1997 SEMIANNUAL REPORT
IDS
Progressive
Fund
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., Member SIPC
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.
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 27
IDS mutual funds 28
To our shareholders
From the president
If you're an experienced investor, you know that the past two years have
been unusually strong ones in many financial markets. Perhaps just as
important, you also know that history shows that bull markets don't last
forever. Though they're often unpredictable, declines -- whether they're
brief or long-lasting, moderate or substantial -- are always a
possibility.
That fact reinforces the need for investors to periodically review their
long-term goals and examine whether their investment program remains on
track to achieving them. Your quarterly investment statements are one part
of that monitoring process. The other is a meeting with your American
Express financial advisor. That becomes even more important if there's a
major change in your financial situation or in the financial markets.
William R. Pearce
(picture of )William R. Pearce
President of the Fund
<PAGE>
From the portfolio manager
Despite a sharp decline in the stock market late last winter, IDS
Progressive Fund provided a positive total return during the first half of
its fiscal year -- October 1996 through March 1997. For investors in Class
A shares, the gain was 6.0% for the period. (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.)
The stock market was on a roll when the period began last fall, as the
inflation rate, corporate profits and long-term interest rates continued
to work in stocks' favor. Aside from a moderate setback last December, the
market's advance was essentially unabated until mid-February. November was
the strongest month, as the market responded especially well to the
expected results of the presidential and congressional elections.
Rate-rise rumblings
Although no signs of higher inflation had yet emerged, solid
economic-growth data, coupled with cautionary comments from Federal
Reserve chairman Alan Greenspan, soon had investors worrying about
imminently higher interest rates.
While the Fed wouldn't make its move on short-term interest rates until
late March, the bond market quickly bid long-term rates higher.
Predictably, when that factor was joined by less-robust profit reports by
some key companies, stocks began to tumble, giving back most of the ground
they had gained since the start of the new year.
The Fund's performance pattern roughly tracked that of the broad market,
but with much more subdued swings. This is characteristic of the Fund's
value-oriented investment style, which focuses on steadier, less-glamorous
companies that tend to trail the market's front-runners during upturns and
hold up better during downturns. The emphasis on small stocks, the other
half of the Fund's investment equation, continued to be comparatively less
fruitful, however. As has been the case in recent years,
large-capitalization stocks again finished far ahead of the pack for the
past six months.
Pricey stocks
With stock prices climbing ever higher throughout much of the period, it
was difficult to find stocks of solid companies that offered exceptional
investment value. Despite the market sell-off late in the period, most
names in the relatively small group of large-capitalization stocks that
have powered the market in the past two years remained pricey. Still, I
did add some issues in the technology sector, which has emerged as the
driving force in our economy.
Given the likelihood of higher interest rates in the months ahead, I think
stocks as a whole will find it tough to mount a sustained advance. If such
a trendless market develops, or if ongoing market erosion sets in, history
says that value stocks are in a position to fare relatively well.
Moreover, while this segment of the market has lagged in recent years, I
think the value orientation will help the Fund avoid untimely commitments
to what may prove to be short-lived investment fads.
Mike Garbisch
(picture of )Mike Garbisch
Portfolio manager
<PAGE>
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1997 $ 8.05
Sept. 30, 1996 $ 8.23
Decrease $ 0.18
Distributions
Oct. 1, 1996 - March 31, 1997
From income $ 0.19
From capital gains $ 0.49
Total distributions $ 0.68
Total return* +6.0%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1997 $ 7.97
Sept. 30, 1996 $ 8.15
Decrease $ 0.18
Distributions
Oct. 1, 1996 - March 31, 1997
From income $ 0.15
From capital gains $ 0.49
Total distributions $ 0.64
Total return* +5.7%**
Class Y
6-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1997 $ 8.06
Sept. 30, 1996 $ 8.24
Decrease $ 0.18
Distributions
Oct. 1, 1996 - March 31, 1997
From income $ 0.20
From capital gains $ 0.49
Total distributions $ 0.69
Total return* +6.1%**
* 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.
