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1996 ANNUAL REPORT
IDS Equity Value Fund
(prospectus enclosed)
(Icon of) Three growing 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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PAGE 2
(Icon of) Three growing flowers
Stocks for the bargain-hunter
Just like almost everything else, prices of companies that are
believed to be sound sometimes are reduced. That is, for any of a
variety of reasons, they fall out of favor with investors anf their
stock prices decline. These so-called "value" stocks represent a
classic opportunity to buy low in the market, which is what Equity
Value Fund seeks to do. Should investors rediscover the potential
of such companies, the stocks may well recover and benefit
shareholders accordingly.
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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.
1996 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 22
IDS mutual funds 26
Federal income tax information 29
1996 prospectus
The Fund in brief 3p
Goal 3p
Types of Fund investments and their risks 3p
Manager and distributor 3p
Portfolio manager 3p
Alternative purchase arrangements 3p
Sales charge and Fund expenses 4p
Performance 6p
Financial highlights 6p
Total returns 8p
Investment policies and risks 11p
Facts about investments and their risks 12p
Alternative investment option 18p
Valuing Fund shares 18p
How to purchase, exchange or redeem shares 19p
Alternative purchase arrangements 19p
How to purchase shares 22p
How to exchange shares 25p
How to redeem shares 26p
Reductions and waivers of the sales charge 31p
Special shareholder services 35p
Services 35p
Quick telephone reference 35p
Distributions and taxes 36p
Dividend and capital gain distributions 36p
Reinvestments 37p
Taxes 38p
How to determine the correct TIN 40p
How the Fund is organized 41p
Shares 41p
Voting rights 41p
Shareholder meetings 41p
Board members and officers 42p
Investment manager and transfer agent 44p
Distributor 45p
About American Express Financial Corporation 46p
General information 46p
Appendix 47p
Descriptions of derivative instruments 47p
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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
If you're an experienced investor, you know that 1995 was an
unusually strong year for the U.S. financial markets. Perhaps just
as important, you should also know that history shows that bull
markets don't last forever. Though they're often unpredictable,
declines - whether they're brief or long-lasting, moderate or
substantial - are always a possibility.
That fact reinforces the need for investors to review periodically
their long-term goals and assess whether their their investment
program remains on track to achieving them. Your quarterly
investment statements are one part of that monitoring process. The
other is a meeting with your American Express financial advisor.
That becomes even more important if there's a major change in your
financial situation or in the financial markets.
William R. Pearce
From the portfolio manager
Taking advantage of a highly favorable environment, stocks
unleashed a powerful rally during the past year. Although they
were unable to match the furious pace of the broad market, value
stocks advanced at a substantial rate, as evidenced by IDS Equity
Value Fund's total return for Class A shares of approximately 26%.
(Part of the total return was in the form of a capital gain, which
was paid to shareholders last December and reduced the Fund's net
asset value by a like amount at that time.)
After struggling during much of 1994, the stock market got off to a
good start in 1995. By the beginning of the Fund's fiscal year last
spring, the market had established a positive momentum that
persisted with only brief interruptions throughout the ensuing 21
months.
Value lags, then picks up
Much of the time, growth stocks - those of companies boasting
rapidly growing profits - were at the forefront of the market's
advance. That trend worked to the Fund's disadvantage for several
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
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PAGE 5
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.
Our value orientation proved to be beneficial last fall and winter,
though, as growth stocks were dragged down by a sharp decline in
high-priced technology issues. Because of our small exposure to
the technology sector, the Fund was able to essentially avoid that
downturn.
Financials provide boost
As for positive contributions, many of our holdings generated good
gains. Several of the leading examples were in the financial
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. Our "cyclical" stocks, such as those in auto, chemical
and general industrial sectors, were positive though less
productive than the U.S. market as a whole during 1995, but picked
up sharply during the first quarter of 1996.
The structure of the portfolio remained largely the same during the
12 months, as we made no major shifts in or out of stock sectors.
