IDS Equity Select Fund
1995 semiannual report
(icon of) three apple 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>
(icon of) three apple 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-sized 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.
Contents
From the president 3
From the portfolio manager 3
Ten largest holdings 5
Financial statements 6
Notes to financial statements 9
Investments in securities 21
Directors and officers 24
IDS mutual funds 25
<PAGE>
To our shareholders
From the president
As I indicated in the fund's annual report, new agreements between the
fund and American Express Financial Corporation were approved by
shareholders in November 1994. The new agreements became effective
when the fund began offering multiple classes of shares on March 20,
1995.
The advantage of offering more than a single class of shares is that
investors may choose how they wish to pay sales charges. These charges
compensate your American Express financial advisor (formerly called
your IDS planner), who is committed to providing you with outstanding
services.
Adding new classes of mutual fund shares does make the presentation of
financial information in this report more complex. However, we will
continue our effort to make the reports easier to read and understand.
Meanwhile, your American Express financial advisor is available to
answer your questions.
William R. Pearce
From the portfolio manager
A much-improved environment for U.S. stocks set the stage for a
rebound by IDS Equity Select Fund during the first half of the fiscal
year (December 1994 through May 1995). This market upturn resulted in
a double-digit total return for Class A shareholders during the past
six months. (The total return includes a capital gain distribution
last December, which reduced the fund's net asset value by a like
amount.)
Unlike 1994, when rapidly rising interest rates kept the stock market
off balance nearly all year, the past period saw long-term rates
decline. That, coupled with generally strong corporate profits and an
ongoing low inflation rate, provided support to the market almost from
the outset of the period.
Large stocks lead
For the most part, stocks of large companies were at the forefront of
the market's advance. That trend worked against us, because this fund
focuses mainly on mid-size companies, commonly called
"mid-caps." So, while we enjoyed good gains from a number of holdings,
overall we were unable to overcome that inherent disadvantage.
However, to allow us to participate in some of the success of the
"large caps," we did add to our holdings in that segment of the
market.
Looking at stock sectors, those in technology and financial services
were especially strong. We maintained exposure to both sectors and
enjoyed particularly good gains from our holdings of Intel and
Hewlett-Packard in the technology area, and Bank of Boston and First
Chicago among the financials.
<PAGE>
Other highly positive performers regardless of their business included
Goodyear, United Technologies, Illinois Tool Works and Crown Cork and
Seal.
Also working to the fund's benefit was our decision to hold relatively
small cash reserves, opting instead to keep more money at work in
stocks.
Dollar may be a key
As we make our way through the fiscal year, we think stock performance
will largely be determined by two factors: the fate of the U.S. dollar
and the strength of corporate profits. The dollar has spent much of
the past few years in a near free-fall compared to strong currencies
such as the Japanese yen and the German mark. At this writing, the
dollar seems to have gotten its feet under itself and, we suspect, may
appreciate in value in the months ahead. If that's the case, then
foreign investment in the U.S. should increase, which would likely
benefit the stock market.
U.S. corporate profits, on the other hand, have been strong for some
time, and we think they have enough momentum to maintain a reasonably
good pace even as the economy slows down. Of particular interest to us
at this time are stocks of retailing companies, especially those of
apparel marketers - a group we've added to in recent months. These
stocks picked up late in the past period, and we think they have more
positive performance ahead of them. Should they perform as we hope,
and small and mid-size stocks in general gain more favor, we expect to
enjoy another productive period.