<PAGE>
The Fund's ten largest holdings
Percent Value
(of Fund's net assets) (as of March 31, 1997)
ALLIED Group 2.83% $11,902,500
Lancaster Colony 2.46 10,350,000
Tower Automotive 2.09 8,775,000
Living Centers of America 2.05 8,625,000
Belden 2.04 8,550,000
First Virginia Banks 1.98 8,302,500
Lands' End 1.89 7,950,000
Griffon 1.72 7,200,000
Ecolab 1.70 7,144,000
TCF Financial 1.70 7,132,500
The ten holdings listed here make up 20.46% of the Fund's net assets
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Progressive Fund, Inc.
March 31, 1997
Assets
<S> <C>
(Unaudited)
Investment in securities, at value (Note 1)
(identified cost $369,946,551) $425,036,285
Cash in bank on demand deposit 6,444
Dividends and accrued interest receivable 813,726
Receivable for investment securities sold 2,542,415
---------
Total assets 428,398,870
-----------
Liabilities
Payable for investment securities purchased 2,684,150
Payable upon return of securities loaned (Note 4) 5,675,100
Accrued investment management services fee 59,324
Accrued distribution fee-- Class B 2,861
Accrued service fee 8,145
Accrued transfer agency fee 5,316
Accrued administrative services fees 2,723
Other accrued expenses 34,007
------
Total liabilities 8,471,626
---------
Net assets applicable to outstanding capital stock $419,927,244
============
Represented by
Capital stock-- authorized 10,000,000,000 shares of $.01 par value $ 522,070
Additional paid-in capital 342,928,716
Undistributed net investment income 1,393,731
Accumulated net realized gain (Note 1) 19,992,897
Unrealized appreciation of investments and on translation
of assets and liabilities in foreign currencies 55,089,830
----------
Total-- representing net assets applicable to outstanding capital stock $419,927,244
============
Net assets applicable to outstanding shares: Class A $381,387,683
Class B $ 34,251,395
Class Y $ 4,288,166
Net asset value per share of outstanding capital stock: Class A shares 47,379,298 $ 8.05
Class B shares 4,295,329 $ 7.97
Class Y shares 532,333 $ 8.06
See accompanying notes to financial statements.
<PAGE>
Statements of operations
IDS Progressive Fund, Inc.
Six months ended March 31, 1997
Investment income
(Unaudited)
Income:
Dividends (net of foreign taxes withheld of $31,421) $ 3,078,730
Interest 1,244,356
---------
Total income 4,323,086
---------
Expenses (Note 2):
Investment management services fee 1,410,200
Distribution fee-- Class B 111,454
Transfer agency fee 309,125
Incremental transfer agency fee-- Class B 2,086
Service fee
Class A 328,569
Class B 25,947
Administrative services fees and expenses 121,347
Compensation of board members 2,538
Compensation of officers 809
Custodian fees 33,396
Postage14,275
Registration fees 29,222
Reports to shareholders 20,213
Audit fees 12,000
Other 10,953
------
Total expenses 2,432,134
Earnings credits on cash balances (Note 2) (12,330)
- -------
Total net expenses 2,419,804
---------
Investment income -- net 1,903,282
=========
Realized and unrealized gain -- net
Net realized gain on security and foreign currency transactions
(including gain of $1,391 from foreign currency transactions) (Note 3) 20,389,619
Net change in unrealized appreciation or depreciation of investments and on
translation of assets and liabilities in foreign currencies 1,193,444
---------
Net gain on investments and foreign currencies 21,583,063
----------
Net increase in net assets resulting from operations $23,486,345
===========
See accompanying notes to financial statements.
<PAGE>
Statements of changes in net assets
IDS Progressive Fund, Inc.
