contract purchase payments
to the Fund.
________________________________________________
_________
3. Investment management agreement
The Fund has an Investment Management Agreement
with IDS Life. For its services, IDS Life is
paid a fee based on the aggregate average daily
net assets of the Fund. The investment
management fee paid to IDS Life is computed
daily and is equal on an annual basis to 0.4
percent of the average daily net assets of the
Fund.
In addition to paying its own management fee,
the Fund also pays all brokerage commissions and
charges in the purchase and sale of assets.
Brokerage charges are paid to IDS Life for
reimbursement of charges incurred in the
purchase and sale of foreign securities.
________________________________________________
_________
4. Security transactions and basis for
determining realized gain and loss
Cost of purchases and proceeds from sales of
securities (other than short-term obligations)
aggregated $228,835,650 and $264,123,075 for the
year ended Dec. 31, 1995. Net realized gain on
investments has been determined on the basis of
identified costs.
Brokerage commissions paid to brokers affiliated
with IDS Life were $17,804 for the year ended
Dec. 31, 1995.
________________________________________________
_________
5. Accumulation units
The changes in number of outstanding units
applicable to contracts in the accumulation
period were as follows:
<TABLE>
<CAPTION>
Year ended Year ended
Dec. 31, 1995Dec. 31, 199
4
_______________________________________________________
________________
<S> <C> <C>
Units outstanding at beginning of year39,954,87941,447,
618
Additions for contract purchase payments and
repayments 348,227 465,722
Net transfers from (to) fixed annuities(251,533)531,992
Deductions for contract terminations and withdrawals(3,
579,895) (2,490,453)
_______________________________________________________
________________
Units outstanding at end of year 36,471,678 39,954,879
_______________________________________________________
________________
</TABLE>
6. Financial highlights
The table below shows certain important financial
information for evaluating the Fund's results.
<TABLE>
<CAPTION>
Year ended Dec. 31,
___________________________________________________________________________
_____________________
1995 1994 1993 1992 1991
___________________________________________________________________________
_____________________
<S> <C> <C> <C> <C> <C>
Accumulation unit value at beginning of year$12.18$12.69 $11.60 $10.87 $ 7.29
___________________________________________________________________________
_____________________
Income from investment operations:
Net investment income (loss) (.03) .03 (.02) (.03) .02
Net gains (losses) on securities, both realized
and unrealized 4.40 (0.54) 1.11 0.76 3.56
___________________________________________________________________________
_____________________
Total from investment operations 4.37 (0.51) 1.09 0.73 3.58
___________________________________________________________________________
_____________________
Accumulation unit value at end of year$16.55$12.18$12.69 $11.60 $10.87
___________________________________________________________________________
_____________________
Total Return* 35.88% (4.00)% 9.42% 6.72% 49.03%
___________________________________________________________________________
_____________________
Ratios/Supplemental Data
Total contract owner's equity at end of year
(000 omitted) $613.941$494,520$534,556$506,150$500,877
Ratio of operating expenses to average net assets 1.40% 1.40% 1.40% 1.40% 1.41%
Ratio of net investment income (loss) to average
net assets (0.19)% 0.25% (0.17)%(0.28)% 0.26%
Portfolio turnover rate 44% 61% 64% 74% 67%
___________________________________________________________________________
_____________________
*Total return does not reflect payment of a sales charge.
</TABLE>
The foregoing table pertains to
accumulation units only. There are two
kinds of units. As long as you are paying
into the Fund they are called
"accumulation" units. When you begin to
receive your annuity, they change to
"annuity" units.
The value of an annuity unit (assuming a
3.5 percent investment rate) was $6.58 as
of Dec. 31, 1995, $5.02 as of Dec. 31,
1994, $5.41 as of Dec. 31, 1993, $5.11 as
of Dec. 31, 1992 and $4.96 as of Dec. 31,
1991. The value of an annuity unit
(assuming a 5 percent investment rate) was
$4.47 as of Dec. 31, 1995, $3.46 as of Dec.
31, 1994, $3.78 as of Dec. 31, 1993, $3.63
as of Dec. 31, 1992 and $3.57 as of Dec.
31, 1991.
