PAGE
1996 semiannual report
IDS Progressive Fund
(icon of) shooting star
The goal of IDS Progressive Fund, Inc. is long-term growth of capital.
The Fund invests primarily in undervalued common stocks.
Distributed by American Express Financial Advisors Inc.
The power of patience
Everyone likes to get a bargain. In the investment world, bargainsare
known as "value" stocks - stocks whose prices are believed to below in
relation to the true worth of their respective companies. In thecase of
Progressive Fund, the focus is on small-company value stocks, whichcan
get overlooked as investors try to find a new "high-flier." Many of
these companies have already proved themselves in the marketplaceand
are financially sound. Patient investors may benefit, however, whensuch
stocks get rediscovered and eventually rise to their fair values.
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 24
Board members and officers 28
IDS mutual funds 29
To our shareholders
(picture of William R. Pearce)
William R. Pearce
President of the Fund
(picture of Mike Garbisch)
Mike Garbisch
Portfolio manager
From the president
strong year for the U.S. financial markets. Perhaps just asimportant,
you also know that history shows that bull markets don't lastforever.
Though they're often unpredictable, declines - whether they'rebrief or
long-lasting, moderate or substantial - are always a possibility.
That fact reinforces the need for investors to review periodicallytheir
long-term goals and assess whether their investment program remainson
track to achieving them. Your quarterly investment statements areone
part of that monitoring process. The other is a meeting with yourAmerican
Express financial advisor. That becomes even more important ifthere's a
major change in your financial situation or in the financialmarkets.
William R. Pearce
From the portfolio manager
The stock market continued to advance during the first half of IDS
Progressive Fund's fiscal year, extending a remarkable rally thatbegan
in early 1995. Although small-capitalization value stocks, the coreof
this Fund, lagged behind the broad market's pace, the Fundgenerated
positive results over the October 1995 through March 1996 period.(Much
of the Fund's return came in the form of a capital gain paid to
shareholders last December, which reduced the Fund's net assetvalue by
a like amount at that time.)
While the stock market as a whole displayed fairly consistentperformance
during the past six months, there was considerable turmoil withinsectors
of the market as investors tried to sort out conflicting economicdata.
Ultimately, though, the focus came down to growth stocks -specifically,
technology-related issues versus big, blue chip growth stocks. Forthe
most part, those two groups took turns soaring and slumpingthroughout the
fall and winter.During that time, aside from the periodic bursts by certain
technology stocks, small-capitalization issues garnered comparatively little
attention from investors. Nevertheless, except for a downturn lastOctober,
the Fund was able to grind out positive returns in five of the sixmonths.
Among our most consistently productive holdings were stocks in the
financial services, including banking and insurance, and healthcare
industries. As is typical of this Fund, much of the portfolio(about
half of assets) remained invested in what are commonly called"cyclical"
stocks - those of companies whose business fortunes are closelylinked
to the strength of the economy. Included in this group are autoparts,
chemical, building material, energy, furniture/ appliance, metal,paper
and retailing companies, all of which we owned over the pastperiod.
The performance from these cyclicals was erratic, but on the whole,
positive.
Portfolio a bit more aggressive
As the period progressed, we made two notable changes to theportfolio.
We added several technology-related stocks after they experiencedprice
declines, effectively doubling our exposure to that sector. We also
substantially lowered our cash reserves in response to the factthat
cash-equivalent investments were proving to be a drag on Fundperformance.
These shifts have resulted in a slightly more aggressivelystructured
portfolio as we enter the second half of the fiscal year.Currently, we
are looking to increase our exposure to foreign stocks, as well asadd
more domestic technology and health care issues to balance out our
industrial holdings. This does not mean that we have abandoned our
relatively conservative, value-oriented style, however. We continue
to stress stocks of sound, smaller companies with solid trackrecords
that can be bought at reasonable prices and, thus, offer goodinvestment
nature enjoyed improving performance. If that momentum issustained, we
expect the Fund to benefit accordingly in the months ahead.
Mike Garbisch
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1996 $ 7.71
Sept. 30, 1995 $ 7.66
Increase $ 0.05
Distributions Oct. 1, 1995 - March 31, 1996
From income $ 0.13
From capital gains $ 0.35
Total distributions $ 0.48
Total return* +7.2%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1996 $ 7.67
Sept. 30, 1995 $ 7.63
Increase $ 0.04
Distributions Oct. 1, 1995 - March 31, 1996
From income $ 0.11
From capital gains $ 0.35
Total distributions $ 0.46
Total return* +6.8%**
Class Y
6-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1996 $ 7.72
Sept. 30, 1995 $ 7.67
Increase $ 0.05
Distributions Oct. 1, 1995 - March 31, 1996
From income $ 0.14
From capital gains $ 0.35
Total distributions $ 0.49
Total return* +7.3%**
<TABLE>
<CAPTION>
IDS Progressive Fund, Inc.
