IDS
Progressive
Fund
1999 SEMIANNUAL REPORT
(icon of) ruler
The goal of IDS Progressive Fund, Inc.
is long-term growth of capital.
Distributed by American Express Financial Advisors Inc.
AMERICAN EXPRESS Financial Advisors
<PAGE>
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 Chairman 3
From the Portfolio Manager 3
Fund Facts 5
The 10 Largest Holdings 6
Financial Statements 7
Notes to Financial Statements 10
Investments in Securities 19
<PAGE>
(picture of) Arne H. Carlson
Arne H. Carlson
Chairman of the board
From the Chairman
It is an honor for me to join the IDS Mutual Fund Group as chairman of the board
and chief executive officer for each of the funds. I have served for the past
eight years as governor of Minnesota and also for the past 20 years as a
constitutional officer responsible for the pension investments made on behalf of
government employees. My responsibility in the upcoming years is to serve your
interests.
By law, half the members of a mutual fund board must be independent of their
investment manager and distributor. I am one of those persons. I am not an
employee of American Express Financial Corporation (AEFC), nor do I own stock in
American Express Company. Both are fine companies, but the law clearly states
that to fully represent your interests I must be independent.
Having said that, I have a great deal of respect for the capabilities of AEFC
and for the services it provides to investors. Your financial advisor assists
you in financial planning, conducts regular investment reviews and responds to
your questions and needs. This is a very personal service that makes AEFC a
partner in your financial future. I know that AEFC has an investment focus on
the long-term performance of our economy and that it wants you to participate in
that growth. Consistent with that, our board is here to serve you and represent
your interests in a professional manner.
Arne H. Carlson
(picture of) Kurt Winters
Kurt Winters
Portfolio manager
From the Portfolio Manager
IDS Progressive Fund recorded a double-digit return for the first half of the
fiscal year, as the U.S. stock market staged an impressive recovery. For the six
months -- October 1998 through March 1999 -- the Fund's Class A shares generated
a total return of 10.17%. (A portion of the return came in the form of a capital
gain, which was paid to shareholders in December 1998 and reduced the Fund's net
asset value by the same amount at that time.)
When the period started, the U.S. stock market had just finished dusting itself
off from a nasty tumble that began in mid-summer of 1998 and ultimately took the
market down by nearly 20%. Wasting no time, stocks set out to regain the lost
ground last fall. With support from three reductions in short-term interest
rates by the Federal Reserve, stocks quickly gained momentum and powered their
way through the winter. After backing off a bit in February, the market capped
the run by soaring to an all-time high just before the period came to a close in
March.
A SELECT GROUP
As has been the case in recent years, the resurgence was most often led by a
relatively small number of large-capitalization growth stocks and high-flying
Internet-related issues. The Fund's focus, on the other hand, is on small- and
mid-size stocks whose prices appear to offer above-average value in relation to
their respective companies' fundamental strengths and earnings potential.
Therefore, while the Fund's performance was clearly positive for the period, the
bias of the market continued to work against its investment style.
Looking at the make-up of the portfolio, I kept the greatest portion (about 25%)
in financial services stocks. Most of the remaining investments were divided in
roughly equal amounts (between 12% and 16% each) among technology, utility,
industrial and health care stocks. Over the six months, technology and financial
services issues made the greatest contributions to the Fund's gain.
As the second half of the fiscal year begins, the stock market continues to
experience very narrow leadership; the largest growth stocks, helped in recent
months by the soaring Internet sector, remain responsible for the lion's share
of the market's returns.
Its value approach has kept the Fund from fully participating in the market's
recent climb. But with inflation still in check, the economy still humming and
growth picking up in other parts of the world, a broader range of stocks could
begin to show good performance. The Fund is structured to respond to just such a
rally. But if the market's tone deteriorates, the Fund's avoidance of the
riskier, high-flying stocks should allow it to hold up relatively well.
