<PAGE>
PAGE 1
IDS Selective Fund
1994 annual report
(Icon of) skyline
The goals of IDS Selective Fund, Inc. are current income and the
preservation of capital by investing in investment grade bonds.
Distributed by American Express Financial Advisors, Inc.<PAGE>
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
owned 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.<PAGE>
PAGE 3
The purpose of this annual report os to tell investors how the fund
performed.
1994 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<PAGE>
PAGE 4
To our shareholders
William R. Pearce
President of the fund
Ray Goodner
Portfolio manager
From the president
All of the funds in the IDS MUTUAL FUND GROUP held shareholder
meetings on Nov. 9, 1994. The meetings, which were well-attended,
approved all of the proposals advanced by management. Among the
proposals were:
o The election of directors and the selection of KPMG Peat Marwick
LLP as independent auditors for each of the funds in the group.
o A new investment management agreement that will become effective
for each fund when it begins offering multiple classes of shares,
now planned to occur in March, 1995.
o A change in investment policy that will permit the funds to
adopt a master/feeder structure if and when the board of each fund
determines that it is in the best interest of the shareholders.
o And, finally, changes to the funds' "fundamental investment
policies" that, among other things, allow the board to modify them
should it deem appropriate.
No other business was presented at the meeting, which was concluded
by a report to shareholders from the IDS Investment Department.
Thanks to all of you for your effort in reviewing the proxy
material and voting your proxies.
William R. Pearce
From the portfolio manager
Interest rates rose substantially during the past fiscal year,
causing a sharp drop in bond prices (This reflects the fundamental
fact of life in the market that falling interest rates boost bond
prices, while rising rates depress them.)
Although this development had little effect on the fund's dividend,
the decline in bond values resulted in a negative total return for
the fund during the past fiscal year.
Early in the period, while the economy was moving solidly forward,
the rate of inflation, the key determinant of long-term interest-
rate levels, continued to decline. As it had for some time, the
fund responded well to these conditions, generating gains in
December and January.
Fed raises rates
The investment environment changed markedly in early February,
however. The Federal Reserve Board, in an effort to slow down the<PAGE>
PAGE 5
economy from its rapid growth late in 1993 and, therefore, head off
an increase in inflation, began to raise short-term interest rates.
By the end of November, the Fed had raised rates six times.
Bond investors reacted immediately to the Fed's initial action,
driving down bond prices on the fear that inflation, would soon
soar. No clear evidence of rising inflation has developed. Still,
the sell-off became contagious, and bond prices spiraled down from
roughly February through April. (It should be noted that the Fed's
moves regarding short-term interest rates do not directly affect
rates on longer-term bonds. Those rates and, thus, bond prices move
up and down with investors' inflation expectations and the
supply/demand situation within the bond market.)
Defensive tactics
To counter the negative effect of the higher-interest-rate trend,
we reduced the average maturity of the securities in the portfolio
(the longer the maturity level, the more sensitive a portfolio is
to interest-rate changes) and substantially raised our level of
cash reserves. These moves were quite effective in tempering the
effect of the market downturn on fund performance. We also added to
our investments in U.S. dollar-denominated Asian bonds, which we
expect to generate good returns thanks to robust economic growth in
that part of the world.
Though still volatile on a day-to-day basis, the bond market and
the fund were able to essentially hold their ground during the last
several months of the period as inflation worries periodically
tapered off. In fact, in the final weeks of the fund's fiscal year,
bonds managed to sustain a nice advance fueled by an increasing
belief that the Fed had gained the upper hand in its effort to
contain inflation.
We view that as an indication that the worst may have passed and
that some positive market fundamentals are beginning to take hold.
These include a commitment on the part of major industrialized
nations to keep inflation down, advances in free trade (as
evidenced by the passage of NAFTA and GATT) and the likelihood of
lower federal budget deficits in the United States. Given that
backdrop, we expect to see bonds perform better in the current
fiscal year.
Ray Goodner
12-month performance
(All figures per share)
Net asset value (NAV)
Nov. 30, 1994 $ 8.57
Nov. 30, 1993 $ 9.77
Decrease $ (1.20)
Distributions
Dec. 1, 1993 - Nov. 30, 1994
From income $ 0.64
From capital gains $ 0.11
Total distributions $ 0.75
<PAGE>
PAGE 6
Total return* (4.7)%
*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.<PAGE>
PAGE
IDS Selective Fund, Inc.
<TABLE>
<CAPTION>
Your fund's ten largest holdings
(Pie chart) The ten holdings listed here make up 11.83% of the fund's net assets
Percent Value
(of fund's net assets) (as of Nov. 30, 1994)
<S> <C> <C>
Japan Finance 1.93% $27,052,875
9.25% 1998
Tokyo Electric Power Euro 1.33 18,624,375
6.125% 2003
Province of Quebec 1.30 18,209,125
11% 2015
Republic of Italy 1.22 17,132,500
6.875% 2023
General Electric Capital 1.09 15,262,500
8.65% Reset Note 1996
Williams Companies 1.03 14,512,500
7.50% 1999
GTE South 1.00 14,044,875
9.375% 1st Mortgage 2030
First Security 1.00 13,987,500
7.50% Sub Notes 2002
PDV America .97 13,571,250
7.875% 2003
Guang Dong Enterprise .96 13,443,750
8.75% 2003
Excludes U.S. Treasury and government agency holdings that total 33% of the
fund's net assets.
