<PAGE>
1997 ANNUAL REPORT
IDS
Progressive
Fund
(prospectus enclosed)
(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.
(This annual report includes a prospectus that describes in detail the Fund's
objective, investment policies, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.)
AMERICAN EXPRESS Financial Advisors
Distributed by American Express Financial Advisors Inc.
<PAGE>
(icon of) shooting star
The power of patience
Everyone likes to get a bargain. In the investment world, bargains are known as
"value" stocks -- stocks whose prices are believed to be low in relation to the
true worth of their respective companies. In the case of Progressive Fund, the
focus is on small-company value stocks, which can get overlooked as investors
try to find a new "high-flier." Many of these companies have already proved
themselves in the marketplace and are financially sound. Patient investors may
benefit, however, when such stocks get rediscovered and eventually rise to their
fair values.
<PAGE>
(icon of) One open book inside of another
The purpose of this annual report is to tell investors how the Fund performed.
The prospectus, which is bound into the middle of this annual report, describes
the Fund in detail.
Contents
1997 annual report
From the chairman 4
From the portfolio manager 4
The Fund's ten largest holdings 6
Making the most of the Fund 7
The Fund's long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 22
IDS mutual funds 26
Federal income tax information 30
1997 prospectus
The Fund in brief 3p
Goal 3p
Investment policies and risks 3p
Manager and distributor 3p
Portfolio manager 3p
Alternative purchase arrangements 3p
Sales charge and Fund expenses 4p
Performance 6p
Financial highlights 6p
Total returns 8p
Investment policies and risks 10p
Facts about investments and their risks 11p
Alternative investment option 17p
Valuing Fund shares 17p
How to purchase, exchange or redeem shares 18p
Alternative purchase arrangements 18p
How to purchase shares 21p
How to exchange shares 24p
How to redeem shares 25p
Reductions and waivers of the sales charge 30p
Special shareholder services 35p
Services 35p
Quick telephone reference 35p
Distributions and taxes 36p
Dividend and capital gain distributions 36p
Reinvestments 37p
Taxes 38p
How to determine the correct TIN 40p
How the Fund is organized 41p
Shares 41p
Voting rights 41p
Shareholder meetings 41p
Board members and officers 41p
Investment manager 43p
Administrator and transfer agent 43p
Distributor 44p
About American Express Financial Corporation 46p
General information 46p
Appendix 47p
Descriptions of derivative instruments 47p
(This annual report is not part of the prospectus.)
<PAGE>
(picture of) William R. Pearce
Chairman of the board
(picture of) Mike Garbisch
Portfolio manager
To our shareholders
From the chairman
If you're an experienced investor, you know that the past few years have
been unusually strong ones in many financial markets. Perhaps just as
important, history shows that bull markets don't last forever. Though
they're often unpredictable, declines -- whether they're brief or
long-lasting, moderate or substantial -- are always a possibility. We saw
evidence of that in late October, when declines in certain Asian markets
spawned a sharp drop in the U.S. stock market.
That fact reinforces the need for investors to review periodically their
long-term goals and examine whether their investment program remains on
track to achieving them. Your quarterly investment statements are one part
of that monitoring process. The other is a meeting with your American
Express financial advisor. That becomes even more important if there's a
major change in your financial situation or in the financial markets.
I also want to point out that, on Dec. 1, 1997, Kurt Winters will become
portfolio manager of this Fund. Please see the prospectus for information
on his investment experience.
William R. Pearce
From the portfolio manager
Taking advantage of a soaring stock market, IDS Progressive Fund produced
a substantial return during the past fiscal year -- October 1996 through
September 1997. For investors in Class A shares, the gain was 33.9% for
the 12 months. (Part of the Fund's return came in the form of a capital
gain paid to shareholders in December 1996, which reduced the Fund's net
asset value by a like amount at that time.)
Buoyed by low long-term interest rates and ongoing reports of solid
economic growth, tame inflation and healthy corporate profits, the stock
market was already on a roll when the period began last fall. From that
point through the end of the period, stocks experienced only two declines
worth noting -- one last spring and another in August, both resulting
primarily from a rise in long-term interest rates.
`Large-caps' lead the way
Continuing the trend of recent years, stocks of large companies
("large-caps"), particularly those with strong earnings growth, generally
performed better than stocks of smaller
(This annual report is not part of the prospectus.)
<PAGE>
companies ("small-caps"). While
that situation largely worked to the disadvantage of this Fund, whose
emphasis is on small-cap value stocks, it did prove beneficial during the
market's downturns. During those times, as is usually the case, the Fund
held up much better than the market as a whole.
For the year, the Fund enjoyed its best performance from auto-related,
technology and financial services, especially insurance, stocks. Weak
groups, on the other hand, were restaurants and retailers.
Other changes to the portfolio included the addition of more technology
stocks, which were often at the forefront of the market's advance. Also,
late in the period, I allowed the level of cash reserves to build up from
about 10% to about 16% of assets. The move reflected my belief that, given
the market's rapid run-up during the first nine months of calendar 1997,
it would be prudent to take a more conservative investment approach in
case the market were to experience a meaningful decline from its
historically high levels.
Market broadens out
It's encouraging to note that, during the final two months of the period,
small-cap stocks began catching up with, and, at times, outperforming
their bigger brethren. Should this "broadening out" trend in the market
continue in the current fiscal year, the Fund would almost surely benefit.