The Fund's ten largest holdings
(Pie chart)
The ten holdings listed here make up 20.00% of the Fund's netassets
___________________________________________________________________________
Percent Value
(of fund's net assets) (as of March31, 1996)
___________________________________________________________________________
<S> <C> <C>
Allied Group 2.47% $9,142,500
A holding company, Allied provides
property-casualty insurance,
excess and surplus insurance,
investment services and data-processing.
Enhance Financial Services Group 2.31 8,538,887
Engages primarily in the reinsurance of financial
guaranties of municipal and asset-backed debt
obligations issued by monoline financial guaranty
insurers.
Lancaster Colony 2.11 7,822,500
Manufactures and markets specialty foods,
automotive products and glassware candles.
Ecolab 2.11 7,800,000
Supplies cleansing agents and related products to
nonresidential markets.
Hormel Foods 1.98 7,350,000
This leading meat packer specializes in branded
meat products for the consumer market.
Boston Scientific 1.86 6,900,000
Develops, manufactures and markets medical devices.
Miller (Herman) Inc. 1.84 6,820,000
furniture and furniture systems.
Century Telephone Enterprises 1.80 6,667,500
A regional diversified telecommunicatioons company
primarily engaged in providing traditional and
cellular telephone services.
Ethan Allen Interiors 1.77 6,562,500
Manufacturer and retailer of fine, hand-crafted
furniture.
Kaydon 1.75 6,475,000
A designer, manufacturer and seller of customer-
engineered products for a variety of uses in the
construction, aerospace, defense, and medical
industries.
</TABLE>
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Progressive Fund, Inc.
March 31, 1996
_____________________________________________________________________________________________________________
Assets
______________________________________________________________________________________________________________
<S> <C>
(Unaudited)
Investments in securities, at value (Note 1)
(identified cost $323,902,693) $376,777,183
Dividends and accrued interest receivable 835,385
Unrealized appreciation on foreign currency contracts held, atvalue (Notes 1 and 6) 400
Receivable from investment advisor 13,920
______________________________________________________________________________________________________________
Total assets 377,626,888
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 241,406
Payable for investment securities purchased 3,896,828
Payable upon return of securities loaned (Note 4) 2,989,000
Unrealized depreciation on foreign currency contracts
held, at value (Notes 1 and 6) 10,102
Accrued distribution fee 598
Accrued service fee 3,512
Accrued transfer agency fee 3,340
Accrued administrative services fee 1,178
68,468
_____________________________________________________________________________________________________________
Total liabilities 7,214,432
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $370,412,456
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value $ 480,462
Additional paid-in capital 309,324,295
Undistributed net investment income 1,567,701
Accumulated net realized gain (Note 1) 6,173,869
Unrealized appreciation of investments and on translation
of assets and liabilities in foreign currencies (Note 6) 52,866,129
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capitalstock $370,412,456
_____________________________________________________________________________________________________________
Net assets applicable to outstanding shares: ClassA $353,706,115
ClassB $ 14,749,201
ClassY $ 1,957,140
Net asset value per share of outstanding capital stock: ClassA shares 45,868,696 $ 7.71
ClassB shares 1,923,831 $ 7.67
ClassY shares 253,646 $ 7.72
See accompanying notes to financial statements.
Financial statements
Statement of operations
IDS Progressive Fund, Inc.
Six months ended March 31, 1996
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
Income: (Unaudited)
Dividends (net of foreign taxes withheld of $18,689) $ 2,919,781
Interest 1,754,132
_____________________________________________________________________________________________________________
Total income 4,673,913
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management services fee 965,905
Distribution fee
Class B 40,319
Transfer agency fee 304,681
Incremental transfer agency fee -- Class B 1,068
Service fee
Class A 291,341
Class B 9,407
Administrative services fee 103,016
Compensation of board members 1,457
Compensation of officers 1,501
Custodian fees 43,593
Postage 25,214
Registration fees 33,392
Reports to shareholders 10,766
Audit fees 10,470 2,317
Other 3,407
_____________________________________________________________________________________________________________
Total expenses 1,847,854
Earnings credits on cash balances (Note 2) (8,181)
_____________________________________________________________________________________________________________
Total net expenses 1,839,673
_____________________________________________________________________________________________________________
Investment income -- net 2,834,240
_____________________________________________________________________________________________________________
Realized and unrealized gain -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions
(including gain of $109,835 from foreign currency transactions)(Note 3) 6,175,114
Net change in unrealized appreciation or depreciation ofinvestments and on
translation of assets and liabilities in foreign currencies 15,940,254
_____________________________________________________________________________________________________________
Net gain on investments and foreign currency 22,115,368
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $24,949,608
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Progressive Fund, Inc.
