<PAGE>
PAGE 1
IDS EQUITY SELECT FUND
(formerly IDS Equity Plus Fund)
1994 annual report
(Icon of) trees
The goals of IDS Equity Select Fund, Inc. are growth of capital and
income. The fund invests primarily in moderate growth stocks,
higher yielding equities and debt securities.
Distributed by American Express Financial Advisors Inc.<PAGE>
PAGE 2
(icon of) trees
Budding blue chips
When most people think of stocks, they tend to focus on the notable
names in American business -- the blue chips, as they're known.
But there's another group of companies that, though smaller and
less well-known, boast impressive business histories. These mid-
size companies, which we call "budding blue chips," are the
foundation of Equity Select Fund. Often, they enjoy a dominant
position in their business. For an investor, this means an
opportunity to participate in the growth that's likely for these
companies and the potential for rising stock prices.<PAGE>
PAGE 3
Contents
The purpose of this annual report is 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 24
Federal income tax information 27<PAGE>
PAGE 4
To our shareholders
(photo of) William R. Pearce
President of the fund
(photo of) Joe Barsky
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 A change to the funds' "fundamental investment policies" that,
among other things, allows the board to modify them should it deem
appropriate.
o And, lastly, a change in the name of this fund - from Equity
Plus to Equity Select. (The fund's investment objective and
management style remain the same.)
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
The stocks of small and mid-size companies, which form the core of
this fund, found themselves under considerable selling pressure
throughout much of the past fiscal year, covering December 1993
through November 1994. As a result, many of these issues
experienced price declines that ultimately caused the fund to lose
value for the period. (Please note that much of the decline in net
asset value was a result of a capital gain distribution in December
1993. The amount of the capital gain is automatically deducted from
the fund's net asset value.)
Reflecting the volatile nature of the stock market, the fund
experienced wide performance swings during the year. During the
first two months, for example, the fund enjoyed a strong surge, led
by our holdings in the technology and housing-related sectors.
About that point, the market underwent a broad shift; larger stocks
began coming into favor at the expense of small and mid-size
stocks, even though the companies in the latter group often
continued to enjoy strong business results. Put another way, the<PAGE>
PAGE 5
companies would perform very well but their stocks did not respond
accordingly.
Rate rise takes hold
The other major influence on the market and fund emerged in
February, when the Federal Reserve Board started raising interest
rates in an effort to temper economic growth and head off a
potential increase in the inflation rate. As often happens during
interest-rate rises, the stock market went into a retreat that, in
this case, lasted for three months. Small and mid-size stocks were
hit the hardest during this time, with our former winners, the
housing-related stocks, among the poorest performers.
Rising interest rates generally kept stocks off balance through the
end of the fiscal period. The environment was particularly
difficult for this fund because we owned a number of housing and
auto-related stocks - two groups that typically struggle in a
higher-interest-rate environment. Despite that, we did enjoy
occasional respites, highlighted by excellent advances in July and
August that were keyed by our technology-related holdings.
As for portfolio changes during the year, the most notable were an
increase in exposure to technology stocks and a reduction in
financial services stocks. The biggest portion of the portfolio,
however, continues to consist of industrial and consumer-related
stocks.
Improving outlook
At this writing, the possibility of still higher interest rates is
keeping the stock market unsettled. We view this as a near-term
condition and believe that there will be enough favorable factors
to boost stock prices during the current fiscal year. More
important for this fund, small and mid-size stocks of good-quality,
growing companies appear to be in good position to rebound.
Naturally, after a difficult period such as this past one, it can
be tempting for investors to shy away from stocks. Given that, we
think it's worth remembering that, over many decades, stocks have
generated clearly higher returns than other types of investments.
What's more, because short-term market turns are virtually
impossible to predict consistently, being out of stocks for a few
months, or even weeks, can result in missing out on a sizable gain.
Therefore, we suggest that those who share our long-term investment
perspective will benefit most from the potential rewards that lie
ahead.
