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IDS Equity Value Fund
1995 annual report
(prospectus enclosed)
(Icon of) Three flowers
The goal of IDS Equity Value Fund, a part of IDS Strategy Fund,
Inc., is growth of capital and income. The fund invests primarily
in equity securities that provide income, offer the opportunity for
long-term capital growth, or both.
(This annual report includes a prospectus that describes in detail
the fund's objective, investment policies, risks, sales charges,
fees and other matters of interest. Please read the prospectus
carefully before you invest or send money.)
Distributed by American Express Financial Advisors Inc.
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(Icon of) Three flowers
Best of the bargains
Just like anything else, stocks of solid companies sometimes go "on
sale." That is, they fall out of favor with investors and their
prices decline. These "value" stocks represent a classic
opportunity to "buy low" in the market, which is what Equity Value
Fund seeks to do. Investors benefit when the potential of such
companies is rediscovered, causing the stocks to regain favor.
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Contents
(Icon of) One open book inside of another.
The purpose of this annual report is to tell investors how the fund
performed.
The prospectus, which is bound into the middle of this annual
report, describes the fund in detail.
1995 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
1995 prospectus
The fund in brief
Goal 3p
Types of fund investments and their risks 3p
Manager and distributor 3p
Portfolio manager 3p
Alternative sales arrangements 3p
Sales charge and fund expenses
Sales charge and operating expenses 4p
Performance
Financial highlights 6p
Total returns 7p
Key terms 9p
Investment policies and risks
Facts about investments and their risks 10p
Alternative investment option 14p
Valuing assets 14p
How to buy, exchange or sell shares
Alternative sales arrangements 15p
How to buy shares 17p
How to exchange shares 20p
How to sell shares 20p
Reductions and waivers of the sales charge 25p
Special shareholder services
Services 29p
Quick telephone reference 29p
Distributions and taxes
Dividend and capital gain distributions 30p
Reinvestments 30p
Taxes 31p
How the fund is organized
Shares 34p
Voting rights 34p
Shareholder meetings 34p
Directors and officers 34p
Investment manager and transfer agent 36p
Distributor 37p
About American Express Financial Corporation
General information 38p
Appendix
Descriptions of derivative instruments 39p
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PAGE 4
To our shareholders
(Photo of) William R. Pearce, President of the fund
(Photo of) Thomas W. Medcalf, 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:
The election of directors and the selection of KPMG Peat Marwick
LLP as independent auditors for each of the funds in the group.
A new investment management agreement that became effective March
1995, when the funds began offering multiple classes of shares.
A change in investment policy that will permit the fund to adopt a
master/feeder structure if and when the board of each fund
determines that it is in the best interest of shareholders.
Changes with respect to the fund's "fundamental investment
policies" that, among other things, allows the board to modify them
should it deem appropriate.
The final change shareholders approved was the remaning of this
fund - from IDS Strategy Equity to IDS Equity Value. The
investment policies have not changed, and your investment is in no
way affected.
No other business was presented at the meeting, which was concluded
by a report to shareholders from the American Express Financial
Corporation 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
A sometimes frustrating fiscal year ended on a positive note, as a
strong stock market late in the period boosted IDS Equity Value
Fund's performance for the 12 months - April 1994 through March
1995. (Note: A capital gain paid to shareholders last December
reduced the fund's net asset value by a like amount.) Despite the
strong finish, the fund was unable to keep pace with the stock
market as a whole.
The most significant gains during the period were registered by
growth stocks, which usually don't fit with our value-oriented
investment style. Instead of these rapidly growing companies with
commensurately high stock prices, we generally focus on companies
that have more stable earnings patterns, pay consistent dividends
and offer value in terms of their current stock prices.
Health care helps
An exception was the health-care sector, a group comprised mainly
of growth stocks to which we increased our exposure. That proved
to be among the best-performing sectors for us during the period.
On the other hand, we participated little in the strong rally by
technology-related growth stocks, a sector that rarely offers
investment opportunities that mesh with our value style.
We maintained a substantial investment in stocks of chemical, metal
and paper producers - a group that tends to do well in the late
stages of an economic upturn. We were very bullish regarding the
profit potential for these industries and, indeed, their
profitability turned out to be excellent. The stocks, however,
failed to follow suit, providing only average gains. Looking
ahead, we believe this investment in basic industry will be more
rewarding this year and next based on our expectation of strong
earnings by such companies.
As for disappointments, our financial services stocks generated
somewhat below-average results, despite their attractively low
prices. We see more opportunity in this group, particularly among
banks and insurance companies, and continue to keep substantial
exposure to it. Finally, we kept about 15% of portfolio assets in
cash reserves during the fiscal year, which ultimately proved to be
a slight drag on performance when the market rebounded.
