IDS
Equity Value Fund
1995 semiannual report
(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.
Distributed by
American Express
Financial Advisors Inc.
<PAGE>
(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.
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 17
Directors and officers 20
IDS mutual funds 21
<PAGE>
To our shareholders
(Picture of William R. Pearce)
William R. Pearce
President of the Fund
(Picture of Thomas W. Medcalf)
Thomas W. Medcalf
Portfolio manager
From the president
As I indicated in the Fund's previous reports, new agreements
between the Fund and American Express Financial Corporation (AEFC)
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.
A portion of these charges compensates 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<PAGE>
From the portfolio manager
A highly favorable investment environment prevailed throughout most
of the spring and summer, enabling IDS Equity Value Fund to post a
double-digit total return for the first half of the fiscal year
(May through September, 1995).
After struggling during much of 1994, the stock market got off to a
strong start in 1995, thanks to a decline in long-term interest rates.
Soon, surprisingly good corporate profit reports and the continuation
of a subdued inflation rate created additional market momentum. The
result was a roaring rally that persisted with only minor interruptions
through the end of the fiscal period in September.
Growth stocks
lead advance
Most of the time, growth stocks - those of companies boasting rapidly
growing profits - were at the forefront of the market's advance.
Of that group, stocks of high-technology companies, especially producers
of semiconductors, were especially strong.
That trend worked to the Fund's disadvantage during the past six months,
because growth stocks rarely fit our value-oriented investment style.
Growth stocks tend to be high-priced relative to their respective
companies' earnings power, and are subject to above-average price
declines as well as upswings. Value stocks, on the other hand,
usually represent more-established companies (often of the blue
chip variety), pay substantial dividends and sell at prices below
their true market potential.
Banks, insurance
provide boost
That notwithstanding, many of our holdings generated good gains.
The leading examples were in the financial services sector, especially
in the banking and insurance areas. These stocks, which comprised an
above-average portion of the portfolio, were buoyed by falling
long-term interest rates.
Complementing them were our health-care stocks, our second-best group
of performers.
As for disappointments, our "cyclical" stocks such as those in the
auto, chemicals and energy sectors were less productive than the
U.S. market as a whole. The same was true of our holdings in the
retailing group and our foreign stocks.
The structure of the portfolio remained essentially the same during
the six months, as we made no meaningful shifts in or out of stock
sectors. We did, however, reduce the number of stocks in the
portfolio to allow us to better allocate our investment attention.
Given the stock market's remarkable run-up thus far in 1995, we're
expecting a more modest performance in the second half of the fiscal
year. If that outlook proves to be correct, we think the relatively
conservative stocks that characterize our portfolio will begin to look
increasingly attractive to investors.
Thomas W. Medcalf
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
Sept. 30, 1995 $10.25
March 31, 1995 $ 9.21
Increase $ 1.04
Distributions
April 1, 1995 - Sept. 30, 1995
From income $ 0.13
From capital gains $ --
Total distributions $ 0.13
Total return* +12.7%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
Sept. 30, 1995 $10.25
March 31, 1995 $ 9.21
Increase $ 1.04
Distributions
April 1, 1995 - Sept. 30, 1995
From income $ 0.09
From capital gains $ --
Total distributions $ 0.09
Total return* +12.3%**
Class Y
6-month performance
(All figures per share)
Net asset value (NAV)
Sept. 30, 1995 $10.25
March 31, 1995 $ 9.21
Increase $ 1.04
Distributions
April 1, 1995 - Sept. 30, 1995
From income $ 0.14
From capital gains $ --
Total distributions $ 0.14
Total return* +12.9%**
*The prospectus discusses the effects of sales
charges, if any, on the various classes.
**The total return is a hypothetical investment
in the Fund with all distributions reinvested.
<PAGE>
PAGE
<TABLE>
<CAPTION>
Your fund's ten largest holdings
(Pie chart) The ten holdings listed here make up 15.83% of the fund's net assets
Equity Value Fund
_____________________________________________________________________________________
Percent Value
of fund's net assets)(as of Sept. 30, 1995)
_____________________________________________________________________________________
<S> <C> <C>
(Unaudited)
Pfizer 1.64% $24,018,750
Leading producer of pharmaceuticals, hospital products, animal health items,
non-prescription medications and specialty chemicals.