Joe Barsky
<PAGE>
PAGE 6
12-month performance
(All figures per share)
Net asset value (NAV)
Nov. 30, 1994 $ 10.31
Nov. 30, 1993 $ 12.04
Decrease $ (1.73)
Distributions
Dec. 1, 1993 - Nov. 30, 1994
From income $ 0.17
From capital gains $ 1.02
Total distributions $ 1.19
Total Return* (5.3%)
*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 7
<TABLE>
Your fund's ten largest holdings
<CAPTION>
________________________________________________________________________________________________________________
The ten holdings listed here make up 19.62% of the fund's net assets
Percent Value
(of fund's net assets) (as of Nov. 30, 1994)
_______________________________________________________________________________________________________
<S> <C> <C>
Pep Boys 2.51% $14,568,750
A retailer of auto parts, with more than 330 stores located
primarily in Southern California and the Delaware Valley,
Texas and the Southeast.
Worthington Industries 2.07 12,000,000
This processor of close-tolerance steel also manufactures
steel castings, pressure cylinders and custom plastic and precision metal
parts.
Harcourt General 2.00 11,659,375
A leading publisher of elementary and secondary school
textbooks. The company also has interests in the motion
picture industry through General Cinema Theaters and
specialty retailing through its ownership of Neiman Marcus,
Bergdorf Goodman and Contempo Casual Stores.
Sherwin-Williams 1.98 11,531,250
A leading producer and marketer of consumer and industrial
paints and coatings.
Crown Cork & Seal 1.95 11,325,000
A leading producer of packing materials, including metal cans
and plastic containers.
Intel 1.90 11,046,875
Designs and manufactures the microprocessor chips used in
all IBM and IBM-compatible personal computers.
Nucor Corporation 1.88 10,900,000
One of the largest and most profitable domestic steel
mini-mills, Nucor is a leading producer of joists and
girders used in construction.
Parametric Technology 1.79 10,425,000
A producer of software for the automation of complex engineering
tasks that are essential to the development of virtually all
manufactured products.
Clayton Homes 1.78 10,350,000
Clayton Homes produces and sells, both wholesale and retail,
manufactured homes. The company also provides related financial
and insurance services and develops, markets and manages
manufactured home communities.
Dayton Hudson 1.76 10,203,125
Daytons Hudson Corp. is a diversified retailer operating Mervyn's,
Target, Marshall Field's and Dayton/Hudson stores.
</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
- -10.01% +7.59% +13.09%
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 September) and fewer shares when the
per share market price is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
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 Equity Select Fund
Average annual total return
(as of Nov. 30, 1994)
1 year 5 years 10 years $34,216
- -10.01% +7.59% +13.09% S&P 500 Eqiuty
Stock Index Select
Fund
Lipper Growth &
$20,000 Income Fund 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 $20,676.
Standard & Poor's 500 Stock Index (S&P 500), an unmanaged list of
common stocks is frequently used as a general measure of market
performance. However, the S&P 500 companies are generally larger
than those in which the fund invests.
Lipper Growth and Income Fund Index, published by Lipper Analytical
Services, Inc., includes 30 funds that are generally similar to the
fund, although some funds in the index may have somewhat different
investment policies or objectives.
On the chart above you can see how the fund's total return compared
to two widely cited performance indexes, the S&P 500 and the Lipper
Growth & Income Fund Index. In comparing Equity Select Fund to the
two indexes, you should take account of the fact that the fund's
performance reflects the maximum sales charge of 5%, which such
charges are not reflected in the performance of the indexes. If
you were actually to buy either individual stocks or growth 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 auditor's report
The board of directors and shareholders
IDS Equity Select Fund, Inc.:
(formerly IDS Equity Plus Fund, Inc.)
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments in securities,
of IDS Equity Select 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 estimatets 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
Equity Select 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 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 11
<TABLE>
Financial statements
Statement of assets and liabilities
IDS Equity Select Fund, Inc.