Opportunities abroad
Outside of our value approach, one of the differentiating features
of this fund has been its increasing use of foreign stocks. We
were able to generate strong returns in 1992 and 1993 by having up
to 25% of our assets in such issues. Fortunately, we sold many of
them at a profit a year or more ago, thereby avoiding sharp
downturns in many foreign markets. As value investors, though, we
saw a silver lining. Those declines created a number of good
buying opportunities in well-developed countries, and we will be
looking to add stocks of blue-chip companies that are selling at
attractively low levels.
Here at home, we're optimistic about the economy's ability to grow
and, specifically, about the prospects for financial services and
cyclical stocks in this new fiscal year. On a more general note,
we remain confident that our value approach will, as it
historically has, prove beneficial to the fund and its shareholders
over the long pull.
Thomas W. Medcalf
Class A
March 20, 1995 - March 31, 1995
(All figures per share)
Net asset value (NAV)
March 31, 1995 $ 9.21
March 20, 1995* $ 9.10
Increase $ 0.11
Distributions
March 20, 1995 - March 31, 1995
From income $ 0.05
From capital gains $ --
Total distributions $ 0.05
Total return** --%***
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1995 $ 9.21
March 31, 1994 $ 9.17
Increase $ 0.04
Distributions
April 1, 1994 - March 31, 1995
From income $ 0.39
From capital gains $ 0.23
Total distributions $ 0.62
Total return** +7.7%
Class Y
March 28, 1995 - March 31, 1995
(All figures per share)
Net asset value (NAV)
March 31, 1995 $ 9.21
March 28, 1995* $ 9.23
Decrease $(0.02)
Distributions
March 28, 1995 - March 31, 1995
From income $ 0.05
From capital gains $ --
Total distributions $ 0.05
Total return** --%***
* Commencement of operations.
** The prospectus discusses the effects of the sales charge on the
various classes.
***Not presented--as short period of operations may not be
indicative of annual results.
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<TABLE>
<CAPTION>
Your fund's ten largest holdings
(Pie chart) The ten holdings listed here make up 13.90% of the fund's net assets
Equity Value Fund
_____________________________________________________________________________________
Percent Value
of fund's net assets)(as of March 31, 1995)
_____________________________________________________________________________________
<S> <C> <C>
Dow Chemical 1.59% $20,805,000
The second-largest U.S. chemical company,
Dow produces commercial products and provides
financial services.
Exxon 1.40 18,356,250
Exxon is a major factor in the world crude oil,
natural gas and chemical industry and also has
substantial coal and mineral holdings.
Emerson Electric 1.40 18,287,500
Emerson Electric is a diversified manufacturer
of electrical and electronic products for use in
commercial and industrial products, appliances, and
construction-related components.
Royal Dutch Petroleum 1.37 18,000,000
Royal Dutch Petroleum Co., which includes Royal
Dutch (the Dutch version) and Shell Transport
(the English version) is a major oil company.
Philip Morris 1.37 17,943,750
Philip Morris is the largest cigarette company
and has become the second largest packaged-food
company in the world as a result of its Kraft
acquisition.
Hanson Industries 1.37 17,931,250
Based in the United Kingdom, Hanson Industries
is an industrial conglomerate with interests in
tobacco, coal mining, industrial products, building
products, consumer products, chemicals, house building,
material handling and forest products/lumber.
Sears, Roebuck & Co. 1.37 17,880,625
Sears, Roebuck & Co., through its Sears stores,
is the third largest retailer in the world.
Tenneco, Inc. 1.35 17,671,875
Tenneco, Inc. is engaged in the operation of
natural gas pipelines, farm and construction
equipment, shipbuilding, chemicals and minerals,
automotive parts, and packaging.
Bank America 1.34 17,611,250
A holding company that owns Bank of America
(one of the world's largest banks) and
Seattle-First National Bank.
Xerox 1.34 17,606,250
Xerox Corp. is a large, multinational company
focused on the document-processing business.
The company also operates several financial
services businesses.
</TABLE>
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Making the most of your fund
Class B
Average annual total return*
(as of March 31, 1995)
1 year 5 years 10 years
+3.69% +10.64% +13.36%
* Average annual total return is not presented for Class A and
Class Y because annualized return based on short period of
operations may not be indicative of annual results.
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 impact of a deferred sales charge assuming
redemption at the end of the stated periods above. This was a
period of widely fluctuating security prices. Past performance is
no guarantee of future results.