In the meantime, the portfolio remains well-diversified among stocks of
smaller companies that offer what I believe are above-average investment
value and, complemented by its relatively high level of cash reserves, has
a largely conservative structure.
Mike Garbisch
Class A
12-month performance
(All figures per share)
Net asset value (NAV)
Sept. 30, 1997 $ 10.17
Sept. 30, 1996 $ 8.23
Increase $ 1.94
Distributions
Oct. 1, 1996 - Sept. 30, 1997
From income $ 0.19
From capital gains $ 0.49
Total distributions $ 0.68
Total return* +33.9%**
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
Sept. 30, 1997 $ 10.03
Sept. 30, 1996 $ 8.15
Increase $ 1.88
Distributions
Oct. 1, 1996 - Sept. 30, 1997
From income $ 0.15
From capital gains $ 0.49
Total distributions $ 0.64
Total return* +32.9%**
Class Y
12-month performance
(All figures per share)
Net asset value (NAV)
Sept. 30, 1997 $ 10.18
Sept. 30, 1996 $ 8.24
Increase $ 1.94
Distributions
Oct. 1, 1996 - Sept. 30, 1997
From income $ 0.20
From capital gains $ 0.49
Total distributions $ 0.69
Total return* +34.1%**
* The prospectus discusses the effect of sales charges, if any, on the
various classes.
** The total return is a hypothetical investment in the Fund with all
distributions reinvested.
(This annual report is not part of the prospectus.)
<PAGE>
The Fund's ten largest holdings
Percent Value
(of Fund's net assets) (as of Sept. 30, 1997)
Allied Group 3.14% $17,530,313
Lancaster Colony 2.14 11,953,125
First Virginia Banks 2.11 11,770,312
TCF Financial 1.88 10,518,750
Griffon 1.75 9,750,000
Terra Nova Holdings Cl A 1.70 9,493,750
Martin Marietta Materials 1.68 9,385,200
Lands' End 1.66 9,243,750
Century Telephone Enterprises 1.66 9,240,000
Ecolab 1.64 9,129,750
(icon of) pie chart
The ten holdings listed here make up 19.36% of the Fund's net assets
(This annual report is not part of the prospectus.)
<PAGE>
Making the most of the Fund
Build your assets systematically
One of the best ways to invest in the Fund is by dollar-cost averaging --
a time-tested strategy that can make market fluctuations work for you. To
dollar-cost average, simply invest a fixed amount of money regularly.
You'll automatically buy more shares when the Fund's share price is low,
fewer shares when it is high.
Using this strategy does not ensure a profit or avoid a loss if the market
declines, and requires that you be able to keep on investing on a regular
basis, even when the price of your shares falls or the market declines.
Investing in this manner can be an effective way to accumulate shares to
meet your long-term goals.
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00 XXXXX
Feb 100 18 5.56 XXXXXx
March 100 17 5.88 XXXXXx
April 100 15 6.67 XXXXXXx
May 100 16 6.25 XXXXXXx
June 100 18 5.56 XXXXXx
July 100 17 5.88 XXXXXx
Aug 100 19 5.26 XXXXXx
Sept 100 21 4.76 XXXXx
Oct 100 20 5.00 XXXXX
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more
shares when the per share market price is low...
(arrow in table pointing to September) and fewer shares when the
per share market price is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
(This annual report is not part of the prospectus.)
<PAGE>
The Fund's long-term performance
Three ways to benefit from a mutual fund:
o your shares increase in value when the Fund's investments do well
o you receive capital gains when the gains on investments sold by the
Fund exceed losses
o you receive income when the Fund's stock dividends, interest and
short-term gains exceed its expenses.
All three make up your total return. And you potentially can increase your
investment if, like most investors, you reinvest your dividends and
capital gain distributions to buy additional shares of the Fund or another
fund.
How your $10,000 has grown in IDS Progressive Fund
S&P 500
Stock Index
$30,000
$24,618
$20,000 Lipper Capital Progressive
Appreciation Fund Index Fund
Class A
$10,000
$9,500
'87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97
Assumes:
o Holding period from 10/1/87 to 9/30/97.
o Returns do not reflect taxes payable on distributions.
o Reinvestment of all income and capital gain distributions for the Fund,
with a value of $11,743. Also see "Performance" in the Fund's current
prospectus.
Standard & Poor's 500 Stock Index (S&P 500), an unmanaged list of common
stocks, is frequently used as a general measure of market performance.
However, the S&P 500 companies are generally larger than those in which
the Fund invests.
Lipper Capital Appreciation Fund Index, published by Lipper Analytical
Services, Inc., includes 30 funds that are generally similar to this Fund,
although some funds in the index may have somewhat different investment
policies or objectives.
Average annual total return
(as of Sept. 30, 1997)
1 year Since inception 5 years 10 years
Class A +27.18% --% +16.41% +9.42%
Class B +28.85% +21.37%* --% --%
Class Y +34.06% +23.66%* --% --%
*Inception date was March 20, 1995.
On the graph above you can see how the Fund's total return compared to two
widely cited performance indexes, the S&P 500 and the Lipper Capital
Appreciation Fund Index. In comparing Progressive Fund (Class A) to the
two indexes, you should take into account the fact that the
Fund's performance reflects the maximum sales charge of 5%, while
such charges are not reflected in the performance of the indexes.