One change worth noting was an increase in foreign stocks near the
end of the period. This also fits with our value style in that we
felt foreign stocks in general had become more reasonably priced
than U.S. issues. Beyond that, we added some electric utilities
and real estate investment trusts to the portfolio. Both offer
well-above-average dividends, which should help support the Fund
during periods of market volatility.
Looking to the current fiscal year, we expect a more uncertain
stock market than we saw throughout 1995. If history is a guide,
that could well work in value stocks' favor ,as investors may
become less willing to take on the greater risk that comes with
more aggressive types of stock investments.
Thomas W. Medcalf
Class A
12-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1996 $11.06
March 31, 1995 $ 9.21
Increase $ 1.85
Distributions
April 1, 1995 - March 31, 1996
From income $ .24
From capital gains $ .28
Total distributions $ .52
Total return* +26.1%**
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1996 $11.07
March 31, 1995 $ 9.21
Increase $ 1.86
Distributions
April 1, 1995 - March 31, 1996
From income $ .16
From capital gains $ .28
Total distributions $ .44
Total return* +25.2%**
Class Y
12-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1996 $11.07
March 31, 1995 $ 9.21
Increase $ 1.86
Distributions
April 1, 1995 - March 31, 1996
From income $ .26
From capital gains $ .28
Total distributions $ .54
Total return* +26.4%**
* The prospectus discusses the effect 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 6
<TABLE>
<CAPTION>
The Fund's ten largest holdings
(Pie chart) The ten holdings listed here make up 16.27% of the
Fund's net assets
Equity Value Fund
_____________________________________________________________________________________
Percent Value
of fund's net assets)(as of March 29, 1996)
_____________________________________________________________________________________
<S> <C> <C>
(Unaudited)
Dow Chemical 1.74% $28,234,375
The second largest U.S. chemical company.
Dow produces basic chemicals and plastics,
industrial specialties and household, drug
and agricultural products.
NationsBank 1.72 28,043,750
A bank holding company with a strong presence
in North Carolina, South Carolina,
Texas, Virginia, Florida and Georgia.
General Motors 1.72 27,956,250
A high-technology applications company engaged
in automotive electronics, defense electronics,
telecommunications and commercial technology.
General Electric 1.68 27,256,250
A diversified company with interest in maufacturing,
broadcasting (NBC), financial services and technology.
Gannett Co Inc 1.65 26,900,000
A diversified news and information company with
interests in newspaper publishing, television and
radio broadcast, outdoor adverising and other
related business services.
First Union Corp 1.58 25,712,500
A bank-holding company based in Charlotte, North
Carolina, with strategic market position in North
Carolina, South Carolina and Florida.
Dayton Hudson Corp 1.56 25,462,500
A diversified retailer operating Mervyn's, Target,
Marshall Field's and Dayton/Hudson stores.
Anheuser Busch 1.55 25,265,625
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.
Rockwell International Corp 1.54 25,021,875
An important participant in the defense and aerospace
industry. As a leading producer of space systems,
electronics, automotive products and graphic systems,
the company is involved in the Space Shuttle Orbiter
program, the MX missile, NAVSTAR, and in providing
parts and service for the B-1 bomber.
Mobil 1.53 24,913,125
Among the largest oil companies, with world-scale
refining and marketing operations.
</TABLE>
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Making the most of the Fund
Average annual total return
(as of March 31, 1996)
1 year 5 years 10 years
Class A* +19.84% - -
Class B +21.28% +13.56% +12.66%
Class Y* +26.38% - -
* Inception date was March 20, 1995.
The performance of Class A and Class Y will vary from the
performance of Class B based on differences in sales charges and
fees.
Your investment and return values fluctuates so that your shares,
when redeemed, may be worth more or less than the original cost.
Figures for Class A and Class B reflect the effect of the maximum
5% sales charge. This was a period of widely fluctuating security
prices. Past performance is no guarantee of future results.
Build your assets systematically
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 XXXXX
Feb 100 18 5.56 XXXXXx
Mar 100 17 5.88 XXXXXx
Apr 100 15 6.67 XXXXXXx
May 100 16 6.25 XXXXXXx
June 100 18 5.56 XXXXXx
July 100 17 5.88 XXXXXx
Aug 100 19 5.26 XXXXXx
Sept 100 21 4.76 XXXXx
Oct 100 20 5.00 XXXXX
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more
shares when the per share market price is low...