Operations and distributions March 31, 1997 Sept. 30, 1996
Six months ended Year ended
(Unaudited)
Investment income-- net $ 1,903,282 $ 4,336,115
Net realized gain on investments and foreign currencies 20,389,619 28,404,561
Net change in unrealized appreciation or depreciation of investments
and on translation of assets and liabilities in foreign currencies 1,193,444 16,970,511
--------- ----------
Net increase in net assets resulting from operations 23,486,345 49,711,187
---------- ----------
Distributions to shareholders from:
Net investment income
Class A (3,535,311) (5,559,877)
Class B (139,177) (152,829)
Class Y (37,540) (19,834)
Net realized gain
Class A (26,372,965) (15,575,830)
Class B (2,052,353) (495,315)
Class Y (238,498) (51,524)
-------- -------
Total distributions (32,375,844) (21,855,209)
----------- -----------
Capital share transactions (Note 5)
Proceeds from sales
Class A shares (Note 2) 22,472,761 39,648,057
Class B shares 10,361,958 17,231,778
Class Y shares 1,407,787 2,550,315
Reinvestment of distributions at net asset value
Class A shares 29,255,864 20,738,354
Class B shares 2,173,101 644,113
Class Y shares 276,037 71,358
Payments for redemptions
Class A shares (30,267,306) (55,284,721)
Class B shares (Note 2) (2,099,910) (2,019,169)
Class Y shares (560,125) (1,410,053)
-------- ----------
Increase in net assets from capital share transactions 33,020,167 22,170,032
---------- ----------
Total increase in net assets 24,130,668 50,026,010
Net assets at beginning of period 395,796,576 345,770,566
----------- -----------
Net assets at end of period
(including undistributed net investment income of
$1,393,731 and $3,202,477) $419,927,244 $395,796,576
============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
IDS Progressive Fund, Inc.
(Unaudited as to March 31, 1997)
1. Summary of significant accounting policies
The Fund is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company. The
Fund invests primarily in 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 after eight years.
Class Y shares have no sales charge and are offered only to qualifying
institutional investors.
All classes of shares have identical voting, dividend, liquidation and
other rights, and the same terms and conditions, except that the level of
distribution fee, transfer agency fee and service fee (class specific
expenses) differs among classes. Income, expenses (other than class
specific expenses) and realized and unrealized gains or losses on
investments are allocated to each class of shares based upon its relative
net assets.
Significant accounting policies followed by the Fund are summarized below:
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.
Valuation of securities
All securities are valued at the close of each business day. Securities
traded on national securities exchanges or included in national market
systems are valued at the last quoted sales price; securities for which
market quotations are not readily available, are valued at fair value
according to methods selected in good faith by the board. Determination of
fair value involves, among other things, reference to market indexes,
matrixes and data from independent brokers. Short-term securities maturing
in more than 60 days from the valuation date are valued at the market
price or approximate market value based on current interest rates; those
maturing in 60 days or less are valued at amortized cost.
Option transactions
In order to produce incremental earnings, protect gains, and facilitate
buying and selling of securities for investment purposes, the Fund may buy
or write options traded on any U.S. or foreign exchange or in the
over-the-counter market where the completion of the obligation is
dependent upon the credit standing of the other party. The Fund also may
buy 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.
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.
Foreign currency translations
and foreign currency contracts
Securities and other assets and liabilities denominated in foreign
currencies are translated daily into U.S. dollars at the closing rate of
exchange. Foreign currency amounts related to the purchase or sale of
securities and income and expenses are translated at the exchange rate on
the transaction date. The effect of changes in foreign exchange rates on
realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the statement of operations, net
realized gains or losses from foreign currency transactions may arise from
sales of foreign currency, closed forward contracts, exchange gains or
losses realized between the trade date and settlement dates on securities
transactions, and other translation gains or losses on dividends, interest
income and foreign withholding taxes.
The Fund may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate
fluctuation. The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the Fund and the resulting unrealized
appreciation or depreciation are determined using foreign currency
exchange rates from an independent pricing service. The Fund is subject to
the credit risk that the other party will not complete the obligations of
the contract.
Federal taxes
Since the Fund's policy is to comply with all sections of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders, no provision for
income or excise taxes is required.
Net investment income (loss) and net realized gains (losses) may differ
for financial statement and tax purposes primarily because of the deferral
of losses on certain futures contracts, the recognition of certain foreign
currency gains (losses) as ordinary income (loss) for tax purposes and
losses deferred due to "wash sale" transactions. The character of
distributions made during the year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. The effect on dividend distributions of certain
book-to-tax differences is presented as "excess distributions" in the
statement of changes in net assets. Also, due to the timing of dividend
distributions, the fiscal year in which amounts are distributed may differ
from the year that the income or realized gains (losses) were recorded by
the Fund.
