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FINANCIAL PLANNING
IDS Selective Fund
1993 annual report
(prospectus enclosed)
(Icon of) skyline
The goals of IDS Selective Fund, Inc. are current income and the
preservation of capital by investing in investment grade bonds.
IDS
An American Express company
AMERICAN
EXPRESS
Distributed by IDS Financial Services Inc.
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PAGE 2
(Icon of) skyline
A quest for quality
Not all bonds are created equal. A bond's quality depends on the
ability of its issuer to make the interest and principal payments
owed to the bondholders. The quality is determined by independent
rating agencies, which assign a credit rating (in the form of a
letter grade) to each bond.
Since its establishment in 1945, Selective Fund has concentrated
its investments in the four highest investment grades. Along the
way, investors have enjoyed a steady stream of interest income with
minimal risk to their principal.
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Contents
(Icon of) One book inside of another and their both being opened
together.
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.
1993 annual report
From the president 4
From the portfolio manager 4
Ten largest holdings 6
Making the most of your fund 7
Long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 21
IDS mutual funds 28
Federal income tax information 31
1993 prospectus
The fund in brief
Goals 3p
Types of fund investments 3p
Manager and distributor 3p
Portfolio manager 3p
Sales charge and fund expenses
Sales charge 4p
Operating expenses 4p
Performance
Financial highlights 5p
Total returns 6p
Yield 7p
Key terms 8p
How to buy, exchange or sell shares
How to buy shares 9p
How to exchange shares 11p
How to sell shares 11p
Reductions of the sales charge 15p
Waivers of the sales charge 16p
Special shareholder services
Services 17p
Quick telephone reference 17p
Distributions and taxes
Dividend and capital gain distributions 18p
Reinvestments 18p
Taxes 19p
Investment policies
Facts about investments and their risks 22p
Valuing assets 26p
How the fund is organized
Shares 27p
Voting rights 27p
Shareholder meetings 27p
Directors and officers 27p
Investment manager and transfer agent 29p
Distributor 30p
About IDS
General information 31p
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PAGE 4
To our shareholders
(Photo of) William R. Pearce, President of the fund
(Photo of) Ray Goodner, Portfolio manager
From the president
As you read this report, you'll find it very different from those
you've received from us in the past. We've made substantial
changes in the design and organization to make the information
easier to find and understand.
The annual report and prospectus are combined into a single
document, and each provides information important to you. The
annual report gives you the fund's performance information and a
snapshot of its investments. A good place to begin is with the
portfolio manager's letter, which describes the events and
investment strategies that most influenced the fund's performance
during the year. The prospectus includes essential data such as
the fund's investment policies and service information.
In redesigning our reports, we asked IDS financial planners and
some of you for suggestions and recommendations. We believe that
you'll find the results of our work worthwhile.
William R. Pearce
From the portfolio manager
It was another outstanding year for bonds.
The declining interest-rate trend that has been in place since 1991
continued during the past year, boosting bond prices in the
process. As a result, investors were rewarded throughout the
fiscal year with both dividend income and an increase in the value
of their shares.
In recent years, extended sluggishness in the economy, an ongoing
low inflation rate and, more recently, optimism that future federal
deficits will be reduced, have provided an especially accommodating
environment for interest rates to come down. For example, during
the past fiscal year, the yield on the 30-year U.S. Treasury bond
hit its lowest level since its introduction in the 1970s. Because
bond prices rise when interest rates go down, this recent trend was
particularly positive for bond rates.
Longer maturities lead to greater return
This fund has enjoyed an extra benefit because of our emphasis on
bonds with long maturities, a strategy based on our anticipation of
lower interest rates. Such bonds appreciate more than shorter-
maturity issues when interest rates fall, and the longer-term bonds
in our portfolio naturally enhanced the fund's performance in the
past year.
Other keys to the strong results included a healthy exposure to
zero-coupon U.S. Treasury bonds, foreign bonds denominated in U.S.
dollars and U.S. corporate bonds, particularly those of financial
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PAGE 5
services companies. All of these produced solid gains. On the
other hand, the fund benefited from holding only a relatively small
amount of bonds in another sector - mortgage-backed securities - as
that group under-performed most others throughout the period.
Subtle shifts
Portfolio changes were few. Among those of any note, we did
increase the foreign bond holdings moderately and added more bonds
issued by U.S. corporations.
In the current fiscal year, we continue to expect an investment
environment largely like the one we've been experiencing. The
biggest difference is that the economy has shown moderate but
increasing improvement in recent quarters. While that raises the
question of rising inflation, rising interest rates and,
ultimately, declining bond prices, we currently don't see that
developing to any substantial degree. In fact, we won't be
surprised to see the economy slow down somewhat during the first
part of 1994.
Given that outlook, we're sticking to our relatively aggressive
strategy of holding longer-maturity securities, which should allow
the fund to again provide a return that keeps investors ahead of
the rate of inflation.