_____________________________________________________________________________________________________________
Operations and distributions March 31, 1996 Sept. 30, 1995
_____________________________________________________________________________________________________________
Six months ended Year ended
(Unaudited)
<S> <C> <C>
Investment income -- net $ 2,834,240 $ 5,548,736
Net realized gain on investments and foreign currency 6,175,114 16,098,282
Net change in unrealized appreciation or depreciation ofinvestments
and on translation of assets and liabilities in foreigncurrencies 15,940,254 29,110,171
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations 24,949,608 50,757,189
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (5,557,814) (5,046,235)
Class B (151,571) --
Class Y (19,834) --
Net realized gain
Class A (15,575,830) (12,036,462)
Class B (495,315) --
Class Y (51,524) --
_____________________________________________________________________________________________________________
Total distributions
_____________________________________________________________________________________________________________
Capital share transactions (Note 5)
_____________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 18,940,464 51,297,752
Class B shares 7,403,745 7,175,301
Class Y shares 1,189,732 1,700,674
Reinvestment of distributions at net asset value
Class A shares 20,736,290 16,744,777
Class B shares 642,856 --
Class Y shares 71,358 --
Payments for redemptions
Class A shares (25,374,837) (41,167,059)
Class B shares (Note 2) (907,335) (127,637)
Class Y shares (1,158,103) (27,749)
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions 21,544,170 35,596,059
_____________________________________________________________________________________________________________
Total increase in net assets 24,641,890 69,270,551
Net assets at beginning of period 345,770,566 276,500,015
_____________________________________________________________________________________________________________
Net assets at end of period
(including undistributed net investment income of
$1,567,701 and $4,462,680) $370,412,456 $345,770,566
_____________________________________________________________________________________________________________
See accompanying notes to financial statements
</TABLE>
Notes to financial statements
IDS Progressive Fund, Inc.
(Unaudited as to March 31, 1996)
______________________________________________________________________________
1. Summary of significant accounting policies
The Fund is registered under the Investment Company Act of 1940 (asamended)
as a diversified, open-end management investment company. The Fundinvests
primarily in undervalued common stocks. The Fund offers Class A,Class B
and Class Y shares. Class A shares are sold with a front-end salescharge.
Class B shares may be subject to a contingent deferred sales chargeand
such shares automatically convert to Class A after eight years.Class Y
shares have no sales charge and are offered only to qualifyinginstitutional
investors.
All classes of shares have identical voting, dividend, liquidationand other
rights, and the same terms and conditions, except that the level of
distribution fee, transfer agency fee and service fee (classspecific
expenses) differs among classes. Income, expenses (other than classspecific
expenses) and realized and unrealized gains or losses oninvestments are
allocated to each class of shares based upon its relative netassets.
Significant accounting policies followed by the Fund are summarizedbelow:
Use of estimates
The preparation of financial statements in conformity withgenerally
accepted accounting principles requires management to makeestimates and
assumptions that affect the reported amounts of assets andliabilities
and disclosure of contingent assets and liabilities at the date ofthe
financial statements and the reported amounts of increase anddecrease
in net assets from operations during the period. Actual results differ from
those estimates.
Valuation of securities
All securities are valued at the close of each business day.Securities
traded on national securities exchanges or included in nationalmarket
systems are valued at the last quoted sales price; securities forwhich
market quotations are not readily available, including illiquidsecurities,
are valued at fair value according to methods selected in goodfaith by the
board. Determination of fair value involves, among other things,reference
to market indexes, matrixes and data from independent brokers.Short-term
securities maturing in more than 60 days from the valuation dateare valued
at the market price or approximate market value based on currentinterest
rates; those maturing in 60 days or less are valued at amortizedcost.
Option transactions
In order to produce incremental earnings, protect gains, andfacilitate
buying and selling of securities for investment purposes, the Fundmay 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 isdependent
upon the credit standing of the other party. The Fund also may buyand sell
put and call options and write covered call options on portfoliosecurities
and may write cash-secured put options. The risk in writing a calloption
is that the Fund gives up the opportunity of profit if the marketprice of
the security increases. The risk in writing a put option is thatthe Fund
may incur a loss if the market price of the security decreases andthe
option is exercised. The risk in buying an option is that the Fundpays a
premium whether or not the option is exercised. The Fund also hasthe
additional risk of not being able to enter into a closingtransaction if
Option contracts are valued daily at the closing prices on theirprimary
exchanges and unrealized appreciation or depreciation is recorded.The Fund
will realize a gain or loss upon expiration or closing of theoption
transaction. When an option is exercised, the proceeds on sales fora
written call option, the purchase cost for a written put option orthe cost
of a security for a purchased put or call option is adjusted by theamount
of premium received or paid.
Futures transactions
In order to gain exposure to or protect itself from changes in themarket,
the Fund may buy and sell stock index or interest rate futurescontracts
traded on any U.S. or foreign exchange. The Fund also may buy orwrite put
and call options on these futures contracts. Risks of entering into
futures contracts and related options include the possibility thatthere
may be an illiquid market and that a change in the value of thecontract
or option may not correlate with changes in the value of theunderlying
securities.