PAGE
<TABLE>
<CAPTION>
____________________________________________________________
__________________
Investments in Securities, Dec. 31, 1995
____________________________________________________________
__________________
(Percentages represent value of investments compared to
total net assets)
Common stocks
____________________________________________________________
__________________
Issuer Shares Value(a)
____________________________________________________________
__________________
<S> <C> <C>
Airlines (1.2%)
Northwest Airlines 150,000(b)$ 7,650,000
____________________________________________________________
__________________
Automotive Related (0.9%)
Ford Motor 180,000 5,220,000
____________________________________________________________
__________________Banks and Savings & Loans (2.6%)
First Chicago 401,277 15,850,441
____________________________________________________________
__________________
Beverages & Tobacco (2.4%)
Coca-Cola 199,600 14,820,300
____________________________________________________________
__________________
Building Materials (1.2%)
Tyco Intl 200,000 7,125,000
____________________________________________________________
__________________
Computers & Office Equipment (20.2%)
Cisco Systems 200,000(b)14,925,000
Compaq Computer 200,000(b) 9,600,000
Computer Association Intl 373,500 21,242,812
First Data 223,294 14,932,786
Hewlett-Packard 112,400 9,413,500
Intuit 90,000(b) 7,020,000
Microsoft 80,000(b) 7,020,000
Oracle Systems 454,000(b)19,238,250
Parametric Technology 151,800(b)10,094,700
Softkey Intl 140,000(b) 3,237,500
Solectron 160,000(b) 7,060,000
___________
123,784,548
____________________________________________________________
__________________
Electronics (6.6%)
Applied Materials 217,600(b) 8,568,000
AVX 161,100 4,269,150
Harman Intl 145,215 5,826,752
Intel 125,000 7,093,750
MEMC Electronic Materials 258,600(b) 8,436,825
Maxim Intergrated Products 160,000(b) 6,160,000
_____________
40,354,477
____________________________________________________________
__________________
Energy (1.5%)
Mobil 80,000 8,960,000
____________________________________________________________
__________________
Energy Equipment & Services (1.1%)
Fluor 100,000 6,600,000
____________________________________________________________
__________________
Foreign (8.5%)
Danka Business Systems ADR 300,000 11,100,000
Ericsson ADR 600,000 11,700,000
Magna Intl 133,900 5,791,175
Royal Dutch Petroleum 94,000 13,265,750
Schlumberger 100,000 6,925,000
Teva Pharmaceutical ADR 80,000 3,710,000
___________
52,491,925
____________________________________________________________
__________________
Health Care (12.4%)
Amgen 120,000(b) 7,125,000
Boston Scientific 260,000(b)12,740,000
Johnson & Johnson 85,000 7,278,125
Medtronic 400,000 22,350,000
Perclose 13,200(b) 252,450
Pfizer 316,200 19,920,600
Stryker 120,000 6,300,000
___________
75,966,175
____________________________________________________________
__________________
Health Care Services (6.2%)
HEALTHSOUTH 537,400(b)15,651,775
Healthcare COMPARE 200,000(b) 8,700,000
United Healthcare 212,700 13,931,850
___________
38,283,625
____________________________________________________________
__________________
Household Products (1.8%)
Duracell 176,400 9,128,700
Sola Intl 70,000(b) 1,767,500
___________
10,896,200
____________________________________________________________
__________________Industrial Machines & Services (4.5%)
Caterpillar 180,000 10,575,000
Deere & Company 294,000 10,363,500
Sanifill 200,000(b) 6,675,000
__________
27,613,500
____________________________________________________________
__________________
Insurance (0.7%)
Risk Capital Holdings 172,600(b) 4,034,525
_________________________________________________
_____________________________
Leisure Time & Entertainment (2.9%)
Mattel 200,000 6,150,000
Walt Disney 200,000 11,800,000
___________
17,950,000
____________________________________________________________
__________________
Metals (3.2%)
Birmingham Steel 317,700 4,725,787
Nucor Steel 267,000 15,252,375
___________
19,978,162
____________________________________________________________
__________________
Multi-industry (2.9%)
Alco Standard 300,000 13,687,500
Manpower 150,900 4,244,063
____________
17,931,563
____________________________________________________________
__________________
Restaurants & Lodging (1.4%)
McDonald's 187,500 8,460,938
____________________________________________________________
__________________
Telecommunications Equipment & Services (6.2%)