NationsBank 1.61 23,537,500
A bank holding company with a strong presence in North Carolina, South Carolina,
Texas, Virginia, Florida and Georgia.
Xerox 1.61 23,515,625
A large, multinational company focused on the document-processing business.
The company also operates several financial services businesses.
General Motors 1.60 23,437,500
A high-technology applications company engaged in automotive electronics, defense
electronics, telecommunications and commercial technology.
Anheuser Busch 1.60 23,390,625
The leading brewer in the United States. The company is also a producer of baked
goods and snacks, and is an operator of theme parks.
St. Paul Companies 1.60 23,350,000
Through its subsidiaries, the St. Paul Company is primarily engaged in property-
liability insurance, underwriting, insurance brokerage, and investment banking and
asset management.
Philip Morris 1.57 22,962,500
The largest cigarette company, Philip Morris has become the second largest
packaged-food company in the world as a result of its Kraft acquisition.
SmithKline Beecham 1.56 22,781,250
One of the world's largest phamaceutical and health-care companies, providing a
wide range of prescription and over-the-counter drugs and clinical laboratory
services.
General Electric 1.52 22,312,500
A diversified company with interest in maufacturing, broadcasting (NBC), financial
services and technology.
Repsol SA ADR 1.52 22,225,000
The major gasoline refiner and marketer in Spain, in now venturing abroad in a search
for oil and gas. The company also has interests in commodity chemicals.
</TABLE>
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<TABLE>
<CAPTION>
Statement of assets and liabilities
IDS Equity Value Fund
Sept. 30, 1995
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
(Unaudited)
Investments in securities, at value (Note 1)
(identified cost $1,280,111,426) $1,466,846,427
Dividends and accrued interest receivable 4,216,299
Receivable for investment securities sold 24,616,072
U.S. government securities held as collateral (Note 5) 30,240,321
_____________________________________________________________________________________________________________
Total assets 1,525,919,119
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 14,380,615
Dividends payable to shareholders 79,681
Payable for investment securities purchased 17,552,763
Payable upon return of securities loaned (Note 5) 30,731,721
Accrued investment management services fee 40,284
Accrued distribution fee 59,169
Accrued service fee 13,937
Accrued transfer agency fee 12,837
Accrued administrative services fee 2,800
Other accrued expenses 376,362
_____________________________________________________________________________________________________________
Total liabilities 63,250,169
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $1,462,668,950
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value; $ 1,427,455
Additional paid-in capital 1,243,857,100
Undistributed net investment income 375,804
Accumulated net realized gain (Note 1) 30,265,650
Unrealized appreciation of investments and on translation of assets
and liabilities in foreign currencies 186,742,941
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $1,462,668,950
_____________________________________________________________________________________________________________
Net assets applicable to outstanding shares: Class A $ 13,857,180
Class B $1,448,810,636
Class Y $ 1,134
Net asset value per share of outstanding capital stock: Class A shares 1,352,375 $ 10.25
Class B shares 141,393,015 $ 10.25
Class Y shares 111 $ 10.25
See accompanying notes to financial statements.<PAGE>
PAGE
Financial statements
Statement of operations
IDS Equity Value Fund
Six months ended Sept. 30, 1995
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
(Unaudited)
Income:
Interest $ 4,424,302
Dividends (net of foreign taxes withheld of $305,406) 20,386,365
_____________________________________________________________________________________________________________
Total income 24,810,667
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management services fee 3,513,590
Distribution fee - Class B 5,190,432
Transfer agency fee 1,195,068
Incremental transfer agency fee - Class B 80,712
Service fee
Class A 8,142
Class B 1,204,958
Administrative services fee 245,845
Compensation of directors 11,802
Compensation of officers 5,181
Custodian fees 217,642
Postage 104,838
Registration fees 41,637
Reports to shareholders 22,574
Audit fees 10,000
Administrative 4,702
Other 11,372
_____________________________________________________________________________________________________________
Total expenses 11,868,495
_____________________________________________________________________________________________________________
Investment income -- net 12,942,172
_____________________________________________________________________________________________________________
Realized and unrealized gain -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions (Note 3) 37,639,980
Net change in unrealized appreciation or depreciation of investments and on
translation of assets and liabilities in foreign currencies 110,518,414
_____________________________________________________________________________________________________________
Net gain on investments and foreign currency 148,158,394
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $161,100,566
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