Nov. 30, 1994
<CAPTION>
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $485,269,873) $573,070,939
Cash in bank on demand deposit 2,197,212
Dividends and accrued interest receivable 1,265,417
Receivable for investment securities sold 16,128,021
U.S. government securities held as collateral (Note 4) 9,876,953
_____________________________________________________________________________________________________________
Total assets 602,538,542
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Payable for investment securities purchased 5,012,925
Payable upon return of securities loaned (Note 4) 16,036,953
Accrued investment management and services fee 233,479
Accrued distribution fee 23,716
Accrued transfer agency fee 59,036
Other accrued expenses 93,792
Open option contracts written, at value (premium received $57,373)(Note 5) 31,250
_____________________________________________________________________________________________________________
Total liabilities 21,491,151
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $581,047,391
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 56,378,201 shares $ 563,782
Additional paid-in capital 463,711,060
Undistributed net investment income 1,406,669
Accumulated net realized gain (Note 1) 27,538,669
Unrealized appreciation 87,827,189
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $581,047,391
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 10.31
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 12
Financial statements
Statement of operations
IDS Equity Select Fund, Inc.
Year ended Nov. 30, 1994
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
<S> <C>
Income:
Dividends (net of foreign taxes withheld of $77,590) $ 8,650,075
Interest 1,298,878
_____________________________________________________________________________________________________________
Total income 9,948,953
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 3,061,420
Distribution fee 293,588
Transfer agency fee 730,215
Compensation of directors 6,677
Compensation of officers 6,026
Custodian fees 97,658
Postage 84,222
Registration fees 37,223
Reports to shareholders 27,174
Audit fees 22,000
Administrative 10,157
Other 15,922
_____________________________________________________________________________________________________________
Total expenses 4,392,282
_____________________________________________________________________________________________________________
Investment income -- net 5,556,671
_____________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions (including loss of $3,667
from foreign currency transactions) (Note 3) 27,537,749
Net realized gain on expired option contracts written (Note 5) 1,101
_____________________________________________________________________________________________________________
Net realized gain on investments and foreign currency 27,538,850
Net change in unrealized appreciation or depreciation (65,795,357)
_____________________________________________________________________________________________________________
Net loss on investments and foreign currency (38,256,507)
_____________________________________________________________________________________________________________
Net decrease in net assets resulting from operations $(32,699,836)
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 13
Financial statements
Statements of changes in net assets
IDS Equity Select Fund, Inc.
Year ended Nov. 30,
<CAPTION>
_____________________________________________________________________________________________________________
Operations and distributions 1994 1993
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 5,556,671 $ 5,696,350
Net realized gain on investments and foreign currency 27,538,850 56,475,888
Net change in unrealized appreciation or depreciation (65,795,357) 4,317,731
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations (32,699,836) 66,489,969
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (5,298,428) (5,557,608)
Net realized gain (56,481,045) (19,786,644)
_____________________________________________________________________________________________________________
Total distributions (61,779,473) (25,344,252)
_____________________________________________________________________________________________________________
Capital share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
5,845,726 and 11,347,396 shares (Note 2) 64,577,273 131,816,576
Net asset value of 5,172,792 and 2,148,496 shares
issued in reinvestment of distributions 58,528,158 23,909,060
Payments for redemptions of
5,934,761 and 4,683,577 shares (64,956,218) (54,866,937)
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions
representing net addition of
5,083,757 and 8,812,315 shares 58,149,213 100,858,699
_____________________________________________________________________________________________________________
Total increase (decrease) in net assets (36,330,096) 142,004,416
Net assets at beginning of year 617,377,487 475,373,071
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$1,406,669 and $1,142,297) $581,047,391 $617,377,487
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 14
Notes to financial statements
IDS Equity Select 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, including
illiquid secutities, 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
the 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.
<PAGE>
PAGE 15
Option contracts are valued daily at the closing
prices on their primary exchanges and unrealized
appreciation or depreciation is recorded. The
fund will realize a gain or loss upon expiration
or closing of the option transaction. When an
option is exercised, the proceeds on sales for a
written call option, the purchase cost for a
written put option or the cost of a security for
a purchased put or call option is adjusted by the
amount of premium received or paid.
