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PAGE 1
1997 ANNUAL REPORT
IDS Strategy Aggressive Fund
(prospectus enclosed)
(icon of) chess piece
The goal of IDS Strategy Aggressive Fund, a part of IDS Strategy
Fund, Inc., is long-term growth of capital. The Fund invests
primarily in common stocks that are selected for their above-
average growth potential.
(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.)
AMERICAN
EXPRESS
Financial
Advisors
Distributed by American Express Financial Advisors Inc., Member
SIPC.
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PAGE 2
(icon of) chess piece
Corporate climbers
All rapidly growing companies pass through various stages. During
their middle stage, they're known in the investment world as "mid-
caps." Stocks of such companies, which are the main focus of this
Fund, offer investors an attractive combination: the potential for
above-average corporate growth without the initial risks that are
inherent in brand-new businesses.
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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.
1997 annual report
From the president 4
From the portfolio manager 4
Ten largest holdings 6
Making the most of the Fund 7
Long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 24
IDS mutual funds 28
Federal income tax information 31
1997 prospectus
The Fund in brief 3p
Goal 3p
Investment policies and 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 10p
Facts about investments and their risks 10p
Alternative investment option 16p
Valuing Fund shares 16p
How to purchase, exchange or redeem shares 17p
Alternative purchase arrangements 17p
How to purchase shares 19p
How to exchange shares 22p
How to redeem shares 22p
Reductions and waivers of the sales charge 27p
Special shareholder services 34p
Services 34p
Quick telephone reference 34p
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PAGE 4
Distributions and taxes 35p
Dividend and capital gain distributions 35p
Reinvestments 36p
Taxes 37p
How to determine the correct TIN 38p
How the Fund is organized 39p
Shares 39p
Voting rights 40p
Shareholder meetings 40p
Board members and officers 40p
Investment manager 42p
Administrator and transfer agent 42p
Distributor 43p
About American Express Financial Corporation 45p
General information 45p
Appendix 46p
Descriptions of derivative instruments 46p
(This annual report is not part of the prospectus.)
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PAGE 5
To our shareholders
(photo of) William R. Pearce
President of the Fund
(photo of) David Bayer
Portfolio manager
From the president
If you're an experienced investor, you know that the past two years
have been unusually strong ones in many financial markets. Perhaps
just as important, you 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 periodically review
their long-term goals and examine whether 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.
/s/ W. R. Pearce
William R. Pearce
From the portfolio manager
A severe, late-period sell-off among smaller growth stocks,
especially technology-related issues, turned what had been a very
productive year into a modestly positive one for IDS Strategy
Aggressive Fund. For the fiscal year - April 1996 through March
1997 - the Fund's Class A shares generated a total return of 2.0%.
(This figure includes a capital gain that was paid to shareholders
last December and reduced the Fund's net asset value by the same
amount at that time.)
Thanks to a low inflation rate, relatively low long-term interest
rates and moderate economic growth, stocks in general, and growth
stocks in particular, enjoyed a highly favorable environment in the
spring of 1996. Although the strong start was followed by a summer
swoon, by fall stocks were again on the march, faltering only
briefly in December before reaching an all-time high in mid-
February.
Rate-rise fears
It was then that doubt began creeping into the market, particularly
about the direction of interest rates. When some previously high-
flying companies subsequently reported disappointing earnings, the
doubt turned into deep concern. And by the time the Federal
Reserve did indeed raise short-term interest rates in March, the
market was already in full retreat.
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PAGE 6
Most affected were small- and mid-capitalization stocks, which
investors felt would be less resilient than big blue-chips in a
more difficult investment environment. While much of the damage
was done in the technology sector, smaller stocks of virtually all
stripes came under pressure. The market was merciless in many
cases, as some issues dropped 50% or more in a single day.
Portfolio shifts
To mitigate the trend, I reduced the Fund's technology holdings,
which comprised nearly 40% of its investment at one point and had
long been the major contributor to Fund gains. I also let the
Fund's cash reserves build up and put more assets into less-
vulnerable sectors such as health care, restaurants and lodging, as
well as fast-growing foreign economies. Still, those efforts
couldn't prevent a decline in net asset value during February and
March.
While periods such as the recent one are trying, they do create
opportunities to add stocks of high-quality growth companies at
unusually low prices. They are the kinds of companies that have
proved rewarding for the Fund in the past and, I expect, will prove
so in the future. Along the way, however, we will continue to see
similar market cycles; above-average price fluctuations are a fact
of life in the small- and mid-cap investment arena. The key to
long-term success, then, is to remain committed to what history has
shown to be a successful strategy. I hope you share that view, and
I look forward to providing you with an update on the Fund's
progress six months from now.