Joe Barsky
(picture of William R. Pearce)
William R. Pearce
President of the fund
(picture of Joe Barsky)
Joe Barsky
Portfolio manager
<PAGE>
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
May 31, 1995 $10.87
Nov. 30, 1994 $10.31
Increase $ 0.56
Distributions
Dec. 1, 1994 - May 31, 1995
From income $0.06
From capital gains $0.49
Total distributions $0.55
Total return** +11.3%
Class B
March 20, 1995 - May 31, 1995
(All figures per share)
Net asset value (NAV)
May 31, 1995 $10.85
March 20, 1995* $10.37
Increase $ 0.48
Distributions
March 20, 1995*- May 31, 1995
From income $ 0.03
From capital gains $ -
Total distributions $ 0.03
Total return** +4.9%
Class Y
March 20, 1995 - May 31, 1995
(All figures per share)
Net asset value (NAV)
May 31, 1995 $10.87
March 20, 1995* $10.37
Increase $ 0.50
Distributions
March 20, 1995* - May 31, 1995
From income $ 0.03
From capital gains $ -
Total distributions $ 0.03
Total return** +5.1%
*Commencement of operations.
**The prospectus discusses the effect of the sales
charge on the various classes.
***The total return is a hypothetical investment in the fund
with all distributions reinvested.
<PAGE>
PAGE
<TABLE>
<CAPTION>
IDS Equity Select Fund, Inc.
Your fund's ten largest holdings
__________________________________________________________________________________________
(Pie Chart)
The ten holdings listed here make up 19.70% of the fund's net assets
Percent Value
(of fund's net assets) (as of May 31, 1995)
__________________________________________________________________________________________
<S> <C> <C>
Crown Cork & Seal 2.44% $15,027,780
A leading producer of packing materials, including metal
cans and plastic containers.
Sherwin-Williams 2.09 12,862,500
A leading producer and marketer of consumer and
industrial paints and coatings.
Pep Boys-Manny Moe & Jack 2.04 12,543,750
A retailer of auto parts, with more than 330 stores located
primarily in Southern California and the Delaware Valley,
Texas and the Southeast.
Clayton Homes 1.97 12,162,500
A company that 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.
Illinois Tool Works 1.94 11,940,000
A highly-regarded industrial manufacturer, with a broad,
leading-edge base of capital goods and consumer component products.
Goodyear Tire & Rubber 1.89 11,618,750
One of the largest manufacturers of tires in the world.
Harcourt General 1.88 11,584,375
A leading publisher of elementary and secondary school
textbooks. The company also has specialty retailing through
its ownership of Neiman Marcus and Bergdorf Goodman.
Tyco Intl 1.85 11,366,250
A diverse, New England-based producer of packaging,cable
manufacturing, fire extinguishing systems, alarms and controls,
and simple electronic parts.
Hewlett Packard 1.82 11,241,250
A premier technology company with a strong position in the technical
computer, computer peripherals, instruments and medical
products markets.
Teleflex 1.78 10,964,375
An application engineering company that designs and manufactures a
wide variety of proprietary products. The company's precision controls
often developed to customers' specifications, are used in aerospace
and defense, automotive, marine and medical industries.
</TABLE>
<PAGE>
PAGE
Financial statements
Statement of assets and liabilities
IDS Equity Select Fund, Inc.
May 31, 1995
<TABLE>
<CAPTION>
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
(Unaudited)
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $499,476,205) $630,553,184
Dividends and accrued interest receivable 1,534,404
Receivable for investment securities sold 4,395,640
U.S. government securities held as collateral (Note 4) 1,797,809
_____________________________________________________________________________________________________________
Total assets 638,281,037
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 1,770,787
Payable for investment securities purchased 8,677,483
Payable upon return of securities loaned (Note 4) 11,727,809
Accrued investment management services fee 62,240
Accrued distribution and service fees 20,703
Accrued transfer agency fee 12,582
Accrued administrative services fee 4,627
Other accrued expenses 81,704
_____________________________________________________________________________________________________________
Total liabilities 22,357,935
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $615,923,102
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value; $ 566,838
Additional paid-in capital 465,685,069
Undistributed net investment income 1,361,630
Accumulated net realized gain (Note 1) 17,232,586
Unrealized appreciation 131,076,979
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $615,923,102
_____________________________________________________________________________________________________________
Net assets applicable to outstanding shares: Class A $611,551,366
Class B $ 723,955
Class Y $ 3,647,781
Net asset value per share of outstanding capital stock: Class A shares 56,281,493 $ 10.87
Class B shares 66,712 $ 10.85
CLass Y share 335,606 $ 10.87
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statement of operations
IDS Equity Select Fund, Inc.