Your investment and return values fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Average annual
total return figures reflect the impact of the applicable sales charge up
to a maximum of 5%. This was a period of widely fluctuating security
prices. Past performance is no guarantee of future results.
(This annual report is not part of the prospectus.)
<PAGE>
Independent auditors' report
The board and shareholders IDS Progressive Fund, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments in securities, of IDS Progressive
Fund, Inc. as of September 30, 1997, and the related statement of
operations for the year then ended and the statements of changes in net
assets for each of the years in the two-year period ended September 30,
1997, and the financial highlights for each of the years in the ten-year
period ended September 30, 1997. These financial statements and the
financial highlights are the responsibility of fund management. Our
responsibility is to express an opinion on these financial statements and
the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and the
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Investment securities held in
custody are confirmed to us by the custodian. As to securities purchased
and sold but not received or delivered, and securities on loan, we request
confirmations from brokers, and where replies are not received, we carry
out other appropriate auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of IDS Progressive Fund,
Inc. at September 30, 1997, and the results of its operations, changes in
its net assets and the financial highlights for the periods stated in the
first paragraph above, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
November 7, 1997
(This annual report is not part of the prospectus.)
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Progressive Fund, Inc.
Sept. 30, 1997
Assets
<S> <C>
Investment in securities, at value (Note 1)
(identified cost $416,719,447) $558,431,561
Dividends and accrued interest receivable 820,623
Receivable for investment securities sold 9,049,385
Unrealized appreciation on foreign currency contracts held, at value (Notes 1 and 5) 16
------------
Total assets 568,301,585
------------
Liabilities
Disbursements in excess of cash on demand deposit
(includes bank overdraft of $1,778,720) 1,489,579
Payable for investment securities purchased 1,829,909
Payable upon return of securities loaned (Note 4) 6,834,800
Unrealized depreciation on foreign currency contracts held, at value (Notes 1 and 5) 11,989
Accrued investment management services fee 38,811
Accrued distribution fee 1,211
Accrued service fee 2,636
Accrued transfer agency fee 198
Accrued administrative services fees 860
Other accrued expenses 44,044
------------
Total liabilities 10,254,037
------------
Net assets applicable to capital stock $558,047,548
============
Represented by
Capital stock-- $.01 par value (Note 1) $ 549,697
Additional paid-in capital 368,014,328
Undistributed net investment income 3,488,056
Accumulated net realized gain (loss) 44,283,160
Unrealized appreciation (depreciation) on investments and on translation
of assets and liabilities in foreign currencies 141,712,307
-----------
Total-- representing net assets applicable to outstanding capital stock $558,047,548
============
Net assets applicable to outstanding shares: Class A $491,047,485
Class B $ 59,627,432
Class Y $ 7,372,631
Net asset value per share of outstanding capital stock: Class A shares 48,301,837 $ 10.17
Class B shares 5,943,475 $ 10.03
Class Y shares 724,368 $ 10.18
See accompanying notes to financial statements.
(This annual report is not part of the prospectus.)
<PAGE>
Statement of operations
IDS Progressive Fund, Inc.
Year ended Sept. 30, 1997
Investment income
Income:
Dividends $ 6,504,561
Interest 2,712,277
Less: Foreign taxes withheld (7,968)
------------
Total income 9,208,870
------------
Expenses (Note 2):
Investment management services fee 3,051,855
Distribution fee -- Class B 282,071
Transfer agency fee 644,781
Incremental transfer agency fee-- Class B 5,077
Service fee
Class A 699,480
Class B 65,586
Class Y 2,386
Administrative services fees and expenses 266,087
Compensation of board members 8,182
Compensation of officers 809
Custodian fees 69,568
Postage 34,501
Registration fees 54,993
Reports to shareholders 29,686
Audit fees 24,500
Other 10,412
------------
Total expenses 5,249,974
Earnings credits on cash balances (Note 2) (39,571)
------------
Total net expenses 5,210,403
------------
Investment income (loss) -- net 3,998,467
------------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 44,683,973
Foreign currency transactions (3,092)
------------
Net realized gain (loss) on investments 44,680,881
Net change in unrealized appreciation (depreciation) on investments and on
translation of assets and liabilities in foreign currencies 87,815,921
------------
Net gain (loss) on investments and foreign currencies 132,496,802
------------
Net increase (decrease) in net assets resulting from operations $136,495,269
============
See accompanying notes to financial statements.
(This annual report is not part of the prospectus.)
<PAGE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Progressive Fund, Inc.
Year ended Sept. 30,
Operations and distributions 1997 1996
<S> <C> <C>
Investment income (loss)-- net $ 3,998,467 $ 4,336,115
Net realized gain (loss) on investments 44,680,881 28,404,561
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 87,815,921 16,970,511
------------ ------------
Net increase (decrease) in net assets resulting from operations 136,495,269 49,711,187
------------ ------------
Distributions to shareholders from:
Net investment income
Class A (3,537,075) (5,559,877)
Class B (139,272) (152,829)
Class Y (37,540) (19,834)
Net realized gain
Class A (26,372,964) (15,575,830)
Class B (2,052,354) (495,315)
Class Y (238,498) (51,524)
Total distributions (32,377,703) (21,855,209)
Capital share transactions (Note 6)
Proceeds from sales
Class A shares (Note 2) 58,138,297 39,648,057
Class B shares 27,926,302 17,231,778
Class Y shares 3,669,597 2,550,315
Reinvestment of distributions at net asset value
Class A shares 29,257,627 20,738,354
Class B shares 2,173,196 644,113
Class Y shares 276,038 71,358
Payments for redemptions
Class A shares (57,382,629) (55,284,721)
Class B shares (Note 2) (4,832,125) (2,019,169)
Class Y shares (1,092,897) (1,410,053)
------------ ------------
Increase (decrease) in net assets from capital share transactions 58,133,406 22,170,032
------------ ------------
Total increase (decrease) in net assets 162,250,972 50,026,010
Net assets at beginning of year 395,796,576 345,770,566
------------ ------------
Net assets at end of year $558,047,548 $395,796,576
============ ============
Undistributed net investment income $ 3,488,056 $ 3,202,477
------------ ------------
See accompanying notes to financial statements.