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<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Equity Value Fund
_____________________________________________________________________________________________________________
Operations and distributions Sept. 30, 1995 March 31, 1995
_____________________________________________________________________________________________________________
<S> <C> <C>
Six months ended Year ended
(Unaudited)
Investment income -- net $ 12,942,172 $ 24,535,993
Net realized gain on investments and foreign currency 37,639,980 7,363,051
Net change in unrealized appreciation or depreciation
of investments and on translation of assets and
liabilities in foreign currencies 110,518,414 57,194,997
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations 161,100,566 89,094,041
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (151,828) (31,456)
Class B (13,351,042) (24,811,727)
Class Y (15) --
Net realized gains
Class B -- (55,817,534)
_____________________________________________________________________________________________________________
Total distributions (13,502,885) (80,660,717)
_____________________________________________________________________________________________________________
Capital share transactions (Note 4)
_____________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 7,340,317 6,221,965
Class B shares 77,419,166 312,970,153
Class Y shares 1,000 20
Reinvestment of distributions at net asset value
Class A shares 149,545 31,089
Class B shares 13,197,156 79,769,788
Class Y shares 15 --
Payments for redemptions
Class A shares (871,727) (63,496)
Class B shares (Note 2) (92,333,123) (128,511,731)
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions 4,902,349 270,417,788
_____________________________________________________________________________________________________________
Total increase in net assets 152,500,030 278,851,112
Net assets at beginning of period 1,310,168,920 1,031,317,808
_____________________________________________________________________________________________________________
Net assets at end of period
(including undistributed net investment income of $375,804
and $936,517) $1,462,668,950 $1,310,168,920
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE
Notes to financial statements
IDS Equity Value Fund
(Unaudited as to Sept. 30, 1995)
______________________________________________________________________________
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) differs 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.
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 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
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.
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 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
Effective March 20, 1995, when the Fund began offering multiple classes of
shares, the Fund entered into agreements with AEFC for managing its portfolio,
providing administrative services and serving as transfer agent as follows:
Under its Investment Management Services Agreement, AEFC 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 AEFC 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, AEFC maintains shareholder
accounts and records. The Fund pays AEFC 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 a Plan and Agreement of Distribution, 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.
AEFC will assume and pay any expenses (except taxes and brokerage commissions)
that exceed the most restrictive applicable state expense limitation.
Sales charges received by American Express Financial Advisors Inc. for
distributing Fund shares were $128,866 for Class A and $522,637 for Class B
for the six months ended Sept. 30, 1995. The Fund also pays custodian fees to
American Express Trust Company, an affiliate of AEFC.
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 $3,032 for the six months ended Sept. 30, 1995.
______________________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $354,439,251 and $348,386,606, respectively, for the
six months ended Sept. 30, 1995. Realized gains and losses are determined on
an identified cost basis.
Brokerage commissions paid to brokers affiliated with AEFC were $23,472 for
the six months ended Sept. 30, 1995.
______________________________________________________________________________
4. Capital share transactions
<TABLE>
<CAPTION>
Transactions in shares of capital stock for the periods indicated are as
follows:
________________________________________________________________________________________
Six months ended Sept. 30, 1995
Class A Class B Class Y
___________________________________________________________________________
<S> <C> <C> <C>
Sold 746,163 7,974,762 107
Issued for reinvested 14,944 1,325,160 2
distributions
Redeemed (88,855) (9,475,741) --
___________________________________________________________________________
Net increase (decrease) 672,252 (175,819) 109
___________________________________________________________________________
Year ended March 31, 1995
Class A* Class B Class Y*
___________________________________________________________________________
Sold 683,711 33,954,887 2
Issued for reinvested 3,367 9,108,628 --
distributions
Redeemed (6,955) (14,021,209) --
___________________________________________________________________________
Net increase 680,123 29,042,306 2
___________________________________________________________________________
*Inception date was March 20, 1995.