ADC Telecommunications 180,000(b) 6,570,000
Andrew 133,300(b) 5,098,725
Motorola 150,000 8,550,000
StrataCom 90,000(b) 6,615,000
Tellabs 300,000(b)11,100,000
___________
37,933,725
____________________________________________________________
__________________Textiles & Apparel (1.2%)
Nike Cl B 110,000 7,658,750
____________________________________________________________
__________________
Utilities - Telephone (3.9%)
AirTouch Communications 290,000(b) 8,192,500
MFS Communications 300,000(b)15,975,000
___________
24,167,500
____________________________________________________________
__________________
Total Common Stocks (93.5%)
(Cost: $374,181,469) $573,731,354
____________________________________________________________
__________________
</TABLE>
<TABLE>
<CAPTION>
Short-term Securities
____________________________________________________________
__________________
Annualized
Yield on
Date of Principal
Issuer Purchase Amount Value(a)
____________________________________________________________
__________________
<S> <C> <C> <C>
U.S. Government Agencies (0.4%)
Federal Home Loan Mtge Corp
Disc Nts
01-16-96 5.67% $2,100,000 $ 2,094,397
01-19-96 5.49 800,000 797,569
___________
2,891,966
____________________________________________________________
__________________Commercial Paper (6.1%)
BBV Finance
02-05-96 5.73 2,100,000 2,086,504
Fleet Funding
01-26-96 5.80 600,000(c) 597,408
Glaxo Wellcome
01-22-96 5.75 6,000,000(c) 5,976,348
Household Finance
01-04-96 5.90 3,800,000 3,796,886
01-10-96 5.78 4,100,000 4,092,772
Natl Australia Funding
01-16-96 5.77 3,400,000 3,386,867
Northern States Power
01-17-96 5.72 2,550,000 2,542,745
Sandoz
01-04-96 5.61 1,000,000 999,222
Southwestern Bell
02-21-96 5.65 3,400,000 3,370,993
Transamerica Finance
01-08-96 5.75 4,100,000 4,094,137
USL Capital
01-12-96 5.77 2,300,000 2,293,132
01-26-96 5.77 4,000,000 3,979,729
___________
37,216,743
____________________________________________________________
__________________
Total Short-term Securities (6.5%)
(Cost: $40,121,950) $ 40,108,709
____________________________________________________________
__________________Total Investments in Securities (100.0%)
(Cost: $414,303,419)(d) $613,840,063
____________________________________________________________
__________________
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)Commercial paper 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."
These securities have been determined to be liquid under guidelines established by
the board of managers.
(d)At Dec. 31, 1995, the cost of securities for federal
income tax purposes was $414,303,419 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $206,212,495
Unrealized depreciation (6,675,851)
____________________________________________________________
__________________Net unrealized appreciation $199,536,644
____________________________________________________________
__________________</TABLE>
PAGE
Managers and Officers
Board of Managers
Richard W. Kling
president, IDS Life Insurance Company
Carl N. Platou
president emeritus, Fairview Hospital
and Healthcare Services
Edward Landes
retired, former development consultant
Janis E. Miller
executive vice president, variable assets,
IDS Life Insurance Company
Gordon H. Ritz
president, Con Rad Broadcasting Corp.
Principal Officers
Richard W. Kling
chairman of the board and president
Morris Goodwin, Jr.
vice president and treasurer
Lorraine R. Hart
vice president, investments
William A. Stoltzmann
general counsel and assistant secretary
Timothy S. Meehan
secretary
Additional Information
The investment objective of IDS Life Variable
Annuity Fund B is to invest in securities that
offer opportunities for long-term capital
appreciation
consistent with accumulating fund value and
providing annuity payments under variable annuity
contracts issued by IDS Life.
PAGE
Additional Information (continued)
There is a sales and administrative charge to the
contract owner included in
the purchase payment.
This report is for the information of contract
owners of IDS Life Variable Annuity Fund B but it
may be used as sales literature when preceded or
accompanied by the current prospectus. For
details and other material information, see the
current prospectus.
Issuer and Investment Manager:
IDS Life Insurance Company,
Minneapolis, Minn.
Custodian:
American Express Trust Company,
Minneapolis, Minn.
Sub-Custodian:
First Bank National Association
St. Paul, Minn.