Six months ended May 31, 1995
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
(Unaudited)
Income:
Dividends (net of foreign taxes withheld of $7,895) $ 4,098,213
Interest 1,419,780
_____________________________________________________________________________________________________________
Total income 5,517,993
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management services fee 1,405,400
Distribution fee 84,806
Transfer agency fee 346,520
Service fee 211,056
Administrative services fee 47,419
Compensation of directors 8,053
Compensation of officers 3,290
Custodian fees 119,642
Postage 32,792
Registration fees 715
Reports to shareholders 33,836
Audit fees 11,000
Administrative 510
Other 883
_____________________________________________________________________________________________________________
Total expenses 2,305,922
_____________________________________________________________________________________________________________
Investment income -- net 3,212,071
_____________________________________________________________________________________________________________
Realized and unrealized gain -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions (including loss of $2,578
from foreign currency transactions) (Note 3) 17,181,890
Net realized gain on expired option contracts written (Note 5) 78,622
_____________________________________________________________________________________________________________
Net realized gain on investments and foreign currency 17,260,512
Net change in unrealized appreciation or depreciation 43,249,790
_____________________________________________________________________________________________________________
Net gain on investments and foreign currency 60,510,302
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $63,722,373
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Equity Select Fund, Inc.
_____________________________________________________________________________________________________________
Operations and distributions May 31, 1995 Nov. 30, 1994
_____________________________________________________________________________________________________________
Six months ended Year ended
(Unaudited)
<S> <C> <C>
Investment income -- net $ 3,212,071 $ 5,556,671
Net realized gain on investments and foreign currency 17,260,512 27,538,850
Net change in unrealized appreciation or depreciation 43,249,790 (65,795,357)
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations 63,722,373 (32,699,836)
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (3,248,237) (5,298,428)
Class B (145) --
Class Y (8,728) --
Net realized gain
Class A (27,566,617) (56,481,045)
_____________________________________________________________________________________________________________
Total distributions (30,823,727) (61,779,473)
_____________________________________________________________________________________________________________
Capital share transactions (Note 7)
_____________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 13,341,725 64,577,273
Class B shares 708,851 --
Class Y shares 3,518,505 --
Reinvestment of distributions at net asset value
Class A shares 29,189,298 58,528,158
Class B shares 145 --
Class Y shares 8,728 --
Payments for redemptions
Class A shares (44,754,372) (64,956,218)
Class B shares (Note 2) (1,532) --
CLass Y shares (34,283) --
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions 1,977,065 58,149,213
_____________________________________________________________________________________________________________
Total increase (decrease) in net assets 34,875,711 (36,330,096)
Net assets at beginning of period 581,047,391 617,377,487
_____________________________________________________________________________________________________________
Net assets at end of period
(including undistributed net investment income of
$1,361,630 and $1,406,669) $615,923,102 $581,047,391
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE
Notes to financial statements
IDS Equity Select Fund, Inc.
(Unaudited as to May 31, 1995)
______________________________________________________________________________
1. Summary of significant accounting policies
The fund is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company. The
fund offers Class A, Class B and Class Y shares. Class A shares are sold
with a front-end sales charge. Class B shares, which the fund began
offering on March 20, 1995, may be subject to a contingent deferred sales
charge, Class B shares automatically convert to Class A after eight
years. Class Y shares, which the fund also began offering on March 20,
1995, have no sales charge and are offered only to qualifying
institutional investors.
All classes of shares have identical voting, dividend, liquidation and
other rights, and the same terms and conditions, except that the level of
distribution fee, transfer agency fee, and service fee (class specific
expenses) differ among classes. Income, expenses (other than class
specific expenses) and realized and unrealized gains or losses on
investments are allocated to each class of shares based upon its relative
net assets.