(This annual report is not part of the prospectus.)
</TABLE>
<PAGE>
Notes to financial statements
IDS Progressive Fund, Inc.
1
Summary of
significant
accounting policies
The Fund is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company. The
Fund has 10 billion authorized shares of capital stock. The Fund invests
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 sales charge.
Class B shares may be subject to a contingent deferred sales charge and
such shares automatically convert to Class A shares during the ninth
calendar year of ownership. Class Y shares have no sales charge and are
offered only to qualifying institutional investors.
All classes of shares have identical voting, dividend, liquidation and
other rights, and the same terms and conditions, except that the level of
distribution fee, transfer agency fee and service fee (class specific
expenses) differs among classes. Income, expenses (other than class
specific expenses) and realized and unrealized gains or losses on
investments are allocated to each class of shares based upon its relative
net assets.
(This annual report is not part of the prospectus.)
<PAGE>
Notes to financial statements
IDS Progressive Fund, Inc.
Significant accounting policies followed by the Fund are summarized below:
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.
Valuation of securities
All securities are valued at the close of each business day. Securities
traded on national securities exchanges or included in national market
systems are valued at the last quoted sales price. Debt securities are
generally traded in the over-the-counter market and are valued at a price
deemed best to reflect fair value as quoted by dealers who make markets in
these securities or by an independent pricing service. Securities for
which market quotations are not readily available are valued at fair value
according to methods selected in good faith by the board. Short-term
securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current
interest rates; those maturing in 60 days or less are valued at amortized
cost.
(This annual report is not part of the prospectus.)
<PAGE>
Option transactions
In order to produce incremental earnings, protect gains, and facilitate
buying and selling of securities for investment purposes, the Fund may buy
or write options traded on any U.S. or foreign exchange or in the
over-the-counter market where the completion of the obligation is
dependent upon the credit standing of the other party. The Fund also may
buy or sell put and call options and write covered call options on
portfolio securities and may write cash-secured put options. The risk in
writing a call option is that the Fund gives up the opportunity of profit
if the market price of the security increases. The risk in writing a put
option is that the Fund may incur a loss if the market price of the
security decreases and the option is exercised. The risk in buying an
option is that the Fund pays a premium whether or not the option is
exercised. The Fund also has the additional risk of not being able to
enter into a closing transaction if a liquid secondary market does not
exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The
Fund will realize a gain or loss upon expiration or closing of the option
transaction. When an option is exercised, the proceeds on sales for a
written call option, the purchase cost for a written put option or the
cost of a security for a purchased put or call option is adjusted by the
amount of premium received or paid.
(This annual report is not part of the prospectus.)
<PAGE>
Notes to financial statements
IDS Progressive Fund, Inc.
Futures transactions
In order to gain exposure to or protect itself from changes in the market,
the Fund may buy and sell financial futures contracts traded on any U.S.
or foreign exchange. The Fund also may buy or write put and call options
on these futures contracts. Risks of entering into futures contracts and
related options include the possibility that there may be an illiquid
market and that a change in the value of the contract or option may not
correlate with changes in the value of the underlying securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent payments (variation margin)
are made or received by the Fund each day. The variation margin payments
are equal to the daily changes in the contract value and are recorded as
unrealized gains and losses. The Fund recognizes a realized gain or loss
when the contract is closed or expires.
(This annual report is not part of the prospectus.)
<PAGE>
Foreign currency translations and
foreign currency contracts
Securities and other assets and liabilities denominated in foreign
currencies are translated daily into U.S. dollars at the closing rate of
exchange. Foreign currency amounts related to the purchase or sale of
securities and income and expenses are translated at the exchange rate on
the transaction date. The effect of changes in foreign exchange rates on
realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the statement of operations, net
realized gains or losses from foreign currency transactions may arise from
sales of foreign currency, closed forward contracts, exchange gains or
losses realized between the trade date and settlement dates on securities
transactions, and other translation gains or losses on dividends, interest
income and foreign withholding taxes.
The Fund may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate
fluctuation. The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the Fund and the resulting unrealized
appreciation or depreciation are determined using foreign currency
exchange rates from an independent pricing service. The Fund is subject to
the credit risk that the other party will not complete the obligations of
the contract.
(This annual report is not part of the prospectus.)
<PAGE>
Notes to financial statements
IDS Progressive Fund, Inc.
Federal taxes
Since the Fund's policy is to comply with all sections of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders, no provision for
income or excise taxes is required.