Futures transactions
In order to gain exposure to or protect itself
from changes in the market, the fund may buy and
sell stock index futures contracts traded on any
U.S. or foreign exchange. The fund also may but
or write put and call options on these 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. The effect of changes in
foreign exchanges 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 for 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 dividend, interest
income and foreign withholding taxes.
<PAGE>
PAGE 16
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.
Also, due to the timing of dividend
distributions, the fiscal year in which amounts
are distributed may differ from the year that the
income or realized gains (losses) were recorded
by the fund.
On the statement of assets and liabilities, as a
result of permanent book-to-tax differences,
undistributed net investment income has been
increased by $6,129 and accumulated net realized
gain has been increased by $5,997 resulting in a
net reclassification adjustment to decrease paid-
in-capital by $12,126.
Dividends to shareholders
Dividends from net investment income, declared
and paid each calendar quarter, 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.
<PAGE>
PAGE 17 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 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 0.14% of
average daily net assets. The fee is adjusted
upward or downward by a performance incentive
adjustment based on the fund's average daily net
assets over a rolling 12-month period as measured
against the change in the Lipper Growth and
Income Fund Index. The maximum adjustment is
0.08% of the fund's average daily net assets
after deducting 1% from the performance
difference. If the performance difference is less
than 1%, the adjustment will be zero. The
adjustment decreased the fee by $247,430 for the
year ended Nov. 30, 1994.
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 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
$1,289,833 for the year ended Nov. 30, 1994. The
fund also pays custodian fees to American Express
Trust Company, an affiliate of American Express
Financial Corporation.
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<PAGE>
PAGE 18
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 $224 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 $267,759,657 and $284,312,394,
respectively, for the year ended Nov. 30, 1994.
Realized gains and losses are determined on an
identified cost basis.
Brokerage commissions paid to brokers affiliated
with American Express Financial Corporation were
$138,381 for the year ended Nov. 30, 1994.
___________________________________________________________________
4. Lending of portfolio securities
At Nov. 30, 1994, securities valued at
$15,451,900 were on loan to brokers. For
collateral, the fund received $6,160,000 in cash
and U.S. government securities valued at
$9,876,953. Income from securities lending
amounted to $25,015 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.
___________________________________________________________________
5. Option contracts written
The number of contracts and premium amounts
associated with option contracts written is as
follows:
<TABLE>
Year ended Nov. 30, 1994
______________________________________________
Puts Calls
Contracts Premium Contracts Premium
___________________________________________________________________
<S> <C> <C> <C> <C>
Balance Nov. 30, 1993 -- $ -- -- $ --
Open 512 31,350 500 27,124
Expired (12) (1,101) -- --
___________________________________________________________________
Balance Nov. 30, 1994 500 $30,249 500 $27,124
/TABLE
<PAGE>
PAGE 19
6. Illiquid securities
At Nov. 30, 1994, investments in securities
included issues that are illiquid. The fund
currently limitsinvestments in illiquid
securities to 10% of the netassets, at market
value, at the time of purchase. Theaggregate
value of such securities at Nov. 30, 1994,was
$8,010,400 which represents 1.4% of net assets.
Pursuant to guidelines adopted by the fund's
boardof directors, certain unregistered
securities aredetermined to be liquid and are not
included within the 10% limitation specified
above.