/s/ David Bayer
David Bayer
Class A
12-month performance
(All figures per share)
Net asset value (NAV)
____________________________
March 31, 1997 $18.34
____________________________
March 31, 1996 $18.99
____________________________
Decrease $ 0.65
____________________________
Distributions
April 1, 1996-March 31, 1997
____________________________
From income $ ---
____________________________
From capital gains $ 1.13
____________________________
Total distributions $ 1.13
____________________________
Total return* 2.0%**
____________________________
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Class B
12-month performance
____________________________
(All figures per share)
Net asset value (NAV)
____________________________
March 31, 1997 $18.04
____________________________
March 31, 1996 $18.83
____________________________
Decrease $ 0.79
____________________________
Distributions
April 1, 1996-March 31, 1997
____________________________
From income $ --
____________________________
From capital gains $ 1.13
____________________________
Total distributions $ 1.13
____________________________
Total return* 1.2%**
____________________________
Class Y
12-month performance
____________________________
(All figures per share)
Net asset value (NAV)
____________________________
March 31, 1997 $18.40
____________________________
March 31, 1996 $19.16
____________________________
Decrease $ 0.76
____________________________
Distributions
April 1, 1996-March 31, 1997
____________________________
From income $ --
____________________________
From capital gains $ 1.13
____________________________
Total distributions $ 1.13
____________________________
Total return* 2.2%**
____________________________
*The prospectus discusses the
effects of sales charge, if any,
on the various classes.
**The total return is a hypothetical
investment in the Fund with all
distributions reinvested.
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PAGE 8
<TABLE>
<CAPTION>
The Fund's ten largest holdings
(Pie chart)
The ten holdings listed here make up 20.18% of the Fund's net
assets
____________________________________________________________________________________________________________
Percent Value
(of Fund's net assets) (as of March 31, 1997)
______________________________________________________________________________________________________________
<S> <C> <C>
Parametric Technology 2.59% $29,123,675
HBO & Co. 2.42 27,113,000
Boston Scientific 2.30 25,780,625
USA Waste Service 2.24 25,089,625
HFS 2.22 24,945,338
Tellabs 1.79 20,143,300
UNUM 1.71 19,206,300
Cisco Systems 1.68 18,850,563
Oracle Systems 1.64 18,349,965
Promus Hotel 1.59 17,885,175
</TABLE>
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PAGE 9
Making the most of your Fund
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.
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.
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PAGE 10
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 Strategy Aggressive Fund
$30,000
Graph showing the growth of the Fund,
the S&P 500, and the Lipper Small Company
$20,000 Growth Index over the past 10 years
$10,000
'87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97
(the following three paragraphs appear in the margin next to the
table:)
Assumes: *Holding period from 4/1/87 to 3/31/97. *Returns do not
reflect taxes payable on distributions. *Reinvestment of all
income and capital gain distributions for the Fund, with a value of
$7,768. *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.
The Lipper Small Company Growth Fund Index includes 30 funds that
are generally similar to the Fund, although some funds in the index
may have somewhat different investment policies or objectives.
Average annual total return
(as of March 31, 1997)
Since
1 year Inception* 5 years 10 years
Class A -3.10% +14.35% --% --%
Class B -2.61% -- +8.70% +8.41%
Class Y +2.18% +16.22% --% --%
*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
Small Company Growth Fund Index. Sales charges are not reflected
in the performance of the indexes.
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Average annual total return figures reflect the impact of the
applicable sales charge up to a maximum 5%. This was a period of
widely fluctuating security prices. Past performance is no
guarantee of future results.
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PAGE 11
The financial statements contained in Post-Effective Amendment #29
to the Registration Statement No. 2-89288 filed on or about May 29,
1997 are incorporated herein by reference.
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PAGE 12
IDS mutual funds
Global/International funds
Funds in this group seek capital growth and/or income by investing
primarily in foreign securities. Foreign investments may be
subject to currency fluctuations and political and economic risks
of the countries in which the investments are made. They are high
risk mutual funds with a potential for high reward.
IDS Emerging Markets Fund
Invests in a Portfolio comprised primarily of stocks of companies
in developing countries throughout the world that are believed to
offer growth potential. Seeks to provide long-term growth of
capital.