(arrow in table pointing to September) and fewer shares when the
per share market price is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
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The 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.
How your $10,000 has grown in IDS Equity Value Fund
$32,941
IDS Equity
Value Fund
Class B
S&P 500
Stock Index
$30,000
$20,000
Lipper Growth
& Income Index
$10,000
'86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96
Average annual total return
(as of March 31, 1996)
1 year 5 years 10 years
Class A* +19.84% - -
Class B +21.28% +13.56% +12.66%
Class Y* +26.38% - -
*Inception date was March 20, 1995
On the graph 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.
Assumes: Holding period from 4/1/86 to 3/31/96. Returns do not
reflect taxes payable on distributions. Reinvestment of all income
and capital gain distributions for the Fund, with a value of
$17,937. Also see "Performance" in the Fund's current prospectus.
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.
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Independent auditors' report
___________________________________________________________________
The board 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 (a series of IDS Strategy Fund, Inc.) as
of March 31, 1996, 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, 1996, and
the financial highlights for each of the years in the ten-year
period ended March 31, 1996. 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, 1996, 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,
1996, 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 3, 1996
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<TABLE>
<CAPTION>
Statement of assets and liabilities
IDS Equity Value Fund
March 31, 1996
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $1,382,462,645) $1,620,964,771
Dividends and accrued interest receivable 4,977,654
Receivable for investment securities sold 29,681,073
Unrealized appreciation of foreign currency contracts held, at value (Notes 1 and 5) 1,486,901
_____________________________________________________________________________________________________________
Total assets 1,657,110,399
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 87,039
Dividends payable to shareholders 80,385
Payable for investment securities purchased 6,586,998
Payable upon return of securities loaned (Note 4) 22,115,000
Accrued investment management services fee 45,000
Accrued distribution fee 53,449
Accrued service fee 15,659
Accrued transfer agency fee 15,530
Accrued administrative services fee 3,094
Other accrued expenses 364,055
_____________________________________________________________________________________________________________
Total liabilities 29,366,209
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $1,627,744,190
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 100,000,000,000 shares of $.01 par value $ 1,471,082
Additional paid-in capital 1,290,148,287
Undistributed net investment income 2,316,910
Accumulated net realized gain (Note 1) 93,816,138
Unrealized appreciation of investments and on translation of assets
and liabilities in foreign currencies (Note 5) 239,991,773
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $1,627,744,190
_____________________________________________________________________________________________________________
Net assets applicable to outstanding shares: Class A $ 331,621,682
Class B $1,296,121,235
Class Y $ 1,273
Net asset value per share of outstanding capital stock: Class A shares 29,986,923 $ 11.06
Class B shares 117,121,212 $ 11.07
Class Y shares 115 $ 11.07
See accompanying notes to financial statements.<PAGE>
PAGE 11
Financial statements
Statement of operations
IDS Equity Value Fund
March 31, 1996
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
Income:
Interest $ 8,351,484
Dividends (net of foreign taxes withheld of $460,206) 41,333,930
_____________________________________________________________________________________________________________
Total income 49,685,414
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management services fee 7,365,378
Distribution fee -- Class B 10,661,141
Transfer agency fee 2,465,505
Incremental transfer agency fee -- Class B 158,579
Service fee
Class A 63,733
Class B 2,472,258
Administrative services fee 512,259
Compensation of board members 27,665
Compensation of officers 14,552
Custodian fees 256,519
Postage 215,011
Registration fees 78,285
Reports to shareholders 65,590
Audit fees 20,000
Administrative 10,380
Other 22,931
_____________________________________________________________________________________________________________
Total expenses 24,409,786
Earnings credits on cash balances (Note 2) (11,906)
_____________
Total net expenses 24,397,880
_____________________________________________________________________________________________________________
Investment income -- net 25,287,534
_____________________________________________________________________________________________________________
Realized and unrealized gain -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions 140,762,006
(including gain of $15,762 from foreign currency transactions) (Note 3)
Net change in unrealized appreciation or depreciation of investments and on
translation of assets and liabilities in foreign currencies 163,767,246