Significant accounting policies followed by the fund are summarized
below:
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
securities, 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.
Option transactions
In order to produce incremental earnings, protect gains, and facilitate
buying and selling of securities for investment purposes, the fund may
buy or write options traded on any U.S. or foreign exchange or in the
over-the counter market where the completion of the obligation is
dependent upon the credit standing of the other party. The fund also may
buy 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 is that the fund may incur a loss if the market price of the
security decreases and the option is exercised. The risk in buying an
option is that the fund pays a premium whether or not the option is
exercised. The fund also has the additional risk of not being able to
enter into a closing transaction if a liquid secondary market does not
exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The
fund will realize a gain or loss upon expiration or closing of the option
transaction. When an option is exercised, the proceeds on sales for a
written call option, the purchase cost for a written put option or the
cost of a security for a purchased put or call option is adjusted by the
amount of premium received or paid.
Futures transactions
In order to gain exposure to or protect itself from changes in the
market, the fund may buy and sell stock index futures contracts traded on
any U.S. or foreign exchange. The fund also may buy 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
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 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>
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.
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>
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 a prior agreement that ended March 19, 1995, the fund paid
American Express Financial Corporation a fee for managing its
investments, recordkeeping and other specified services. The fee was 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 was 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 was 0.08% of the
fund's average daily net assets after deducting 1% from the performance
difference. If the performance difference was less than 1%, the
adjustment would have been zero. The adjustment decreased the fee by
$159,561 for the six months ended May 31, 1995.
Also under the terms of a prior agreement, the fund also paid 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 was reduced by
earnings on monies pending shareholder redemptions.
Effective March 20, 1995, when the fund began offering multiple classes
of shares, the fund entered into agreements with American Express
Financial Corporation for managing its portfolio, providing
administrative services and serving as transfer agent as follows: Under
its Investment Management Services Agreement, American Express Financial
Corporation determines which securities will be purchased, held or sold.
The management fee is a percentage of the fund's average daily net assets
in reducing percentages from 0.53% to 0.4% annually. The performance
incentive adjustment remains unchanged from the prior agreement. Under an
Administrative Services Agreement, the fund pays American Express
Financial Corporation for administration and accounting services at a
percentage of the fund's average daily net assets in reducing percentages
from 0.04% to 0.02% annually.
Under a separate Transfer Agency Agreement, American Express Financial
Corporation maintains shareholder accounts and records. The fund pays
American Express Financial Corporation an annual fee per shareholder
account for this services as follows:
o Class A $15
o Class B $16
o Class Y $15
Also effective March 20, 1995, the fund entered into agreements with
American Express Financial Advisors Inc. for distribution and shareholder
servicing -- related services as follows: Under the Distribution
Agreement, the fund pays a distribution fee at an annual rate of 0.75% of
the fund's average daily net assets attributable to Class B shares for
distribution-related services.
<PAGE>
Under a Shareholder Service Agreement, the fund pays a fee for service
provided to shareholders by financial advisors and other servicing
agents. The fee is calculated at a rate of 0.175% of the fund's average
daily net assets attributable to Class A and Class B shares.
American Express Financial 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 for distributing
fund shares were $273,745 for Class A for the six months ended May 31,
1995. 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 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 $6,911 for the six
months ended May 31, 1995.
<PAGE>
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $205,731,057 and $208,832,765,
respectively, for the six months ended May 31, 1995. Realized gains and
losses are determined on an identified cost basis.
Brokerage commissions paid to brokers affiliated with American Express
Financial Corporation were $86,580 for the six months ended May 31, 1995.
______________________________________________________________________________
4. Lending of portfolio securities
At May 31, 1995, securities valued at $9,671,250 were on loan to brokers.