Upon entering into a futures contract, the Fund is required todeposit
either cash or securities in an amount (initial margin) equal to acertain
percentage of the contract value. Subsequent payments (variationmargin)
are made or received by the Fund each day. The variation marginpayments
are equal to the daily changes in the contract value and arerecorded as
unrealized gains and losses. The Fund recognizes a realized gain orloss
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 closingrate of
securities and income and expenses are translated at the exchangerate
on the transaction date. The effect of changes in foreign exchangerates
on realized and unrealized security gains or losses is reflected asa
component of such gains or losses. In the statement of operations,net
realized gains or losses from foreign currency transactions mayarise
from sales of foreign currency, closed forward contracts, exchangegains
or losses realized between the trade date and settlement dates on
securities transactions, and other translation gains or losses on
dividends,
interest income and foreign withholding taxes.
The Fund may enter into forward foreign currency exchange contractsfor
operational purposes and to protect against adverse exchange rate
fluctuation. The net U.S. dollar value of foreign currencyunderlying
all contractual commitments held by the Fund and the resultingunrealized
appreciation or depreciation are determined using foreign currencyexchange
rates from an independent pricing service. The Fund is subject tothe
credit risk that the other party will not complete the obligationsof the
contract.
Federal taxes
Since the Fund's policy is to comply with all sections of theInternal
Revenue Code applicable to regulated investment companies and todistribute
all of its taxable income to shareholders, no provision for incomeor excise
taxes is required.
Net investment income (loss) and net realized gains (losses) maydiffer
for financial statement and tax purposes primarily because of thedeferral
of losses on certain futures contracts, the recognition of certainforeign
currency gains (losses) as ordinary income (loss) for tax purposesand
losses deferred due to "wash sale" transactions. The character of
distributions made during the year from net investment income or realized
gains may differ from their ultimate characterization forfederal
income tax purposes. The effect on dividend distributions ofcertain
book-to-tax differences is presented as "excess distributions" inthe
statement of changes in net assets. Also, due to the timing ofdividend
distributions, the fiscal year in which amounts are distributed maydiffer
from the year that the income or realized gains (losses) wererecorded by
the Fund.
Dividends to shareholders
An annual dividend declared and paid at the end of the calendaryear from
net investment income is reinvested in additional shares of theFund 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 arepurchased
or sold. Dividend income is recognized on the ex-dividend date andinterest
income, including level-yield amortization of premium and discount,is
accrued daily.
______________________________________________________________________________
2. Expenses and sales charges
Effective March 20, 1995, the Fund entered into agreements withAmerican
Express Financial Corporation (AEFC) for managing its portfolio,providing
administrative services and serving as transfer agent as follows:Under
its Investment Management Services Agreement, AEFC determines which
securities will be purchased, held or sold. The management fee isa
percentage of the Fund's average daily net assets in reducingpercentages
from 0.64% to 0.515% annually. The fee is adjusted upward ordownward by
a performance incentive adjustment based on the Fund's averagedaily net
Lipper Capital Appreciation Fund Index. The maximum adjustment is0.12% of
the Fund's average daily net assets after deducting 1% from theperformance
difference. If the performance difference is less than 1%, theadjustment
will be zero. The adjustment decreased the fee by $147,526 for thesix
months ended March 31, 1996.
Under an Administrative Services Agreement, the Fund pays AEFC for
administration and accounting services at a percentage of theFund's average
daily net assets in reducing percentages from 0.06% to 0.035%annually.
Under a separate Transfer Agency Agreement, AEFC maintainsshareholder
accounts and records. The Fund pays AEFC an annual fee pershareholder
account for this service as follows:
o Class A $15
o Class B $16
o Class Y $15
Also effective March 20, 1995, the Fund entered into agreementswith
American Express Financial Advisors Inc. for distribution andshareholder
servicing-related services as follows: Under a Plan and Agreementof
Distribution, the Fund pays a distribution fee at an annual rate of0.75%
of the Fund's average daily net assets attributable to Class Bshares for
distribution-related services.
Under a Shareholder Service Agreement, the Fund pays a fee forservice
provided to shareholders by financial advisors and other servicingagents.
The fee is calculated at a rate of 0.175% of the Fund's averagedaily
net assets attributable to Class A and Class B shares.
AEFC will assume and pay any expenses (except taxes and brokerage
commissions) that exceed the most restrictive applicable stateexpense
limitation.
Sales charges received by American Express Financial Advisors Inc.
distributing Fund shares were $309,565 for Class A and $3,186 forClass B
for the six months ended March 31, 1996. The Fund also payscustodian fees
to American Express Trust Company, an affiliate of AEFC.
During the six months ended March 31, 1996, the Fund's custodianand
transfer agency fees were reduced by $8,181 as a result of earningscredits
from overnight cash balances.