Kurt Winters
<PAGE>
Fund Facts
Class A -- 6-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1999 $7.34
Sept. 30, 1998 $7.93
Decrease $0.59
Distributions -- Oct. 1, 1998 - March 31, 1999
From income $0.05
From capital gains $1.37
Total distributions $1.42
Total return* +10.17%**
Class B -- 6-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1999 $7.21
Sept. 30, 1998 $7.80
Decrease $0.59
Distributions -- Oct. 1, 1998 - March 31, 1999
From income $ --
From capital gains $1.37
Total distributions $1.37
Total return* +9.74%**
Class Y -- 6-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1999 $7.35
Sept. 30, 1998 $7.94
Decrease $0.59
Distributions -- Oct. 1, 1998 - March 31, 1999
From income $0.05
From capital gains $1.37
Total distributions $1.42
Total return* +10.21%**
*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 10 Largest Holdings
Percent Value
(of net assets) (as of March 31, 1999)
Federated Investors Cl B 2.15% $11,821,874
FORE Systems 2.15 11,816,405
Danaher 2.14 11,756,250
TCF Financial 2.03 11,179,999
Southwest Airlines 1.77 9,755,625
Martin Marietta Materials 1.73 9,512,319
Meyer (Fred) 1.71 9,420,000
Tosco 1.62 8,932,500
Jacobs Engineering Group 1.58 8,676,250
Wendy's Intl 1.55 8,531,250
For further detail about these holdings, please refer to the section entitled
"Investments in Securities" herein.
(icon of) pie chart
The 10 holdings listed here
make up 18.43% of net assets
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<TABLE>
<CAPTION>
Financial Statements
Statement of assets and liabilities
IDS Progressive Fund, Inc.
March 31, 1999 (Unaudited)
Assets
Investments in securities, at value (Note 1):
Investments in securities of unaffiliated issuers (identified cost
<S> <C>
$514,915,308) $545,086,585
Investments in securities of affiliated issuers
(identified cost $6,912,502) 6,932,500
---------- ---------
Total investments in securities (identified cost: $521,827,810) 552,019,085
Cash in bank on demand deposit 885,302
Dividends and accrued interest receivable 667,027
Receivable for investment securities sold 2,559,497
---------
Total assets 556,130,911
-----------
Liabilities
Payable for investment securities purchased 5,466,074
Payable upon return of securities loaned (Note 4) 612,500
Accrued investment management services fee 9,527
Accrued distribution fee 1,903
Accrued service fee 3,418
Accrued transfer agency fee 2,942
Accrued administrative services fees 867
Other accrued expenses 81,344
------
Total liabilities 6,178,575
---------
Net assets applicable to outstanding capital stock $549,952,336
============
Represented by
Capital stock-- $.01 par value (Note 1) $ 751,459
Additional paid-in capital 543,888,109
Undistributed net investment income 1,630,978
Accumulated net realized gain (loss) (26,509,485)
Unrealized appreciation (depreciation) on investments and on
translation of assets and liabilities in foreign currencies 30,191,275
----------
Total -- representing net assets applicable to outstanding capital stock $549,952,336
============
Net assets applicable to outstanding shares: Class A $448,694,043
Class B $ 91,499,756
Class Y $ 9,758,537
Net asset value per share of outstanding capital stock: Class A shares 61,123,322 $ 7.34
Class B shares 12,694,060 $ 7.21
Class Y shares 1,328,472 $ 7.35
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<TABLE>
<CAPTION>
Statement of operations
IDS Progressive Fund, Inc.