Build your assets systematically
To keep your assets growing steadily, one of the best ways to
invest in the fund is by dollar-cost averaging -- a time-tested
strategy that can make market fluctuations work for you. To
dollar-cost average, simply invest a fixed amount of money
regularly. You'll automatically buy more shares when the fund's
share price is low, fewer shares when it is high.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00
Feb 100 18 5.56
Mar 100 17 5.88
Apr 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
Sept 100 21 4.76
Oct 100 20 5.00
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more
shares when the per share market price is low.
(arrow in table pointing to Sept) and fewer shares when the per
share market price is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
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PAGE 7
Your fund's long-term performance
Three ways to benefit from a mutual fund:
o your shares increase in value when the fund's investments do
well
o you receive capital gains when the gains on investments sold
by the fund exceed losses
o you receive income when the fund's 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.
Class B*
How your $10,000 has grown in IDS Equity Value Fund
Average annual total return
(as of March 31, 1995)
1 year 5 years 10 years $35,080
+3.69% +10.64% +13.36% Equity
Value Fund
S&P 500
Stock Index
Lipper Growth
& Income Index
$20,000
$10,000
'85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95
* Average annual total return is not presented for Class A and
Class Y because annualized return based on short period of
operations may not be indicative of annual results.
Assumes: Holding period from 4/1/85 to 3/31/95. 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 $19,143.
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 & Income Fund Index, published by Lipper Analytical
Services, Inc. includes 30 funds that are generally similar to this
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 and Income Fund Index.
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 impact of a deferred sales charge assuming
redemption at the end of the stated periods above. This was a
period of widely fluctuating security prices. Past performance is
no guarantee of future results.
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Independent auditors' report
___________________________________________________________________
The board of directors and shareholders
IDS Equity Value Fund:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments in securities,
of IDS Equity Value Fund-formerly known as IDS Strategy Equity Fund
(a series of IDS Strategy Fund, Inc.) as of March 31, 1995, 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 March 31, 1995, and the financial highlights
for each of the years in the ten-year period ended March 31, 1995.
These financial statements and the financial highlights are the
responsibility of fund management. Our responsibility is to express
an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and the financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Investment securities held in custody are
confirmed to us by the custodian. As to securities purchased and
sold but not received or delivered and securities on loan, we
request confirmations from brokers, and where replies are not
received, we carry out other appropriate auditing procedures. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IDS
Equity Value Fund at March 31, 1995, 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 March 31,
1995, 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
May 5, 1995
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<TABLE>
<CAPTION>
Statement of assets and liabilities
IDS Equity Value Fund
March 31, 1995
_____________________________________________________________________________________________________________
Assets
______________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $1,256,983,400) $1,333,204,653
Cash in bank on demand deposit 2,036,126
Dividends and accrued interest receivable 3,719,125
Receivable for investment securities sold 18,264,058
Receivable for foreign currency contracts held, at value (Notes 1 and 6) 1,188,713
U.S. government securities held as collateral (Note 5) 4,175,376
_____________________________________________________________________________________________________________
Total assets 1,362,588,051
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Dividends payable to shareholders 68,913
Payable for investment securities purchased 42,078,179
Payable for foreign currency contracts held, at value
(Notes 1 and 6) 1,185,439
Payable upon return of securities loaned 8,186,376
Accrued investment management and services fee 216,495
Accrued distribution fee 317,546
Accrued service fee 74,438
Accrued transfer agency fee 86,971
Accrued administrative services fee 14,743
Other accrued expenses 190,031
_____________________________________________________________________________________________________________
Total liabilities 52,419,131
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $1,310,168,920
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value; $ 1,422,489
Additional paid-in capital 1,238,959,717
Undistributed net investment income 936,517
Accumulated net realized loss (Notes 1 and 7) (7,374,330)
Unrealized appreciation (Note 6) 76,224,527
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $1,310,168,920
_____________________________________________________________________________________________________________
Net assets applicable to outstanding shares: Class A $ 6,264,342
Class B $1,303,904,558
Class Y $ 20
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock: Class A shares 680,123 $ 9.21
Class B shares 141,568,834 $ 9.21
Class Y shares 2 $ 9.21
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
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PAGE 10
Financial statements
Statement of operations
IDS Equity Value Fund
Year ended March 31, 1995
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
Income:
Interest (net of foreign taxes withheld of $30,054) $11,088,222
Dividends (net of foreign taxes withheld of $466,641) 32,275,433
_____________________________________________________________________________________________________________
Total income 43,363,655