Net investment income (loss) and net realized gains (losses) may differ
for financial statement and tax purposes primarily because of the deferral
of losses on certain futures contracts, the recognition of certain foreign
currency gains (losses) as ordinary income (loss) for tax purposes and
losses deferred due to "wash sale" transactions. The character of
distributions made during the year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to the timing of dividend distributions,
the fiscal year in which amounts are distributed may differ from the year
that the income or realized gains (losses) were recorded by the Fund.
On the statement of assets and liabilities, as a result of permanent
book-to-tax differences, undistributed net investment income has been
increased by $999 and accumulated net realized gain has been decreased by
$999.
Dividends to shareholders
An annual dividend declared and paid at the end of the calendar year from
net investment income is reinvested in additional shares of the Fund at
net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
Other
Security transactions are accounted for on the date securities are
purchased or sold. Dividend income is recognized on the ex-dividend date
and interest income, including level-yield amortization of premium and
discount, is accrued daily.
(This annual report is not part of the prospectus.)
<PAGE>
2
Expenses and
sales charges
Effective March 20, 1995, the Fund entered into agreements with American
Express Financial Corporation (AEFC) for managing its portfolio, providing
administrative services and serving as transfer agent. Under its
Investment Management Services Agreement, AEFC determines which securities
will be purchased, held or sold. The management fee is a percentage of the
Fund's average daily net assets in reducing percentages from 0.64% to
0.515% annually. The fee is adjusted upward or downward by a performance
incentive adjustment based on the Fund's average daily net assets over a
rolling twelve-month period as measured against the change in the Lipper
Capital Appreciation Fund Index. The maximum adjustment is 0.12% of the
Fund's average daily net assets after deducting 1% from the performance
difference. If the performance difference is less than 1%, the adjustment
will be zero. The adjustment increased the fee by $222,277 for the year
ended Sept. 30, 1997.
Under its Administrative Services Agreement, the Fund pays AEFC a fee for
administration and accounting services at a percentage of the Fund's
average daily net assets in reducing percentages from 0.06% to 0.035%
annually. Additional administrative service expenses paid by the Fund are
office expenses, consultants' fees and compensation of officers and
employees. Under this agreement, the Fund also pays taxes, audit and
certain legal fees, registration fees for shares, compensation of board
members, corporate filing fees, organizational expenses and any other
expenses properly payable by the Fund approved by the board.
Under a separate Transfer Agency Agreement, AEFC maintains shareholder
accounts and records. The Fund pays AEFC an annual fee per shareholder
account for this service as follows:
oClass A $15
oClass B $16
oClass Y $15
(This annual report is not part of the prospectus.)
<PAGE>
Notes to financial statements
IDS Progressive Fund, Inc.
Also effective March 20, 1995, the Fund entered into agreements with
American Express Financial Advisors Inc. for distribution and shareholder
servicing-related services. Under a Plan and Agreement of Distribution,
the Fund pays a distribution fee at an annual rate of 0.75% of the Fund's
average daily net assets attributable to Class B shares for
distribution-related services.
Under a Shareholder Service Agreement, the Fund pays a fee for service
provided to shareholders by financial advisors and other servicing agents.
The fee is calculated at a rate of 0.175% of the Fund's average daily net
assets attributable to Class A and Class B shares and commencing on May 9,
1997, the fee is calculated at a rate of 0.10% of the Fund's average daily
net assets attributable to Class Y shares.
Sales charges received by American Express Financial Advisors Inc. for
distributing Fund shares were $758,495 for Class A and $22,770 for Class B
for the year ended Sept. 30, 1997. The Fund also pays custodian fees to
American Express Trust Company, an affiliate of AEFC.
During the year ended Sept. 30, 1997, the Fund's custodian and transfer
agency fees were reduced by $39,571 as a result of earnings credits from
overnight cash balances.
3
Securities
transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $249,497,990 and $282,958,149,
respectively, for the year ended Sept. 30, 1997. Realized gains and losses
are determined on an identified cost basis.
Brokerage commissions paid to brokers affiliated with AEFC were $28,560
for the year ended Sept. 30, 1997.
4
Lending of
portfolio securities
At Sept. 30, 1997, securities valued at $6,633,220 were on loan to
brokers. For collateral, the Fund received $6,834,800 in cash. Income from
securities lending amounted to $165,443 for the year ended Sept. 30, 1997.
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.
(This annual report is not part of the prospectus.)
<PAGE>
5
Foreign currency
contracts
At Sept. 30, 1997, the Fund had entered into 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. See Summary of
significant accounting policies. The terms of the open contracts are as
follows:
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
Oct. 1, 1997 6,828,760 4,930,121 $-- $11,989
Canadian Dollar U.S. Dollar
Oct. 6, 1997 4,825,168 623,584 16 --
Hong Kong Dollar U.S. Dollar ______ _______
$16 $11,989
6
Capital share
transactions
Transactions in shares of capital stock for the years indicated are as
follows:
Year ended Sept. 30, 1997
Class A Class B Class Y
Sold 6,618,226 3,202,387 420,561
Issued for reinvested 3,597,404 269,232 33,932
distributions
Redeemed (6,614,552) (559,212) (125,747)
---------- -------- --------
Net increase (decrease) 3,601,078 2,912,407 328,746
Year ended Sept. 30, 1996
Class A Class B Class Y
Sold 5,118,893 2,232,425 332,283
Issued for reinvested 2,788,167 86,937 9,593
distributions
Redeemed (7,139,474) (261,613) (184,442)
---------- -------- --------
Net increase (decrease) 767,586 2,057,749 157,434
7
Financial
highlights
"Financial highlights" showing per share data and selected information is
presented on pages 6 and 7 of the prospectus.