Six months ended March 31, 1999 (Unaudited)
Investment income
Income:
<S> <C>
Dividends $ 4,020,086
Interest 777,563
Less foreign taxes withheld (14)
---
Total income 4,797,635
---------
Expenses (Note 2):
Investment management services fee 1,482,156
Distribution fee-- Class B 348,090
Transfer agency fee 440,877
Incremental transfer agency fee
Class A 26,532
Class B 14,358
Service fee
Class A 403,501
Class B 80,964
Class Y 4,577
Administrative services fees and expenses 165,518
Compensation of board members 5,706
Custodian fees 43,913
Postage 93,595
Registration fees 40,357
Reports to shareholders 19,697
Audit fees 12,750
Other 14,617
------
Total expenses 3,197,208
Earnings credits on cash balances (Note 2) (16,808)
-------
Total net expenses 3,180,400
---------
Investment income (loss) -- net 1,617,235
---------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) (27,236,541)
Financial futures contracts 727,690
-------
Net realized gain (loss) on investments (26,508,851)
Net change in unrealized appreciation (depreciation) on investments and on
translation of assets and liabilities in foreign currencies 79,497,073
----------
Net gain (loss) on investments and foreign currencies 52,988,222
----------
Net increase (decrease) in net assets resulting from operations $54,605,457
===========
</TABLE>
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<TABLE>
<CAPTION>
Statements of changes in net assets
IDS Progressive Fund, Inc.
March 31, 1999 Sept. 30, 1998
Six months ended Year ended
(Unaudited)
Operations and distributions
<S> <C> <C>
Investment income (loss)-- net $ 1,617,235 $ 2,820,587
Net realized gain (loss) on investments (26,508,851) 92,537,477
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 79,497,073 (191,018,105)
---------- ------------
Net increase (decrease) in net assets resulting from operations 54,605,457 (95,660,041)
---------- -----------
Distributions to shareholders from:
Net investment income
Class A (2,493,432) (3,793,152)
Class B (27) (199,753)
Class Y (53,923) (65,315)
Net realized gain
Class A (75,429,332) (38,328,394)
Class B (15,387,157) (5,367,116)
Class Y (1,410,207) (588,363)
---------- --------
Total distributions (94,774,078) (48,342,093)
----------- -----------
Capital share transactions (Note 5)
Proceeds from sales
Class A shares (Note 2) 107,016,157 145,734,679
Class B shares 17,842,385 50,364,870
Class Y shares 2,431,805 4,636,324
Reinvestment of distributions at net asset value
Class A shares 73,240,210 40,469,236
Class B shares 15,207,266 5,515,374
Class Y shares 1,464,130 653,678
Payments for redemptions
Class A shares (144,082,520) (111,768,366)
Class B shares (Note 2) (18,000,617) (10,558,219)
Class Y shares (1,409,648) (2,681,201)
---------- ----------
Increase (decrease) in net assets from capital share transactions 53,709,168 122,366,375
---------- -----------
Total increase (decrease) in net assets 13,540,547 (21,635,759)
Net assets at beginning of period 536,411,789 558,047,548
----------- -----------
Net assets at end of period $549,952,336 $536,411,789
============ ============
Undistributed net investment income $ 1,630,978 $ 2,561,125
------------ ------------
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Notes to Financial Statements
IDS Progressive Fund, Inc.
(Unaudited as to March 31, 1999)
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.
o Class A shares are sold with a front-end sales charge.
o Class B shares may be subject to a contingent deferred sales charge and
automatically convert to Class A shares during the ninth calendar year of
ownership.
o Class Y shares have no sales charge and are offered only to qualifying
institutional investors.
All classes of shares have identical voting, dividend and liquidation rights.
The 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.
The Fund's significant accounting policies are summarized below:
Use of estimates
Preparing financial statements that conform to generally accepted accounting
principles requires management to make estimates (e.g., on assets and
liabilities) that could differ from actual results.
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 that
reflects fair value as quoted by dealers 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.
Option transactions
To produce incremental earnings, protect gains, and facilitate buying and
selling of securities for investments, the Fund may buy and write options traded
on any U.S. or foreign exchange or in the over-the-counter market where
completing the obligation depends upon the credit standing of the other party.