_____________________________________________________________________________________________________________
Net gain on investments and foreign currency 304,529,252
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $329,816,786
_____________________________________________________________________________________________________________
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 1996 1995
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 25,287,534 $ 24,535,993
Net realized gain on investments and foreign currency 140,762,006 7,363,051
Net change in unrealized appreciation or depreciation
of investments and on translation of assets and
liabilities in foreign currencies 163,767,246 57,194,997
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations 329,816,786 89,094,041
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (2,245,881) (31,456)
Class B (21,676,993) (24,811,727)
Class Y (29) --
Net realized gains
Class A (528,216) --
Class B (39,027,529) (55,817,534)
Class Y (31) __
_____________________________________________________________________________________________________________
Total distributions (63,478,679) (80,660,717)
_____________________________________________________________________________________________________________
Capital share transactions (Note 6)
_____________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 23,920,155 6,221,965
Class B shares 147,229,281 312,970,153
Class Y shares 1,000 20
Reinvestment of distributions at net asset value
Class A shares 2,717,827 31,089
Class B shares 60,152,086 79,769,788
Class Y shares 59 --
Payments for redemptions
Class A shares (5,090,416) (63,496)
Class B shares (Note 2) (177,692,829) (128,511,731)
Conversion of shares
Class A shares 299,775,130 --
Class B shares (299,775,130) --
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions 51,237,163 270,417,788
_____________________________________________________________________________________________________________
Total increase in net assets 317,575,270 278,851,112
Net assets at beginning of year 1,310,168,920 1,031,317,808
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of $2,316,910
and $936,517) $1,627,744,190 $1,310,168,920
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
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PAGE 13
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
invests primarily in equity securities that provide income, offer
the opportunity for long term capital growth, or both. The Fund
offers Class A, Class B and Class Y shares. Class A shares, are
sold with a front-end sales charge. Class B shares may be subject
to a contingent deferred sales charge and such shares automatically
convert to class A after eight years. Class Y shares, 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:
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of increase and decrease in net assets from
operations during the period. Actual results could differ from
those estimates.
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PAGE 14
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.
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PAGE 15
Option contracts are valued daily at the closing prices on their
primary exchanges and unrealized appreciation or depreciation is
recorded. The Fund will realize a gain or loss upon expiration or
closing of the option transaction. When an option is exercised, the
proceeds on sales for a written call option, the purchase cost for
a written put option or the cost of a security for a purchased put
or call option is adjusted by the amount of premium received or
paid.
Futures transactions
In order to gain exposure to or protect itself from changes in the
market, the Fund may buy and sell stock index futures contracts
traded on any U.S. or foreign exchange. The Fund also may 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.
<PAGE>
PAGE 16
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.
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PAGE 17
Federal taxes
Since the Fund's policy is to comply with all sections of the
Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income to shareholders, no
provision for income or excise taxes is required.
Net investment income (loss) and net realized gains (losses) may
differ for financial statement and tax purposes primarily because
of the deferral of losses on certain futures contracts, the
recognition of certain foreign currency gains (losses) as ordinary
income (loss) for tax purposes, and losses deferred due to "wash
sale" transactions. The character of distributions made during the
year from net investment income or net realized gains may differ
from their ultimate characterization for federal income tax
purposes. Also, due to the timing of dividend distributions, the
fiscal year in which amounts are distributed may differ from the
year that the income or realized gains (losses) were recorded by
the Fund.
On the statement of assets and liablilities, as a result of
permanent book-to-tax differences, undistributed net investment
income has been increased by $15,762 and accumulated net realized
gain has been increased by $15,762.
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.
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PAGE 18
___________________________________________________________________
2. Expenses and sales charges
Effective March 20, 1995, the Fund entered into
agreements with American Express Financial Corporation (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.