The Fund has a retirement plan for its independent board members.Upon
retirement, board members receive monthly payments equal toone-half of
the retainer fee for as many months as they served as board membersup to
120 months. There are no death benefits. The plan is not funded,but the
Fund recognizes the cost of payments during the time board membersserve
on the board. The retirement plan expense amounted to $1,639 forthe six
months ended March 31, 1996. The plan was terminated on April 30, 1996.
The total liability for the plan is $18,644, which will be paid out at
some future date.
______________________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $119,264,008 and $92,502,577,
respectively, for the six months ended March 31, 1996. Realized gains
and losses are determined on an identified cost basis.
Brokerage commissions paid to brokers affiliated with AEFC were $17,337
for the six months ended March 31, 1996.
______________________________________________________________________________
4. Lending of portfolio securities
At March 31, 1996, securities valued at $2,780,725 were on loan to brokers.
For collateral, the Fund received $2,989,000 in cash. Income from
securities lending amounted to $5,275 for the six months ended March
31, 1996. The risks to the Fund of securities lending are that the
borrower may not provide additional collateral when required or
return the securities when due.<PAGE>
5. Capital share transactions
Transactions in shares of capital stock for the period indicated are
as follows:
<TABLE>
Six months ended March 31, 1996
Class A Class B Class Y
______________________________________________________________________________
<S> <C> <C> <C>
Sold 2,508,410 984,393 158,457
Issued for reinvested 2,787,890 86,767 9,592
distributions
Redeemed (3,360,777) (120,648) (152,591)
_____________________________________________________________________________
Net increase 1,953,523 950,512 15,458
_______________________________________________________________________________
Year ended Sept. 30, 1995
Class A Class B* Class Y*
_________________________________________________________________________
Sold 7,377,210 990,962 241,975
Issued for reinvested 2,586,065 -- --
distributions
Redeemed (5,882,611) (17,643) (3,787)
________________________________________________________________________
Net increase 4,080,664 973,319 238,188
_________________________________________________________________________
*Inception date was March 20, 1995
_________________________________________________________________________
6. Foreign currency contracts
At March 31, 1996, the Fund had entered into two foreign currency exchange
contracts that obligate the Fund to deliver currencies at specified future
dates. The unrealized appreciation and/or depreciation on these contracts
is included in the accompanying financial statements. The terms of the open
contracts are as follows:
Exchange date Currency to be Currency to be Unrealized Unrealized
delivered received appreciation depreciation
_________________________________________________________________________________
June 14, 1996 2,980,000 4,533,474 $ -- $10,102
British Pound U.S. Dollar
April 4, 1996 2,800,000 1,695,223 400 --
Dutch Guilder U.S. Dollar
________ ________
$400 $10,102
__________________________________________________________________________
</TABLE>
7. Illiquid securities
At March 31, 1996, investments in securities included issues that are illiquid.
The Fund currently limits investments in illiquid securities to 10% of the
Fund's net assets, at market value, at the time of purchase. The aggregate
value of such securities at March 31, 1996, was $3,965,700 which represents
1.1% of net assets. Pursuant to guidelines adopted by the Fund's board, certain
unregistered securities are determined to be liquid and are not included within
the 10% limitation specified above.
PAGE
<TABLE>
<CAPTION>
______________________________________________________________________________
8. Financial highlights
The tables below show certain important financial information for evaluating
the Fund's results.
Fiscal period ended Sept. 30,
Per share income and capital changes*
Class A
1996** 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $7.66 $6.94 $7.11 $6.26 $5.77 $5.03
beginning of period
Income from investment operations:
Net investment income .06 .13 .11 .10 .12 .18
Net gains .47 1.01 .44 .88 .53 .81
(both realized
and unrealized)
Total from investment .53 1.14 .55 .98 .65 .99
operations
Less distributions:
Dividends from net (.13) (.12) (.11) (.09) (.16) (.20)
investment income
Distributions from (.35) (.30) (.61) (.04) -- (.05)
realized gains
Total distributions (.48) (.42) (.72) (.13) (.16) (.25)
Net asset value, $7.71 $7.66 $6.94 $7.11 $6.26 $5.77
end of period
Ratios/supplemental data
Class A
1996** 1995 1994 1993 1992 1991
Net assets, end of $354 $337 $277 $255 $174 $132
period (in millions)
Ratio of expenses to 1.02%+ 1.04% .99% 1.09% 1.06% .98%
average daily net assets
Ratio of net income 1.63%+ 1.85% 1.65% 1.64% 2.07% 3.11%
to average
daily net assets
Portfolio turnover rate 30% 60% 77% 75% 87% 125%
(excluding short-term
securities)
Total return++ 7.2% 17.6% 7.9% 15.9% 11.4% 20.8%
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended March 31, 1996 (Unaudited).
+Adjusted to an annual basis.
++Total return does not reflect payment of a sales charge.
