<PAGE>
PAGE 1
1996 ANNUAL REPORT
IDS International Fund
(prospectus enclosed)
(Icon of) three flags
The goal of IDS International Fund, Inc. is long-term growth of
capital. The Fund invests primarily in common stocks and
securities convertible into common stocks of foreign issuers.
(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.
<PAGE>
PAGE 2
(Icon of) three flags
A world of opportunity
There's a new recognition among investors that the stock market
extends beyond Wall Street. Opportunity abounds in other markets,
from Tokyo, London and Frankfurt to Singapore, Mexico and Hong
Kong. Ignoring these opportunities may mean missing out on
tremendous world economic growth in the years ahead. International
Fund focuses on finding the markets that offer the greatest current
potential to investors. With about two-thirds of the world's stock
market value currently based outside of the United States, American
investors now have an even greater opportunity to diversify their
portfolios beyond our boundaries.<PAGE>
PAGE 3
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 the Fund 7
Long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 29
IDS mutual funds 35
Federal income tax information 39
1996 prospectus
The Fund in brief 3p
Goal 3p
Investment policies and risks 3p
Manager and distributor 3p
Portfolio manager 3p
Alternative purchase arrangements 4p
Sales charge and Fund expenses 5p
Performance 7p
Financial highlights 7p
Total returns 9p
Investment policies and risks 11p
Facts about investments and their risks 12p
Alternative investment option 16p
Valuing Fund shares 16p
How to purchase, exchange or redeem shares 17p
Alternative purchase arrangements 17p
How to purchase shares 20p
How to exchange shares 23p
How to redeem shares 23p
Reductions and waivers of the sales charge 28p
Special shareholder services 33p
Services 33p
Quick telephone reference 33p
<PAGE>
PAGE 4
Distributions and taxes 34p
Dividend and capital gain distributions 34p
Reinvestments 35p
Taxes 36p
How to determine the correct TIN 38p
How the Fund is organized 39p
Shares 39p
Voting rights 39p
Shareholder meetings 39p
Board members and officers 39p
Investment manager 41p
Administrator and transfer agent 42p
Distributor 43p
About American Express Financial Corporation 45p
General information 45p
Appendix 46p
Descriptions of derivative instruments 46p
<PAGE>
PAGE 5
To our shareholders
(Photo of) William R. Pearce
President of the Fund
(Photo of) Paul Hopkins
Portfolio manager
From the president
If you're an experienced investor, you know that the past year or
two has been a generally strong period for financial assets.
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.
William R. Pearce
From the portfolio manager
IDS International Fund took advantage of upturns in several foreign
stock markets during the past fiscal year, November 1995 through
October 1996. For the past 12 months, the Fund's total return on
Class A was 9.9%, which includes a capital gain of $0.14 that was
paid to shareholders in December 1995 and reduced the Fund's net
asset value by the same amount at that time.
Although they experienced some volatility, particularly last
summer, foreign stock markets as a whole exhibited more consistent
performance than they have in recent years. Reflecting that trend,
the Fund recorded gains in 10 of the past 12 months.
Gains continue
into the spring
Most of the Fund's progress was made in the first several months of
the fiscal year, as it recorded a gain well into double digits by
the end of April. In May, the Japanese market, the portfolio's
largest investment exposure and 36% of the international index,
declined as a result of profit-taking. The situation was
compounded by a drop in the value of the yen versus the dollar,
which further reduced returns to U.S. investors who held Japanese
stocks.
Still, the Fund managed to generate positive overall performance
until July, when concerns about rising interest rates in the U.S.
spread to several foreign markets, driving down prices, especially
in Southeast Asia. The Fund soon rebounded, though, registering
gains in August and September.
<PAGE>
PAGE 6
Japan remains
largest exposure
Although it was less than that of the international index, the
Fund's exposure to the Japanese market remained its largest single
country investment. The next biggest exposures were the United
Kingdom (about 13-15%) and France (about 6-8%), which gave us
positive, but less impressive, results. Although they are not in
the index, the Fund's holdings in the "emerging" markets of Latin
America, such as Brazil, were sometimes stellar performers.
Looking to the current fiscal year, the investment fundamentals
have improved for most regions of the world: interest rates have
come down; currency values appear to have bottomed out; and the
inventory cycle has been completed in the major European economies.
In Japan, the economy is growing at a reasonably good pace and
interest rates have stabilized. And in Latin America, economic
growth remains strong. In light of the latter point, this past
fall I added to the Fund's holdings in Mexico. In sum, I believe
the overall environment is as promising as at any time in the past
few years.
Paul Hopkins
Class A
12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1996 $10.65
Oct. 31, 1995 $ 9.97
Increase $ 0.68
Distributions
Nov. 1, 1995-Oct. 31, 1996
From income $ 0.15
From capital gains $ 0.14
Total distributions $ 0.29
Total return* +9.9%**
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1996 $10.58
Oct. 31, 1995 $ 9.92
Increase $ 0.66
Distributions
Nov. 1, 1995-Oct. 31, 1996
From income $ 0.10
From capital gains $ 0.14
Total distributions $ 0.24
Total return* + 9.1%**
<PAGE>
PAGE 7
Class Y
12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1996 $10.67
Oct. 31, 1995 $ 9.98
Increase $ 0.69
Distributions
Nov. 1, 1995-Oct. 31, 1996
From income $ 0.17
From capital gains $ 0.14
Total distributions $ 0.31
Total return* +10.1%**
*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 8
<TABLE>
<CAPTION>
IDS International Fund, Inc.