<PAGE>
PAGE 19
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 $373,149 for Class A and $1,243
for Class B for the year ended March 31, 1996. The Fund also pays
custodian fees to American Express Trust Company, an affiliate of
AEFC.
During the year ended March 31, 1996, the Fund's custodian and
transfer agency fees were reduced by $11,906 as a result of
earnings credits from overnight cash balances.
The Fund has a retirement plan for its independent board members.
Upon retirement, board members receive monthly payments equal to
one-half of the retainer fee for as many months as they served as
board members 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 board members serve on the board. The
retirement plan expense amounted to $10,905 for the year ended
March 31, 1996. The plan was terminated April 30, 1996. The total
liablility for the plan is $35,035, which will be paid out at some
future date.
<PAGE>
PAGE 20
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $764,645,039 and $715,668,224
respectively, for the year ended March 31, 1996. Realized gains and
losses are determined on an identified cost basis.
Brokerage commissions paid to brokers affiliated with AEFC were
$9,088 for the year ended March 31, 1996.
___________________________________________________________________
4. Lending of portfolio securities
At March 31, 1996, securities valued at $21,877,500 were on loan to
brokers. For collateral, the Fund received $22,115,000 in cash.
Income from securities lending amounted to $159,082 for the year
ended March 31, 1996. The risks to the Fund of securities lending
are that the borrower may not provide additional collateral when
required or return the securities when due.
___________________________________________________________________
5. Foreign currency contracts
At March 31, 1996, the Fund had entered into three foreign currency
exchange contracts that obligate the Fund to deliver currencies at
specified future dates. The unrealized appreciation and/or
depreciation on these contracts is included in the accompanying
financial statements. The terms of the open contracts are as
follows:
<TABLE><CAPTION>
Currency to be Currency to be Unrealized
Exchange date delivered received appreciation
________________________________________________________________________________
<S> <C> <C> <C>
May 22, 1996 48,600,000 74,823,588 $ 698,868
British Pound U.S. Dollar
May 22, 1996 57,000,000 35,179,452 570,443
Dutch Guilder U.S. Dollar
May 22, 1996 103,500,000 18,400,654 217,590
Danish Krona U.S. Dollar
____________
$1,486,901
</TABLE>
<PAGE>
PAGE 21
__________________________________________________________________________
6. Capital share transactions
Transactions in shares of capital stock for the years indicated are
as follows:
<TABLE>
<CAPTION>
___________________________________________________________________________
Year ended March 31, 1996
Class A Class B Class Y
___________________________________________________________________________
<S> <C> <C> <C>
Sold 2,299,573 14,555,513 107
Issued for reinvested 250,311 5,792,693 6
distributions
Redeemed (475,563) (17,528,671) --
Conversion of shares 27,232,479 (27,267,157) --
___________________________________________________________________________
Net increase (decrease) 29,306,800 (24,447,622) 113
___________________________________________________________________________
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>
___________________________________________________________________
7. Illiquid Securities
At March 31, 1996 investments insecurities included issues that
are illiquid. The Fund currently limits investments in illiquid
secruities to 10% of the net assets, at market value, at the time
of purchase. The value of such securities at March 31, 1996 was
$10,178,630 which represents 0.63% of net assets. Pursuant to
guidelines adopted by the Fund's board, certain unregistered
securities are determined to be liquid and are not included within
the 10% limitation specified above.
___________________________________________________________________
8. Financial Highlights
"Financial highlights" showing per share data and selected
information is presented on pages 6 and 7 of the prospectus.