For collateral, the fund received $9,930,000 in cash and U.S. government
securities valued at $1,797,809. Income from securities lending amounted
to $55,039 for the six months ended May 31, 1995. 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
<TABLE>
<CAPTION>
The number of contracts and premium amounts
associated with option contracts written is as
follows:
Six months ended May 31, 1995
_____________________________________________________
Puts Calls
Contracts Premium Contracts Premium
_____________________________________________________________________________
<S> <C> <C> <C> <C>
Balance Nov. 30, 1994 500 $30,249 500 $27,124
Opened -- -- 500 37,999
Expired (500) (30,249) (750) (48,373)
Exercised -- -- (250) (16,750)
______________________________________________________________________________
Balance May 31, 1995 -- $ -- -- $ --
______________________________________________________________________________
/TABLE
<PAGE>
6. Illiquid securities
At May 31, 1995, investments in securities included issues that are
illiquid. The fund currently limits investments in illiquid securities to
10% of the net assets, at market value, at the time of purchase. The
aggregate value of such securities at May 31, 1995 was $8,824,000,
representing 1.4% of net assets. Pursuant to guidelines adopted by the
fund's board of directors, certain unregistered securities are determined
to be liquid and are not included within the 10% limitation specified
above.
_____________________________________________________________________________
7. Capital share transactions
Transactions in shares of capital stock for the periods indicated are as
follows:
<TABLE>
<CAPTION>
Six months ended May 31, 1995 Year ended
11/30/94
Class A Class B* Class Y* Class A
________________________________________________________________________________________
<S> <C> <C> <C> <C>
Sold 1,300,014 66,842 338,028 5,845,726
Issued for reinvested
distributions 2,945,002 14 831 5,172,792
Redeemed (4,341,724) (144) (3,253) (5,934,761)
_______________________________________________________________________________________
Net increase (decrease) (96,708) 66,712 335,606 5,083,757
_______________________________________________________________________________________
*Commencement of operations was March 20, 1995.
_______________________________________________________________________________________
/TABLE
<PAGE>
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<TABLE>
<CAPTION>
8. Financial highlights
The table below shows certain important financial information for evaluating the fund's results.
Fiscal period ended Nov. 30,
Per share income and capital changes*
1995** 1994+++ 1993 1992 1991 1990
Classes
A B Y
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $10.31 $10.37 $10.37 $12.04 $11.19 $10.18 $8.82 $10.01
beginning of period
Income from investment operations:
Net investment income .06 .03 .03 .10 .11 .13 .18 .26
Net gains (losses) 1.05 .48 .50 (.64) 1.31 1.69 1.75 (.55)
(both realized
and unrealized)
Total from investment 1.11 .51 .53 (.54) 1.42 1.82 1.93 (.29)
operations
Less distributions:
Dividends from net (.06) (.03) (.03) (.09) (.11) (.14) (.20) (.27)
investment income
Distributions from (.49) -- -- (1.10) (.46) (.67) (.37) (.63)
realized gains
Total distributions (.55) (.03) (.03) (1.19) (.57) (.81) (.57) (.90)
Net asset value, $10.87 $10.85 $10.87 $10.31 $12.04 $11.19 $10.18 $8.82
end of period
Ratios/supplemental data
1995** 1994*** 1993 1992 1991 1990
Classes
A B Y
Net assets, end of period $611 $1 $4 $581 $617 $475 $400 $348
(in millions)
Ratio of expenses to .78%+ 1.67%+ .68%+ .71% .77% .74% .67% .63%
average daily net assets
Ratio of net income 1.09%+ .91%+ 1.41%+ .90% 1.00% 1.22% 1.82% 2.78%
to average daily net assets
Portfolio turnover rate 38% 38% 38% 46% 41% 42% 46% 55%
(excluding short-term
securities)
Total return+++ 11.3%++ 4.9% 5.1% (5.3%) 13.2% 19.2% 22.9% (3.3%)
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended May 31, 1995 for Class A and commencement of operations
March 20, 1995 for Class B and Y (Unaudited).