Ray Goodner
12-month performance
(All figures per share)
Net asset value (NAV)
Nov. 30, 1993 $ 9.77
Nov. 30, 1992 $ 9.20
Increase $ 0.57
Distributions
Dec. 1, 1992 - Nov. 30, 1993
From income $ 0.64
From capital gains $ 0.11
Total distributions $ 0.75
Total return* +14.8%
*If you purchased shares in the fund during this period, your
return also would have been affected by the sales charge, as
described in the prospectus.
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Your fund's ten largest holdings
(Pie chart representing) The ten holdings listed here make up
10.67% of the fund's net assets.
<TABLE>
<CAPTION>
Percent Value
(of fund's net assets) (as of Nov. 30, 1993)
<S> <C> <C>
Japan Finance 1.73% $30,037,125
9.25% 1998
Province of Quebec 1.20 20,752,750
11% 2015
New York Telephone 1.15 19,997,500
8.75% 2023
Federal Paper Board 1.04 18,043,969
10% 2011
Malaysia Government .97 16,794,937
9.875% 2000
General Electric Capital .94 16,350,000
8.65% Reset Note 1996
Republic of Italy .94 16,235,000
6.875% 2023
Williams Companies .91 15,881,250
7.50% 1999
First Security .90 15,656,250
7.50% Sub Notes 2002
Government of Canada .89 15,461,599
10.50% 2001
Excludes U.S. Treasury and government agencies holdings that total 36.1% of the fund's
net assets.
</TABLE>
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PAGE 7
Making the most of your fund
Average annual total return
(as of Nov. 30, 1993)
1 year 5 years 10 years
+9.09% +10.33% +11.06%
Your investment and return value fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Figures reflect the deduction of the maximum 5% sales charge. This
was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.
Build your assets systematically
To keep your assets growing steadily, 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.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it 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
Feb 100 18 5.56
Mar 100 17 5.88
Apr 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
Sept 100 21 4.76
Oct 100 20 5.00
(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 August) 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.
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PAGE 8
Your 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 interest dividends, 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 Selective Fund
Average annual total return
$30,000 (as of Nov. 30, 1993)
$28,568
1 year 5 years 10 years Selective Fund
+9.09% +10.33% +11.06%
$25,000
$20,000 Lehman Aggregate
Bond Index
$15,000
$9,500
'84 '85 '86 '87 '88 '89 '90 '91 '92 '93
Assumes: Holding period from 11/30/83 to 11/30/93. Returns do not
reflect taxes payable on distributions. Also see "Performance" in
the fund's current prospectus. Reinvestment of all income and
capital gain distributions for the fund, with a value of $16,985.
The Lehman Aggregate Bond Index is made up of a representative list
of government and corporate bonds as well as asset-backed
securities and mortgage-backed securities. The index is frequently
used as a general measure of bond market performance. However, the
securities used to create the index may not be representative of
the bonds held in IDS Selective Fund.
On the chart above you can see how the fund's total return compared
to a widely cited performance measure, the Lehman Aggregate Bond
Index. In comparing Selective Fund to this index, 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 index. If you were actually to buy either
individual bonds or bond mutual funds, any sales charges that you
pay would reduce your total return as well.
Your investment and return value fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.
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PAGE 9
Independent auditors' report
___________________________________________________________________
The board of directors and shareholders
IDS Selective Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments in securities,
of IDS Selective Fund, Inc. as of November 30, 1993, 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 November 30, 1993, and the financial
highlights for each of the years in the ten-year period ended
November 30, 1993. 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 but
not received 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
Selective Fund, Inc. at November 30, 1993, and the results of its
operations for the year then ended and the changes in its net
assets for each of the years in the two-year period ended November
30, 1993, and the financial highlights for the periods stated in
the first paragraph above, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick
Minneapolis, Minnesota
January 7, 1994
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PAGE 10
Financial statements
<TABLE>
<CAPTION>
Statement of assets and liabilities
IDS Selective Fund, Inc.
Nov. 30, 1993
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $1,566,258,656) $1,723,828,786
Dividends and accrued interest receivable 25,676,076
U.S. government securities held as collateral (Note 4) 78,044,226
_____________________________________________________________________________________________________________
Total assets 1,827,549,088
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 2,085,815
Dividends payable to shareholders 2,097,787
Payable for investments securities purchased 46,875
Payable upon return of securities loaned (Note 4) 85,386,726
Accrued investment management and services fee 808,385
Accrued distribution fee 60,629
Accrued transfer agency fee 153,681
Other accrued expenses 318,055
_____________________________________________________________________________________________________________
Total liabilities 90,957,953
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $1,736,591,135
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 177,801,940 shares $ 1,778,019
Additional paid-in capital 1,550,446,767
Undistributed net investment income 70,717
Accumulated net realized gain on investments (Note 1) 27,052,408
Unrealized appreciation of investments (Note 5) 157,243,224
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $1,736,591,135
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 9.77
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
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Financial statements
<TABLE>
<CAPTION>
Statement of operations
IDS Selective Fund, Inc.