</TABLE>
PAGE
<TABLE>
<CAPTION>
Fiscal period ended Sept. 30,
Per share income and capital changes*
Class B Class Y
1996*** 1995** 1996*** 1995**
<S> <C> <C> <C> <C>
Net asset value, $7.63 $6.88 $7.67 $6.88
beginning of period
Income from investment operations:
Net investment income .01 .02 .11 .06
Net gains .49 .73 .43 .73
(both realized
and unrealized)
Total from investment .50 .75 .54 .79
operations
Less distributions:
Dividends from net (.11) -- (.14) --
investment income
Distributions from (.35) -- (.35) --
realized gains
Total distributions (.46) -- (.49) --
Net asset value, $7.67 $7.63 $7.72 $7.67
end of period
Ratios/supplemental data
Class B Class Y
1996*** 1995** 1996*** 1995**
Net assets, end of $15 $7 $2 $2
period (in millions)
Ratio of expenses to 1.79%+ 1.84%+ .85%+ .88%+
average daily net assets
Ratio of net income .88%+ 1.03%+ 1.84%+ 1.95%+
to average
daily net assets
Portfolio turnover rate 30% 60% 30% 60%
(excluding short-term
securities)
Total return++ 6.8% 10.9% 7.3% 11.5%
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Inception date was March 20, 1995 for Class B and Class Y.
***Six months ended March 31, 1996 (Unaudited).
+Adjusted to an annual basis.
++Total return does not reflect payment of a sales charge.
</TABLE>
PAGE
<TABLE>
<CAPTION>
Investments in securities
IDS Progressive Fund, Inc. (Percentages represent value of
March 31, 1996 (Unaudited) investments compared to net assets)
____________________________________________________________________________________________________________________________
Common stocks (89.7%)
____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Airlines (0.2%)
Western Pacific Airlines 50,100 (b,c) $ 707,663
_____________________________________________________________________________________________________________________________
Automotive & related (3.0%)
Danaher 170,000 6,290,000
Tower Automotive 300,000 (b) 4,837,500
____________
Total 11,127,500
_____________________________________________________________________________________________________________________________
Banks and savings & loans (5.2%)
F&M Bancorp 37,100 1,001,700
First Virginia Banks 150,000 6,056,250
Standard Federal Bancorp 150,000 6,375,000
TCF Financial 165,000 5,981,250
____________
Total 19,414,200
_____________________________________________________________________________________________________________________________
Beverages & tobacco (0.5%)
Mafco Consolidated Group 120,000 (b) 1,860,000
_____________________________________________________________________________________________________________________________
Building materials (2.2%)
Cameron Ashley 250,000 (b) 2,187,500
Martin Marietta Materials 260,700 5,930,925
____________
Total 8,118,425
_____________________________________________________________________________________________________________________________
Chemicals (2.1%)
Ecolab 260,000 7,800,000
_____________________________________________________________________________________________________________________________
Computers & office equipment (4.9%)
Diebold 95,250 3,774,281
Exabyte 310,000 (b) 5,056,875
Intl Imaging Materials 205,000 (b) 3,638,750
Solectron 125,000 (b) 5,500,000
_____________
Total 17,969,906
_____________________________________________________________________________________________________________________________
Electronics (5.8%)
Belden 200,000 5,900,000
ITI Technologies 70,000 (b) 1,898,750
Lattice Semiconductor 135,000 (b) 3,830,625
MEMC Electronic Materials 100,000 (b) 3,637,500
Pioneer Standard Electronics 400,000 6,150,000
_____________
Total 21,416,875
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
_____________________________________________________________________________________________________________________________
Energy (1.2%)
Murphy Oil 100,000 4,287,500
_____________________________________________________________________________________________________________________________
Energy equipment & services (1.5%)
Production Operators 180,000 5,580,000
_____________________________________________________________________________________________________________________________
Financial services (2.4%)
Simon Property Group 180,000 4,140,000
Sun Communities 180,000 4,905,000
_____________
Total 9,045,000
_____________________________________________________________________________________________________________________________
Food (2.0%)
Hormel Foods 280,000 7,350,000
_____________________________________________________________________________________________________________________________
Furniture & appliances (3.6%)
Ethan Allen Interiors 250,000 (b) 6,562,500
Miller (Herman) 220,000 6,820,000
____________
Total 13,382,500
_____________________________________________________________________________________________________________________________
Health care (3.6%)
Beckman Instruments 125,000 4,875,000
Boston Scientific 150,000 (b) 6,900,000
Life Technologies 58,900 1,649,200
____________
Total 13,424,200
_____________________________________________________________________________________________________________________________
Health care services (2.0%)
Living Centers of America 152,000 (b) 5,662,000
United Wisconsin Services 72,600 1,569,975
____________
Total 7,231,975
_____________________________________________________________________________________________________________________________
Household products (1.0%)
Libbey 100,000 2,187,500
Natl Presto Industries 34,800 1,392,000
____________
Total 3,579,500
_____________________________________________________________________________________________________________________________
Industrial equipment & services (5.9%)
Alamo Group 220,000 3,932,500
General Signal 110,000 3,987,500
Hubbell 49,100 3,185,363
Kaydon 185,000 6,475,000
Regal Beloit 205,000 4,305,000
____________
Total 21,885,363