The Fund also may buy and sell put and call options and write covered call
options on portfolio securities as well as write cash-secured put options. The
risk in writing a call option is that the Fund gives up the opportunity for
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 being unable 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 when the option transaction expires or closes. 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
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund also may buy and write put and call options on these futures contracts.
Risks of entering into futures contracts and related options include the
possibility of 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,
if any, may arise from sales of foreign currency, closed forward contracts,
exchange gains or losses realized between the trade date and settlement date 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 its contract obligations.
Federal taxes
The Fund's policy is to comply with all sections of the Internal Revenue Code
that apply to regulated investment companies and to distribute all of its
taxable income to shareholders. No provision for income or excise taxes is thus
required.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred losses on
certain futures contracts, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes and losses deferred due to
"wash sale" transactions. The character of distributions made during the year
from net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
Dividends to shareholders
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available 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
The Fund entered into agreements with American Express Financial Corporation
(AEFC) for managing its portfolio and providing administrative services. Under
an 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 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 decreased the fee by $291,101 for the six months ended March 31,
1999.
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 and any
other expenses properly payable by the Fund and approved by the board.
Under a separate Transfer Agency Agreement, American Express Client Service
Corporation (AECSC) maintains shareholder accounts and records. The Fund pays
AECSC an annual fee per shareholder account for this service as follows:
o Class A $19
o Class B $20
o Class Y $15
Under terms of a prior agreement that ended Jan. 31, 1999, the Fund paid a
transfer agency fee at an annual rate per shareholder account of $15 for Class A
and $16 for Class B. Effective April 1, 1999, the annual rate per shareholder
account will change to $17 for Class Y.
The Fund entered into agreements with American Express Financial Advisors Inc.
for distribution and shareholder 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
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 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 $437,302 for Class A and $46,661 for Class B for
the six months ended March 31, 1999. The Fund also pays custodian fees to
American Express Trust Company, an affiliate of AEFC.
During the six months ended March 31, 1999, the Fund's custodian and transfer
agency fees were reduced by $16,808 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 $385,335,435 and $385,328,949, respectively, for the six
months ended March 31, 1999. Realized gains and losses are determined on an
identified cost basis.
Brokerage commissions paid to brokers affiliated with AEFC were $37,662 for the
six months ended March 31, 1999.
4. LENDING OF PORTFOLIO SECURITIES
As of March 31, 1999, securities valued at $514,063 were on loan to brokers. For
collateral, the Fund received $612,500 in cash. Income from securities lending
amounted to $29,271 for the six months ended March 31, 1999. The risks to the
Fund of securities lending are that the borrower may not provide additional
collateral when required or return the securities when due.
<PAGE>
<TABLE>
<CAPTION>
5. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
Six months ended March 31, 1999
Class A Class B Class Y
<S> <C> <C> <C>
Sold 13,809,274 2,308,785 317,314
Issued for reinvested distributions 9,829,577 2,074,096 196,422
Redeemed (18,618,102) (2,402,929) (184,440)
----------- ---------- --------
Net increase (decrease) 5,020,749 1,979,952 329,296
Year ended Sept. 30, 1998
Class A Class B Class Y
Sold 15,286,298 5,302,810 478,118
Issued for reinvested distributions 4,355,284 600,283 70,318
Redeemed (11,840,846) (1,132,460) (273,628)
----------- ---------- --------
Net increase (decrease) 7,800,736 4,770,633 274,808
6. BANK BORROWINGS
The Fund entered into a revolving credit agreement with U.S. Bank, N.A., whereby
the Fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The Fund must have asset coverage for
borrowings not to exceed the aggregate of 333% of advances equal to or less than
five business days plus 367% of advances over five business days. The agreement,
which enables the Fund to participate with other IDS Funds, permits borrowings
up to $200 million, collectively. Interest is charged to each Fund based on its
borrowings at a rate equal to the Federal Funds Rate plus 0.30% or the
Eurodollar Rate (Reserve Adjusted) plus 0.20%. Borrowings are payable up to 90
days after such loan is executed. The Fund also pays a commitment fee equal to
its pro rata share of the amount of the credit facility at a rate of 0.05% per
annum. The Fund had no borrowings outstanding during the six months ended March
31, 1999.