Year ended Nov. 30, 1993
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
<S> <C>
Income:
Interest $121,652,356
Dividends 309,076
_____________________________________________________________________________________________________________
Total income 121,961,432
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 8,932,798
Distribution fee 666,796
Transfer agency fee 1,697,473
Compensation of directors 60,961
Compensation of officers 20,564
Custodian fees 141,537
Postage 269,865
Registration fees 110,008
Reports to shareholders 71,936
Audit fees 32,000
Administrative 31,953
Other 40,053
_____________________________________________________________________________________________________________
Total expenses 12,075,944
_____________________________________________________________________________________________________________
Investment income -- net 109,885,488
_____________________________________________________________________________________________________________
Realized and unrealized gain on investments and foreign currency -- net
_____________________________________________________________________________________________________________
Net realized gain on security transactions (including gain of $37,692 from
foreign currency transactions)(Note 3) 27,615,211
Net realized gain on closed interest rate futures contracts 22,200
_____________________________________________________________________________________________________________
Net realized gain on investments 27,637,411
Net change in unrealized appreciation or depreciation of investments 89,408,374
_____________________________________________________________________________________________________________
Net gain on investments 117,045,785
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $226,931,273
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
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Financial statements
<TABLE>
<CAPTION>
Statements of changes in net assets
IDS Selective Fund, Inc.
Year ended Nov. 30,
_____________________________________________________________________________________________________________
Operations and distributions 1993 1992
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 109,885,488 $ 108,968,857
Net realized gain on investments 27,637,411 33,371,342
Net change in unrealized appreciation or
depreciation of investments 89,408,374 9,273,125
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations 226,931,273 151,613,324
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (110,889,838) (108,843,360)
Net realized gains on investments (18,273,614) --
Excess distribution of realized gain (Note 1) (473,077) (140,075)
_____________________________________________________________________________________________________________
Total distributions (129,636,529) (108,983,435)
_____________________________________________________________________________________________________________
Capital share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
29,056,630 and 26,919,706 shares (Note 2) 280,546,936 246,466,878
Net asset value of 10,006,921 and 8,462,437 shares
issued in reinvestment of distributions 95,735,511 77,361,930
Payments for redemptions of
28,767,588 and 25,010,405 shares (277,656,557) (228,726,347)
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions
representing net addition of
10,295,963 and 10,371,738 shares 98,625,890 95,102,461
_____________________________________________________________________________________________________________
Total increase in net assets 195,920,634 137,732,350
Net assets at beginning of year 1,540,670,501 1,402,938,151
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$70,717 and $1,075,067) $1,736,591,135 $1,540,670,501
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
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PAGE 13
Notes to financial statements
IDS Selective 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.
Significant accounting policies followed by the fund are summarized
below:
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 of directors. 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.
Options transactions
In order to produce incremental earnings, protect gains, and
facilitate buying and selling of securities for investment
purposes, the fund may buy and sell put and call optionsand 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 in 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. The fund also may write over-the-counter options where the
completion of the obligation is dependent upon the credit standing
of the other party.
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.
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PAGE 14
Notes to financial statements
IDS Selective Fund, Inc.
___________________________________________________________________
1. Summary of significant accounting policies
Futures transactions
In order to gain exposure to or protect itself from changes in the
market, the fund may buy and sell interest rate 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
forward 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. It is not practicable to
identify that portion of realized and unrealized gain (loss)
arising from changes in the exchange rates from the portion arising
from changes in the market value of investments.
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.
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PAGE 15
Notes to financial statements
IDS Selective Fund, Inc.
___________________________________________________________________
1. Summary of significant accounting policies
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
Dividends from net investment income, declared daily and payable
monthly, are reinvested in additional shares of the fund at net
asset value or payable in cash. Capital gains, when available, are
distributed along with the last income dividend of the calendar
year.
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
Under terms of an agreement dated Nov. 14, 1991, the fund pays IDS
Financial Corporation (IDS) a fee for managing its investments,
recordkeeping and other specified services. The fee is a
percentage of the fund's average daily net assets consisting of a
group asset charge in reducing percentages from 0.46% to 0.32%
annually on the combined net assets of all non-money market funds
in the IDS MUTUAL FUND GROUP and an individual annual asset charge
of 0.13% of average daily net assets.
The fund also pays IDS a distribution fee at an annual rate of $6
per shareholder account and a transfer agency fee at an annual rate
of $15.50 per shareholder account. The transfer agency fee is
reduced by earnings on monies pending shareholder redemptions.
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PAGE 16
Notes to financial statements
IDS Selective Fund, Inc.
___________________________________________________________________
2. Expenses and sales charges
IDS will assume and pay any expenses (except taxes and brokerage
commissions) that exceed the most restrictive applicable state
expense limitation.
Sales charges by IDS Financial Services Inc. for distributing fund
shares were $7,381,370 for the year ended Nov. 30, 1993.