(icon of) world with countries
IDS Global Growth Fund
Invests in a Portfolio comprised primarily of 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 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 Global Balanced Fund
Invests in stocks and bonds in, for the most part, major markets
throughout the world, including the U.S. Seeks to provide a
balance of growth of capital and current income.
(icon of) scale holding two worlds
IDS Global Bond Fund
Invests in a Portfolio comprised primarily of debt securities of
U.S. and foreign issuers to seek high total return through income
and growth of capital.
(icon of) globe
Growth funds
Funds in this group seek capital growth, primarily from common
stocks. They are high risk mutual funds with a potential for high
reward.
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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. A highly aggressive and speculative fund
that seeks long-term growth of capital.
(icon of) cart of precious gems
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 Small Company Index Fund
Invests in all or a representative group of the equity securities
comprising the S&P SmallCap 600 Index, as it strives to provide
long-term capital appreciation.
(icon of) office building
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 Research Opportunities Fund
Invests in a Portfolio comprised primarily of equity securities of
companies included in the S&P 500 Index that are believed to have
strong growth potential. The Portfolio is managed using a research
methodology by the Research Department of AEFC. Goal is long-term
appreciation.
(icon of) magnifying glass
(This annual report is not part of the prospectus.)
IDS Growth Fund
Invests in a Portfolio comprised primarily of companies that have
above-average potential for long-term growth as a result of new
management, marketing opportunities or technological superiority.
(icon of) trees
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PAGE 14
IDS New Dimensions Fund
Invests in a Portfolio comprised primarily of 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
Growth & income funds
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. Foreign investments
may be subject to currency fluctuations and political and economic
risks of the countries in which the investments are made.
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 Managed Allocation Fund
Invests in a Portfolio comprised primarily of 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. Seeks maximum total return.
(icon of) gyroscope
(This annual report is not part of the prospectus.)
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PAGE 15
IDS Stock Fund
Invests in a Portfolio comprised primarily of 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
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 in a Portfolio comprised primarily of 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 Portfolio which seeks to 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
(This annual report is not part of the prospectus.)
Income funds
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 Extra Income Fund
Invests in a Portfolio comprised mainly of 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
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PAGE 16
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 a Portfolio comprised primarily of 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 in a Portfolio comprised primarily of 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 funds
These funds provide tax-free income by investing in municipal
bonds. The income is generally free from federal income tax, but a
portion of the income may be subject to state and local taxes.
Risk varies by bond quality.
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
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PAGE 17
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 High Yield Tax-Exempt Fund
Invests in a Portfolio comprised primarily of 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 Intermediate Tax-Exempt Fund
Invests in mainly investment-grade bonds and other debt securities
with intermediate-term maturities issued by state and local
government units. Goal is to seek a high level of current income
exempt from federal taxes.
(icon of) shield with a tree enclosed
(This annual report is not part of the prospectus.)
Money market funds
These money market funds have three main goals: conservation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. An investment in these funds is
neither insured nor guaranteed by the U.S. government, and there
can be no assurance that these funds will be able to maintain a
stable net asset value of $1.00 per share. 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
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PAGE 18
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.
(This annual report is not part of the prospectus.)<PAGE>
PAGE 19
Federal income tax information
IDS Strategy Aggressive 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. The dividends listed below were reported
to you on Form 1099-DIV, Dividends and Distributions, last January.
Shareholders should consult a tax advisor on how to report
distributions for state and local purposes.
IDS Strategy Aggressive Fund
Fiscal year ended March 31, 1997
Class A
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 30, 1996 $1.13086
(This annual report is not part of the prospectus.)
Class B
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 30, 1996 $1.13086
Class Y
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 30, 1996 $1.13086
(This annual report is not part of the prospectus.)
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PAGE 20
<TABLE><CAPTION>
Quick telephone reference
<S> <C> <C>
American Express Redemptions and exchanges, National/Minnesota:
Financial Advisors dividend payments or 800-437-3133
Telephone Transaction reinvestments and automatic
Service payment arrangements Mpls./St. Paul area:
671-3800
TTY Service For the hearing impaired 800-846-4852
Amerian Express Automated account information 800-862-7919
Financial Advisors (TouchTone phones only),
Easy Access Line including current fund prices and
performance, account values
and recent account transactions
</TABLE>
AMERICAN
EXPRESS
Financial
Advisors
IDS Strategy Aggressive Fund
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
PAGE 21
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 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. 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.