</TABLE>
<PAGE>
PAGE 8
Making the most of your fund
Average annual total return
(as of Nov. 30, 1994)
1 year 5 years 10 years
- -9.49% +6.76% +9.64%
Your investment and return values 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 use
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.
Three ways to benefit from a mutual fund:
o your shares increase in value when the fund's investments do
well<PAGE>
PAGE 9
o you receive capital gains when the gains on investments sold
by the fund exceed losses
o you receive income when the fund's stock dividends, interest
and short-term gains exceed its expenses.
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gain distributions to buy additional shares
of the fund or another fund.
How your $10,000 has grown in IDS Selective Fund
Average annual total return
(as of Nov. 30, 1994)
$25,097
1 year 5 years 10 years Selective Fund
- -9.49% +6.76% +9.64%
$20,000 Lehman Aggregate
Bond Index
$9,500
'84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94
Assumes: Holding period from 11/30/84 to 11/30/94. 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 $14,510.
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 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 values 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.<PAGE>
PAGE 10
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,
1994, 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, 1994, and the financial
highlights for each of the years in the
ten-year period ended November 30, 1994.
These financial statements and the
financial highlights are the responsibility
of fund management. Our responsibility is
to express an opinion on these financial
statements and the financial highlights
based on our audits.
We conducted our audits in accordance with
generally accepted auditing standards.
Those standards require that we plan and
perform the audit to obtain reasonable
assurance about whether the financial
statements and the financial highlights are
free of material misstatement. An audit
includes examining, on a test basis,
evidence supporting the amounts and
disclosures in the financial statements.
Investment securities held in custody are
confirmed to us by the custodian. As to
securities purchased and sold but not
received or delivered and securities on
loan, we request confirmations from
brokers, and where replies are not
received, we carry out other appropriate
auditing procedures. An audit also includes
assessing the accounting principles used
and significant estimates made by
management, as well as evaluating the
overall financial statement presentation.
We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements
referred to above present fairly, in all
material respects, the financial position
of IDS Selective Fund, Inc. at November 30,
1994, 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, 1994,
and the financial highlights for the
<PAGE>
PAGE 11
periods stated in the first paragraph
above, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
January 6, 1995<PAGE>
PAGE 12
Financial statements
<TABLE>
<CAPTION>
Statement of assets and liabilities
IDS Selective Fund, Inc.
Nov. 30, 1994
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $1,432,581,097) $1,386,963,614
Receivable for investment securities sold 3,288,075
Dividends and accrued interest receivable 21,230,727
U.S. government securities held as collateral (Note 5) 88,272,347
_____________________________________________________________________________________________________________
Total assets 1,499,754,763
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 2,944,562
Dividends payable to shareholders 509,448
Payable for investments securities purchased 247,215
Payable upon return of securities loaned (Note 5) 92,712,347
Accrued investment management and services fee 605,040
Accrued distribution fee 53,098
Accrued transfer agency fee 135,807
Other accrued expenses 425,861
_____________________________________________________________________________________________________________
Total liabilities 97,633,378
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $1,402,121,385
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 163,598,056 shares $ 1,635,981
Additional paid-in capital 1,424,820,320
Excess of distributions over net investment income (378,787)
Accumulated net realized gain (Note 1) 21,661,354
Unrealized depreciation (45,617,483)
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $1,402,121,385
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 8.57
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.<PAGE>
PAGE 13
Financial statements
Statement of operations
IDS Selective Fund, Inc.
Year ended Nov. 30, 1994
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
Income:
Interest $113,274,171
Dividends 423,122
_____________________________________________________________________________________________________________
Total income 113,697,293
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 8,228,895
Distribution fee 672,430
Transfer agency fee 1,716,609
Compensation of directors 41,237
Compensation of officers 19,507
Custodian fees 185,757
Postage 209,669
Registration fees 138,295
Reports to shareholders 43,810
Audit fees 32,000
Administrative 24,710
Other 39,716
_____________________________________________________________________________________________________________
Total expenses 11,352,635
_____________________________________________________________________________________________________________
Investment income -- net 102,344,658
_____________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions
(including loss of $284,219 from foreign currency transactions) (Note 3) 22,554,343
Net realized loss on closed interest rate futures contracts (1,635,288)
Net realized gain on closed or expired option contracts written (Note 4) 220,436
_____________________________________________________________________________________________________________
Net realized gain on investments and foreign currency 21,139,491
Net change in unrealized appreciation or depreciation (202,860,707)
_____________________________________________________________________________________________________________
Net loss on investments and foreign currency (181,721,216)
_____________________________________________________________________________________________________________
Net decrease in net assets resulting from operations $(79,376,558)
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.<PAGE>
PAGE 14
Financial statements
<CAPTION>
Statements of changes in net assets
IDS Selective Fund, Inc.