The fund has a retirement plan for its independent directors. Upon
retirement, directors receive monthly payments equal to one-half of
the retainer fee for as many months as they served as directors up
to 120 months. There are no death benefits. The plan is not funded
but the fund recognizes the cost of payments during the time the
directors serve on the board. The retirement plan expense amounted
to $30,328 for the year ended Nov. 30, 1993.
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $576,285,566 and $462,213,432,
respectively, for the year ended Nov. 30, 1993. Realized gains and
losses are determined on an identified cost basis.
___________________________________________________________________
4. Lending of portfolio securities
At Nov. 30, 1993, securities valued at $75,488,428 were on loan to
brokers. For collateral, the fund received $7,342,500 in cash and
U.S. government securities valued at $78,044,226. Income from
securities lending amounted to $151,117 for the year ended Nov. 30,
1993. 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. Interest rate futures contracts
At Nov. 30, 1993, investments in securities included securities
valued at $4,147,920 that were pledged as collateral to cover
initial margin deposit on 100 purchase contracts. The market value
of the open contracts at Nov. 30, 1993, was $10,175,000 with a
net unrealized loss of $326,906.
___________________________________________________________________
6. Financial highlights
"Financial highlights" showing per share data and selected
information is presented on page 5 of the prospectus.
<PAGE>
PAGE 17
Investments in securities
<TABLE>
<CAPTION>
IDS Selective Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Bonds (93.1%)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. government obligations (29.1%)
U.S. Treasury 7.50 % 2016 $18,900,000 $ 21,064,237
7.98 2007 34,000,000 (c) 14,515,953
8.00 2021 85,000,000 101,204,400
8.625 1995-97 79,745,000 87,313,210
10.375 2012 84,210,000 (b,i) 116,432,106
Resolution Funding Corp 7.60 2017 79,000,000 (c) 15,643,572
7.89 2016 85,900,000 (b,c) 18,469,350
7.98 2016 32,000,000 (c) 6,776,637
8.07 2003 6,000,000 (c) 3,264,899
8.11 2016 35,073,000 (c) 7,174,179
8.12 2004 7,899,000 (c) 4,061,982
8.16 2004 15,000,000 (c) 7,569,899
8.18 2005 13,000,000 (c) 6,104,149
8.19 2014 48,000,000 (c) 11,951,995
8.20 2005 38,048,000 (c) 18,586,068
8.27 2014 10,000,000 (c) 2,400,600
8.35 2006 48,000,000 (c) 21,780,000
8.94 2006 25,000,000 (c) 11,634,997
8.95 2006 68,000,000 (c) 29,698,993
_____________
Total 505,647,226
_____________________________________________________________________________________________________________________________
Mortgage-backed securities (8.0%)
Federal Home Loan Mtge Corp
5.823 1993-22 9,117,228 9,451,465
8.00 1993-17 22,209 22,939
8.50 1993-22 23,136,134 24,217,646
Collateralized Mtge Obligation 8.50 2019 12,000,000 12,563,160
9.00 1993-21 13,667,066 14,412,173
Federal Housing Admin 7.43 1993-24 9,602,256 9,494,231
Federal Natl Mtge Assn 6.50 1993-23 14,832,845 14,619,622
Collateralized Mtge Obligation 6.50 2020 10,000,000 10,146,200
8.00 2021 11,195,840 11,514,698
8.50 2019 8,305,000 8,645,422
Principal Only 17.74 2020 3,193,191 (d) 2,817,991
Principal Only 8.05 2018 3,781,189 (d) 3,246,983
See accompanying notes to investments in securities.