Dividends to shareholders
An annual dividend declared and paid at the end of the calendar year from
net investment income is reinvested in additional shares of the Fund at
net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
Other
Security transactions are accounted for on the date securities are
purchased or sold. Dividend income is recognized on the ex-dividend date
and interest income, including level-yield amortization of premium and
discount, is accrued daily.
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 $96,154 for the six
months ended March 31, 1997.
Under an 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:
o Class A $15
o Class B $16
o Class Y $15
Also effective March 20, 1995, the Fund entered into agreements with
American Express Financial Advisors Inc. for distribution and shareholder
servicing-related services. 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.
American Express Financial Advisors Inc. for distributing Fund shares were
$304,146 for Class A and $10,735 for Class B for the six months ended
March 31, 1997. The Fund also pays custodian fees to American Express
Trust Company, an affiliate of AEFC.
During the six months ended March 31, 1997, the Fund's custodian and
transfer agency fees were reduced by $12,330 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 $140,714,911 and $131,780,751,
respectively, for the six months ended March 31, 1997. Realized gains and
losses are determined on an identified cost basis.
Brokerage commissions paid to brokers affiliated with AEFC were $15,159
for the six months ended March 31, 1997.
4. Lending of portfolio securities
At March 31, 1997, securities valued at $5,409,033 were on loan to
brokers. For collateral, the Fund received $5,675,100 in cash. Income from
securities lending amounted to $75,813 for the six months ended March 31,
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.
5. Capital share transactions
Transactions in shares of capital stock for the periods indicated are as
follows:
Six months ended March 31, 1997
Class A Class B Class Y
Sold 2,690,107 1,248,218 170,100
Issued for reinvested 3,597,187 269,220 33,932
distributions
Redeemed (3,608,755) (253,177) (67,321)
---------- -------- -------
Net increase 2,678,539 1,264,261 136,711
========= ========= =======
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 767,586 2,057,749 157,434
======= ========= =======
<PAGE>
6.Financial highlights
<TABLE>
<CAPTION>
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
1997** 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $8.23 $7.66 $6.94 $7.11 $6.26 $5.77 $5.03 $7.16 $6.40 $7.50
beginning of period
Income from investment
operations:
Net investment income .04 .09 .13 .11 .10 .12 .18 .23 .31 .22
Net gains (losses) .46 .96 1.01 .44 .88 .53 .81 (1.24) .52 (.96)
(both realized
and unrealized)
Total from investment .50 1.05 1.14 .55 .98 .65 .99 (1.01) .83 (.74)
operations
Less distributions:
Dividends from net (.08) (.13) (.12) (.11) (.09) (.16) (.20) (.34) (.07) (.22)
investment income
Distributions from (.60) (.35) (.30) (.61) (.04) -- (.05) (.78) -- (.14)
realized gains
Total distributions (.68) (.48) (.42) (.72) (.13) (.16) (.25) (1.12) (.07) (.36)
Net asset value, $8.05 $8.23 $7.66 $6.94 $7.11 $6.26 $5.77 $5.03 $7.16 $6.40
end of period
Ratios/supplemental data
Class A
1997** 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net assets, end of $381 $368 $337 $277 $255 $174 $132 $127 $176 $179
period (in millions)
Ratio of expenses to 1.11%+ 1.04% 1.04% .99% 1.09% 1.06% .98% .79% .75% .70%
average daily net assets#
Ratio of net income .96%+ 1.21% 1.85% 1.65% 1.64% 2.07% 3.11% 3.38% 4.23% 3.33%
to average
daily net assets
Portfolio turnover rat 34% 56% 60% 77% 75% 87% 125% 86% 132% 64%
(excluding short-term
securities)
Total return++ 6.0% 14.4% 17.6% 7.9% 15.9% 11.4% 20.8% (16.3%) 13.1% (9.6%)
Average brokerage $.0463 $.0504 -- -- -- -- -- -- -- --
commission rate##
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Six months ended March 31, 1997 (Unaudited).