</TABLE>
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<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
Fiscal period ended Sept. 30,
Per share income and capital changesa
Class A
1999b 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $7.93 $10.17 $ 8.23 $7.66 $6.94
Income from investment operations:
Net investment income (loss) .03 .05 .08 .09 .13
Net gains (losses) (both realized and unrealized) .80 (1.43) 2.54 .96 1.01
Total from investment operations .83 (1.38) 2.62 1.05 1.14
Less distributions:
Dividends from net investment income (.05) (.08) (.08) (.13) (.12)
Distributions from realized gains (1.37) (.78) (.60) (.35) (.30)
Total distributions (1.42) (.86) (.68) (.48) (.42)
Net asset value, end of period $7.34 $ 7.93 $10.17 $8.23 $7.66
Ratios/supplemental data
Class A
1999b 1998 1997 1996 1995
Net assets, end of period (in millions) $449 $445 $491 $368 $337
Ratio of expenses to average daily net assetsc 1.00%d 1.02% 1.10% 1.04% 1.04%
Ratio of net investment income (loss)
to average daily net assets .69%d .57% .95% 1.21% 1.85%
Portfolio turnover rate
(excluding short-term securities) 71% 116% 60% 56% 60%
Total returne 10.17% (14.77%) 33.87% 14.39% 17.63%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b For the six months ended March 31, 1999 (Unaudited).
c Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
d Adjusted to an annual basis.
e Total return does not reflect payment of a sales charge.
</TABLE>
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<TABLE>
<CAPTION>
Fiscal period ended Sept. 30,
Per share income and capital changesa
Class B Class Y
1999c 1998 1997 1996 1995b 1999c 1998 1997 1996 1995b
Net asset value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of period $7.80 $10.03 $8.15 $7.63 $6.88 $7.94 $10.18 $8.24 $7.67 $6.88
Income from investment operations:
Net investment
income (loss) -- -- .03 .06 .02 .03 .06 .09 .11 .06
Net gains (losses) (both
realized and unrealized) .78 (1.42) 2.49 .92 .73 .80 (1.43) 2.54 .95 .73
Total from investment
operations .78 (1.42) 2.52 .98 .75 .83 (1.37) 2.63 1.06 .79
Less distributions:
Dividends from net
investment income -- (.03) (.04) (.11) -- (.05) (.09) (.09) (.14) --
Distributions from
realized gains (1.37) (.78) (.60) (.35) -- (1.37) (.78) (.60) (.35) --
Total distributions (1.37) (.81) (.64) (.46) -- (1.42) (.87) (.69) (.49) --
Net asset value,
end of period $7.21 $7.80 $10.03 $8.15 $7.63 $7.35 $7.94 $10.18 $8.24 $7.67
Ratios/supplemental data
Class B Class Y
1999c 1998 1997 1996 1995b 1999c 1998 1997 1996 1995b
Net assets, end of
period (in millions) $91 $84 $60 $25 $7 $10 $8 $7 $3 $2
Ratio of expenses to
average daily net assetsd 1.77%e 1.78% 1.87% 1.81% 1.84%e .92%e .95% .98% .87% .88%e
Ratio of net investment
income (loss) to average
daily net assets (.08%)e (.21%) .21% .36% 1.03%e .78%e .62% 1.09% 1.31% 1.95%e
Portfolio turnover rate
(excluding short-term
securities) 71% 116% 60% 56% 60% 71% 116% 60% 56% 60%
Total returnf 9.74% (15.42%) 32.85% 13.51% 10.90% 10.21% (14.70%) 34.06% 14.56% 11.53%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Inception date was March 20, 1995.
c For the six months ended March 31, 1999 (Unaudited).
d Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
e Adjusted to an annual basis.
f Total return does not reflect payment of a sales charge.