</TABLE>
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PAGE 18
Investments in securities
<TABLE>
<CAPTION>
IDS Selective Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Mortgage-backed securities (cont'd)
Prudential Bache
Collateralized Mtge Obligation 7.965% 2019 $ 5,000,000 $ 5,179,800
Salomon Brothers
GNMA Collateralized Mtge Obligation 7.75 2012 9,200,142 9,498,227
WestAm
Collateralized Mtge Obligation 8.95 2018 2,405,495 2,438,643
______________
Total 138,269,200
_____________________________________________________________________________________________________________________________
Financial (14.8%)
Banks and savings & loans (4.6%)
BankAmerica
Sub Nts 7.50 2002 8,810,000 9,404,675
Boatmen's Bancshares
Sub Nts 9.25 2001 8,950,000 10,561,000
First Chicago
Sr Nts 9.00 1999 7,900,000 9,035,625
First Security
Sub Nts 7.50 2002 15,000,000 15,656,250
Golden West Financial
Sub Nts 10.25 2000 9,500,000 11,661,250
Great Western Bank 10.25 2000 10,000,000 11,712,500
NCNB
Sub Nts 9.125 2001 10,000,000 11,537,500
______________
Total 79,568,800
_____________________________________________________________________________________________________________________________
Financial services (8.8%)
Amer General Finance 6.35 1995 9,500,000 9,737,500
Sr Nts 8.375 1995 6,500,000 6,784,375
Aristar
Sr Deb 8.875 1998 10,520,000 11,769,250
Sr Deb 14.25 1994 6,000,000 6,420,000
Beneficial 9.125 1998 10,000,000 11,312,500
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
PAGE 19
Investments in securities
<TABLE>
<CAPTION>
IDS Selective Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Financial (cont'd)
Financial services (cont'd)
General Electric Capital
Reset Nt 8.65% 1996 $15,000,000 (e) $ 16,350,000
General Motors Acceptance 4.75 1994 6,900,000 6,925,875
5.95 1998 8,000,000 7,940,000
8.20 1994 9,000,000 9,225,000
8.40 1995 7,000,000 7,393,750
Goldman Sachs Group LP 7.125 2003 12,000,000 (f) 12,435,000
Greyhound Financial 7.95 1999 9,600,000 10,440,000
9.06 1999 10,000,000 11,412,500
Salomon Brothers 7.61 1994 15,000,000 15,150,000
SunAmerica 9.95 2012 8,000,000 9,830,000
______________
Total 153,125,750
_____________________________________________________________________________________________________________________________
Insurance (1.4%)
Berkley (WR) 8.70 2022 10,000,000 11,412,500
Massachusetts Mutual Life Insurance 7.625 2023 13,000,000 (f) 13,195,000
USLICO
Cv 8.50 2014 600,000 621,000
_____________
Total 25,228,500
_____________________________________________________________________________________________________________________________
Industrial (12.8%)
Aerospace & defense (0.7%)
United Technologies 8.875 2019 10,000,000 11,825,000
_____________________________________________________________________________________________________________________________
Automotive & related (1.1%)
Ford Capital B.V.
Gtd Nts 9.00 1996 9,700,000 10,597,250
General Motors 8.875 2003 7,050,000 7,984,125
____________
Total 18,581,375
_____________________________________________________________________________________________________________________________
Beverages & tobacco (0.6%)
Philip Morris 8.10 1996 10,000,000 10,750,000
_____________________________________________________________________________________________________________________________
Chemicals (0.7%)
Dow Chemical 8.85 2021 10,000,000 11,925,000
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
PAGE 20
Investments in securities
<TABLE>
<CAPTION>
IDS Selective Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Industrial (cont'd)
Ecological services & equipment (0.5%)
Browning-Ferris Inds 9.25 2021 $ 7,000,000 $ 8,575,000
_____________________________________________________________________________________________________________________________
Electronics (0.2%)
Harris 10.375 2018 3,900,000 4,504,500
_____________________________________________________________________________________________________________________________
Energy (2.9%)
PDV Amer 7.875 2003 13,000,000 13,195,000
Texaco Capital
Gtd Deb 7.50 2043 12,000,000 12,315,000
Union Oil of California 9.25 2003 7,500,000 8,821,875
USX 9.125 2013 5,000,000 5,262,500
9.375 2022 9,200,000 9,924,500
______________
Total 49,518,875
_____________________________________________________________________________________________________________________________
Food (0.4%)
RJR Nabisco 8.625 2002 7,000,000 6,912,500
_____________________________________________________________________________________________________________________________
Health care (1.0%)
Foundation Health 7.75 2003 5,000,000 5,087,500
Schering-Plough 7.31 1996 15,000,000 (c,f) 12,918,750
_____________
Total 18,006,250
_____________________________________________________________________________________________________________________________
Industrial equipment & services (0.7%)
Deere 8.95 2019 10,000,000 11,987,500
_____________________________________________________________________________________________________________________________
Media (0.7%)
Time Warner Entertainment 8.375 2033 12,000,000 (f) 12,420,000
_____________________________________________________________________________________________________________________________
Multi-industrial (0.2%)
Eastman Kodak
Cv 6.51 2011 9,800,000 (c) 3,430,000
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
PAGE 21
Investments in securities
<TABLE>
<CAPTION>
IDS Selective Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Industrial (cont'd)
Paper & packaging (1.7%)
Federal Paper Board 10.00 % 2011 $14,775,000 $ 18,043,969