<PAGE>
PAGE 20
7. Financial highlights
<TABLE>
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*
<CAPTION>
1994*** 1993 1992 1991 1990 1989 1988 1987 1986 1985**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $12.04 $11.19 $10.18 $ 8.82 $10.01 $ 8.09 $7.38 $9.55 $8.87 $7.23
beginning of year
Income from investment operations:
Net investment income .10 .11 .13 .18 .26 .34 .24 .24 .24 .28
Net gains (losses) (.64) 1.31 1.69 1.75 (.55) 1.89 .94 (.27) 1.98 1.81
(both realized and
unrealized)
Total from investment (.54) 1.42 1.82 1.93 (.29) 2.23 1.18 (.03) 2.22 2.09
operations
Less distributions:
Dividends from net (.09) (.11) (.14) (.20) (.27) (.31) (.23) (.26) (.24) (.26)
investment income
Distributions from (1.10) (.46) (.67) (.37) (.63) -- (.24) (1.88) (1.30) (.19)
realized gains
Total distributions (1.19) (.57) (.81) (.57) (.90) (.31) (.47) (2.14) (1.54) (.45)
Net asset value, $10.31 $12.04 $11.19 $10.18 $ 8.82 $10.01 $8.09 $7.38 $9.55 $8.87
end of year
Ratios/supplemental data
1994*** 1993 1992 1991 1990 1989 1988 1987 1986 1985**
Net assets, end of year $581 $617 $475 $400 $348 $392 $357 $360 $377 $337
(in millions)
Ratio of expenses to .71% .77% .74% .67% .63% .57% .68% .57% .51% .53%
average daily net assets
Ratio of net income to .90% 1.00% 1.22% 1.82% 2.78% 3.58% 2.80% 2.13% 2.33% 3.06%
average daily net assets
Portfolio turnover rate 46% 41% 42% 46% 55% 49% 81% 115% 72% 110%
(excluding short-term
securities)
Total return**** (5.3%) 13.2% 19.2% 22.9% (3.3%) 27.9% 16.0% (0.8%) 25.0% 28.9%
*For a share outstanding throughout the year. Rounded to the nearest cent.
**On July 10, 1985, shareholders approved a change in the fund's goals from
capital appreciation to growth of capital and income, and a change in the
fund's name from IDS Variable Payment Fund, Inc. to IDS Equity Plus Fund, Inc.
***On Nov. 10, 1994, the fund's named changed from IDS Equity Plus Fund, Inc. to IDS
Equity Select Fund, Inc.
****Total return does not reflect payment of a sales charge.
/TABLE
<PAGE>
PAGE 21
<TABLE>
Investments in securities
IDS Equity Select Fund, Inc. (Percentages represent value of
Nov. 30, 1994 investments compared to net assets)
<CAPTION>
_____________________________________________________________________________________________________________________________
Common stocks (89.0%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<C> <C> <C>
Aerospace & defense (2.7%)
Martin Marietta 50,000 $ 2,168,750
Thiokol 350,000 9,318,750
United Technologies 75,000 4,387,500
____________
Total 15,875,000
_____________________________________________________________________________________________________________________________
Automotive & related (6.1%)
Dana 400,000 8,650,000
Ford Motor 200,000 (b) 5,425,000
Goodyear Tire & Rubber 275,000 9,315,625
Worthington Inds 600,000 12,000,000
____________
Total 35,390,625
_____________________________________________________________________________________________________________________________
Banks and savings & loans (1.6%)
First Chicago 200,000 9,300,000
_____________________________________________________________________________________________________________________________
Building materials (7.6%)
Clayton Homes 600,000 (c) 10,350,000
Lennar 525,000 8,203,125
Martin Marietta Materials 325,000 5,850,000
Sherwin-Williams 375,000 11,531,250
Williamette Inds 200,000 8,475,000
____________
Total 44,409,375
_____________________________________________________________________________________________________________________________
Chemicals (3.1%)
Hanna (MA) 400,000 9,000,000
Pall 500,000 8,875,000
____________
Total 17,875,000
_____________________________________________________________________________________________________________________________
Communications equipment (1.2%)
Airtouch Communications 250,000 (c) 6,781,250
_____________________________________________________________________________________________________________________________
Computers & office equipment (11.8%)
Amer Power Conversion 325,000 (c) 5,240,625
Banyan Systems 300,000 (b,c) 5,850,000
Cisco Systems 200,000 (c) 6,450,000
See accompanying notes to investments in securities.