</TABLE>
___________________________________________________________________________
5. Lending of portfolio securities
At Sept. 30, 1995, securities valued at $30,066,075 were on loan to brokers.
For collateral, the Fund received $491,400 in cash and U.S. government
securities valued at $30,240,321. Income from securities lending amounted to
$104,487 for the six months ended Sept. 30, 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>
______________________________________________________________________________
6. Financial highlights
<TABLE>
<CAPTION>
The table below shows certain important financial information for evaluating
the Fund's results.
Fiscal period ended March 31,
Per share income and capital changes*
Class A Class B Class Y
______________ _______________________________________________ ______________
1995*** 1995** 1995*** 1995 1994 1993 1992 1991 1995*** 1995**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $ 9.21 $9.10 $ 9.21 $9.17 $9.46 $8.90 $8.22 $7.92 $ 9.21 $9.23
beginning of period
Income from investment operations:
Net investment income .12 .01 .09 .19 .18 .19 .22 .26 .13 --
Net gains (losses) 1.05 .15 1.04 .47 .37 1.18 .98 .48 1.05 .03
(both realized and unrealized)
Total from investment 1.17 .16 1.13 .66 .55 1.37 1.20 .74 1.18 .03
operations
Less distributions:
Dividends from net (.13) (.05) (.09) (.19) (.18) (.19) (.22) (.26) (.14) (.05)
investment income
Distributions from -- -- -- (.43) (.66) (.62) (.30) (.18) -- --
realized gains
Total distributions (.13) (.05) (.09) (.62) (.84) (.81) (.52) (.44) (.14) (.05)
Net asset value, $10.25 $9.21 $10.25 $9.21 $9.17 $9.46 $8.90 $8.22 $10.25 $9.21
end of period
Ratios/supplemental data
______________ _______________________________________________ ______________
1995*** 1995** 1995*** 1995 1994 1993 1992 1991 1995*** 1995**
Net assets, end of period $14 $6 $1,449 $1,304 $1,031 $758 $497 $370 $-- $--
(in millions)
Ratio of expenses to .96%+ .91%+ 1.72%+ 1.61% 1.56% 1.63% 1.66% 1.66% .78%+ --%****
average daily net assets
Ratio of net income 2.71%+ 2.43%+ 1.87%+ 2.10% 1.93% 2.15% 2.56% 3.41% 3.01%+ --%****
to average daily net assets
Portfolio turnover rate 28% 85% 28% 85% 70% 48% 72% 65% 28% 85%
(excluding short-term
securities)
Total return++ 12.7% 1.8% 12.3% 7.7% 5.5% 16.0% 15.0% 10.1% 12.9% 0.3%
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Inception date was March 20, 1995 for Class A and Y.
***Six months ended Sept. 30, 1995 (Unaudited).
****Ratio of expenses and net investment income to average daily net assets is not presented
for Class Y as only two shares were outstanding during the period.
+Adjusted to an annual basis.
++Total return does not reflect payment of a sales charge. Total return for periods less than a
year are not annualized.