Georgia-Pacific
Credit Sensitive Nts 10.00 1997 10,000,000 11,175,000
______________
Total 29,218,969
_____________________________________________________________________________________________________________________________
Retail (1.4%)
Associated Dry Goods 8.85 2006 10,735,000 12,694,138
Dayton Hudson 10.00 2011 9,000,000 11,171,250
_____________
Total 23,865,388
_____________________________________________________________________________________________________________________________
Municipal (0.5%)
Washington Public Power Supply System
Bonneville Nuclear Project #1
Refunding Revenue Bonds Series 1993C 5.375 2015 10,000,000 9,468,200
_____________________________________________________________________________________________________________________________
Transportation (1.0%)
AMR 9.75 2021 2,500,000 2,812,500
10.00 2021 8,000,000 9,210,000
10.20 2020 5,000,000 5,850,000
______________
Total 17,872,500
_____________________________________________________________________________________________________________________________
Utilities (12.1%)
Electric (6.6%)
Arizona Public Service
1st Mtge 8.75 2024 5,000,000 5,700,000
Sale Lease-Backed Obligation 8.00 2015 9,000,000 9,438,750
Cajun Electric Power Cooperative
Mtge Trust 8.92 2019 4,960,000 5,846,600
Cleveland Toledo Consolidated Mansfield Funds
Sale Lease-Backed Obligation 10.25 2003 1,500,000 1,582,500
Commonwealth Edison 6.50 2000 9,000,000 9,146,250
Long Island Lighting 9.625 2024 4,600,000 5,244,000
Ohio Power Scherer Funding 9.70 2011 6,000,000 6,412,500
Public Service Electric & Gas
1st Mtge 8.50 2022 13,859,000 15,192,929
RGS Funding
Sale Lease-Backed Obligation 9.82 2022 9,952,508 12,303,788
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
PAGE 22
Investments in securities
<TABLE>
<CAPTION>
IDS Selective Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Utilities (cont'd)
Electric (cont'd)
San Diego Gas & Electric
1st Mtge 9.625% 2020 $ 9,950,000 $ 11,952,438
Southern California Edison
1st Mtge 8.875 2023 13,000,000 14,478,750
Texas Utilities Electric 10.35 2018 1,500,000 1,681,875
1st Mtge 9.75 2021 7,000,000 8,295,000
1st Mtge 9.875 2019 6,000,000 6,607,500
______________
Total 113,882,880
_____________________________________________________________________________________________________________________________
Gas (1.2%)
Southern California Gas 7.375 2023 5,000,000 5,006,250
Williams Companies 7.50 1999 15,000,000 15,881,250
______________
Total 20,887,500
_____________________________________________________________________________________________________________________________
Telephone (4.3%)
GTE 8.50 2017 7,500,000 8,400,000
10.25 2020 2,000,000 2,505,000
GTE South
1st Mtge 9.375 2030 13,975,000 15,355,031
New York Tel 8.75 2023 19,000,000 19,997,500
9.375 2031 7,000,000 8,426,250
1st Mtge 4.625 2004 6,300,000 5,481,000
U S WEST Communications 8.875 2031 12,660,000 14,606,475
______________
Total 74,771,256
_____________________________________________________________________________________________________________________________
Foreign (14.8%)(g)
ABN Amro Bank
(U.S. Dollar) 7.125 2093 8,200,000 7,759,250
(U.S. Dollar) 7.75 2023 3,800,000 4,013,750
Alcan Aluminium
(U.S. Dollar) 8.875 2022 9,600,000 10,596,000
Austria Republic Euro
(U.S. Dollar) 10.00 1998 5,000,000 5,878,000
Banca Comm Italia
(U.S. Dollar) 8.25 2007 5,000,000 5,375,000
Euratom Euro
(U.S. Dollar) 7.75 1997 6,100,000 6,565,125
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
PAGE 23
Investments in securities
<TABLE>
<CAPTION>
IDS Selective Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Foreign (cont'd)
Govt of Canada
(Canadian Dollar) 10.50 % 2001 $17,000,000 $ 15,461,599
Hanson Inds
(British Pound) Cv 9.50 2006 3,000,000 5,567,040
Hong Kong & Shanghai Banking
(U.S. Dollar) 7.40 2003 12,000,000 (b) 12,476,640
Intl Finance Euro
(U.S. Dollar) 8.25 1996 8,000,000 8,690,000
Japan Finance
(U.S. Dollar) 9.25 1998 25,950,000 30,037,125
KFW Intl Finance
(U.S. Dollar) 8.50 1999 10,000,000 11,362,500
Kingdom of Denmark Euro
(U.S. Dollar) 7.25 1996 8,000,000 8,487,280
Korea Development Bank
(U.S. Dollar) 8.90 1996 9,000,000 9,663,750
Korea Electric Power
(U.S. Dollar) 8.00 2002 9,000,000 9,810,000
Korea Telecom
(U.S. Dollar) 7.40 1999 6,700,000 7,110,375
Malaysia Govt
(U.S. Dollar) 9.875 2000 14,025,000 16,794,937
Natl Westminster Bank
(U.S. Dollar) Sub Nts 9.45 2001 4,900,000 5,818,750
Norddeutsche LB Euro
(U.S. Dollar) 6.875 2003 11,500,000 11,762,200
Province of Ontario
(U.S. Dollar) 7.375 2003 5,000,000 5,312,500
Province of Quebec
(U.S. Dollar) 11.00 2015 16,150,000 20,752,750
Republic of Italy
(U.S. Dollar) 6.875 2023 17,000,000 16,235,000
Roche Holdings
(U.S. Dollar) 2.75 2000 12,000,000 10,027,500
(U.S. Dollar) 4.75 2008 5,500,000 (c,f) 2,860,000
World Bank
(U.S. Dollar) 12.375 2002 6,000,000 8,512,500
______________
Total 256,929,571
_____________________________________________________________________________________________________________________________
Total bonds
(Cost: $1,459,934,109) $1,617,171,740
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
PAGE 24
Investments in securities
<TABLE>
<CAPTION>
IDS Selective Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Preferred stocks (0.4%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
First Chicago
2.875% Cm Cv 60,000 $ 3,120,000
Occidental Petroleum
3.875% Cm Cv 41,000 (f) 2,193,500
Sonoco Products
2.25% Cv 40,000 2,070,000
_____________________________________________________________________________________________________________________________
Total preferred stocks