Year ended Nov. 30,
_____________________________________________________________________________________________________________
Operations and distributions 1994 1993
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 102,344,658 $ 109,885,488
Net realized gain on investments and foreign currency 21,139,491 27,637,411
Net change in unrealized appreciation or depreciation (202,860,707) 89,408,374
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations (79,376,558) 226,931,273
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (102,415,375) (110,889,838)
Excess distribution of net investment income (378,787) --
Net realized gain (26,487,582) (18,273,614)
Excess distribution of realized gain (Note 1) (42,963) (473,077)
_____________________________________________________________________________________________________________
Total distributions (129,324,707) (129,636,529)
_____________________________________________________________________________________________________________
Capital share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
21,519,839 and 29,056,630 shares (Note 2) 196,126,624 280,546,936
Net asset value of 10,813,989 and 10,006,921 shares
issued in reinvestment of distributions 99,112,296 95,735,511
Payments for redemptions of
46,537,712 and 28,767,588 shares (421,007,405) (277,656,557)
_____________________________________________________________________________________________________________
Increase (decrease) in net assets from capital share transactions
representing net reduction of
14,203,884 and net addition of 10,295,963 shares (125,768,485) 98,625,890
_____________________________________________________________________________________________________________
Total increase (decrease) in net assets (334,469,750) 195,920,634
Net assets at beginning of year 1,736,591,135 1,540,670,501
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$(378,787) and $70,717) $1,402,121,385 $1,736,591,135
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 15
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 or write options traded on any U.S. or
foreign exchange or in the over-the-counter
market where the completion of the obligation is
dependent upon the credit standing of the other
party. The fund also may buy and sell put and
call options and write covered call options on
portfolio securities and may write cash-secured
put options. The risk in writing a call option is
that the fund gives up the opportunity of profit
if the market price of the security increases.
The risk in writing a put option is that the fund
may incur a loss if the market price of the
security decreases and the option is exercised.
The risk in buying an option is that the fund
pays a premium whether or not the option is
exercised. The fund also has the additional risk
of not being able to enter into a closing
transaction if a liquid secondary market does not
exist.
Option contracts are valued daily at the closing
prices on their primary exchanges and unrealized
<PAGE>
PAGE 16
appreciation or depreciation is recorded. The
fund will realize a gain or loss upon expiration
or closing of the option transaction. When
options on debt securities or futures are
exercised, the fund will realize a gain or loss.
When other options are exercised, the proceeds on
sales for a written call option, the purchase
cost for a written put option or the cost of a
security for a purchased put or call option is
adjusted by the amount of premium received or
paid.
Futures transactions
In order to gain exposure to or protect itself
from changes in the market, the fund may buy and
sell interest rate futures contracts traded on
any U.S. or foreign exchange. The fund also may
buy or write put and call options on these
futures contracts. Risks of entering into futures
contracts and related options include the
possibility that there may be an illiquid market
and that a change in the value of the contract or
option may not correlate with changes in the
value of the underlying securities.
Upon entering into a futures contract, the fund
is required to deposit either cash or securities
in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent
payments (variation margin) are made or received
by the fund each day. The variation margin
payments are equal to the daily changes in the
contract value and are recorded as unrealized
gains and losses. The fund recognizes a realized
gain or loss when the contract is closed or
expires.
Foreign currency translations and
foreign currency contracts
Securities and other assets and liabilities
denominated in foreign currencies are translated
daily into U.S. dollars at the closing rate of
exchange. Foreign currency amounts related to the
purchase or sale of securities and income and
expenses are translated at the exchange rate on
the transaction date. The effect of changes in
foreign exchange rates on realized and unrealized
security gains or losses is reflected as a
component of such gains or losses. In the
statement of operations, net realized gains or
losses from foreign currency transactions may
arise from sales of foreign currency, closed
forward contracts, exchange gains or losses
realized between the trade date and settlement
dates on securities transactions, and other
translation gains or losses on dividends,
interest income and foreign withholding taxes.<PAGE>
PAGE 17
The fund may enter into forward foreign currency
exchange contracts for operational purposes and
to protect against adverse exchange rate
fluctuation. The net U.S. dollar value of foreign
currency underlying all contractual commitments
held by the fund and the resulting unrealized
appreciation or depreciation are determined using
foreign currency exchange rates from an
independent pricing service. The fund is subject
to the credit risk that the other party will not
complete the obligations of the contract.
Federal taxes
Since the fund's policy is to comply with all
sections of the Internal Revenue Code applicable
to regulated investment companies and to
distribute all of its taxable income to
shareholders, no provision for income or excise
taxes is required.
Net investment income (loss) and net realized
gains (losses) may differ for financial statement
and tax purposes primarily because of the
deferral of losses on certain futures contracts,
the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax
purposes, and losses deferred due to "wash sale"
transactions. The character of distributions made
during the year from net investment income or net
realized gains may differ from their ultimate
characterization for federal income tax purposes.
The effect on dividend distributions of certain
book-to-tax differences is presented as "excess
distributions" in the statement of changes in net
assets. Also, due to the timing of dividend
distributions, the fiscal year in which amounts
are distributed may differ from the year that the
income or realized gains (losses) were recorded
by the fund.