<PAGE>
PAGE 22
<TABLE>
<CAPTION>
Investments in securities
IDS Equity Value Fund (Percentages represent value of
March 31, 1996 investments compared to net assets)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Common stocks (92.3%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Aerospace & defense (3.0%)
Raytheon 450,000 $ 23,062,500
Rockwell Intl 425,000 25,021,875
______________
Total 48,084,375
_____________________________________________________________________________________________________________________________
Automotive & related (4.3%)
Ford Motor 550,000 18,906,250
General Motors 525,000 27,956,250
Genuine Parts 525,000 23,625,000
______________
Total 70,487,500
_____________________________________________________________________________________________________________________________
Banks and savings & loans (9.0%)
Banc One 600,000 21,375,000
BankAmerica 265,000 20,537,500
First Union 425,000 25,712,500
Keycorp 170,900 6,601,013
Morgan (JP) 250,000 20,750,000
NationsBank 350,000 28,043,750
Norwest 650,000 23,887,500
______________
Total 146,907,263
_____________________________________________________________________________________________________________________________
Beverages & tobacco (4.3%)
Anheuser-Busch 375,000 25,265,625
Philip Morris 240,000 21,060,000
UST 725,000 23,109,375
______________
Total 69,435,000
_____________________________________________________________________________________________________________________________
Building materials (1.3%)
Masco 750,000 21,750,000
_____________________________________________________________________________________________________________________________
Chemicals (7.3%)
Air Products & Chemicals 400,000 21,850,000
ARCO Chemical 212,500 11,023,438
Betz Laboratories 400,000 18,600,000
Dow Chemical 325,000 28,234,375
Lubrizol 525,000 15,487,500
PPG Inds 475,000 23,215,625
______________
Total 118,410,938
_____________________________________________________________________________________________________________________________
Computers and office equipment (2.6%)
Intl Business Machines 175,000 19,446,875
Xerox 185,000 23,217,500
______________
Total 42,664,375
_____________________________________________________________________________________________________________________________
Electronics (1.3%)
Thomas & Betts 275,000 20,625,000
_____________________________________________________________________________________________________________________________
Energy (6.4%)
Amoco 325,000 23,481,250
Atlantic Richfield 185,000 22,015,000
Exxon 200,000 16,325,000
Mobil 215,000 24,913,125
TOTAL Cl B 500,000 17,000,000
______________
Total 103,734,375
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 23
Financial services (2.0%)
Developers Diversified Realty 300,000 8,812,500
Meditrust 350,000 11,856,250
Simon Property Group 500,000 11,500,000
______________
Total 32,168,750
_____________________________________________________________________________________________________________________________
Food (--%)
Earthgrains 15,000 (c) 448,125
_____________________________________________________________________________________________________________________________
Furniture & appliances (0.8%)
Maytag 650,000 13,162,500
_____________________________________________________________________________________________________________________________
Health care (2.0%)
Baxter Intl 550,000 24,887,500
Beckman Instruments 212,000 8,268,000
______________
Total 33,155,500
_____________________________________________________________________________________________________________________________
Industrial equipment & services (1.8%)
General Signal 385,000 13,956,250
WMX Technologies 500,000 15,875,000
______________
Total 29,831,250
_____________________________________________________________________________________________________________________________
Industrial transportation (2.4%)
Norfolk Southern 200,000 17,000,000
Union Pacific 325,000 22,303,125
______________
Total 39,303,125
_____________________________________________________________________________________________________________________________
Insurance (6.7%)
American General 550,000 18,975,000
ITT Hartford 350,000 17,150,000
Marsh & McLennan 250,000 23,218,750
Providian 400,000 17,850,000
St. Paul Companies 400,000 22,200,000
Tempest Reinsurance 77,000 (c,f) 10,178,630
______________
Total 109,572,380
_____________________________________________________________________________________________________________________________
Media (3.0%)
Gannett 400,000 26,900,000
McGraw-Hill 250,000 21,687,500
______________
Total 48,587,500
_____________________________________________________________________________________________________________________________
Metals (1.5%)
Reynolds Metals 400,000 23,650,000
See accompanying notes to investments in securities.