<PAGE>
PAGE 22
Computer Assn Intl 115,000 5,232,500
Hewlett Packard 80,000 7,840,000
Intel 175,000 11,046,875
Parametric Technology 300,000 (c) 10,425,000
Solectron 325,000 (b,c) 8,815,625
Sterling Software 100,000 (c) 3,075,000
Tech Data 275,000 (c) 4,675,000
____________
Total 68,650,625
_____________________________________________________________________________________________________________________________
Energy (4.7%)
Enron Oil & Gas 450,000 (f) 8,156,250
Enterra 300,000 (c) 5,925,000
Fluor 160,000 6,860,000
Western Atlas 150,000 (c) 6,543,750
____________
Total 27,485,000
_____________________________________________________________________________________________________________________________
Financial services (2.5%)
Morgan Stanley Group 100,000 (b) 5,912,500
Northern Trust 250,000 8,437,500
____________
Total 14,350,000
_____________________________________________________________________________________________________________________________
Health care (2.6%)
Beckman Instruments 200,000 5,725,000
Genentech 200,000 (c) 9,400,000
____________
Total 15,125,000
_____________________________________________________________________________________________________________________________
Household products (2.5%)
Rubbermaid 310,000 (b) 8,370,000
Shaw Inds 450,000 6,300,000
____________
Total 14,670,000
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 23
Industrial equipment & services (5.9%)
Caterpillar 37,500 2,025,000
Giddings & Lewis 400,000 5,700,000
Illinois Tool Works 250,000 10,125,000
Teleflex 270,000 9,618,750
Trinity Inds 200,000 6,550,000
____________
Total 34,018,750
_____________________________________________________________________________________________________________________________
Industrial transportation (4.4%)
Conrail 150,000 7,800,000
CSX 135,000 9,382,500
Union Pacific 185,000 8,602,500
____________
Total 25,785,000
_____________________________________________________________________________________________________________________________
Insurance (3.9%)
ACE Limited 300,000 6,562,500
Tempest Reinsurance 80,000 (c,g) 8,010,400
Transatlantic Holdings 150,000 7,818,750
____________
Total 22,391,650
_______________________________________________________________________________________________________________________________
Media (6.3%)
Harcourt General 325,000 11,659,375
Houghton Mifflin 200,000 9,125,000
McGraw-Hill 150,000 10,181,250
Multimedia 200,000 5,750,000
____________
Total 36,715,625
_____________________________________________________________________________________________________________________________
Metals (3.3%)
Aluminum Co Amer 100,000 8,162,500
Nucor 200,000 10,900,000
____________
Total 19,062,500
_____________________________________________________________________________________________________________________________
Paper & packaging (3.5%)
Crown Cork & Seal 300,000 (c) 11,325,000
Union Camp 200,000 9,275,000
____________
Total 20,600,000
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 24
Retail (8.8%)
Albertson's 350,000 10,062,500
Dayton Hudson 125,000 10,203,125
Gap 150,000 5,287,500
Home Depot 81,300 3,760,125
Pep Boys-Manny Moe & Jack 450,000 14,568,750
Sysco 275,000 7,081,250
____________
Total 50,963,250
_____________________________________________________________________________________________________________________________
Soaps & cosmetics (1.7%)
Procter & Gamble 160,000 (b) 10,000,000
_____________________________________________________________________________________________________________________________
Foreign (4.8%)(d)
BBC Brown Boveri 8,500 (c) 7,137,841
Desc Sociedad ADR 100,000 (c) 2,925,000
Renaissance Energy 300,000 (c) 6,380,430
Renaissance Energy 17,900 (c,e) 380,699
Tsudakoma 325,000 2,938,325
YPF 350,000 7,918,750
____________
Total 27,681,045
_____________________________________________________________________________________________________________________________
Total common stocks
(Cost: $429,328,629) $517,129,695
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 25
_______________________________________________________________________________________________________________________________
<CAPTION>
Short-term securities (9.6%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (0.9%)
Federal Natl Mtge Assn
Disc Note
12-27-94 5.46% $5,400,000 $ 5,378,823
_____________________________________________________________________________________________________________________________
Commercial paper (8.7%)
Amer General Finance
12-29-94 5.58 2,500,000 2,489,209
Avco Financial Services