Dividends to shareholders
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. For
U.S. dollar denominated bonds, interest income
includes level-yield amortization of premium and
discount. For foreign bonds, except for original
<PAGE>
PAGE 18
issue discount, the fund does not amortize
premium and discount.
_____________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991,
the fund pays American Express Financial
Corporation 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 American Express Financial
Corporation 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.
American Express Financial Corporation will
assume and pay any expenses (except taxes and
brokerage commissions) that exceed the most
restrictive applicable state expense limitation.
Sales charges by American Express Financial
Advisors Inc. for distributing fund shares were
$3,861,526 for the year ended Nov. 30, 1994.
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 $17,255 for the year
ended Nov. 30, 1994.
_____________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of
securities (other than short-term obligations)
aggregated $403,947,741 and $717,092,406,
respectively, for the year ended Nov. 30, 1994.
Realized gains and losses are determined on an
identified cost basis.
<PAGE>
PAGE 19
_____________________________________________________
4. Option contracts written
The number of contracts and premium amounts
associated with option contracts written is as
follows:
<TABLE><CAPTION>
Year ended Nov. 30, 1994
_____________________________________________
Puts Calls
_____________________________________________
Contracts Premium Contracts Premium
__________________________________________________________
<S> <C> <C> <C> <C>
Balance Nov. 30, 1993 -- $ -- -- $ --
Opened 1,050 859,840 1,200 1,275,975
Closed (650) (618,890) (1,100) (1,239,175)
Expired (400) (240,950) (100) (36,800)
___________________________________________________________
Balance Nov. 30, 1994 -- $ -- -- $ --
</TABLE>
___________________________________________________________________
5. Lending of portfolio securities
At Nov. 30, 1994, securities valued at
$89,332,600 were on loan to brokers. For
collateral, the fund received $4,440,000 in cash
and U.S. government securities valued at
$88,272,347. Income from securities lending
amounted to $183,217 for the year ended Nov. 30,
1994. 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.
___________________________________________________________________
6. Financial highlights
"Financial highlights" showing per share data and
selected information is presented on page 5 of
the prospectus.
<PAGE>
PAGE 20
<TABLE>
<CAPTION>
6. Financial highlights
The table below shows certain important financial information for evaluating the fund's results.
Fiscal year ended Nov. 30,
Per share income and capital changes*
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $9.77 $9.20 $8.93 $8.41 $8.69 $8.44 $8.27 $9.03 $8.24 $7.69
beginning of year
Income from investment operations:
Net investment income .60 .63 .66 .69 .70 .72 .74 .77 .81 .89
Net gains (losses) (1.05) .69 .27 .52 (.30) .27 .17 (.71) .79 .55
(both realized
and unrealized)
Total from investment (.45) 1.32 .93 1.21 .40 .99 .91 .06 1.60 1.44
operations
Less distributions:
Dividends from net (.60) (.64) (.66) (.69) (.68) (.74) (.74) (.77) (.81) (.89)
investment income
Distributions from (.15) (.11) -- -- -- -- -- (.05) -- --
realized gains
Total distributions (.75) (.75) (.66) (.69) (.68) (.74) (.74) (.82) (.81) (.89)
Net asset value, $8.57 $9.77 $9.20 $8.93 $8.41 $8.69 $8.44 $8.27 $9.03 $8.24
end of year
Ratios/supplemental data
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
Net assets, end of year $1,402 $1,737 $1,541 $1,403 $1,196 $1,167 $1,081 $1,101 $1,181 $906
(in millions)
Ratio of expenses to .72% .72% .74% .77% .76% .77% .74% .75% .66% .61%
average daily net assets
Ratio of net income to 6.53% 6.57% 7.32% 7.94% 8.58% 8.42% 8.67% 8.80% 9.29% 11.37%
average daily net assets
Portfolio turnover rate 30% 30% 62% 59% 54% 79% 86% 74% 108% 176%
(excluding short-term
securities)
Total return** (4.7%) 14.8% 10.8% 15.0% 4.8% 12.3% 11.3% 0.6% 20.2% 19.7%
*For a share outstanding throughout the year. Rounded to the nearest cent.