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 6,217,085
Distribution fee - Class B 9,004,348
Transfer agency fee 2,532,647
Incremental transfer agency fee - Class B 5,405
Service fee 74,438
Administrative services fee 14,743
Compensation of directors 22,677
Compensation of officers 12,309
Custodian fees 338,074
Postage 259,209
Registration fees 161,129
Reports to shareholders 135,732
Audit fees 17,500
Administrative 9,189
Other 23,177
_____________________________________________________________________________________________________________
Total expenses 18,827,662
_____________________________________________________________________________________________________________
Investment income -- net 24,535,993
_____________________________________________________________________________________________________________
Realized and unrealized gain -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions
(including loss of $117,803 from foreign currency transactions) (Note 3) 7,363,051
Net change in unrealized appreciation or depreciation 57,194,997
_____________________________________________________________________________________________________________
Net gain on investments and foreign currency 64,558,048
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $89,094,041
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Equity Value Fund
Year ended March 31,
_____________________________________________________________________________________________________________
Operations and distributions 1995 1994
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 24,535,993 $ 17,634,417
Net realized gain on investments and foreign currency 7,363,051 81,083,334
Net change in unrealized appreciation or depreciation 57,194,997 (57,859,852)
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations 89,094,041 40,857,899
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (31,456) --
Class B (24,811,727) (16,824,052)
Net realized gain
Class B (55,817,534) (64,484,810)
Excess distribution of realized gain (Note 1)
Class B -- (251,175)
_____________________________________________________________________________________________________________
Total distributions (80,660,717) (81,560,037)
_____________________________________________________________________________________________________________
Capital share transactions (Note 4)
_____________________________________________________________________________________________________________
Proceeds from sales or transfers from other funds
Class A shares (Note 2) 6,221,965 --
Class B shares 312,970,153 322,046,101
Class Y shares 20 --
Reinvestment of distributions at net asset value
Class A shares 31,089 --
Class B shares 79,769,788 80,767,882
Payments for redemptions or transfers to other funds
Class A shares (63,496) --
Class B shares (Note 2) (128,511,731) (89,266,723)
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions 270,417,788 313,547,260
_____________________________________________________________________________________________________________
Total increase in net assets 278,851,112 272,845,122
Net assets at beginning of year 1,031,317,808 758,472,686
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of $936,517
and $1,360,998) $1,310,168,920 $1,031,317,808
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
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PAGE 12
Notes to financial statements
IDS Equity Value Fund
___________________________________________________________________
1. Summary of significant accounting policies
The fund is a series of IDS Strategy Fund, Inc. and 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, which
the fund began offering on March 20, 1995, are sold with a front-
end sales charge. Class B shares may be subject to a contingent
deferred sales charge and such 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) charges 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
are valued at fair value according to methods selected in good
faith by the board of directors. Determination of fair value
involves, among other things, reference to market indexes, matrixes
and data from independent brokers. Short-term securities maturing
in more than 60 days from the valuation date are valued at the
market price or approximate market value based on current interest
rates; those maturing in 60 days or less are valued at amortized
cost.
Options transactions
In order to produce incremental earnings, protect gains, and
facilitate buying and selling of securities for investment
purposes, the fund may buy or write options traded on any U.S. or
foreign exchange or in the over-the-counter market where the
completion of the obligation is dependent upon the credit standing
of the other party. The fund also may buy and sell put and call
options and write covered call options on portfolio securities and
may write cash-secured put options. The risk in writing a call
option is that the fund gives up the opportunity of profit if the
market price of the security increases. The risk in writing a put
option is that the fund may incur a loss if the market price of the
security decreases and the option is exercised. The risk in buying
an option is that the fund pays a premium whether or not the option
is exercised. The fund also has the additional risk of not being
able to enter into a closing transaction if a liquid secondary
market does not exist.<PAGE>
PAGE 13
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 futures contracts. Risks of
entering into futures contracts and related options include the
possibility that there may be an illiquid market and that a change
in the value of the contract or option may not correlate with
changes in the value of the underlying securities.
Upon entering into a futures contract, the fund is required to
deposit either cash or securities in an amount (initial margin)
equal to a certain percentage of the contract value. Subsequent
payments (variation margin) are made or received by the fund each
day. The variation margin payments are equal to the daily changes
in the contract value and are recorded as unrealized gains and
losses. The fund recognizes a realized gain or loss when the
contract is closed or expires.