</TABLE>
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<TABLE>
<CAPTION>
Investments in securities
IDS Equity Value Fund (Percentages represent value of
Sept. 30, 1995 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (89.2%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Aerospace & defense (4.4%)
Raytheon 260,000 $ 22,100,000
Rockwell 425,000 20,081,250
United Technologies 250,000 22,093,750
______________
Total 64,275,000
_____________________________________________________________________________________________________________________________
Automotive & related (4.5%)
Ford Motor 700,000 (b) 21,787,500
General Motors 500,000 23,437,500
Genuine Parts 525,000 21,065,625
______________
Total 66,290,625
_____________________________________________________________________________________________________________________________
Banks and savings & loans (6.8%)
BankAmerica 365,000 21,854,375
First Union 425,000 21,675,000
Fleet Financial 550,000 20,762,500
NationsBank 350,000 23,537,500
Southern Natl 449,500 11,799,375
______________
Total 99,628,750
_____________________________________________________________________________________________________________________________
Beverages & tobacco (4.6%)
Anheuser-Busch 375,000 23,390,625
Philip Morris 275,000 22,962,500
UST 725,000 20,753,125
______________
Total 67,106,250
_____________________________________________________________________________________________________________________________
Building materials (1.4%)
Masco 725,000 19,937,500
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Chemicals (6.5%)
Air Products & Chemicals 400,000 20,850,000
ARCO Chemical 212,500 10,359,375
Dow Chemical 285,000 21,232,500
Ethyl 340,500 3,788,062
Lubrizol 525,000 17,128,125
PPG Inds 475,000 22,087,500
______________
Total 95,445,562
_____________________________________________________________________________________________________________________________
Computers and office equipment (3.1%)
Intl Business Machines 230,000 21,706,250
Xerox 175,000 23,515,625
______________
Total 45,221,875
_____________________________________________________________________________________________________________________________
Electronics (1.2%)
Thomas & Betts 275,000 17,771,875
_____________________________________________________________________________________________________________________________
Energy (5.7%)
Amoco 325,000 20,840,625
Atlantic Richfield 185,000 19,864,375
Exxon 300,000 21,675,000
Mobil 215,000 21,419,375
______________
Total 83,799,375
_____________________________________________________________________________________________________________________________
Financial services (1.4%)
Travelers 375,000 19,921,875
_____________________________________________________________________________________________________________________________
Furniture & appliances (0.9%)
Maytag 750,000 13,125,000
_____________________________________________________________________________________________________________________________
Health care (4.7%)
Beckman Instruments 212,000 6,413,000
Bristol Myers-Squibb 275,000 20,040,625
Johnson & Johnson 250,000 18,531,250
Pfizer 450,000 24,018,750
______________
Total 69,003,625
_____________________________________________________________________________________________________________________________
Industrial equipment & services (0.8%)
General Signal 385,000 11,261,250
_____________________________________________________________________________________________________________________________
Industrial transportation (2.9%)
Norfolk Southern 275,000 20,556,250
Union Pacific 325,000 21,531,250
______________
Total 42,087,500
_____________________________________________________________________________________________________________________________
Insurance (7.2%)
Amer General 550,000 20,556,250
Aon 525,000 21,459,375
Marsh & McLennan 225,000 19,771,875
Providian 251,600 10,441,400
St. Paul Companies 400,000 23,350,000
Tempest Reinsurance 77,000 (c) 9,820,580
______________
Total 105,399,480
_____________________________________________________________________________________________________________________________
Media (4.2%)
Dun & Bradstreet 325,000 18,809,375
Gannett 400,000 21,850,000
McGraw-Hill 250,000 20,437,500
______________
Total 61,096,875
_____________________________________________________________________________________________________________________________
Metals (1.2%)
Reynolds Metals 300,000 17,325,000
_____________________________________________________________________________________________________________________________
Multi-industry conglomerates (5.9%)
Emerson Electric 300,000 21,450,000
General Electric 350,000 22,312,500
Minnesota Mining & Mfg 375,000 21,187,500
Textron 325,000 22,181,250
______________
Total 87,131,250
_____________________________________________________________________________________________________________________________
Paper & packaging (1.5%)
Union Camp 375,000 21,609,375