<PAGE>
PAGE 24
Common stocks (continued)
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Multi-industry conglomerates (4.3%)
Emerson Electric 300,000 24,225,000
General Electric 350,000 27,256,250
Textron 225,000 18,000,000
______________
Total 69,481,250
_____________________________________________________________________________________________________________________________
Paper & packaging (1.2%)
Union Camp 400,000 19,850,000
_____________________________________________________________________________________________________________________________
Retail (8.3%)
Dayton Hudson 300,000 25,462,500
May Dept Stores 500,000 24,125,000
Melville 550,000 19,731,250
Nordstrom 475,000 23,007,812
Rite Aid 575,000 17,753,125
Toys R Us 900,000 (c) 24,300,000
______________
Total 134,379,687
_____________________________________________________________________________________________________________________________
Utilities - electric (3.1%)
Edison Intl 1,000,000 17,125,000
Gen Pub Utilities 500,000 16,500,000
Peco Energy 650,000 17,306,250
_____________
Total 50,931,250
_____________________________________________________________________________________________________________________________
Utilities - telephone (1.1%)
Bell Atlantic 300,000 18,525,000
_____________________________________________________________________________________________________________________________
Foreign (14.6%)(d)
BTR 3,500,000 16,852,500
Grand Met 3,100,000 19,967,100
Hanson ADR 1,500,000 (b) 22,500,000
Imperial Chemical Inds 1,700,000 23,949,600
KPN ADR 575,000 (c) 22,712,500
Repsol (SA) ADR 650,000 24,293,750
Royal Dutch Petroleum 175,000 24,718,750
SmithKline Beecham 475,000 24,462,500
Tele Danmark ADR 700,000 (b) 18,112,500
Tomkins 5,000,000 19,305,000
Unilever 150,000 20,362,500
______________
Total 237,236,700
_____________________________________________________________________________________________________________________________
Total common stocks
(Cost: $1,263,877,725) $1,502,381,843
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (7.3%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (.3%)
Federal Home Loan Mtge Corp
Disc Nt
04-22-96 5.29% $4,200,000 $ 4,185,859
______________
Total 4,185,859
_____________________________________________________________________________________________________________________________
Commercial paper (6.7%)
Alabama Power
04-04-96 5.18% 700,000 699,500
Aon
04-25-96 5.28 1,400,000 1,394,692
Associates
North America
04-03-96 5.24 4,000,000 3,997,680
Avoc Financial<PAGE>
PAGE 25
04-15-96 5.28 900,000 897,896
Colgate Palmolive
04-23-96 5.33 800,000 (e) 797,173
Consolidated Rail
04-19-96 5.17 5,700,000 (e) 5,682,465
Fleet Funding
04-04-96 5.24 3,500,000 (e) 3,497,467
05-02-96 5.38 4,276,000 (e) 4,255,030
Gannett
04-22-96 5.28 3,000,000 (e) 2,989,937
Gateway Fuel
05-08-96 5.36 5,600,000 5,567,665
Lincoln National
04-18-96 5.32 3,700,000 (e) 3,689,650
See accpomanying notes to investments in securities.
<PAGE>
PAGE 26
Short-term securities (continued)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
Metlife Funding
04-09-96 5.27 6,000,000 5,991,249
Mobil Australia
05-15-96 5.36 2,800,000 (e) 2,780,931
Northern States Power
05-09-96 5.36 6,500,000 6,461,506
PACCAR
04-08-96 5.44 1,100,000 1,098,285
Reed Elsevier
04-12-96 5.27 5,600,000 (e) 5,589,383
Southwestern Bell
Telecommunications
06-27-96 5.34 600,000 591,720
SAFECO
04-16-96 5.29 5,000,000 4,987,557
04-26-96 5.34 2,900,000 2,888,429
St. Paul Companies
04-17-96 5.29 4,100,000 (e) 4,089,196
Sandoz
04-03-96 5.24 5,500,000 5,496,810
04-15-96 5.29 5,000,000 (e) 4,988,289
Sysco
05-07-96 5.40 5,400,000 (e) 5,369,391
Toyota Motor
04-12-96 5.29 7,900,000 7,884,966
Transamerica Financial
04-24-96 5.31 4,100,000 4,084,967
USAA Capital
05-03-96 5.38 6,000,000 5,969,627
05-20-96 5.34 2,500,000 2,481,229
USL Capital
04-08-96 5.26 5,400,000 5,392,926
____________
Total 109,615,616
_____________________________________________________________________________________________________________________________
Letter of credit (0.3%)
BankAmerica-
AES Barbers Point
04-25-96 5.37 4,800,000 4,781,453
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $118,584,920) $ 118,582,928
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $1,382,462,645)(f) $1,620,964,771
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
PAGE 27
Notes to investments in securities
___________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Security is partially or fully on loan. See Note 4 to the
financial statements.