**Total return does not reflect payment of a sales charge.
/TABLE
<PAGE>
PAGE 21
Investments in securities
<TABLE>
<CAPTION>
IDS Selective Fund, Inc. (Percentages represent value of
Nov. 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Bonds (80.3%)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. government obligations (24.3%)
U.S. Treasury 6.875% 1999 $50,000,000 (b) $ 48,287,500
7.25 1996 30,000,000 29,928,597
7.50 2016 9,450,000 8,881,015
7.75 1995 35,000,000 35,136,500
8.00 2021 35,000,000 (b) 34,730,147
8.625 1997 50,745,000 52,047,619
Resolution Funding Corp
Zero Coupon 7.61 2017 79,000,000 (c) 12,534,930
Zero Coupon 7.89 2016 85,900,000 (b,c) 15,076,300
Zero Coupon 7.98 2016 32,000,000 (c) 5,512,960
Zero Coupon 8.11 2016 35,073,000 (c) 5,798,970
Zero Coupon 8.12 2004 7,899,000 (b,c) 3,682,592
Zero Coupon 8.18 2005 13,000,000 (c) 5,414,759
Zero Coupon 8.19 2014 48,000,000 (c) 9,933,110
Zero Coupon 8.20 2005 38,048,000 (c) 16,664,259
Zero Coupon 8.27 2014 10,000,000 (c) 1,993,399
Zero Coupon 8.35 2006 48,000,000 (c) 19,266,715
Zero Coupon 8.94 2006 25,000,000 (c) 10,226,998
Zero Coupon 8.95 2006 68,000,000 (c) 26,160,946
_____________
Total 341,277,316
_____________________________________________________________________________________________________________________________
Mortgage-backed securities (8.9%)
Federal Home Loan Bank 8.00 2014 5,000,000 4,775,000
Federal Home Loan Mtge Corp
8.00 1994-17 14,493 13,836
8.50 1994-17 626,039 614,692
8.50 1994-19 389,537 382,477
8.50 1994-22 13,066,222 12,874,312
9.00 1994-20 5,357,334 5,392,491
9.00 2021 3,069,373 3,100,067
Collateralized Mtge Obligation 8.50 2019 12,000,000 12,088,680
Federal Housing Admin 7.43 2024 9,469,816 8,901,627
Federal Natl Mtge Assn 6.50 1994-23 14,413,070 12,656,506
Collateralized Mtge Obligation 8.00 2021 12,125,090 11,348,599
8.50 2019 8,305,000 8,254,755
Principal Only 9.50 2018 2,022,791 (e) 1,352,741
Principal Only 9.89 2020 2,629,671 (e) 1,761,327
Trust Series Z 6.00 2024 17,692,020 (d) 9,788,906
See accompanying notes to investments in securities.
<PAGE>
PAGE 22
Govt Natl Mtge Assn 8.00 1994-24 17,381,477 16,572,152
8.00 1994-22 2,317,398 2,209,495
8.00 1994-23 4,730,952 4,510,667
Collateralized Mtge Obligation Trust 7.75 2012 3,924,695 3,866,649
Prudential Bache
Collateralized Mtge Obligation 7.965 2019 4,291,428 3,957,125
WestAm
Collateralized Mtge Obligation 8.95 2018 140,407 132,533
______________
Total 124,554,637
_____________________________________________________________________________________________________________________________
Financial (10.8%)
Banks and savings & loans (3.6%)
BankAmerica
Sub Nts 7.50 2002 8,810,000 8,259,375
Boatmen's Bancshares
Sub Nts 9.25 2001 8,950,000 9,263,250
First Chicago
Sr Nts 9.00 1999 7,900,000 8,067,875
First Security
Sub Nts 7.50 2002 15,000,000 13,987,500
NCNB
Sub Nts 9.125 2001 10,000,000 10,237,500
______________
Total 49,815,500
_____________________________________________________________________________________________________________________________
Financial services (6.5%)
Amer General Finance 6.35 1995 9,500,000 9,500,000
Aristar
Sr Deb 8.875 1998 10,520,000 10,677,800
Beneficial 9.125 1998 10,000,000 10,287,500
General Electric Capital
Reset Nt 8.65 1996 15,000,000 (f) 15,262,500
General Motors Acceptance 5.95 1998 8,000,000 7,370,000
7.00 2000 14,300,000 13,281,125
Goldman Sachs Group LP 7.125 2003 8,400,000 (g) 7,476,000
Greyhound Financial 7.95 1999 9,600,000 9,468,000
SunAmerica 9.95 2012 8,000,000 8,480,000
______________
Total 91,802,925
_____________________________________________________________________________________________________________________________
Insurance (0.7%)
Berkley (WR) 8.70 2022 10,000,000 9,687,500
USLICO
Cv 8.50 2014 600,000 598,500
_____________
Total 10,286,000
_____________________________________________________________________________________________________________________________
Industrial (10.0%)
Aerospace & defense (0.7%)
United Technologies 8.875 2019 10,000,000 10,075,000
_____________________________________________________________________________________________________________________________
Automotive & related (1.2%)
Ford Capital
Gtd Nts 9.00 1996 9,700,000 9,869,750
General Motors 8.875 2003 7,050,000 7,094,062
____________
Total 16,963,812
_______________________________________________________________________________________________________________________________
<PAGE>
PAGE 23
_____________________________________________________________________________________________________________________________
Beverages & tobacco (0.7%)
Philip Morris 8.10 1996 10,000,000 10,075,000
_____________________________________________________________________________________________________________________________
Chemicals (0.7%)
Dow Chemical 8.85 2021 10,000,000 9,875,000