Foreign currency translations and
foreign currency contracts
Securities and other assets and liabilities denominated in foreign
currencies are translated daily into U.S. dollars at the closing
rate of exchange. Foreign currency amounts related to the purchase
or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in
foreign exchange rates on realized and unrealized security gains or
losses is reflected as a component of such gains or losses. In the
statement of operations, net realized gains or losses from foreign
currency transactions may arise from sales of foreign currency,
closed forward contracts, exchange gains or losses realized between
the trade date and settlement dates on securities transactions, and
other translation gains or losses on dividends, interest income and
foreign withholding taxes.
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.
<PAGE>
PAGE 14
Federal taxes
Since the fund's policy is to comply with all sections of the
Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income to shareholders, no
provision for income or excise taxes is required.
Net investment income (loss) and net realized gains (losses) may
differ for financial statement and tax purposes primarily because
of the deferral of losses on certain futures contracts, the
recognition of certain foreign currency gains (losses) as ordinary
income (loss) for tax purposes, and losses deferred due to "wash
sale" transactions. The character of distributions made during the
year from net investment income or net realized gains may differ
from their ultimate characterization for federal income tax
purposes. The effect on dividend distributions of certain book-to-
tax differences is presented as "excess distributions" in the
statement of changes in net assets. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized
gains (losses) were recorded by the fund.
On the statement of assets and liabilities, as a result of
permanent book-to-tax differences, undistributed net investment
income has been decreased by $117,291 and accumulated net realized
loss has been decreased by $123,211, resulting in a net
reclassification adjustment to decrease paid-in-capital by $5,920.
Dividends to shareholders
Dividends from net investment income, declared and paid quarterly
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 dividend at the end of the calendar quarter.
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 which 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.
Also under the prior agreement, the fund paid American Express
Financial Corporation a distribution fee equal, on an annual basis,
to 1% of the lesser of (i) aggregate purchase payments for shares
sold since inception, including purchase payments for shares
<PAGE>
PAGE 15
exchanged from another of the Strategy Funds and the value of all
shares exchanged from another fund in the IDS MUTUAL FUND GROUP
(excluding appreciation and reinvested income dividends and capital
gain distributions), less the aggregate amount of any redemptions
of purchase payments, or (ii) that fund's average daily net assets.
Of the distribution fee, the first 0.75% was for distribution of
fund shares and the balance of the fee, up to 0.25%, represented
service fees for personal services rendered to shareholders of the
fund.
Also under the terms of the prior agreement, the fund paid American
Express Financial Corporation a transfer agency fee at an annual
rate of $16 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 a new agreement 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. 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 service 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.
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.
<PAGE>
PAGE 16
Sales charges deducted by American Express Financial Advisors Inc.
for distributing fund shares were $5,973 for Class A and $962,823
for Class B for the year ended March 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 $10,368 for the year ended March 31, 1995.
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $1,018,252,315 and $835,401,762,
respectively, for the year ended March 31, 1995. Realized gains and
losses are determined on an identified cost basis.
Brokerage commissions paid to brokers affiliated with American
Express Financial Advisors were $127,945 for the year ended March
31, 1995.
___________________________________________________________________
4. Capital share transactions
Transactions in shares of capital stock for the periods indicated
are as follows:
<TABLE>
<CAPTION>
________________________________________________________________________________________
Period ended March 31, 1995 Year ended
3/31/94
Class A* Class B Class Y* Class B
________________________________________________________________________________________
<S> <C> <C> <C> <C>
Sold 683,711 33,954,887 2 33,138,214
Issued for reinvested
distributions 3,367 9,108,628 -- 8,433,793
Redeemed (6,955) (14,021,209) -- (9,197,496)
________________________________________________________________________________________
Net increase 680,123 29,042,306 2 32,374,511
*Commencement of operations was from March 20, 1995 for Class A and March 28, 1995
for Class Y.
</TABLE>
___________________________________________________________________
5. Lending of portfolio securities
At March 31, 1995, securities valued at $7,701,750 were on loan to
brokers. For collateral, the fund received $4,011,000 in cash and
U.S. government securities valued at $4,175,376. Income from
securities lending amounted to $211,680 for the year ended March
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.
<PAGE>
PAGE 17
___________________________________________________________________
6. Foreign currency contracts
At March 31, 1995, the fund had entered into a foreign currency
exchange contract that obligates the fund to deliver currency at a
specified future date. The unrealized appreciation of $3,274 on
this contract is included in the accompanying financial statements.