(c) Presently non-income producing.
(d) Foreign security values are stated in U.S. dollars.
(e) 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.
(f) Identifies issues considered to be illiquid (see Note 7 to the
financial statements). Information concerning such security
holdings at March 31, 1996, is as follows:
Security Acquisition Date Cost
___________________________________________________________________
Tempest Reinsurance 09-13-93 $7,700,000
(g) At March 31, 1996, the cost of securities for federal income
tax purposes was $1,382,702,052 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $250,447,790
Unrealized depreciation (12,185,071)
_____________________________________________
Net unrealized appreciation $238,262,719
_____________________________________________
<PAGE>
PAGE 28
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conservation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposits (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income. Secondary
objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
seek high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed-income
securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) coins
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher
rated, lower risk bond categories, or the equivalent, and in
government bonds.
(icon of) greek column
<PAGE>
PAGE 29
IDS 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) shield with eagle head enclosed
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 enclosed
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 star enclosed
<PAGE>
PAGE 30
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 U.S. equity securities, U.S. and foreign debt
securities, foreign equity securities and money market instruments.
The fund provides diversification among these major investment
categories and has a target mix that represents the way the fund's
investments will be allocated over the long term.
(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 pine 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 31
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) light bulb
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) two 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) trees
<PAGE>
PAGE 32
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 33
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, 1996
Class A
Income distributions
taxable as dividend income, 63.82% qualifying for deduction by
corporations.
Payable date Per share
___________________________________________________
June 28, 1995 $0.06336
Sept. 28, 1995 0.07006
Dec. 28, 1995 0.07820
March 29, 1996 0.06740
___________________________________________________
Total $0.27902
___________________________________________________
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
___________________________________________________
Dec. 28, 1995 $0.24555
___________________________________________________
Total distributions $0.52457
___________________________________________________
The distribution of $0.32375 per share, payable Dec. 28, 1995,
consisted of $.04632 derived from net investment income, $0.03188
from net short-term capital gains (a total of $0.07820 taxable as
dividend income) and $0.24555 from net long-term capital gains.
<PAGE>
PAGE 34
Class B
Income distributions
taxable as dividend income, 63.82% qualifying for deduction by
corporations.
Payable date Per share
___________________________________________________
June 28, 1995 $0.04488
Sept. 28, 1995 0.04981
Dec. 28, 1995 0.05841
March 29, 1996 0.03929
___________________________________________________
Total $0.19239
___________________________________________________
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
___________________________________________________
Dec. 28, 1995 $0.24555
___________________________________________________
Total distributions $0.43794
___________________________________________________
The distribution of $0.30396 per share, payable Dec. 28, 1995,
consisted of $0.02653 derived from net investment income, $0.03188
net short-term capital gains (a total of $0.05841 taxable as
dividend income) and $0.24555 from net long-term capital gains.
Class Y
Income distributions
taxable as dividend income, 63.82% qualifying for deduction by
corporations.
Payable date Per share
___________________________________________________
June 28, 1995 $0.06691
Sept. 28, 1995 0.07369
Dec. 28, 1995 0.08256
March 29, 1996 0.06899
___________________________________________________
Total $0.29215
___________________________________________________
<PAGE>
PAGE 35
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
___________________________________________________
Dec. 28, 1995 $0.24555
___________________________________________________
Total distributions $0.53770
___________________________________________________
The distribution of $0.32811 per share, payable Dec. 28, 1995,
consisted of $0.05068 derived from net investment income, $0.03188
from net short-term capital gains (a total of $0.08256 taxable as
dividend income) and $0.24555 from net long-term capital gains.
<PAGE>
PAGE 36
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
<PAGE>
PAGE 37
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 a 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.