***On Nov. 10, 1994, the fund's named changed from IDS Equity Plus Fund, Inc.
to IDS Equity Select Fund, Inc.
+Adjusted to an annual basis.
++For the fiscal period ended May 31, 1995, the annualized total
return is 22.7%.
+++Total return does not reflect payment of a sales charge.
</TABLE>
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<TABLE>
<CAPTION>
Investments in securities
IDS Equity Select Fund, Inc. (Percentages represent value of
May 31, 1995 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (93.4%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Aerospace & defense (1.4%)
United Technologies 115,000 $ 8,725,625
____________________________________________________________________________________________________________________________
Automotive & related (4.9%)
Dana 275,000 7,768,750
Goodyear Tire & Rubber 275,000 11,618,750
Worthington Inds 525,000 10,959,375
____________
Total 30,346,875
_____________________________________________________________________________________________________________________________
Banks and savings & loans (4.2%)
Bank of Boston 200,000 7,300,000
Collective Bancorp 120,000 2,670,000
First Chicago 190,000 10,901,250
Standard Federal 150,000 4,968,750
____________
Total 25,840,000
_____________________________________________________________________________________________________________________________
Building materials (6.7%)
Clayton Homes 700,000 12,162,500
Lennar 375,000 7,312,500
Martin Marietta Materials 425,000 9,031,250
Sherwin-Williams 350,000 12,862,500
____________
Total 41,368,750
_____________________________________________________________________________________________________________________________
Chemicals (4.2%)
duPont (EI) deNemours 100,000 6,787,500
Hanna (MA) 375,000 9,281,250
Pall 450,000 9,900,000
____________
Total 25,968,750
_____________________________________________________________________________________________________________________________
Communications equipment (2.4%)
Airtouch Communications 325,000 (c) 8,856,250
General Instrument 200,000 (c) 6,175,000
____________
Total 15,031,250
_____________________________________________________________________________________________________________________________
Computers & office equipment (9.0%)
Cisco Systems 145,000 (c) 6,343,750
Compaq Computer 250,000 (c) 9,781,250
See accompanying notes to investments in securities.
<PAGE>
Hewlett-Packard 170,000 11,241,250
Intel 85,000 9,541,250
Parametric Technology 215,000 (c) 9,137,500
Solectron 300,000 (b,c) 9,037,500
____________
Total 55,082,500
_____________________________________________________________________________________________________________________________
Energy (7.5%)
Enron Oil & Gas 400,000 9,700,000
Enterra 310,000 (c) 5,928,750
Exxon 100,000 7,137,500
Fluor 175,000 8,662,500
Royal Dutch Petroleum 60,000 (b) 7,605,000
TOTAL 219,800 6,813,800
____________
Total 45,847,550
_____________________________________________________________________________________________________________________________
Financial services (3.0%)
Equity Residential Property 200,000 5,725,000
Mid-Amer Apart Communities 200,000 5,025,000
Morgan Stanley Group 100,000 7,612,500
____________
Total 18,362,500
_____________________________________________________________________________________________________________________________
Food (1.5%)
ConAgra 275,000 9,178,125
_____________________________________________________________________________________________________________________________
Health care (3.1%)
Beckman Instruments 225,000 6,243,750
Boston Scientific 100,000 (c) 2,875,000
Merck 100,000 4,712,500
Warner-Lambert 60,000 4,972,500
____________
Total 18,803,750
_____________________________________________________________________________________________________________________________
Household products (1.3%)
Rubbermaid 250,000 7,968,750
_____________________________________________________________________________________________________________________________
<PAGE>
Industrial equipment & services (9.2%)
Caterpillar 110,000 6,627,500
Giddings & Lewis 400,000 6,950,000
Illinois Tool Works 240,000 11,940,000
Teleflex 265,000 10,964,375
Trinity Inds 225,000 8,521,875
Tyco Intl 210,000 11,366,250
____________
Total 56,370,000
_____________________________________________________________________________________________________________________________
Industrial transportation (3.1%)
Conrail 185,000 9,990,000
Union Pacific 165,000 9,136,875
____________
Total 19,126,875
_____________________________________________________________________________________________________________________________
Insurance (6.8%)
ACE Limited 300,000 7,612,500
NAC Re 150,000 4,406,250