The terms of the open contracts are as follows:
<TABLE>
<CAPTION>
U.S. dollar value U.S. dollar value
Currency to be as of Currency to be as of
Exchange date delivered March 31, 1995 received March 31, 1995
______________________________________________________________________________________________________
<S> <C> <C> <C> <C>
April 11, 1995 1,185,439 $1,185,439 734,000 $1,188,713
U.S. Dollar British Pound
______________________________________________________________________________________________________
</TABLE>
___________________________________________________________________
7. Capital loss carryover
For federal income tax purposes, the fund had a capital loss
carryover of $8,331,972 at March 31, 1995, that, if not offset by
subsequent capital gains, will expire in 2004. It is unlikely the
board of directors will authorize a distribution of any net
realized gains until the available capital loss carryover has been
offset or expires.
___________________________________________________________________
8. Financial highlights
"Financial highlights" showing per share data and selected
information is presented on page 6 of the prospectus.
<PAGE>
PAGE 18
<TABLE>
<CAPTION>
Investments in securities
IDS Equity Value Fund (Percentages represent value of
March 31, 1995 investments compared to net assets)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Common stocks (86.9%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Aerospace & defense (3.8%)
Raytheon 235,000 $ 17,125,625
Rockwell 400,000 15,600,000
United Technologies 240,000 16,590,000
______________
Total 49,315,625
_____________________________________________________________________________________________________________________________
Automotive & related (4.5%)
Chrysler 325,000 13,609,375
Ford Motor 550,000 (b) 14,850,000
General Motors 350,000 15,487,500
Genuine Parts 375,000 14,953,125
______________
Total 58,900,000
_____________________________________________________________________________________________________________________________
Banks and savings & loans (7.3%)
Ahmanson (HF) 540,000 9,720,000
BankAmerica 365,000 17,611,250
Bankers Trust 200,000 10,450,000
First American 200,000 6,700,000
First Chicago 120,000 6,015,000
Fleet Financial 400,000 12,950,000
Mercantile Bancorp 200,000 7,300,000
NationsBank 325,000 16,493,750
Southern Natl 449,500 8,933,813
______________
Total 96,173,813
_____________________________________________________________________________________________________________________________
Beverages & tobacco (6.1%)
Anheuser-Busch 235,500 13,806,187
PepsiCo 425,000 16,575,000
Philip Morris 275,000 17,943,750
RJR Nabisco 2,350,000 13,806,250
UST 550,000 17,462,500
______________
Total 79,593,687
_____________________________________________________________________________________________________________________________
Building materials (2.0%)
Masco 550,000 15,193,750
Potlatch 266,000 11,205,250
______________
Total 26,399,000
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 19
Chemicals (6.9%)
Air Products & Chemicals 234,000 12,197,250
ARCO Chemical 212,500 9,456,250
Dow Chemical 285,000 20,805,000
Ethyl 900,000 9,225,000
Lubrizol 450,000 15,862,500
Lyondell Petrochem 300,000 7,275,000
PPG Inds 425,000 16,043,750
______________
Total 90,864,750
_____________________________________________________________________________________________________________________________
Computers and office equipment (2.1%)
Intl Business Machines 125,000 10,234,375
Xerox 150,000 17,606,250
______________
Total 27,840,625
_____________________________________________________________________________________________________________________________
Energy (5.3%)
Amoco 275,000 17,496,875
Atlantic Richfield 140,000 16,100,000
Exxon 275,000 18,356,250
Mobil 185,000 17,135,625
______________
Total 69,088,750
_____________________________________________________________________________________________________________________________
Financial services (1.8%)
Student Loan Marketing Assn 275,000 9,590,625
Travelers 375,000 14,484,375
______________
Total 24,075,000
_____________________________________________________________________________________________________________________________
Food (0.4%)
Dean Foods 176,000 4,972,000
_____________________________________________________________________________________________________________________________
Furniture & appliances (0.9%)
Maytag 700,000 11,987,500
_____________________________________________________________________________________________________________________________
Health care (6.4%)
Beckman Instruments 212,000 6,280,500
Bristol Myers-Squibb 260,000 16,380,000
Johnson & Johnson 250,000 14,875,000
Merck 364,000 15,515,500
Pfizer 173,000 14,834,750
SmithKline Beecham 415,000 15,562,500
______________
Total 83,448,250
_____________________________________________________________________________________________________________________________
Industrial equipment & services (1.1%)
General Signal 385,000 13,715,625
_____________________________________________________________________________________________________________________________
Industrial transportation (2.9%)
American President 220,000 4,812,500