_____________________________________________________________________________________________________________________________
Retail (7.5%)
Dayton Hudson 274,300 20,812,513
May Dept Stores 500,000 21,875,000
Melville 275,000 9,487,500
Nordstrom 500,000 20,875,000
Rite Aid 575,000 16,100,000
Toys R Us 775,000 (c) 20,925,000
______________
Total 110,075,013
_____________________________________________________________________________________________________________________________
Utilities - gas (1.4%)
Tenneco 450,000 20,812,500
_____________________________________________________________________________________________________________________________
Foreign (11.4%)(d)
BTR 3,500,000 18,056,500
Grand Met 2,900,000 20,389,900
Hanson ADR 1,300,000 21,125,000
Imperial Chemical Inds 1,600,000 20,300,800
Repsol (SA) ADR 700,000 22,225,000
Royal Dutch Petroleum 175,000 21,481,250
SmithKline Beecham 450,000 22,781,250
Tomkins 5,000,000 19,905,000
______________
Total 166,264,700
_____________________________________________________________________________________________________________________________
Total common stocks
(Cost: $1,117,853,833) $1,304,590,255
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (11.1%)
_____________________________________________________________________________________________________________________________
Annualized Amount
yield on payable at
date of maturity
Issuer purchase Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (0.6%)
Federal Home Loan Bank
Disc Note
10-23-95 5.61% $4,000,000 $ 3,985,740
Federal Natl Mtge Assn
Disc Note
10-11-95 5.68 4,600,000 4,592,059
______________
Total 8,577,799
_____________________________________________________________________________________________________________________________
Commercial paper (10.5%)
Albertson's
10-25-95 5.73 5,000,000 4,980,208
Amer General Finance
10-11-95 5.78 5,600,000 5,590,178
10-30-95 5.73 7,000,000 6,966,808
Amgen
11-17-95 5.72 2,200,000 2,183,368
AT&T Capital
11-02-95 5.73 5,100,000 5,073,399
BellSouth
Telecommunications
10-19-95 5.73 6,000,000 5,981,950
CAFCO
10-12-95 5.76 3,300,000 3,293,697
Campbell Soup
10-20-95 5.76 5,000,000 (e) 4,982,746
Cargill Global Funding
10-10-95 5.75 5,900,000 (e) 5,890,626
CIT Group Holdings
10-10-95 5.79 4,300,000 4,293,132
Commerzbank U.S. Finance
10-03-95 5.76 5,700,000 5,697,278
10-25-95 5.75 6,000,000 5,976,167
10-25-95 5.76 3,600,000 3,585,675
Deutsche Bank Financial
10-23-95 5.73 5,100,000 5,081,427
G.E. Capital
10-24-95 5.73 1,900,000 1,892,780
Harris Trust
11-03-95 5.75 5,800,000 5,800,000
Metlife Funding
11-09-95 5.77 5,300,000 5,266,257
Penney (JC) Funding
10-27-95 5.73 8,000,000 7,965,800
11-10-95 5.74 5,500,000 5,464,296
Pioneer Hi-Bred Intl
10-18-95 5.73 2,600,000 2,592,590
10-23-95 5.75 6,400,000 6,376,612
10-27-95 5.73 3,600,000 3,584,610
Pitney Bowes Credit
10-03-95 5.77 2,800,000 2,798,661
Reed Elsevier
10-19-95 5.75 2,300,000 (e) 2,293,056
SAFECO Credit
10-13-95 5.75 7,000,000 6,985,541
Sandoz
10-27-95 5.75 2,600,000 (e) 2,588,846
Southern California Gas
10-05-95 5.76 4,225,000 (e) 4,221,643
Southwestern Bell Capital
10-18-95 5.76 1,700,000 (e) 1,695,138
UBS Finance
10-02-95 6.52 6,600,000 6,597,609
USAA Capital
10-03-95 5.74 5,000,000 4,997,621
U S WEST Communications
10-24-95 5.72 5,100,000 5,080,654
Wachovia Bank
10-26-95 5.73 7,900,000 7,900,000
____________
Total 153,678,373
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $162,257,593) $ 162,256,172
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $1,280,111,426)(f) $1,466,846,427
_____________________________________________________________________________________________________________________________
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.
(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 Sept. 30, 1995, the cost of securities for federal income tax purposes was approximately
$1,280,111,000 and the approximate aggregate gross unrealized appreciation and depreciation
based on that cost was:
Unrealized appreciation $196,118,000
Unrealized depreciation (9,383,000)
____________________________________________________________________________________
Net unrealized appreciation $186,735,000
____________________________________________________________________________________
</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 AEFC
William H. Dudley
Executive vice president, AEFC.
David R. Hubers
President and chief executive officer, AEFC.
John R. Thomas
Senior vice president, AEFC.
_____________________________________________________________________
Officers who also are officers and/or employees of AEFC
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 mutual funds
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 mutual funds
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 mutual funds
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 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
IDS mutual funds
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 Value Fund
IDS Tower 10
Minneapolis, MN 55440-0010