Tempest Reinsurance 80,000 (c,e) 8,824,000
TIG Holdings 325,000 7,637,500
Transatlantic Holdings 125,000 7,937,500
UNUM 125,000 5,343,750
____________
Total 41,761,500
_______________________________________________________________________________________________________________________________
Media (5.2%)
CBS 50,000 3,350,000
Harcourt General 275,000 11,584,375
McGraw-Hill 125,000 9,250,000
Time Warner 200,000 7,925,000
____________
Total 32,109,375
_____________________________________________________________________________________________________________________________
Metals (2.7%)
Aluminum Co Amer 200,000 9,300,000
Nucor 150,000 7,162,500
____________
Total 16,462,500
_____________________________________________________________________________________________________________________________
Paper & packaging (2.4%)
Crown Cork & Seal 319,740 (c) 15,027,780
_____________________________________________________________________________________________________________________________
<PAGE>
Retail (10.2%)
Albertson's 375,000 10,500,000
Dayton Hudson 135,000 9,568,125
Gap 260,000 8,937,500
Home Depot 160,000 6,660,000
Nordstrom 140,800 5,843,200
Pep Boys-Manny Moe & Jack 450,000 12,543,750
Sysco 335,000 9,086,875
____________
Total 63,139,450
_____________________________________________________________________________________________________________________________
Soaps & cosmetics (1.4%)
Procter & Gamble 125,000 8,984,375
_____________________________________________________________________________________________________________________________
Textiles & apparel (0.9%)
Jones Apparel Group 200,000 (c) 5,775,000
_____________________________________________________________________________________________________________________________
Foreign (2.3%)(d)
BBC Brown Boveri 7,200 7,351,222
Renaissance Energy 300,000 (c) 6,541,980
____________
Total 13,893,202
_____________________________________________________________________________________________________________________________
Total common stocks
(Cost: $443,411,428) $575,174,482
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Options purchased (--%)
_____________________________________________________________________________________________________________________________
Issuer Number of Exercise Expiration Value(a)
contracts price date
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Put
S&P 500 500 $485 June 1995 $ 9,375
400 485 Sept. 1995 95,000
200 490 June 1995 5,000
_____________________________________________________________________________________________________________________________
Total options purchased
(Cost: $795,450) $ 109,375
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE
<TABLE>
<CAPTION>
Short-term securities (9.0%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (1.0%)
Federal Home Loan Mtge Corp
Disc Note
06-12-95 5.88% $3,400,000 $ 3,393,912
Federal Farm Credit Bank
Disc Note
06-13-95 5.95 2,900,000 2,894,277
____________
Total 6,288,189
_____________________________________________________________________________________________________________________________
Commercial paper (8.0%)
AIG Funding
06-23-95 5.95 4,500,000 4,483,720
Amer General
06-07-95 5.98 3,200,000 (f) 3,196,827
BBV Finance (Delaware)
06-09-95 5.98 4,400,000 4,394,182
BellSouth Capital Funding
06-19-95 5.96 5,200,000 5,184,608
Cargill
06-27-95 5.96 1,200,000 1,194,861
Ciesco LP
06-15-95 5.98 2,900,000 2,893,290
Deutsche Bank Financial
06-12-95 5.98 1,000,000 998,182
Fleet Funding
06-01-95 5.99 4,643,000 (f) 4,643,000
Illinois Tool Works
06-21-95 5.98 2,000,000 1,993,400
Lincoln Natl
07-06-95 5.99 2,800,000 (f) 2,783,803
Penney (JC) Funding
06-20-95 5.99 2,600,000 2,591,835
PepsiCo
07-12-95 5.99 2,300,000 2,284,414
Toyota Motor Credit
06-23-95 5.95 1,500,000 1,494,573
UBS Finance
06-26-95 5.97 4,000,000 3,983,500
USAA Capital
06-27-95 5.98 3,500,000 3,484,985
USL Capital
07-14-95 5.97 3,400,000 3,375,958
____________
Total 48,981,138
________________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $55,269,327) $ 55,269,327
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $499,476,205)(g) $630,553,184
_____________________________________________________________________________________________________________________________
<PAGE>
____________________________________________________________________________________________________________________________
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) Identifies issue considered to be illiquid (see Note 6 to the financial statements.) Information
concerning such holdings at May 31, 1995, is as follows:
Acquistion
Security date Cost
________________________________________________________________
Tempest Reinsurance 09-13-93 $8,000,000