Norfolk Southern 250,000 16,718,750
Union Pacific 300,000 16,500,000
______________
Total 38,031,250
_____________________________________________________________________________________________________________________________
Insurance (4.6%)
Amer General 450,000 14,512,500
Aon 450,000 16,425,000
Enhance Financial Services 330,700 5,621,900
St. Paul Companies 300,000 15,000,000
Tempest Reinsurance 77,000 (c) 8,493,100
______________
Total 60,052,500
_____________________________________________________________________________________________________________________________
Media (3.8%)
Dun & Bradstreet 315,000 16,576,875
Gannett 325,000 17,346,875
McGraw-Hill 225,000 16,143,750
______________
Total 50,067,500
_____________________________________________________________________________________________________________________________
Metals (2.6%)
Cleveland-Cliffs 150,000 5,775,000
Inco 525,000 14,634,375
Reynolds Metals 275,000 13,543,750
______________
Total 33,953,125
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 20
Multi-industry conglomerates (5.4%)
Emerson Electric 275,000 18,287,500
General Electric 325,000 17,590,625
Minnesota Mining & Mfg 300,000 17,437,500
Textron 300,000 16,987,500
______________
Total 70,303,125
_____________________________________________________________________________________________________________________________
Paper & packaging (2.9%)
Kimberly-Clark 300,000 15,600,000
Rayonier 195,000 6,069,375
Union Camp 325,000 16,859,375
______________
Total 38,528,750
_____________________________________________________________________________________________________________________________
Retail (5.8%)
Broadway Stores 600,000 (b,c) 4,050,000
Dayton Hudson 225,000 16,087,500
May Dept Stores 475,000 17,575,000
Melville 275,000 10,243,750
Meyer (Fred) 350,000 (c) 10,368,750
Sears Roebuck 335,000 17,880,625
______________
Total 76,205,625
_____________________________________________________________________________________________________________________________
Utilities - electric (1.0%)
SCE 850,000 13,281,250
_____________________________________________________________________________________________________________________________
Utilities - gas (2.5%)
Enron 450,000 14,850,000
Tenneco 375,000 17,671,875
______________
Total 32,521,875
_____________________________________________________________________________________________________________________________
Foreign (6.8%)(d)
Hanson ADR 950,000 17,931,250
Iberdrola 950,000 5,629,700
Imperial Chemical Inds 1,500,000 17,586,000
Pacific Dunlop 4,000,000 8,768,000
Repsol (SA) ADR 525,000 15,225,000
Royal Dutch Petroleum 150,000 18,000,000
Shandong Huaneng 640,000 (c) 5,760,000
______________
Total 88,899,950
_____________________________________________________________________________________________________________________________
Total common stocks
(Cost: $1,062,609,919) $1,138,219,575
_____________________________________________________________________________________________________________________________
Bonds (0.7%)
_____________________________________________________________________________________________________________________________
Issuer and Principal
coupon rate amount Value(a)
_____________________________________________________________________________________________________________________________
Domestic (0.6%)
AMR
6.125% 2024 $ 5,000,000 $ 4,700,000
Delta Air Lines
3.23% Cv 2003 4,000,000 3,380,000
______________
Total 8,080,000
_____________________________________________________________________________________________________________________________
Foreign (0.1%) (d)
Amcor
(Australian Dollar)
6.50% Cv 2003 16,050,000 1,153,032
_____________________________________________________________________________________________________________________________
Total bonds
(Cost: $8,464,129) $ 9,233,032
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 21
Preferred stock (0.2%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Delta Airlines
$3.50 Cm Cv 55,000 $ 2,928,750
_____________________________________________________________________________________________________________________________
Total preferred stock
(Cost: $3,075,118) $ 2,928,750
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (13.9%)
_____________________________________________________________________________________________________________________________
Annualized Amount
yield on payable at
date of maturity
Issuer purchase Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (0.5%)
Federal Home Loan Bank Disc Note
05-05-95 6.25% $ 800,000 $ 795,041
Federal Natl Mtge Assn
Disc Notes
04-03-95 5.92 500,000 499,836
04-19-95 5.95 5,910,000 5,892,477
______________
Total 7,187,354
_____________________________________________________________________________________________________________________________
Commercial paper (12.7%)
AIG Funding
04-10-95 6.01 4,400,000 4,393,422
AVCO Financial
04-07-95 6.00 7,600,000 7,592,438
Bayshore Fuel
04-17-95 6.08 3,800,000 3,789,833
BBV Finance
(Delaware)
04-04-95 6.32 5,000,000 4,997,078
04-06-95 6.03 6,000,000 5,995,000
05-01-95 6.03 4,000,000 3,980,000
BellSouth Capital
04-05-95 6.33 1,600,000 1,598,606
Ciesco LP
04-11-95 6.06 5,000,000 4,989,904