(This annual report is not part of the prospectus.)
<PAGE>
Investments in securities
IDS Progressive Fund, Inc.
Sept. 30, 1997
(Percentages represent value of
investments compared to net assets)
Common stocks (81.8%)
Issuer Shares Value(a)
Automotive & related (4.2%)
Danaher 150,000 $ 8,700,000
Dura Automotive Systems 220,000(b) 6,930,000
Tower Automotive 168,200(b) 7,569,000
Total 23,199,000
Banks and savings & loans (5.6%)
F & M Bancorp 50,391 1,927,456
First Virginia Banks 243,000 11,770,312
Mercantile Bancorp 92,701 7,056,864
TCF Financial 180,000 10,518,750
Total 31,273,382
Building materials & construction (1.2%)
Juno Lighting 205,000 3,510,625
Southern Energy Homes 300,000(b) 3,168,750
Total 6,679,375
Chemicals (3.0%)
Ecolab 188,000 9,129,750
Schulman (A) 350,000 7,481,250
Total 16,611,000
Communications equipment & services (0.1%)
Norstan 35,000(b) 752,500
Computers & office equipment (6.9%)
Black Box 140,000(b) 6,125,000
Intl Imaging Materials 287,500(b) 8,337,500
Learning Co 500,000(b) 7,375,000
Read-Rite 100,000(b,c) 2,450,000
Solectron 146,000(b) 6,497,000
Sterling Software 210,000(b) 7,533,750
Total 38,318,250
Electronics (2.8%)
Belden 240,000 9,045,000
Lattice Semiconductor 100,000(b) 6,512,500
Total 15,557,500
Energy (1.8%)
Murphy Oil 100,000 5,712,500
Newfield Exploration 59,300(b) 1,664,106
United Meridian 65,000(b) 2,388,750
Total 9,765,356
Financial services (2.8%)
Providian Financial 80,000 3,175,000
Simon DeBartolo Group REIT 180,000 5,940,000
Sun Communities REIT 180,000 6,457,500
Total 15,572,500
<PAGE>
Issuer Shares Value(a)
Food (1.0%)
Hormel Foods 180,000 $ 5,771,250
Health care (4.7%)
DENTSPLY Intl 95,000 5,320,000
IDEXX Laboratories 373,500(b) 6,256,125
Life Technologies 88,350 2,672,587
Marquette Medical System 200,000(b) 6,200,000
TECNOL Medical Products 300,000(b) 6,037,500
Total 26,486,212
Health care services (1.5%)
Patterson Dental 150,000(b) 6,075,000
York Group 115,000 2,501,250
Total 8,576,250
Household products (1.0%)
First Brands 53,900 1,441,825
Stanhome 135,000 3,990,937
Total 5,432,762
Industrial equipment & services (6.1%)
AGCO 165,000 5,228,437
Alamo Group 230,000 5,333,125
AMETEK 235,000 5,522,500
Kaydon 120,000 7,200,000
Lydall 200,000(b) 4,687,500
Minerals Technologies 130,000 5,793,125
Total 33,764,687
Insurance (4.7%)
Allied Group 345,000 17,530,313
Executive Risk 129,900 8,881,913
Total 26,412,226
Leisure time & entertainment (1.2%)
Station Casinos 500,000(b,c) 4,062,500
Vail Resorts 108,000(b) 2,889,000
Total 6,951,500
Media (0.5%)
Lee Enterprises 100,000 2,837,500
Metals (1.7%)
Martin Marietta Materials 260,700 9,385,200
Multi-industry conglomerates (9.1%)
Brady (WH) 200,000 6,250,000
Griffon 600,000(b) 9,750,000
Hubbell Cl B 120,000 5,550,000
Kelly Services Cl A 160,000 5,360,000
See accompanying notes to investments in securities.
(This annual report is not part of the prospectus.)
<PAGE>
Common stocks (continued)
Issuer Shares Value(a)
Lancaster Colony 225,000 $ 11,953,125
Standex Intl 150,000 4,725,000
ZERO Corp 248,000 7,021,500
Total 50,609,625
Paper & packaging (2.0%)
AptarGroup 60,000 3,356,250
Rayonier 165,000 7,981,875
Total 11,338,125
Retail (4.4%)
Dept 56 200,000(b) 5,787,500
Hancock Fabrics 250,000 3,359,375
Jostens 220,000 5,967,500
Lands' End 300,000(b) 9,243,750
Total 24,358,125
Utilities -- electric (2.7%)
Duff & Phelps Utilities 475,000 4,631,250
KU Energy 160,000 5,550,000
Sierra Pacific Resources 160,000 5,130,000
Total 15,311,250
Utilities -- gas (2.3%)
New Jersey Resources 153,900 4,982,512
Questar 200,000 8,112,500
Total 13,095,012
Issuer Shares Value(a)
Utilities -- telephone (2.7%)
Century Telephone
Enterprises 210,000 $ 9,240,000
Cincinnati Bell 200,000 5,687,500
Total 14,927,500
Foreign (7.8%)(d)
ACE 96,273 9,049,662
Concordia Paper
Holdings ADR 90,000(b) 315,000
Credicorp 132,000 2,508,000
Empresas ICA Sociedad
Controladora ADR 200,000(c) 3,512,500
GP Batteries Intl 700,000 2,169,336
Gulf Indonesia Resources 12,700(b) 282,575
Kwik-Fit Holdings 660,000 3,409,849
Persimmon 600,000 2,210,042
Polypipe 600,000 2,089,143
Powerscreen Intl 404,494 4,831,628
South China Morning Post 246,000 224,128
Terra Nova Holdings Cl A 350,000 9,493,750
Volker Wessels Stevin 103,240 3,330,825
Total 43,426,438
Total common stocks
(Cost: $314,737,092) $456,412,525
Bonds (1.6%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
Computers & office equipment (0.9%)
Read-Rite 6.50% 2004 $ 5,000,000 $4,912,500
Foreign (0.7%)(d)
Eskom
(South African Rand) 11.00 2008 23,550,000 4,182,250
Total bonds
(Cost: $9,058,069) $9,094,750
See accompanying notes to investments in securities.