(Cost: $7,050,000) $ 7,383,500
_____________________________________________________________________________________________________________________________
<CAPTION>
Short-term securities (5.7%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable
date of at
purchase maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (1.1%)
Federal Home Loan Bank Disc Note
12-17-93 3.07% $ 5,000,000 $ 4,993,200
12-27-93 3.06 2,900,000 2,893,612
12-29-93 3.05 500,000 498,818
Federal Natl Mtge Assn Disc Note
12-15-93 3.06 3,900,000 3,895,374
12-27-93 3.06 7,000,000 6,984,580
______________
Total 19,265,584
_____________________________________________________________________________________________________________________________
Commercial paper (4.1%)
Amer General Investments
12-22-93 3.12 2,000,000 (h) 1,996,383
Amgen
12-10-93 3.12 6,600,000 6,594,869
Associates Corp of North Amer
12-17-93 3.13 8,000,000 7,988,907
Ciesco LP
12-03-93 3.13 500,000 499,914
Colgate Palmolive
12-13-93 3.11 7,800,000 (h) 7,791,940
Columbia Fuels
12-16-93 3.11 900,000 898,823
CPC Intl
12-09-93 3.11 5,800,000 (h) 5,796,004
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
PAGE 25
Investments in securities
<TABLE>
<CAPTION>
IDS Selective Fund, Inc. (Percentages represent value of
Nov. 30, 1993 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Short-term securities (continued)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable
date of at
purchase maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Commercial paper (cont'd)
Lincoln Natl
12-14-93 3.12% $6,000,000 (h) $ 5,993,283
Mobil Australia Finance (Delaware)
12-07-93 3.11 5,800,000 (h) 5,797,003
Natl Australia Funding
12-21-93 3.10 5,400,000 5,390,730
PACCAR Financial
12-15-93 3.11 5,000,000 4,993,972
Pennsylvania Power & Light
01-10-94 3.39 5,600,000 5,578,049
PepsiCo
12-20-93 3.11 1,500,000 1,497,546
Sandoz
12-08-93 3.09 2,300,000 2,298,623
12-09-93 3.09 6,200,000 6,195,756
12-17-93 3.11 1,300,000 1,298,209
______________
Total 70,610,011
_____________________________________________________________________________________________________________________________
Letters of credit (0.5%)
NationsBank North Carolina-
Comdisco
12-01-93 3.11 6,000,000 6,000,000
12-08-93 3.11 3,400,000 3,397,951
______________
Total 9,397,951
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $99,274,547) $ 99,273,546
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $1,566,258,656)(j) $1,723,828,786
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 26
Investments in securities
IDS Selective Fund, Inc.
Nov. 30, 1993
_____________________________________________________________________________________________________________________________
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Security is partially or fully on loan. See Note 4 to the financial statements.
(c) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition.
(d) Principal Only-interest rate disclosed for these securities represent current yields based upon estimated future cash flows.
(e) Interest rate varies, rate shown is the effective rate on Nov. 30, 1993.
(f) Represents a security sold under Rule 144A which is exempt from registration under the Securities Act of 1933, as amended.
This security has been determined to be liquid under guidelines established by the board of directors.
(g) Foreign security values are stated in U.S. dollars; principal amounts are denominated in the currency indicated.
(h) Commercial paper sold within terms of a private placement memorandum, exempt from registration under Section 4(2) of the
Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors". This
security has been determined to be liquid under guidelines established by the board of directors.
(i) Partially pledged as initial deposit on the following open interest rate futures purchase contracts (see Note 5 to the
financial statements):
Type of security Par value
_______________________________________________________
Municipal Bond, Dec. 1993 $10,000,000
________________________________________________________
(j) On Nov. 30, 1993, the cost of securities for federal income tax purposes was $1,564,417,697 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $161,854,162
Unrealized depreciation (2,443,073)
____________________________________________________________________________________________
Net unrealized appreciation $159,411,089
____________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 27
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conversation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposits (CDs) and
other bank securities.
(icon of) piggy bank
IDS Planned Investment Account
Invests in money market securities to provide maximum current
income consistent with liquidity and stability of principal of
principal, while serving as a base for systematic exchanges into
IDS fixed income and equity funds.
(icon of) stair steps
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income. Secondary
objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
achieve high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed-income
securities in the lower rated, higher risk bond categories to
provide high current income. Secondary objective is capital
growth.
(icon of) cornucopia
<PAGE>
PAGE 28
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 Strategy Income Fund
Invests primarily in corporate and government bonds to seek high
current income while conserving capital. Also may seek capital
appreciation when consistent with its primary goals.