Coca-Cola
04-05-95 6.00 5,200,000 5,196,556
Consolidated Rail
04-17-95 6.01 5,900,000 (e) 5,884,345
05-05-95 6.10 4,800,000 (e) 4,772,619
Emerson Electric
04-07-95 6.00 5,000,000 4,995,025
Ford Motor Credit
04-06-95 6.15 6,000,000 5,994,405
04-18-95 6.03 1,900,000 1,894,635
Goldman Sachs Group
04-05-95 6.01 2,700,000 2,698,206
Kredietbank North America
Finance
04-18-95 6.04 6,000,000 5,983,000
Merrill Lynch
04-19-95 6.15 5,000,000 4,983,259
Metlife Funding
05-03-95 6.03 3,100,000 3,083,467
Mobil Australia Finance
(Delaware)
04-11-95 6.01 2,982,000 (e) 2,977,046
Motorola
04-21-95 6.00 4,500,000 4,485,100
04-24-95 6.00 4,400,000 4,383,246
Nestle Capital
04-24-95 5.99 5,925,000 5,902,439
PACCAR Financial
04-05-95 5.99 2,900,000 2,898,076
Paribas Financial
04-20-95 6.00 7,000,000 6,977,944
<PAGE>
PAGE 22
Penney (JC) Funding
04-10-95 6.06 9,800,000 9,783,577
Pitney Bowes Credit
04-12-95 6.01 2,500,000 2,495,440
Pfizer
04-12-95 6.00 5,200,000 (e) 5,190,514
St. Paul Companies
04-10-95 5.98 2,500,000 (e) 2,496,281
Sandoz
05-09-95 6.11 1,200,000 1,192,050
Sysco
04-12-95 6.08 5,600,000 (e) 5,588,568
Toyota Motor Credit
04-11-95 6.06 3,000,000 2,995,000
USAA Capital
04-03-95 5.96 1,400,000 1,399,539
04-25-95 6.06 12,400,000 12,347,390
04-26-95 6.00 2,200,000 2,190,894
05-03-95 6.03 5,700,000 5,669,600
US WEST Communications
04-03-95 6.05 5,000,000 4,998,333
____________
Total 166,792,835
_____________________________________________________________________________________________________________________________
Letters of credit (0.7%)
First Chicago-
Commed Fuel
04-13-95 6.01 7,200,000 7,185,648
05-05-95 6.10 1,667,000 1,657,459
____________
Total 8,843,107
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $182,834,234) $ 182,823,296
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $1,256,983,400)(f) $1,333,204,653
_____________________________________________________________________________________________________________________________
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Security is partially or fully on loan. See Note 5 to the financial statements.
(c) Presently non-income producing.
(d) Foreign security values are stated in U.S. dollars. For debt securities, principal
amount is denominated in the currency indicated.
(e) 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.
(f) At March 31, 1995, the cost of securities for federal income tax purposes was
$1,257,453,415 and the aggregate gross unrealized appreciation and depreciation
based on that cost was:
Unrealized appreciation $100,832,253
Unrealized depreciation (25,081,015)
_____________________________________________________________________________________________
Net unrealized appreciation $ 75,751,238
_____________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 23
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 24
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
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
<PAGE>
PAGE 25
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
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 stock 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
<PAGE>
PAGE 26
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.
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
<PAGE>
PAGE 27
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.
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 28
Federal income tax information
IDS Equity Value Fund
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 Value Fund
Fiscal year ended March 31, 1995
Class A
Income distributions -- taxable as dividend income,
93.07% qualifying for deduction by corporations.
Payable date Per share
___________________________________________________
March 30, 1995 $0.04710
___________________________________________________
Class B
Income distributions -- taxable as dividend income,
85.91% qualifying for deduction by corporations.
Payable date Per share
___________________________________________________
June 29, 1994 $0.05000
Sept. 29, 1994 0.04250
Dec. 29, 1994 0.25300
March 30, 1995 0.04499
___________________________________________________
Total $0.39049
___________________________________________________
Capital gain distribution -- taxable as long-term
capital gain.
Payable date Per share
___________________________________________________
Dec. 29, 1994 $0.22900
___________________________________________________
Total distributions $0.61949
___________________________________________________
The distribution of $0.48200 per share, payable Dec. 29, 1994,
consisted of $0.05500 derived from net investment income, $0.19800
from net short-term capital gains (a total of $0.25300 taxable as
dividend income) and $0.22900 from net long-term capital gains.
Class Y
Income distributions -- taxable as dividend income,
100% qualifying for deduction by corporations.
Payable date Per share
___________________________________________________
March 30, 1995 $0.04757
___________________________________________________
<PAGE>
PAGE 29
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 Value Fund
IDS Tower 10
Minneapolis, MN 55440-0010
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PAGE 30
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.