(This annual report is not part of the prospectus.)
<PAGE>
Investments in securities
IDS Progressive Fund, Inc.
(Percentages represent value of
investments compared to net assets)
Short-term securities (16.7%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
U.S. government agencies (1.9%)
Federal Home Loan Mtge Corp Disc Nts
10-07-97 5.46% $3,000,000 $ 2,997,285
10-14-97 5.45 2,400,000 2,395,294
10-17-97 5.43 1,800,000 1,795,672
Federal Natl Mtge Assn Disc Nt
11-07-97 5.47 3,400,000 3,380,973
Total 10,569,224
Commercial paper (14.4%)
Abbott Laboratories
10-29-97 5.52 3,000,000 2,987,167
Albertson's
10-23-97 5.54 4,700,000 4,684,145
BBV Finance (Delaware)
10-29-97 5.54 4,000,000 3,982,827
Commerzbank U.S. Finance
10-28-97 5.55 3,900,000 3,883,825
Fleet Funding
10-06-97 5.55 3,700,000(e) 3,697,163
Gateway Fuel
10-22-97 5.52 600,000 598,075
Goldman Sachs Group
10-17-97 5.53 4,000,000 3,990,204
Kellogg
10-06-97 5.53 2,600,000 2,598,014
Kredietbank North America Finance
10-08-97 5.52 3,000,000 2,996,792
10-08-97 5.53 3,500,000 3,496,250
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
Metlife Funding
10-01-97 5.52 $ 3,052,000 $ 3,052,000
Morgan Stanley Group
10-14-97 5.54 7,700,000 7,684,679
10-15-97 5.54 2,500,000 2,494,653
NBD Bank
10-03-97 5.54 4,000,000 3,998,773
New Center Asset Trust
10-21-97 5.54 9,600,000 9,570,613
Paccar Financial
10-09-97 5.53 10,000,000 9,987,756
10-20-97 5.53 1,000,000 997,092
Reed Elsevier
10-29-97 5.55 2,600,000(e) 2,588,837
Southern California Gas
10-24-97 5.52 4,900,000 4,882,782
USAA Capital
10-22-97 5.53 2,000,000 1,993,572
Total 80,165,219
Letter of credit (0.4%)
Student Loan Marketing Assn-
Nebraska Higher Education
10-31-97 5.56 2,200,000 2,189,843
Total short-term securities
(Cost: $92,924,286) $ 92,924,286
Total investment in securities
(Cost: $416,719,447)(f) $558,431,561
See accompanying notes to investments in securities.
(This annual report is not part of the prospectus.)
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) 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 amounts are denominated in the currency indicated.
(e) 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.
(f) At Sept. 30, 1997, the cost of securities for federal income tax purposes
was $416,043,678 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
Unrealized appreciation........................................$146,246,718
Unrealized depreciation..........................................(3,858,835)
----------
Net unrealized appreciation....................................$142,387,883
============
(This annual report is not part of the prospectus.)
<PAGE>
IDS mutual funds
Global/International funds
Funds in this group seek capital growth and/or income by investing primarily in
foreign securities. Foreign investments may be subject to currency fluctuations
and political and economic risks of the countries in which the investments are
made. They are high risk mutual funds with a potential for high reward.
IDS Emerging Markets Fund
Invests in a Portfolio comprised primarily of stocks of companies in developing
countries throughout the world that are believed to offer growth potential.
Seeks to provide long-term growth of capital.
(icon of) world with countries
IDS Global Growth Fund
Invests in a Portfolio comprised primarily of 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 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 Global Balanced Fund
Invests in stocks and bonds in, for the most part, major markets throughout the
world, including the U.S. Seeks to provide a balance of growth of capital and
current income.
(icon of) scale of globes
IDS Global Bond Fund
Invests in a Portfolio comprised primarily of debt securities of U.S. and
foreign issuers to seek high total return through income and growth of capital.
(icon of) globe
Growth funds
Funds in this group seek capital growth, primarily from common stocks. They are
high risk mutual funds with a potential for high reward.
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. A
highly aggressive and speculative fund that seeks long-term growth of capital.
(icon of) cart of precious gems
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 Small Company Index Fund
Invests in all or a representative group of the equity securities comprising the
S&P SmallCap 600 Index, as it strives to provide long-term capital appreciation.