</TABLE>
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<CAPTION>
Investments in Securities
IDS Progressive Fund, Inc.
March 31, 1999 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (99.8%)
Issuer Shares Value(a)
Aerospace & defense (2.8%)
<S> <C> <C>
Goodrich (BF) 165,000 $5,661,562
Howmet Intl 375,000(b) 5,367,188
Northrop Grumman 70,000 4,191,250
Total 15,220,000
Airlines (1.8%)
Southwest Airlines 322,500 9,755,625
Automotive & related (3.3%)
Dana 125,000 4,750,000
Federal-Mogul 135,000 5,805,000
Tower Automotive 400,000(b) 7,450,000
Total 18,005,000
Banks and savings & loans (10.1%)
Bank One 110,000 6,056,875
Comerica 85,000 5,307,188
First Virginia Banks 137,500 6,282,031
Marshall & Ilsley 72,500 4,019,219
Mercantile Bancorp 110,000 5,225,000
Regions Financial 150,000 5,193,750
Southtrust 165,000 6,156,563
TCF Financial 430,000 11,179,999
UnionBanCal 200,000 6,812,499
Total 56,233,124
Building materials & construction (1.7%)
Martin Marietta Materials 166,700 9,512,319
Chemicals (3.4%)
Air Products & Chemicals 75,000 2,568,750
Fuller (HB) 110,000 6,483,125
Great Lakes Chemical 170,000 6,247,500
Union Carbide 70,000 3,163,125
Total 18,462,500
Commercial finance (1.4%)
Finova Group 150,000 7,781,250
Computers & office equipment (6.6%)
DAOU Systems 1,180,000(b,e,f) 6,932,500
FORE Systems 625,000(b) 11,816,405
Keane 235,000(b) 5,008,438
Network Associates 135,000(b) 4,142,813
Parametric Technology 280,000(b) 5,530,000
Sterling Commerce 95,000(b) 2,921,250
Total 36,351,406
Electronics (3.2%)
Analog Devices 135,000(b) 4,016,250
Microchip Technology 155,000(b) 5,366,875
SCI Systems 95,000 2,814,375
Teradyne 95,000(b) 5,183,438
Total 17,380,938
Energy (5.3%)
Anadarko Petroleum 200,000 7,550,000
Tosco 360,000 8,932,500
Ultramar Diamond Shamrock 300,000 6,487,500
Unocal 170,000 6,258,125
Total 29,228,125
Energy equipment & services (2.2%)
Hanover Compressor 125,000(b) 3,312,500
Jacobs Engineering Group 220,000(b) 8,676,250
Total 11,988,750
Financial services (6.9%)
Allmerica Financial 140,000 7,708,750
Federated Investors Cl B 650,000 11,821,874
Franchise Finance Corp of America 49,600 1,044,700
Lehman Brothers Holdings 100,000 5,975,000
Metris Companies 135,000 5,450,625
Providian Financial 55,000 6,050,000
Total 38,050,949
Food (2.8%)
Corn Products Intl 220,000 5,266,250
Suiza Foods 140,000(b) 4,716,250
U.S. Foodservice 120,000(b) 5,580,000
Total 15,562,500
Furniture & appliances (1.2%)
Ethan Allen Interiors 160,000 6,650,000
Health care (3.7%)
Bard (CR) 90,000 4,539,375
Biomet 120,000 5,032,500
Elan ADR 70,000(b,c) 4,882,500
IDEXX Laboratories 250,000(b) 5,984,375
Total 20,438,750
Health care services (0.9%)
Health Management Associates Cl A 385,000(b) 4,692,188
Industrial equipment & services (2.0%)
Ingersoll-Rand 160,000 7,940,000
Wyman-Gordon 305,000(b) 2,821,250
Total 10,761,250
Insurance (3.9%)
ACE 220,000(c) 6,861,250
Nationwide Financial Services Cl A 140,100 5,884,200
Protective Life 225,000 8,521,875
Total 21,267,325
Leisure time & entertainment (1.0%)
Polaris Inds 180,000 5,715,000