01-26-95 5.86 4,362,000 4,322,442
Eiger Capital
01-04-95 5.88 5,000,000 (h) 4,972,375
General Mills
12-22-94 5.52 3,800,000 3,787,808
Kellogg
12-23-94 5.53 3,500,000 3,488,236
Lincoln Natl
12-23-94 5.55 2,300,000 (h) 2,292,241
Paribas Finance
12-27-94 5.51 3,300,000 3,286,939
01-06-95 5.87 2,600,000 2,584,842
Pfizer
12-21-94 5.53 3,800,000 3,788,389
Pioneer Hi-bred Intl
12-21-94 5.57 5,100,000 5,084,275
St. Paul Companies
12-16-94 5.51 3,900,000 (h) 3,891,046
SmithKline Beecham
12-05-94 5.07 1,400,000 1,399,215
Sysco
12-05-94 5.02 5,200,000 (h) 5,197,111
USAA Capital
01-03-95 5.95 4,000,000 3,978,293
____________
Total 50,562,421
________________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $55,941,244) $ 55,941,244
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $485,269,873)(i) $573,070,939
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 26
<CAPTION>
____________________________________________________________________________________________________________________________
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) Presently non-income producing.
(d) Foreign security values are stated in U.S. dollars.
(e) Represents a security sold under Rule 144A which is exempt from registration under the
Securities Act of 1933, as amended. This security has been determined to be liquid under
guidelines established by the board of directors.
(f) At Nov. 30, 1994, securities valued at $28,125 were held to cover open call options
written as follows:
Number of Exercise Expiration
Issuer contracts price date Value(a)
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
Enron Oil & Gas 500 $22 Dec. 1994 $28,125
_____________________________________________________________________________________
At Nov. 30, 1994, cash or short-term securities were designated to cover put options
written as follows:
Number of Exercise Expiration
Issuer contracts price date Value(a)
_____________________________________________________________________________________
Gap 500 $30 Dec. 1994 $ 3,125
_____________________________________________________________________________________
(g) Identifies issue considered to be illiquid (see Note 6 to the financial statements.) Information
concerning such holdings at Nov. 30, 1994, is as follows:
Acquistion
Secuity date Cost
________________________________________________________________
<S> <C> <C>
Tempest Reinsurance 09-13-93 $8,000,000
________________________________________________________________
(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) At Nov. 30, 1994, the cost of securities for federal income tax purposes was $485,269,873
and the aggregate gross unrealized appreciation and depreciation based on that cost was:
<S> <C>
Unrealized appreciation $102,622,854
Unrealized depreciation (14,821,788)
_____________________________________________________________________________________________________________________________
Net unrealized appreciation $ 87,801,066
_______________________________________________________________________________________________________________________
</TABLE> <PAGE>
PAGE
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 28
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 29
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 30
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
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 31
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 32
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 33
<TABLE>
Federal income tax information
IDS Equity Select Fund, Inc.
<CAPTION>
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 advisor on how to report
distributions for state and local purposes.
IDS Equity Select Fund, Inc.
Fiscal year ended Nov. 30, 1994
Income distributions
taxable as dividend income,
100% qualifying for deduction by corporations.
Payable date Per share
<S> <C>
Dec. 29, 1993 $0.0971
March 30, 1994 0.0250
June 29, 1994 0.0225
Sept. 29, 1994 0.0250
Total $0.1696
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 29, 1993 $1.0239
Total distributions $1.1935
The distribution of $1.1210 per share, payable Dec. 29, 1993,
consisted of $0.0225 derived from net investment income, $0.0746
from net short-term capital gains (a total of $0.0971 taxable
as dividend income) and $1.0239 from net long-term capital gains.
</TABLE> <PAGE>
PAGE 34
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 Equity Select Fund
(formerly IDS Equity Plus Fund)
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
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.