(icon of) building
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 investment manager, than
the Standard & Poor's Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS Research Opportunities Fund
Invests in a Portfolio comprised primarily of equity securities of companies
included in the S&P 500 Index that are believed to have strong growth potential.
The Portfolio is managed using a research methodology by the Research Department
of AEFC. Goal is long-term appreciation.
(icon of) magnifying glass
(This annual report is not part of the prospectus.)
<PAGE>
IDS Growth Fund
Invests in a Portfolio comprised primarily of companies that have above-average
potential for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) trees
IDS New Dimensions Fund
Invests in a Portfolio comprised primarily of 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
Growth & income funds
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. Foreign investments may be subject to currency fluctuations and
political and economic risks of the countries in which the investments are made.
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 Managed Allocation Fund
Invests in a Portfolio comprised primarily of U.S. equity securities, U.S. and
foreign debt securities, foreign equity securities and money market instruments.
The Fund provides diversification among these major investment categories and
has a target mix that represents the way the Fund's investments will be
allocated over the long term. Seeks maximum total return.
(icon of) gyroscope
IDS Stock Fund
Invests in a Portfolio comprised primarily of common stock of companies
representing many sectors of the economy. Seeks current income and growth of
capital.
(icon of) building with columns
IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential for growth
of capital and income.
(icon of) three growing flowers
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 in a Portfolio comprised 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 Portfolio which seeks to 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
(This annual report is not part of the prospectus.)
<PAGE>
IDS mutual funds
Income funds
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 Extra Income Fund
Invests in a Portfolio comprised mainly of long-term, high-yielding corporate
fixed-income securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) two coins
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk
bond categories, or the equivalent, and in government bonds.
(icon of) Greek column
IDS Selective Fund
Invests in a Portfolio comprised primarily of 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 in a Portfolio comprised primarily of 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 funds
These funds provide tax-free income by investing in municipal bonds. The income
is generally free from federal income tax, but a portion of the income may be
subject to state and local taxes. Risk varies by bond quality.
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
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 High Yield Tax-Exempt Fund
Invests in a Portfolio comprised primarily of medium- and lower-quality
municipal bonds and notes. Lower-quality securities generally involve greater
risk of principal and income.
(icon of) shield with basket of apples enclosed
IDS Intermediate Tax-Exempt Fund
Invests in mainly investment-grade bonds and other debt securities with
intermediate-term maturities issued by state and local government units. Goal is
to seek a high level of current income exempt from federal taxes.
(icon of) shield with tree enclosed
(This annual report is not part of the prospectus.)
<PAGE>
Money market funds
These money market funds have three main goals: conservation of capital,
constant liquidity and the highest possible current income consistent with these
objectives. An investment in these funds is neither insured nor guaranteed by
the U.S. government, and there can be no assurance that these funds will be able
to maintain a stable net asset value of $1.00 per share. 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
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.
(This annual report is not part of the prospectus.)
<PAGE>
Federal income tax information
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during
its fiscal year. The dividends listed below were reported to you on a
Form 1099-DIV, Dividends and Distributions, last January. Dividends paid
to you since the end of last year will be reported to you on a tax
statement sent next January. Shareholders should consult a tax advisor on
how to report distributions for state and local purposes.
IDS Progressive Fund, Inc.
Fiscal year ended Sept. 30, 1997
Class A
Income distribution
taxable as dividend income, 29.12% qualifying for deduction by corporations.
Payable date Per share
Dec. 30, 1996 $0.19291
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 30, 1996 $0.48734
Total distributions $0.68025
The distribution of $0.68025 per share, payable Dec. 30, 1996, consisted of
$0.08038 derived from net investment income, $0.11253 from net short-term
capital gains (a total of $0.19291 taxable as dividend income) and $0.48734
from net long-term capital gains.
Class B
Income distribution
taxable as dividend income, 29.12% qualifying for deduction by corporations.
Payable date Per share
Dec. 30, 1996 $0.15237
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 30, 1996 $0.48734
Total distributions $0.63971
The distribution of $0.63971 per share, payable Dec. 30, 1996, consisted of
$0.03984 derived from net investment income, $0.11253 from net short-term
capital gains (a total of $0.15237 taxable as dividend income) and $0.48734
from net long-term capital gains.
(This annual report is not part of the prospectus.)
<PAGE>
Class Y
Income distribution
taxable as dividend income, 29.12% qualifying for deduction by corporations.
Payable date Per share
Dec. 30, 1996 $0.20695
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 30, 1996 $0.48734
Total distributions $0.69429
The distribution of $0.69429 per share, payable Dec. 30, 1996, consisted of
$0.09442 derived from net investment income, $0.11253 from net short-term
capital gains (a total of $0.20695 taxable as dividend income) and $0.48734
from net long-term capital gains.
(This annual report is not part of the prospectus.)
<PAGE>
Quick telephone reference
American Express Redemptions and exchanges, National/Minnesota
Financial Advisors dividend payments or 800-437-3133
Telephone Transaction reinvestments and automatic
Service payment arrangements Mpls./St. Paul area:
671-3800
TTY Service For the hearing impaired 800-846-4852
American Express Automated account information 800-862-7919
Financial Advisors (TouchTone(R) phones only),
Easy Access Line including current fund prices
and performance, account values
and recent account transactions
AMERICAN EXPRESS Financial Advisors
IDS Progressive Fund
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report are
placed in a blue strip
at the top of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described in
annual report. parentheses.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