Media (2.5%)
Journal Register 217,200(b) 2,606,400
New York Times Cl A 200,000 5,700,000
USA Networks 150,000(b) 5,371,875
Total 13,678,275
Miscellaneous (1.2%)
Convergys 375,000 6,421,875
Multi-industry conglomerates (5.2%)
Danaher 225,000 11,756,250
Hubbell Cl B 170,000 6,800,000
Interim Services 290,000(b) 4,350,000
YORK Intl 160,000 5,650,000
Total 28,556,250
Paper & packaging (2.9%)
Bemis 170,000 5,280,625
Fort James 165,000 5,228,438
Owens-Illinois 215,000(b) 5,375,000
Total 15,884,063
Restaurants & lodging (3.1%)
Tricorn Global Restaurants 120,000(b) 8,430,000
Wendy's Intl 300,000 8,531,250
Total 16,961,250
Retail (5.7%)
Food Lion Cl A 895,000 8,236,797
Lands' End 175,000(b) 6,059,375
Meyer (Fred) 160,000(b) 9,420,000
Tiffany & Co 100,000 7,475,000
Total 31,191,172
Transportation (3.0%)
Hunt (JB) Transport Services 280,000 5,880,000
Kansas City Southern Inds 90,000 5,130,000
Wisconsin Central Transportation 400,000(b) 5,300,000
Total 16,310,000
Utilities -- electric (8.4%)
Allegheny Energy 225,000 6,637,500
Carolina Power & Light 200,000 7,562,499
Cinergy 200,000 5,500,000
DTE Energy 175,000 6,726,563
Sierra Pacific Resources 200,000 7,037,500
Teco Energy 300,000 5,962,500
Unicom 200,000 7,312,500
Total 46,739,062
Utilities -- gas (2.5%)
Coastal 203,900 6,728,700
El Paso Energy 215,000 7,027,813
Total 13,756,513
Utilities -- telephone (1.1%)
Cincinnati Bell 275,000 6,170,313
Total common stocks
(Cost: $518,534,053) $548,725,772
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term securities (0.6%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agency (--%)
Federal Home Loan Mtge Corp Disc Nt
<S> <C> <C> <C>
04-23-99 4.79% $200,000 $199,388
Commercial paper (0.6%)
Fleet Funding
04-29-99 4.87 1,500,000(d) 1,494,140
Salomon Smith Barney
04-01-99 4.84 1,600,000 1,599,785
Total 3,093,925
Total short-term securities
(Cost: $3,293,757) $3,293,313
Total investments in securities
(Cost: $521,827,810)(g) $552,019,085
</TABLE>
<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) Foreign security values are stated in U.S. dollars. As of March 31, 1999,
the value of foreign securities represented 2.14% of net assets.
(d) 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.
(e) Security is partially or fully on loan. See Note 4 to the financial
statements.
(f) Investments representing 5% or more of the outstanding voting securities of
the issuer. Transactions with companies that are or were affiliates during the
six months ended March 31, 1999 are as follows:
Issuer Beginning Purchase Sales Ending Dividend Value(a)
cost cost cost cost income
DAOU Systems* $2,728,750 $4,183,752 $-- $6,912,502 $-- $6,932,500
*Issuer was not an affiliate for the entire period ended March 31, 1999.
(g) At March 31, 1999, the cost of securities for federal income tax purposes
was approximately $521,828,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $70,061,000
Unrealized depreciation (39,870,000)
-----------
Net unrealized appreciation $30,191,000
<PAGE>
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