_____________________________________________________________________________________________________________________________
Insurance (7.9%)
Allied Group 230,000 9,142,500
Enhance Financial Services Group 309,100 8,538,887
Horace Mann Educators 180,000 5,490,000
PennCorp Financial Group 200,000 6,300,000
_____________
Total 29,471,387
_____________________________________________________________________________________________________________________________
Leisure time & entertainment (3.9%)
Carmike Cinemas 240,000 (b) 5,460,000
Polaris Inds 200,000 6,150,000
Station Casinos 250,000 (b) 2,906,250
_____________
Total 14,516,250
_____________________________________________________________________________________________________________________________
Media (0.7%)
ValueVision Intl 300,000 (b) 2,568,750
_____________________________________________________________________________________________________________________________
Metals (1.6%)
Cleveland-Cliffs 135,000 5,973,750
_____________________________________________________________________________________________________________________________
Multi-industry (4.8%)
Griffon 600,000 (b) 5,625,000
Lancaster Colony 210,000 7,822,500
Zero 250,000 4,187,500
____________
Total 17,635,000
_____________________________________________________________________________________________________________________________
Paper & packaging (3.0%)
Longview Fibre 300,000 5,062,500
Rayonier 165,000 5,981,250
____________
Total 11,043,750
_____________________________________________________________________________________________________________________________
Restaurants & lodging (2.7%)
Brinker Intl 250,000 (b) 4,187,500
Buffets 400,000 (b) 5,700,000
____________
Total 9,887,500
_____________________________________________________________________________________________________________________________
Retail (2.3%)
Department 56 100,000 (b) 2,187,500
Lands' End 107,500 1,881,250
TJX Companies 180,000 4,522,500
____________
Total 8,591,250
_____________________________________________________________________________________________________________________________
Utilities-electric (1.9%)
LG&E Energy 80,000 3,430,000
Sierra Pacific Resources 150,000 3,768,750
____________
Total 7,198,750
_____________________________________________________________________________________________________________________________
Utilities-gas (1.2%)
New Jersey Resources 153,900 4,443,862
_____________________________________________________________________________________________________________________________
Utilities-telephone (1.8%)
Century Telephone Enterprises 210,000 6,667,500
_____________________________________________________________________________________________________________________________
Foreign (10.8%)(d)
Concordia Paper Holdings 110,000 (b) 797,500
Davis Service 390,000 1,535,430
DeBeers Consolidated Mines ADR 200,000 6,300,000
Empresas ICA 200,000 (c) 2,600,000
Fomento Construction 22,000 1,966,558
Greencore Group 400,000 1,959,600
Kondor Wessels 58,000 1,825,318
Kwik-Fit Holdings 660,000 (b) 2,195,820
Leigh Interest 1,200,000 1,794,000
Pliva 17,400 325,554
Powerscreen Intl 600,000 3,983,400
Ranger Oil 700,000 4,814,215
Renaissance Energy 27,000 (b,f) 708,103
123,000 (b) 3,225,800
South China Morning Post 3,000,000 1,956,000
Tempest Reinsurance 30,000 (b,e) 3,965,700
_____________
Total 39,952,998
_____________________________________________________________________________________________________________________________
Total common stocks
(Cost: $279,686,612) $332,131,354
_____________________________________________________________________________________________________________________________
Bond (0.8%)
______________________________________________________________________________________________________________________________
Issuer and coupon rate Principal Value(a)
amount
_____________________________________________________________________________________________________________________________
Foreign (c)
Escom
(South African Rand)
11% 2008 16,250,000 $ 3,162,575
_____________________________________________________________________________________________________________________________
Total bond
(Cost: $2,732,827) $ 3,162,575
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (11.2%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable
date of at
purchase maturity
____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (1.3%)
Federal Home Loan Bank
Disc Note
04-12-96 5.39% $4,800,000 $ 4,790,675
_____________________________________________________________________________________________________________________________
Commercial paper (9.9%)
Albertson's
04-24-96 5.34 1,700,000 1,693,719
Anheuser-Busch
04-03-96 5.22 1,600,000 1,599,076
Aon
04-18-96 5.29 2,800,000 2,792,212
Commerzbank U.S. Finance
04-04-96 5.23 2,900,000 2,897,901
Consolidated Rail
04-17-96 5.30 2,700,000 (g) 2,692,872
Fleet Funding
04-30-96 5.37 2,900,000 (g) 2,886,640
Lincoln Natl
04-08-96 5.24 3,000,000 (g) 2,996,085
Merrill Lynch
04-08-96 5.25 1,400,000 1,398,170
Metlife Funding
04-22-96 5.32 3,000,000 2,989,842
Northern States
04-08-96 5.22 3,000,000 2,996,100
PepsiCo
05-10-96 5.38 1,500,000 1,490,860
Reed Elsevier
04-26-96 5.35 2,600,000 (g) 2,589,626
SAFECO
04-15-96 5.27 1,700,000 1,696,033
Siemens
04-15-96 5.27 700,000 698,367
Toyota Motor
04-23-96 5.33 3,500,000 3,487,610
05-15-96 5.35 500,000 496,601
USAA Capital
05-17-96 5.31 1,300,000 1,290,865
_____________
Total 36,692,579
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $41,483,254) $ 41,483,254
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $323,902,693)(h) $376,777,183
_____________________________________________________________________________________________________________________________
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Presently non-income producing.