_____________________________________________________________________________________________________________________________
Ecological services & equipment (0.5%)
Browning-Ferris Inds 9.25 % 2021 7,000,000 7,201,250
____________________________________________________________________________________________________________________________
Electronics (0.3%)
Harris 10.375 2018 3,900,000 4,216,875
_____________________________________________________________________________________________________________________________
Energy (2.7%)
PDV Amer 7.875 2003 16,500,000 13,571,250
Texaco Capital
Gtd Deb 7.50 2043 12,000,000 10,170,000
USX 9.125 2013 5,000,000 4,825,000
9.375 2022 9,200,000 8,935,500
______________
Total 37,501,750
_____________________________________________________________________________________________________________________________
Health care (0.9%)
Schering-Plough
Zero Coupon 7.31 1996 15,000,000 (c,g) 12,956,250
_____________________________________________________________________________________________________________________________
Industrial equipment & services (0.8%)
Deere 8.95 2019 10,000,000 10,487,500
_____________________________________________________________________________________________________________________________
Media (0.7%)
Time Warner Entertainment 8.375 2033 12,000,000 9,885,000
_____________________________________________________________________________________________________________________________
Paper & packaging (0.8%)
Georgia-Pacific
Credit Sensitive Nts 9.85 1997 10,000,000 10,250,000
_____________________________________________________________________________________________________________________________
Transportation (1.1%)
AMR 9.75 2021 2,500,000 2,368,750
10.00 2021 8,000,000 7,760,000
10.20 2020 5,000,000 4,937,500
______________
Total 15,066,250
_____________________________________________________________________________________________________________________________
Utilities (10.0%)
Electric (7.3%)
Arizona Public Service
1st Mtge 8.75 2024 5,000,000 4,731,250
Sale Lease-Backed Obligation 8.00 2015 9,000,000 7,953,750
Cajun Electric Power Cooperative
Mtge Trust 8.92 2019 4,960,000 5,127,400
Commonwealth Edison 6.50 2000 9,000,000 8,223,750
Long Island Lighting 9.625 2024 4,600,000 4,163,000
Ohio Edison 8.75 2022 11,000,000 10,697,500
Public Service Electric & Gas
1st Mtge 8.50 2022 13,859,000 13,044,784
RGS Funding
Sale Lease-Backed Obligation 9.82 2022 9,942,468 10,228,314
<PAGE>
PAGE 24
San Diego Gas & Electric
1st Mtge 9.625 2020 9,950,000 10,559,438
Southern California Edison
1st Mtge 8.875 2023 13,000,000 12,496,250
Texas Utilities Electric 10.35 2018 1,500,000 1,561,875
1st Mtge 9.75 2021 7,000,000 7,157,500
1st Mtge 9.875 2019 6,000,000 6,420,000
______________
Total 102,364,811
_____________________________________________________________________________________________________________________________
Gas (1.0%)
Williams Companies 7.50 1999 15,000,000 14,512,500
_____________________________________________________________________________________________________________________________
Telephone (1.7%)
GTE 10.25 2020 2,000,000 2,202,500
GTE South
1st Mtge 9.375 2030 13,975,000 14,044,875
New York Tel 9.375 2031 7,000,000 7,332,500
______________
Total 23,579,875
_____________________________________________________________________________________________________________________________
Foreign (15.2%)(h)
ABN Amro Bank
(U.S. Dollar) 7.75 2023 12,000,000 10,620,000
Alcan Aluminium
(U.S. Dollar) 8.875 2022 9,600,000 9,312,000
Austria Republic Euro
(U.S. Dollar) 10.00 1998 5,000,000 5,258,000
Euratom Euro
(U.S. Dollar) 7.75 1997 6,100,000 6,092,375
Guang Dong Enterprise
(U.S. Dollar) 8.75 2003 15,000,000 (g) 13,443,750
Hanson Inds Cv
(British Pound) 9.50 2006 1,200,000 1,942,992
Hydro-Quebec
(Canadian Dollar) 9.50 2030 10,000,000 10,387,500
Intl Finance Euro
(U.S. Dollar) 8.25 1996 8,000,000 8,038,400
Intl Bank Reconstruction & Development
(U.S. Dollar) 12.375 2002 6,000,000 7,500,000
Japan Finance
(U.S. Dollar) 9.25 1998 25,950,000 27,052,875
KFW Intl Finance
(U.S. Dollar) 8.50 1999 10,000,000 10,175,000
Kingdom of Denmark Euro
(U.S. Dollar) 7.25 1996 8,000,000 7,924,320
Korea Electric Power
(U.S. Dollar) 6.375 2003 9,000,000 7,661,250
7.75 2013 5,000,000 4,337,500
8.00 2002 9,000,000 8,595,000
Province of Quebec
(U.S. Dollar) 11.00 2015 16,150,000 18,209,125
Republic of Columbia
(U.S. Dollar) 7.25 2004 13,400,000 11,323,000
Republic of Italy
(U.S. Dollar) 6.875 2023 22,000,000 17,132,500
<PAGE>
PAGE 25
Roche Holdings
(U.S. Dollar) 2.75 2000 12,000,000 9,195,000
Tokyo Electric Power Euro
(U.S. Dollar) 6.125 2003 21,500,000 18,624,375
______________
Total 212,824,962
_____________________________________________________________________________________________________________________________
Total bonds
(Cost: $1,170,797,535) $1,125,572,213