+ Adjusted to an annual basis.
++ Total return does not reflect payment of a sales charge.
# Effective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credits on cash balances.
## Effective fiscal year 1996, the Fund is required to disclose an average
brokerage commission rate. The rate is calculated by dividing the total
brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period by the total number of related shares purchased
and sold.
<PAGE>
Fiscal period ended Sept. 30,
Per share income and capital changes*
Class B Class Y
1997*** 1996 1995** 1997*** 1996 1995**
Net asset value, $8.15 $7.63 $6.88 $8.24 $7.67 $6.88
beginning of period
Income from investment operations:
Net investment income .01 .06 .02 .05 .11 .06
Net gains .45 .92 .73 .46 .95 .73
(both realized
and unrealized)
Total from investment .46 .98 .75 .51 1.06 .79
operations
Less distributions:
Dividends from net (.04) (.11) -- (.09) (.14) --
investment income
Distributions from (.60) (.35) -- (.60) (.35) --
realized gains
Total distributions (.64) (.46) -- (.69) (.49) --
Net asset value, $7.97 $8.15 $7.63 $8.06 $8.24 $7.67
end of period
Ratios/supplemental data
Class B Class Y
1997*** 1996 1995** 1997*** 1996 1995**
Net assets, end of $34 $25 $7 $4 $3 $2
period (in millions)
Ratio of expenses to 1.88%+ 1.81% 1.84%+ .94%+ .87% .88%+
average daily net assets#
Ratio of net income .24%+ .36% 1.03%+ 1.14%+ 1.31% 1.95%+
to average
daily net assets
Portfolio turnover rate 34% 56% 60% 34% 56% 60%
(excluding short-term
securities)
Total return++ 5.7% 13.5% 10.9% 6.1% 14.6% 11.5%
Average brokerage $.0463 $.0504 -- $.0463 $.0504 --
commission rate##
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Inception date was March 30, 1995.
*** Six months ended March 31, 1997 (Unaudited).
+ Adjusted to an annual basis.
++ Total return does not reflect payment of a sales charge.
# Effective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credits on cash balances.
## Effective fiscal year 1996, the Fund is required to disclose an average
brokerage commission rate. The rate is calculated by dividing the total
brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period by the total number of related shares purchased
and sold.
</TABLE>
<PAGE>
Investments in securities
IDS Progressive Fund, Inc.
March 31, 1997 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Common stocks (91.5%)
Issuer Shares Value(a)
Aerospace & defense (1.0%)
Rohr 250,000(b) $ 4,312,500
Automotive & related (4.8%)
Danaher 150,000 6,243,750
Dura Automotive Systems 220,000(b) 5,170,000
Tower Automotive 225,000(b) 8,775,000
Total 20,188,750
Banks and savings & loans (5.7%)
F & M Bancorp 45,810 1,339,943
First Virginia Banks 162,000 8,302,500
Roosevelt Financial 325,000 7,068,750
TCF Financial 180,000 7,132,500
Total 23,843,693
Building materials & construction (3.4%)
Juno Lighting 205,000 3,254,375
Lennar 175,000 4,287,500
Martin Marietta Materials 260,700 6,713,025
Total 14,254,900
Chemicals (2.7%)
Ecolab 188,000 7,144,000
Schulman (A) 220,000 4,180,000
Total 11,324,000
Computers & office equipment (5.6%)
America Online 25,000(b) 1,059,375
E Trade Group 30,000(b) 540,000
Intl Imaging Materials 287,500(b) 5,318,750
Learning Company 500,000(b) 3,312,500
Network General 50,000(b) 1,075,000
Read-Rite 150,000(b) 3,787,500
Solectron 73,000(b) 3,659,125
Sterling Software 160,000(b) 4,420,000
Yahoo 15,000(b) 421,875
Total 23,594,125
Electronics (1.9%)
DuPont Photomasks 30,000(b) 1,132,500
GaSonics Intl 72,000(b) 1,026,000
KLA Instruments 30,000(b) 1,095,000
Lattice Semiconductor 100,000(b) 4,575,000
Total 7,828,500
Energy (1.6%)
Murphy Oil 100,000 4,700,000
United Meridian 65,000(b) 1,958,125
Total 6,658,125
Energy equipment & services (1.3%)
Production Operators 100,000 5,662,500