(c) Security is partially or fully on loan. See Note 4 to the financial
statements.
(d) Foreign security values are stated in U.S. dollars. For debt
securities, principal amount is denominated in the currency indicated.
(e) Identifies issues considered to be illiquid (see Note 7 to the
financial statements). Information concerning such holdings at March 31,
1996, is as follows:
Acquisition
Security date Cost
____________________________________________________________________
Tempest Reinsurance 09-13-93 $3,000,000
(f) 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.
(g) Commercial paper sold within terms of a private placement memorandum,
exempt from registration under Section 4(2) of the Securities Act of
1933, as amended, and may be sold only to dealers in that program or
other "accredited investors." This security has been determined to be
liquid under guidelines established by the board of directors.
(h) At March 31, 1996, the cost of securities for federal income tax
purposes was approximately $323,903,000 and the approximate aggregate
gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $62,155,000
Unrealized depreciation (9,281,000)
____________________________________________________________________
Net unrealized appreciation $52,874,000
____________________________________________________________________
</TABLE>
PAGE
Board members and officers
Board members and officers of the Fund
_____________________________________________________________________
President and interested board member
William R. Pearce
President of all funds in the IDS MUTUAL FUND GROUP.
_____________________________________________________________________
Independent board members
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for
Public Policy Research.
Robert F. Froehlke
Former president of all funds in the IDS MUTUAL FUND GROUP.
Heinz F. Hutter
Former president and chief operating officer, Cargill, Inc.
Anne P. Jones
Attorney and telecommunications consultant.
Melvin R. Laird
Senior counsellor for national and international affairs,
The Readers's Digest Association, Inc.
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
C. Angus Wurtele
Chairman of the board and chief executive officer, The Valspar Corporation.
_____________________________________________________________________
Interested board members who are officers and/or employees of AEFC
William H. Dudley
Executive vice president, AEFC.
David R. Hubers
President and chief executive officer, AEFC.
John R. Thomas
Senior vice president, AEFC.
_____________________________________________________________________
Officers who also are officers and/or employees of AEFC
Peter J. Anderson
Vice President of all funds in the IDS MUTUAL FUND GROUP.
Melinda S. Urion
Treasurer of all funds in the IDS MUTUAL FUND GROUP.
___________________________________________________________________
Other officer
Leslie L. Ogg
Vice president general Counsel and secretary of all funds in
the IDS MUTUAL FUND GROUP.
Refer to the SAI for the board members' and officers' biographies.<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) two coins<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 Selective Fund
Invests in high-quality corporate bonds and other highly rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests primarily in securities issued or guaranteed as to the timely
payment of principal and interest by the U.S. government, its agencies
and instrumentalities. Seeks a high level of current income and
safety of principal consistent with its type of investments.
(icon of) shield with eagle head
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 star
Growth and income investments
These funds focus on securities of medium to large, well-established
companies that offer long-term growth of capital and reasonable income
from dividends and interest. Moderate risk.
IDS International Fund
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The fund may invest up to 20%
of its assets in the U.S. market.
(icon of) three flags
IDS Managed Retirement Fund
Invests in U.S. equity securities, U.S. and foreign debt
securities, foreign equity securities and money market
instruments. The fund provides diversification among these
major investments categories and has a target mix that
represents the way the fund's investments will be allocated
over the long term.
(icon of) bird in a nest
<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 pine trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by our research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund
Invests in common stocks of companies representing many
sectors of the economy. Seeks current income and growth of capital.
(icon of) building with columns
IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) three growing flowers
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek
high current income and growth of income and capital with reduced
volatility.
(icon of) light bulb
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to seek high current
income and, secondarily, to benefit from the growth potential offered
by stock investments.
(icon of) two puzzle pieces
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice<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 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
advisor or writing to American Express Shareholder Service, P.O. Box 534,
Minneapolis, MN 55440-0534. Read it carefully before you invest or send
money.
<PAGE>
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 Progressive Fund
IDS Tower 10
Minneapolis, MN 55440-0010