_____________________________________________________________________________________________________________________________
<CAPTION>
Preferred stocks (0.4%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
First Chicago
2.875% Cm Cv 60,000 $ 2,790,000
Sonoco Products
2.25% Cv 51,200 2,470,400
_____________________________________________________________________________________________________________________________
Total preferred stocks
(Cost: $5,559,300) $ 5,260,400
_____________________________________________________________________________________________________________________________
Options purchased (--%)
Issuer Number Exercise Expiration Value(a)
of contracts price date
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
March Treasury Bond Futures 500 $94 Feb. 1995 $ 242,185
_____________________________________________________________________________________________________________________________
Total options purchased
(Cost: $323,815) $ 242,185
_____________________________________________________________________________________________________________________________
Short-term securities (18.3%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable
date of at
purchase maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (0.9%)
Federal Home Loan Bank Disc Note
12-27-94 5.45% $ 7,000,000 $ 6,972,599
Federal Natl Mtge Assn Disc Notes
12-06-94 4.95 2,600,000 2,598,220
12-22-94 5.43 3,400,000 3,389,270
______________
Total 12,960,089
_____________________________________________________________________________________________________________________________
Certificate of deposit (0.4%)
Natl Bank of Detroit
12-08-94 5.16 5,000,000 4,994,328
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 26
Commercial paper (16.4%)
Amer General Finance
01-12-95 5.54 5,700,000 5,661,169
Amgen
12-02-94 4.86 5,000,000 4,999,255
AT&T
02-15-95 5.87 5,200,000 5,132,154
Avco Financial Services
01-26-95 5.89 9,500,000 9,413,846
Banc One Diversified Services
12-06-94 5.15 6,500,000 6,494,901
01-12-95 5.51 4,500,000 4,469,344
Beneficial
12-12-94 5.25 7,800,000 7,786,897
12-28-94 5.53 5,100,000 5,078,962
Campbell Soup
12-22-94 5.25 2,600,000 (i) 2,592,083
Chevron Oil Finance
12-01-94 4.93 8,600,000 8,600,000
CIT Group Holdings
01-18-95 5.78 6,000,000 5,951,089
Colgate Palmolive
12-09-94 5.19 5,200,000 (i) 5,194,026
12-09-94 5.32 9,200,000 (i) 9,189,164
Consolidated Rail
12-13-94 5.19 5,800,000 (i) 5,790,024
Corporate Asset Funding
12-15-94 5.52 6,000,000 5,987,167
12-30-94 5.53 5,000,000 4,977,847
01-19-95 5.81 6,000,000 5,953,042
Eiger Capital
01-18-95 5.77 4,100,000 (i) 4,068,731
Fleet Funding
01-11-95 5.66 6,800,000 (i) 6,753,674
01-12-95 5.53 2,200,000 (i) 2,184,672
Ford Motor Credit
12-19-94 5.55 5,500,000 5,484,820
01-24-95 5.83 6,400,000 6,340,940
General Mills
12-20-94 5.52 9,400,000 9,372,763
Household Finance
01-20-95 5.82 4,000,000 3,967,944
01-27-95 5.78 4,500,000 4,457,933
Kredietbank North Amer Finance
02-28-95 5.97 10,800,000 10,669,590
Lilly (Eli)
12-13-94 5.50 5,000,000 4,990,867
02-01-95 5.85 7,500,000 7,419,937
Merrill Lynch
01-13-95 5.79 6,000,000 5,958,792
Metlife
12-08-94 5.17 5,300,000 5,294,693
Mobile Australia Finance
(Delaware)
12-06-94 5.02 5,200,000 (i) 5,196,389
Morgan Stanley
01-05-95 5.74 7,500,000 7,458,437
<PAGE>
PAGE 27
Pfizer
12-21-94 5.53 9,000,000 8,972,500
Reed Elsevier
01-09-95 5.75 3,600,000 (i) 3,577,770
SmithKline Beecham
12-05-94 5.07 3,200,000 3,198,204
Southern California Gas
02-10-95 5.85 2,200,000 2,173,160
Southwestern Bell Capital
12-01-94 4.88 6,500,000 (i) 6,500,000
01-23-95 5.84 4,700,000 (i) 4,658,143
Sysco
01-20-95 5.81 3,400,000 (i) 3,372,847
USAA Capital
12-14-94 5.19 4,600,000 4,590,623
_____________
Total 229,934,399
_______________________________________________________________________________________________________________________________
Letter of credit (0.6%)
Bank of Amer-
AES Barbers Point
12-01-94 4.94 8,000,000 8,000,000
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $255,900,447) $ 255,888,816
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $1,432,581,097)(j) $1,386,963,614
_____________________________________________________________________________________________________________________________
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 5 to the financial statements.
(c) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition.
(d) This security is a collateralized mortgage obligation that pays no interest or principal during its initial accrual period
until payment of previous series within the trust have been paid off. Interest is accrued at an effective yield; similar
to a zero coupon bond.
(e) Principal only represents securities that entitle holders to receive only principal payments on the underlying mortgages.
The yield to maturity of a principal only is sensitive to the rate of principal payments on the underlying mortgage assets.