(icon of) chess piece
IDS Selective Fund, Inc.
Invests in high quality corporate bonds and other highly-rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund, Inc.
Invests primarily in securities issued or guaranteed as to
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) federal building
IDS Strategy, Short-Term Income Fund
Invests primarily in short-term and intermediate-term bonds and
notes to seek a high level of current income.
(icon of) chess piece
Tax-exempt income investments
These funds provide tax-free income by investing in municipal
bonds. The income is generally free from federal income tax. Risk
varies by bond quality.
IDS High Yield Tax-Exempt Fund, Inc.
Invests primarily in medium- and lower-quality municipal bonds and
notes.
(icon of) shield with basket of apples enclosed
<PAGE>
PAGE 29
IDS State Tax-Exempt Funds
(California, Massachusetts, Michigan, Minnesota, New York, Ohio)
Invests primarily in high- and medium-grade municipal securities to
provide income to residents of each respective state that is exempt
from federal, state and local income taxes. (New York is the only
state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
IDS Tax-Exempt Bond Fund, Inc.
Invests mainly in bonds and notes of state or local government
units, with at least 75 percent 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 eagle head
Growth and income investments
These funds focus on securities of medium to large, well-
established companies that offer long-term growth of capital and
reasonable income from dividends and interest. Moderate risk.
IDS International Fund, Inc.
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The Fund may invest up to 20
percent of its assets in the U.S. market.
(icon of) three flags
IDS Strategy, Worldwide Growth Fund
Invests primarily in common stocks of companies throughout the
world that offer potential for superior growth. Holding may range
from small- to large-capitalization stocks, including those of
companies involve in areas of rapid economic growth.
(icon of) chess piece
IDS Managed Retirement Fund, Inc.
Invests in a combination of common stocks, fixed income investments
and money market securities to seek a maximum total return through
a combination of growth of capital and current income.
(icon of) bird in a nest
<PAGE>
PAGE 30
IDS Equity Plus Fund, Inc.
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of capital and
income.
(icon of) three apple trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by IDS research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund, Inc.
Invests primarily in common stocks of blue chip U.S. companies
representing almost every major sector of the economy. Seeks
current income and growth of capital.
(icon of) building with columns
IDS Strategy, Equity Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) chess piece
IDS Utilities Income Fund, Inc.
Invests primarily in the stocks of public utility companies to
provide high current income and growth of income and capital with
reduced volatility.
(icon of) electrical cord
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to provide high
current income and, secondarily to benefit from the growth
potential offered by stock investments.
(icon of) four puzzle pieces
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice
<PAGE>
PAGE 31
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 Discovery Fund, Inc.
Invests in small and medium-sized, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Growth Fund, Inc.
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) flower
IDS Strategy, Aggressive Equity 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 New Dimensions Fund, Inc.
Invests primarily in domestic 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, Inc.
Invests primarily in undervalued common stocks. The Fund holds
stocks for the long-term with the goal of capital growth.
(icon of) shooting star
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy. These
companies offer above-average potential for long-term growth.
(icon of) world
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against
inflation.<PAGE>
PAGE 32
IDS Precious Metals Fund, Inc.
Invests primarily in the securities of foreign or domestic
companies that explore for, mine and process or distribute gold and
other precious metals. This is the most aggressive and most
speculative IDS mutual fund.
(icon of) cart of precious gems
For more complete information about any of these funds, including
charges and expenses, you can obtain a prospectus by contacting
your IDS personal financial planner or writing to IDS Shareholder
Service, P.O. Box 534, Minneapolis, MN 55440. Read it carefully
before you invest or send money.
<PAGE>
PAGE 33
Federal income tax information
IDS Selective Fund, Inc.
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. Some of 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 adviser on how to report
distributions for state and local purposes.
IDS Selective Fund, Inc.
Fiscal year ended Nov. 30, 1993
Income distributions
taxable as dividend income, 0.26% qualifying for deduction by
corporations.
Payable date Per share
Dec. 29, 1992 $0.0649
Jan. 26, 1993 0.0545
Feb. 24, 1993 0.0522
March 25, 1993 0.0544
April 23, 1993 0.0534
May 24, 1993 0.0546
June 24, 1993 0.0506
July 23, 1993 0.0474
Aug. 23, 1993 0.0550
Sept. 23, 1993 0.0547
Oct. 22, 1993 0.0478
Nov. 23, 1993 0.0524
Total $0.6419
Capital gain distributions
taxable as long-term capital gain.
Payable date Per share
Dec. 29, 1992 $0.1096
Total distributions $0.7515
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PAGE 34
Quick telephone reference
IDS Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
IDS Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
IDS Infoline
Automated account information (TouchToneR 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
Your IDS financial planner:
IDS Selective Fund
IDS Tower 10
Minneapolis, MN 55440-0010
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PAGE 35
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 and
prospectus are placed
in 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 and prospectus. 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.