Financial services (3.8%)
Phoenix Duff & Phelps 600,000 4,575,000
Simon DeBartolo Group REIT 180,000 5,445,000
Sun Communities REIT 180,000 5,760,000
Total 15,780,000
Health care (4.9%)
Beckman Instruments 125,000 5,250,000
DENTSPLY Intl 90,000 4,500,000
Life Technologies 88,350 2,319,187
Marquette Medical
System Cl A 200,000(b) 4,025,000
Tecnol Medical Products 300,000(b) 4,725,000
Total 20,819,187
Health care services (3.7%)
Equity Corp Intl 225,000(b) 4,725,000
Living Centers of America 250,000(b) 8,625,000
York Group 115,000 2,156,250
Total 15,506,250
Household products (1.0%)
Stanhome 165,000 4,104,375
Industrial equipment & services (7.0%)
AGCO 150,000 4,143,750
Alamo Group 220,000 3,492,500
AMETEK 200,000 4,225,000
Belden 240,000 8,550,000
Kaydon 120,000 5,025,000
Minerals Technologies 125,000 4,156,250
Total 29,592,500
Insurance (6.9%)
ALLIED Group 345,000 11,902,500
Executive Risk 129,900 6,024,112
Providian 80,000 4,280,000
Terra Nova Holdings 350,000 6,825,000
Total 29,031,612
Leisure time & entertainment (1.5%)
Station Casinos 500,000(b,c) 4,062,500
Vail Resorts 108,000(b) 2,106,000
Total 6,168,500
Media (2.0%)
Harland (John H) 250,000 5,937,500
Lee Enterprises 100,000 2,425,000
Total 8,362,500
Multi-industry conglomerates (9.8%)
Brady (WH) 100,000 2,512,500
Fisher Scientific Intl 100,000 4,412,500
Griffon 600,000(b) 7,200,000
Hubbell Cl B 120,000 5,070,000
Lancaster Colony 225,000 10,350,000
Standex Intl 150,000 3,918,750
Stewart & Stevenson 160,000 3,200,000
Zero 248,000 4,650,000
Total 41,313,750
Paper & packaging (1.5%)
AptarGroup 2,000 76,500
Rayonier 165,000 6,146,250
Total 6,222,750
Retail (5.1%)
Department 56 200,000(b) 3,475,000
Hancock Fabrics 250,000 2,750,000
Jostens 220,000 4,977,500
Lands' End 300,000(b) 7,950,000
Longs Drug Stores 90,000 2,115,000
Total 21,267,500
Utilities -- electric (2.1%)
LG&E Energy 180,000 4,342,500
Sierra Pacific Resources 160,000 4,700,000
Total 9,042,500
Utilities -- gas (2.1%)
New Jersey Resources 153,900 4,386,150
Questar 120,000 4,305,000
Total 8,691,150
Utilities -- telephone (1.5%)
Century Telephone 210,000 6,195,000
Foreign (10.6%)(d)
ACE 96,273 6,161,472
Concordia Paper Holdings 90,000(b) 382,500
Credicorp 110,000 2,571,250
Empresas ICA
Sociedad ADR 200,000(b,c) 3,175,000
Fomento de Construcciones 22,000 1,910,741
Greencore Group 404,878 2,298,059
Kondor Wessels 58,000 2,783,332
Kwik-Fit Holdings 660,000 2,502,837
Leigh Interests 1,200,000 2,142,046
Persimmon 600,000 2,324,663
Polypipe 600,000 2,388,826
Powerscreen Intl 400,000 4,043,894
Renaissance Energy 150,000(b) 4,264,041
Schibsted Group 130,000(e) 2,627,015
South China Morning
Post 3,000,000 2,555,265
Svedala Industri 118,000(c) 2,303,769
Total 44,434,710
Total common stocks
(Cost: $329,671,182) $384,199,377
Preferred stocks and other (2.1%)
Duff & Phelps Utilities
Income Fund 475,000 4,215,625
Royal Caribbean Cruises
7.25%Cv 80,000 4,480,000
Total preferred stocks and other
(Cost: $8,296,942) $ 8,695,625
Bonds (1.0%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
Foreign (1.0%)(d)
Eskom
(South African Rand)
11.00% 2008 23,550,000 $4,092,249
Total bonds
(Cost: $3,928,355) $4,092,249
Short-term securities (6.7%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
U.S. government agency (0.1%)
Federal Home Loan Mtge Corp Disc Nt
04-09-97 5.24% $500,000 $499,420
Commercial paper (6.6%)
BBV Finance (Delaware)
04-14-97 5.35% 2,600,000 2,594,996
BellSouth Telecommunications
04-10-97 5.33 3,800,000 3,794,965
CAFCO
04-02-97 5.31 1,900,000(f) 1,899,721
Fleet Funding
04-08-97 5.34 3,100,000(f) 3,096,793
04-09-97 5.33 4,200,000(f) 4,195,053
Goldman Sachs Group
04-11-97 5.32 3,200,000 3,195,289
Metlife Funding
04-22-97 5.33 3,000,000 2,990,725
Paccar Financial