________________________________________________________________
(f) Commercial paper sold within terms of a private placement memorandum, exempt from registration
under Section 4(2) of the Securities Act of 1933, as amended, and may be sold only to
dealers in that program or other "accredited investors." This security has been determined
to be liquid under guidelines established by the board of directors.
(g) At May 31, 1995, the cost of securities for federal income tax purposes was approximately $499,476,000
and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $135,514,000
Unrealized depreciation (4,437,000)
______________________________________________________________________________________________
Net unrealized appreciation $131,077,000
_______________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE
Directors and officers
Directors and officers of the fund
_____________________________________________________________________
President and interested director
William R. Pearce
President of all funds in the IDS MUTUAL FUND GROUP.
_____________________________________________________________________
Independent directors
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for
Public Policy Research.
Robert F. Froehlke
Former president of all funds in the IDS MUTUAL FUND GROUP.
Heinz F. Hutter
Former president and chief operating officer, Cargill, Inc.
Anne P. Jones
Attorney and telecommunications consultant.
Donald M. Kendall
Former chairman and chief executive officer, PepsiCo, Inc.
Melvin R. Laird
Senior counsellor for national and international affairs,
The Reader's Digest Association, Inc.
Lewis W. Lehr
Former chairman and chief executive officer,
Minnesota Mining and Manufacturing Company (3M).
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
C. Angus Wurtele
Chairman of the board and chief executive officer, The Valspar
Corporation.
_____________________________________________________________________
Interested directors who are officers and/or employees of American
Express Financial Corporation.
William H. Dudley
Exective vice president, American Express Financial Corporation.
David R. Hubers
President and chief executive officer, American Express Fianacial
Corporation.
John R. Thomas
Senior vice president, American Express Financial Corporation.
_____________________________________________________________________
Officers who are officers and/or employees of American Express
Financial Corporation
Peter J. Anderson
Vice President of all funds in the IDS MUTUAL FUND GROUP.
Melinda S. Urion
Treasurer of all funds in the IDS MUTUAL FUND GROUP.
___________________________________________________________________
Other officer
Leslie L. Ogg
Vice president general Counsel and secretary of all funds in
the IDS MUTUAL FUND GROUP.<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 deposit (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
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<PAGE>
PAGE
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher rated,
lower risk bond categories, or the equivalent, and in government bonds.
(icon of) greek column
IDS Selective Fund
Invests in 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
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<PAGE>
PAGE
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities
to provide income to residents of each respective state that is
exempt from federal, state and local income taxes. (New York
is the only state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
IDS 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 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
<PAGE>
PAGE
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
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 stocks of companies representing many
sectors of the economy. Seeks current income and growth of capital.
(icon of) building with columns
IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) three growing flowers
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek
high current income and growth of income and capital with reduced
volatility.
(icon of) 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<PAGE>
PAGE
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.
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 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
<PAGE>
PAGE
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against inflation.
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
planner 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
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 (TouchTone 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
IDS Tower 10
Minneapolis, MN 55440-0010