A slow (rapid) rate of principal repayments may have an adverse (positive) effect on yield to maturity. Interest rate
disclosed represents current yield based upon the current cost basis and estimated timing of future cash flows.
(f) Interest rate varies, rate shown is the effective rate on Nov. 30, 1994.
(g) 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.
(h) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in the
currency indicated.
(i) 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.
(j) On Nov. 30, 1994, the cost of securities for federal income tax purposes was $1,430,918,060
and the aggregate gross unrealized appreciation and depreciation based on that cost was:
<CAPTION>
<S> <C>
Unrealized appreciation $ 15,022,806
Unrealized depreciation (58,977,252)
____________________________________________________________________________________________
Net unrealized depreciation $(43,954,446)
____________________________________________________________________________________________
/TABLE
<PAGE>
PAGE 28
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conservation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposits (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income. Secondary
objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
seek high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed-income
securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) cornucopia
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher
rated, lower risk bond categories, or the equivalent, and in
government bonds.
(icon of) greek column
<PAGE>
PAGE 29
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
Invests in high-quality corporate bonds and other highly rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests primarily in securities issued or guaranteed as to the
timely payment of principal and interest by the U.S. government,
its agencies and instrumentalities. Seeks a high level of current
income and safety of principal consistent with its type of
investments.
(icon of) 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
Invests primarily in medium- and lower-quality municipal bonds and
notes. Lower-quality securities generally involve greater risk of
principal and income.
(icon of) shield with basket of apples enclosed
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities to
provide income to residents of each respective state that is exempt
from federal, state and local income taxes. (New York is the only
state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
<PAGE>
PAGE 30
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government
units, with at least 75% in the four highest rated, lowest risk
bond categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the fund but does not guarantee
the market value of the fund's shares.
(icon of) shield with 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
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The fund may invest up to 20% of
its assets in the U.S. market.
(icon of) three flags
IDS Strategy, Worldwide Growth Fund
Invests primarily in common stocks of companies throughout the
world that offer potential for superior growth. Holdings may range
from small- to large-capitalization stocks, including those of
companies involved in areas of rapid economic growth.
(icon of) chess piece
IDS Managed Retirement Fund
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
IDS Equity Select Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of capital and
income.
(icon of) three apple trees
<PAGE>
PAGE 31
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by our research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund
Invests in common stock of companies representing many sectors 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
Invests primarily in the stocks of public utility companies to seek
high current income and growth of income and capital with reduced
volatility.
(icon of) electrical cord
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to seek high
current income and, secondarily, to benefit from the growth
potential offered by stock investments.
(icon of) 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
Growth investments
Funds in this group seek capital growth, primarily from common
stocks. They are high risk mutual funds with a potential for high
reward.
<PAGE>
PAGE 32
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Strategy, Aggressive 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 Growth Fund
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) flower
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy. These
companies offer above-average potential for long-term growth.
(icon of) world
IDS New Dimensions Fund
Invests primarily in companies with significant growth potential
due to superiority in technology, marketing or management. The
fund frequently changes its industry mix.
(icon of) dimension
IDS Progressive Fund
Invests primarily in undervalued common stocks. The fund holds
stocks for the long term with the goal of capital growth.
(icon of) shooting star
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against
inflation.
<PAGE>
PAGE 33
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic
companies that explore for, mine and process or distribute gold and
other precious metals. This is the most aggressive and most
speculative IDS mutual fund.
(icon of) cart of precious gems
For more complete information about any of these funds, including
charges and expenses, you can obtain a prospectus by contacting
your financial advisor or writing to American Express Shareholder
Service, P.O. Box 534, Minneapolis, MN 55440-0534. Read it
carefully before you invest or send money.<PAGE>
PAGE 34
Federal income tax information
<TABLE>
<CAPTION>
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, 1994
Income distributions
taxable as dividend income,
0.41% qualifying for deduction by corporations.
Payable date Per share
<S> <C>
Dec. 28, 1993 $0.10030
Jan. 26, 1994 0.04740
Feb. 24, 1994 0.04910
March 25, 1994 0.04960
April 25, 1994 0.05150
May 25, 1994 0.04870
June 27, 1994 0.05290
July 26, 1994 0.04760
Aug. 26, 1994 0.05020
Sept. 26, 1994 0.04917
Oct. 26, 1994 0.04693
Nov. 28, 1994 0.05212
Total $0.64552
Capital gain distribution
taxable as long-term capital gain.
<CAPTION>
Payable date Per share
<S> <C>
Dec. 28, 1993 $0.10790
Total distributions $0.75342
The distribution of $0.20820 per share, payable
Dec. 28, 1993, consisted of $0.05870 from net
investment income, $0.04160 from net short-term capital gains
(a total of $0.10030 taxable as dividend income) and
$0.10790 from net long-term capital gains.
/TABLE
<PAGE>
PAGE 35
Quick telephone reference
American Express Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
American Express Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
American Express Infoline
Automated account information (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
AMERICAN EXPRESS FINANCIAL ADVISORS
IDS Selective Fund
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
PAGE 36
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.