04-10-97 5.32% 1,900,000 1,897,482
Southern California Gas
05-22-97 5.33 1,500,000(f) 1,487,764
Toyota Motor Credit
04-10-97 5.31 2,400,000 2,396,826
Total 27,549,614
Total short-term securities
(Cost: $28,050,072) $ 28,049,034
Total investments in securities
(Cost: $369,946,551)(g) $425,036,285
See accompanying notes to investments in securities.
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) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the
board.
(f) 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.
(g) At March 31, 1997, the cost of securities for federal income tax
purposes was approximately $369,947,000 and the approximate aggregate
gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $74,615,000
Unrealized depreciation (19,526,000)
Net unrealized appreciation $55,089,000
<PAGE>
Board members and officers
Board members and officers of the Fund
President and interested
board member
William R. Pearce
President and director, Board Services Corporation (provides
administrative services to boards including the boards of the IDS and
IDSLife funds and Master Trust portfolios).
Independent
board members
H. Brewster Atwater Jr.
Former chairman and chief executive officer, General Mills, Inc.
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for Public Policy
Research.
Robert F. Froehlke
Former president of all funds in the IDS MUTUAL FUND GROUP.
Heinz F. Hutter
Former president and chief operating officer, Cargill, Inc.
Anne P. Jones
Attorney and telecommunications consultant.
Melvin R. Laird
Senior counsellor for national and international affairs,
The Reader's Digest Association, Inc.
Alan K. Simpson
Former United States senator for Wyoming.
Edson W. Spencer
Former chairman and chief executive officer,
Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
C. Angus Wurtele
Chairman of the board, The Valspar Corporation.
Interested board members who
are officers and/or employees of AEFC
William H. Dudley
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
Senior vice president, AEFC. Vice president - Investments for the Fund.
Melinda S. Urion
Senior vice president and chief financial officer, AEFC. Treasurer for the
Fund.
Other officer
Leslie L. Ogg
Vice president, treasurer and corporate secretary of Board Services
Corporation. Vice president, general counsel and secretary for the Fund.
Refer to the SAI for the board members' and officers' biographies.
<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 globe
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 portfolio's 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
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) flower
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 and 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.
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) spinning toy
IDS Stock Fund
Invests in a Portfolio comprised primarily of 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 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
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 in long-term, high-yielding corporate
fixed-income securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) two coins
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk
bond categories, or the equivalent, and in government bonds.
(icon of) Greek column
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
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
<PAGE>
Quick telephone reference
American Express Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
<PAGE>
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(R) 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
PAGE
AMERICAN EXPRESS FINANCIAL ADVISORS
IDS Fund
IDS Tower 10
Minneapolis, MN 55440-0010