The Fund's ten largest holdings
(Pie chart) The ten holdings listed here make up 17.18% of the Fund's net assets
_______________________________________________________________________________________________________
Percent Value
(of Fund's net assets) (as of Oct. 31, 1996)
_______________________________________________________________________________________________________
<S> <C> <C>
Ente Nazionale Idrocarburi Spa (Italy) 2.90% $40,519,603
A state owned Gas and Oil company in Italy.
NEC(Japan) 2.06 28,759,938
Operates with a synergistic business concept of "C & C", the
integration of computers and communications. These operations
comprise three product categories: Communication Systems and
Equipment, Computers and Industrial Electronic Systems and
Electron Devices.
TDK (Japan) 1.77 24,648,364
A leading producer of audio and video tapes and electronic parts.
Sandoz (Switzerland) 1.72 24,041,772
Through its subsidiaries, this holding company's operations are
structured around five divisions: pharmaceuticals (50%), nutrition
(26%), seeds (6%),agro (10%) and MBT, formerly the construction and
environment division (8%).
Denso (Japan) 1.63 22,806,940
This company and its subsidiaries form the NatWest Group, provides
an extensive range of banking and financial services through
offices and branches in the United Kingdom and overseas.
Matsushita Electric Inds (Japan) 1.49 20,786,294
One of the world's leading producers of electronic and electric
products. Most of Matsushita group's products are marketed under
several trade names, including "Panasonic," "National," "Technics,"
"Quasar," "Victor" and "JVC."
Granada Group (United Kingdom) 1.45 20,240,002
The company and its subsidiaries are engaged in renting and
retailing electronics, providing computer services, the television
industry, leisure services and providing services to businesses.
Nomura Securities (Japan) 1.42 19,836,415
A company engaged in the dealing, brokerage, underwriting and
distribution of securities. Through its subsidiaries, this
company provides financial services to businesses.
Mitsui Fudosan (Japan) 1.38 19,200,526
Engaged in many areas of real estate management. This company is
also engaged in mortgage financing and consulting services and in
the operation of an indoor water park and indoor ski dome.
Credit Commercial de France (France) 1.36 19,021,555
This is the parent company of a banking group primarily engaged
in retail banking, investment banking, asset management and
international private banking.
Note: Certain foreign investment risks include: changes in currency exchange rates, adverse political or
economic order and lack of similar regulatory requirements followed by U.S. companies.
</TABLE>
<PAGE>
PAGE 9
Making the most of the Fund
Average annual total return
(as of Oct. 31, 1996)
1 year Since inception 5 years 10 years
Class A +4.39% --% +6.63% +7.61%
Class B* +5.06% +10.26% --% --%
Class Y* +10.08% +13.59% --% --%
*Inception date was March 20, 1995.
The performance of Class B and Class Y will vary from the
performance of Class A based on differences in sales charges and
fees.
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Figures for Class A reflect the effect of the maximum 5% sales
charge and figures for Class B reflect the applicable contingent
deferred 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
March 100 17 5.88 XXXXXx
April 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...
<PAGE>
PAGE 10
(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.
<PAGE>
PAGE 11
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.
[Blank space]
Average annual total return
(as of Oct. 31, 1996)
1 year Since inception 5 years 10 years
Class A +4.39% --% +6.63% +7.61%
Class B* +5.06% +10.26% --% --%
Class Y* +10.08% +13.59% --% --%
*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 MSCI World Index and
the Lipper International Fund Index. In comparing International
Fund to the two indexes, you should take into account the fact that
the Fund's performance reflects the maximum sales charge of 5%,
while such charges are not reflected in the performance of the
indexes. If you were actually to buy either individual stocks or
growth mutual funds, any sales charges that you pay would reduce
your total return as well.
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.
Assumes: Holding period from 11/1/86 to 10/31/96. Returns do not
reflect taxes payable on distributions. Reinvestment of all income
and capital gain distributions for the Fund, with a value of
$8,683. Also see "Performance" in the Fund's current prospectus.
<PAGE>
PAGE 12
The Morgan Stanley Capital International World Index (MSCI World
Index), compiled from a composite of over 1,500 companies listed on
the stock exchanges of North America, Europe, Australia, New
Zealand and the Far East, is widely recognized by investors as the
measurement index for portfolios of global securities.
Lipper International Fund Index, published by Lipper Analytical
Services, Inc., includes 10 funds that are generally similar to the
Fund, although some funds in the index may have somewhat different
investment policies or objectives.
<PAGE>
<PAGE>
PAGE 13
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.
<PAGE>
PAGE 14
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
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
<PAGE>
PAGE 15
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.
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
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<PAGE>
PAGE 16
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
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
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 17
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
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
<PAGE>
PAGE 18
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
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
<PAGE>
PAGE 19
Federal income tax information
IDS International Fund, Inc.
___________________________________________________________________
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 a 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 International Fund, Inc.
Fiscal year ended Oct. 31, 1996
Class A
Income distribution taxable as dividend income, none qualifying for
deduction by corporations.
Payable date Per share
Dec. 29, 1995 $0.15064
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 29, 1995 $0.14279
Total distributions $0.29343
Class B
Income distribution taxable as dividend income, none qualifying for
deduction by corporations.
Payable date Per share
Dec. 29, 1995 $0.09396
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 29, 1995 $0.14279
Total distributions $0.23675
Class Y
Income distribution taxable as dividend income, none qualifying for
deduction by corporations.
Payable date Per share
Dec. 29, 1995 $0.16403
<PAGE>
PAGE 20
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 29, 1995 $0.14279
Total distributions $0.30682
<PAGE>
PAGE 21
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 International Fund
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
PAGE 22
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.
5) Graph omission. 5) The graph on page 8 of the
printed report and page 11
of the electronic
document, was
unintentionally omitted.
